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10 MOST RARE PLANTS IN THE WORLD (Part 1)

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1. Encephalartos woodii

The first name that goes on the list of rare plants in the world is Encephalartos woodii. Initially, it was spotted growing at the wild forests of Ngoya in Zululand, in South Africa in 1895. It was conserved and now this plant is restricted to the botanical garden only where it was transported from Zululand and planted on the soil bed of the calibrated Temperate House together with other South African plants. It is a cycad variety and has separate male and female plants. Unfortunately, no female plants were found ever since, which indicates that the propagation will be extremely limitedd The male cones are orange yellow in color.

2. Amorphophallus titanum (Titan Arum)

You can find this rare plant of the world only in Huntington. You will find this plant growing in the botanical garden of the area, known as Rose Hills Foundation Conservatory for Botanical Science. The only time botanists can study or research more about this plant is when it blooms on rare occations. The characteristic bloom features a half open giant flower with a red, thick central wick. The internal part of the flower is red with greenish yellow outer surface.

3. Rafflesia arnoldii

Apart from being the world’s rarest plant, it is also one of the largest flowers in the world.  The Rafflesia arnoldii does not have a beautiful aromatic fragrance; instead, its odor is very similar to decaying flesh. Which is why, it also goes by the name- Corpse flower. You can find this flower in the dense rain-forests of Sumatra, Indonesia, Malaysia and Bengkulu. The characteristics of this parasite plant are that it lives on Tetrastigms vine, has large leaves, stems and roots. Insects are attracted to the odor of the flower, which also helps in pollination

4. Erysimum menziesii

If you happen to be in the sandy beach areas of California, Humboldt, Mendocino and Monterey, then you may get a chance to see this rare wall flower. The Erysimum menziesii do not grow more than 15 centimeters. The plant consist of long and straight leaves with thick, hairy and lobed stems. This rare plant has thick cluster of yellow flowers with round petals grow on tops of each of the stems. The flowers shed to give way to the long, sticky fruits.

5. Manzanita

Manzanita is a common name for many varieties of evergreen shrubs or small trees that fall under the genus of Arctostaphylos. You can find this rare plant in North America, mainly in the areas of British Columbia, Washington and California, Mexico, etc. The twisted  branches and barks of these vegetation are smooth. Another beautiful feature of this plant is that the barcks or branches are either orange or red in color. From ground hugging ones to six meter tall trees, these shrubs come in different heights. Some of these varieties are used for culinary while others form parts of landscape gardening.

 

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10 MOST RARE PLANTS IN THE WORLD (Part 2)

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6. Pennantia baylisiana

The Pennantia baylisiana is another name of that appears in the list of most rare plants in the world and has also reserved a spot in the Guinness Book of World Records.  Only one tree survives at Three Kings Islands off the New Zealand coast. There is a lot of controversial findings pertaining to it’s gender. While some botanists feel that this is a female species, some state otherwise. In the efforts of multiplying this plant, botanists have carefully sowed seeds in the ground. However, the biggest challenge is that it takes close to ten years to grow into a mature plant provided it gets past the unfavorable climate and ravages of time.

7. Snowdonia hawkweed (Hieracium snowdoniense)

As the name suggests, you can find the Snowdonia hawkweed at the valley of Snowdonia, in Wales, United Kingdom. This rare plant bears flowers which are extremely simple, having velvety rims with yellow petals. Until a few years back; these plants stopped producing flowers, which made the botanists think that it is getting extinct. In 2002, the flowers started blossoming again breaking the misconception of the botanists.

8. Hackelia venusta

AKA Showy stickseed or Lesser showy stickseed it is part of the list of rare plants in the world for various reasons. You can find the Hackelia venusta in a small topography at the Chelan Country of United States. It grows up to 20 to 40 feet and is a perennial shrub, having several leaves. The flowers of this rare plant blossoms in the months of April and May. During this time, the flowers appear in clusters.  They also features white or tinted blue tone with five, rounded leaves and short, tubular stem. The fruits are tiny and have hair all over that assist them to disperse from the mother plant. Sandy rocky soil with extreme sun is the basic requirement of this plant.

9. Nepenthes tenax

The next name that falls under the list of rare plants in the world is Nepenthes tenax. It has a close resemblance with the pitcher plant. The Nepenthes tenax grows up to a height of 100 cms with the pitcher shaped flower on the top, having a height of 15 cms. This plant belongs to the biological family of Nepenthaceae and bears a biological name, Nepenthes tenax.

10. Welwitschia 

This is a gymnosperm plant which is of African variety. Friedrich Welwitsch an Australian botanist discovered this plant in 1859. It is considered as a living fossil apart from being one of the rare plants in the world . It features a woody, thick, short and stout trunk . The root system is simple, comprising of a taproot at the bottom with a few tapered branching from it. The two leaves grow after the cotyledons have grown to a height of 25 to 35 mm after germination. These are the only leaves of this plant. These leaves grow till 2 to 4 m after which they split and eventually shred out. It is a diecious plant, featuring separate male and female plants. It survives for 1000 to 2000 years and has an extremely slow growth rare.

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TOURISM IN BANGLADESH

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Bangladesh is full of natural beauty. Rivers, coasts and beaches, archaeological sites, religious places, hills, forests, waterfalls, tea gardens surround it. The Sundarban, Historic Mosque in city of Bagerhat, Ruins of the Buddihist Vihara at Paharpur are the three world heritage sites in Bangladesh among 1007. To observe the beauty of nature, huge amount of domestic and foreign tourists visit the country and its tourist attraction sites. In 2012, around six-lakh (6 hundred thousand) tourists came Bangladesh to visit and enjoy its beauty. The total contribution of tourism to GDP was 4.4%, 3.8% to employment and 1.5% to investment in 2013. Bangladesh Parjatan Corporation (BPC) looks after the tourism sector in Bangladesh under the ministry of Civil Aviation and Tourism. Due to some limitations, Bangladesh has failed to introduce itself as a tourist destination country. The paper tries to focus on the attractive tourist spots of Bangladesh and the contribution of tourism in the Bangladesh economy. The major concern of the writer is to highlight the factors by which Bangladesh can be one of the major tourist attractive country in the world in near future.

  1. Introduction

1.1. Concept of tourism

Tourism is a travel for recreation, religious, leisure, family or business purposes, usually for a limited duration. Tourism can be domestic or international. Nowadays, tourism is one of the major source of income for many countries. There is no consensus concerning the definition of tourism; its definition varies source by source, person by person. Guyer Feuler first defined tourism in 1905. In order to prevent the disaccords to define “Tourism”, UNWTO defined it as it is indicated below: “Tourism comprises the activities of persons traveling and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes”. Tourism is different from travel. Not all travel is tourism. In order for tourism to happen, there must be a displacement. Three criteria are used simultaneously in order to characterize a travel as tourism:

Criteria-1: it involves a displacement outside the usual environment;

Criteria-2: the travel must occur for any purpose;

Criteria-3: only a maximal duration is mentioned, not a minimal. Tourism displacement can be with or without an overnight stay.

1.2. Nature of tourism

Tourism is a service industry. It has become a very complex activity encompassing a wide range of relationships. Resulting in the improvements in standard of living and disposable income with more leisure time, the overall numbers of tourists are expected to grow further. Factors like convenient transport, no restrictions on travel, availability of information on various tourist spots and new marketing techniques contributed the growth of overall number of tourists in the present world. Additionally, a number of socio-demographic factors such as higher educational standards, advancement in information technology, rapid urbanization have strongly influenced the growth of tourism.

1.3. Importance of tourism

Tourism is an important driver of economic growth. Besides this, People have an opportunity to exchange culture. Tourism can earn huge amount of foreign currency. Tourism can support the Balance of Payment (BOP) of a country. Tourism can create employment.

1.4. Impact of tourism

Tourism can bring many economic, social and environmental benefits, particularly in rural areas and developing countries, yet mass tourism is also associated with negative effects. Tourism can only be sustainable if it is carefully managed so that probable negative effects on the host community and the environment are not permitted to outweigh the financial benefits.

There are economic, socio-cultural and environmental key benefits of tourism.

  1. i) Economic benefit: Tourism can provide direct jobs to the community, such as tour guides and hotel housekeeping. Indirect employment is generated through other industries like agriculture, food production and retail. Infrastructure development and visitors’ expenditure generates income for the local community and can lead to the alleviation of poverty.
  2. ii) Social benefit: In addition to the revenue, tourism can bring about a real sense of pride and identity to communities. It allows them to look at their history, and community identity. This helps the local residents to maintain their tradition and culture.

iii) Environmental benefit: Tourism provides financial support for the conservation of ecosystems and natural resource management, making the destination more authentic and desirable to visitors.

Negative effects of tourism are also not ignorable. These are:

  1. i) Negative economic effect: Jobs created by tourism are often seasonal and poorly paid, yet tourism can push up local property prices and the cost of goods and services. Place of tourism can be affected by terrorism.
  2. ii) Negative social effect: Visitor’s behavior can have a detrimental effect on the quality of life of the host community. For example, crowding and congestion, drugs and alcohol problems can occur. Interaction with tourists can also lead to an erosion of traditional cultures and values.

iii) Negative environmental effect: Tourism poses a threat to a region’s culture and natural resources, through overuse.

  1. Types of tourism

The type of tourism depends on the reason for travel. Travel can be to destinations that are domestic or international. Domestic tourism involves residents travelling only within their country. International tourism may be inbound or outbound. Inbound tourism involves non-residents travelling within a country. Outbound tourism involves residents travelling within another country. Based on the purpose of visit, tourism is categorized into the following:

  1. i) Leisure Tourism

Tourists may travel to experience a change in climate and place and learn something new about the culture of a destination. Tourists, who seek break from the stress of day-to-day life, devote their holiday to rest, relaxation and refresh themselves. These tourists prefer to stay in some quiet and relaxed destination preferably at a hill resort, beach resort or island resort.

  1. ii) Cultural tourism

Culture is one of the most important factors, which attract tourists to a destination. Cultural tourism gives insight to a way of people’s life of a distant land, its dressing, jewelry, dance, music culture, as well as architecture, customs and traditions, fairs and festivals.

iii) Religious tourism

It is a form of tourism, where people travel individually or in groups for pilgrimage. Modern religious tourists visit holy cities and holy sites around the world.

  1. vi) Family Tourism

Family tourism involves the family unit and their participation in diverse forms of tourism activity. This includes visiting one’s relatives and friends for interpersonal reasons.

  1. v) Health Tourism

Health tourism is also called as medical tourism. Today, many people travel great distances to exotic locations in search of medical treatment. Medical tourism is an old-aged concept that has gained popularity in the recent times. Many developing countries are emerging as hot medical tourism destinations capitalizing on low cost advantages. Many hospitals have specially designed packages including resorts facilities.

  1. vi) Sports Tourism

Sports Tourism refers to travel which involves either viewing or participating in a sporting event staying apart from their usual environment. Normally these kinds of events are the motivators that attract visitors to visit the events like Olympic Games, FIFA World Cup etc.

vii) Educational Tourism

Educational tourism developed because of the growing popularity of teaching and learning of knowledge and the enhancing of technical competency outside of the classroom environment. In educational tourism, the focus of the tour is visiting another country to learn about the culture, such as in Student Exchange Programs and Study Tours, organizing specialized lectures of the eminent personalities and visiting for research.

viii) Business Tourism

Tourists visit a particular destination for various reasons pertaining to his work such as attending a business meeting, conferences, conventions selling products, meeting with clients. Business tourism is popularly called as MICE (Meetings, incentives, conferences, and exhibitions) tourism.

  1. Literature Review

Bangladesh government reformed the national tourism policy in 2010. Aims and goals of this policy is to increase employment, ensure economic development, environmental purity and sustainability (Siraj et al., 2009). The major objective of the policy is to develop Eco-tourism through conservation of natural resources and promote well-being of the community, preservation of cultural values of the local community and their participation and sharing benefits. Government of Bangladesh launched an act of “Protected areas of tourism and special tourism zone (Kabir et al., 2012). Bangladesh is the country in the region that have the least arrivals and revenue earned from tourism industry (Pennington and Thomsen, 2010). Tourism is one of the profitable sectors in Bangladesh (Elena et al., 2012). Tourism sector of Bangladesh is facing many obstacles (Arif, Islam-2011). In this current study, data from several secondary international sources have been used to analyze the pattern of tourism in Bangladesh. Policy recommendations have also been provided based on this analysis.

3.1. Bangladesh at a glance and its tourism policy

Situated between Myanmar and India with the Bay of Bengal in the South, Bangladesh is the small country. It gained independence from Britain in 1947, becoming East Pakistan. On 16th December, 1971, Bangladesh achieved its sovereign independence under the leadership of Bangabondhu Sheik Mujibur Rahman after a bloody liberation war against the Pakistani Army on 26th March. The official and main language is Bangla, but there are many small tribal language groups. Dhaka is the capital. Dhaka, Chittagong, Khulna, Rajshahi, Sylhet, Barisal and Rongpur are the major cities. Bangladesh is mainly an agricultural country.

3.1.1. Institutions of tourism management in Bangladesh

Bangladesh Parjatan Corporation (BPC) is an autonomous body under the ministry of Civil Aviation and Tourism established in 1972. Basic target of BPC is to expand the tourism sector and provide the service for local and foreign tourist. National Hotel and Tourism Training Institute (NHTTI) is an institute for professional tourism management training. NHTTI was established in 1974 under Bangladesh Parjatan Corporation. This institute offers courses to ensure trained personnel for hotel and tourism industry. NHTTI started a two-year long diploma course in hotel management in 1994. Institute also provides the job training for BPC personnel and arrange special seminar, workshop related to tourism development. Another important institution supporting the development of tourism is Bangladesh Tourism Board. Bangladesh Tourism Board established in 2010 to meet the strong demand for private sector and the tourism professionals. It is affiliated with United Nations World Tourism Organizations (UNWTO).

3.1.2. Objectives of tourism policy – 2010

1) To construct various rules under the law where the main objective is to fill in the gap of existing tourism rules and let regulations proceed;

2) To develop tourism industries through various planning related activities and side by side give advice as well as directions;

3) To create general awareness regarding tourism protection, development and exploration;

4) To execute responsible tourism through creation of some helping hand on behalf of government like as personal sector, local people, local administration, NGO, women federation, media;

5) To create better communication channel for the International Tourists Organizations in Bangladesh with both government and private tourism related organizations;

6) To create a strong and safe foothold for the Bangladeshi Tourist by coordinating with respective government organizations;

7) To create a tourism friendly environment in Bangladesh and to market its tourism potential in both domestic and foreign nations;

8) To develop human resource for tourism sector by creating training facilities and provide them with the right directions;

9) To attract tourists by maintaining quality and relevant material which in turn can provide smooth tourism service and ensuring necessary actions that need to be taken for maintenance;

10) To ensure the participation of physically challenged people;

11) To protect women rights and ensure their participation in the tourism sector;

12) To research on tourism industry, to survey international markets and to analyze the data.

3.1.3. Tourist spots in Bangladesh

Tourist spots in Bangladesh are not concentrated in any particular place. Instead, they are scattered throughout the country. Division wise, we can present the tourist spots in Bangladesh as in Table 1.

Jaflong: Jaflong is one of the best natural tourist spot in Sylhet. It is situated at the border between Bangladesh and the Indian state of Meghalaya. It is takes two hours to drive. Tourist can learn something from the lifestyle of Tribe Khasia in Jaflong.

Ratargul: Ratargul is a fresh water swamp forest situated in Sylhet by the river of Goain. The water comes here from the adjacent Goain River. The flavor of Amazon forest is available there.

Madhabkunda waterfall: This is one of the largest waterfalls in Bangladesh. It is situated in Moulvibazar District. On the way visitors can see the greenish beauty of tea garden and the hills. Rubber and lemon plantations form a beautiful landscape.

Satchari National Park: This Park is in Habiganj District. Wildlife in this park is rich.

Bisanakandi: Bisanakandi is situated at Bangladesh-India border in Sylhet. It is a landscape beauty among gardens and hills. Winter is not a suitable time to visit Bisnakandi due to mechanised mining and stone-laden boats and lorries.

Srimongal: Srimongal is famous for the largest tea gardens of world. Most of the tea estates are in Srimongal. It is called “The land of two leaves and a bud”. It is known as the tea capital in Bangladesh. Bangladesh Tea Research Institute (BTRI) and Tea Museum are functioning there.

Lawacherra Rain Forest: Well-reserved forests in Bangladesh. Prime attraction of this forest is rare Chloroform tree of Asia. It is like “A Piece of Paradise”.

Patenga Sea Beaches: It is about 22 km. from Chittagong city. Besides the sea beach, you can enjoy boating and river cruise in the River Karnaphuli.

Port Area: This is the principal sea port of Bangladesh.

Cox’s Bazar: World longest (120 km long) beach .Winter is the season to visit the Cox’s Bazar.

St. Martins Island: St. Martins Island is the most beautiful Coral Island.

Himchori : Himchori is famous for waterfall. Visitor can reach there by jeep from Cox’s Bazar.

Parki beach: It is situated in Anwarathana under southern Chittagong region.

Lalmai, Moinamoti and Shalbon Bihar: They are famous historical and archeological places around Comilla city.

Rangamati: If you don’t visit Rangamati you will unable to discover a big portion of natural beauties of Bangladesh.

Khagrachari: Khagrachhari is the natural wild beauty of Bangladesh. Here visitor can visit the tribal lifestyle.

Kaptai Lake: Built in early sixties Kaptai Dam and the lake are the main attractions of Kaptai.

Bandarban: Chimbuk hill is one of the major attractions of Bandarban.

Ahsan Manzil: Ahsan Manzil was a residential palace for Dhaka Nawab Family.

Shaheed Minar: The Shaheed Minar is a national monument in Dhaka.

Jatiyo Smritisoudho: Jatiyo Sritishoudho is the symbol in the memory of sacrifice of all those who gave their lives in the Bangladesh Liberation War of 1971.

Jatiya Sangshad Bahavan: It has been used for the Bangladesh National Assembly.

Sundarban: The Sundarban is the world largest tidal mangrove forest. The Sundarbans cover approximately 10,000 square kilometers, of which 60 percent is in Bangladesh with the remainder in India. The Sundarbans is a UNESCO World Heritage Site.

Kuakata: Kuakata is a panoramic sea beach located in the Patuakhali district. Kuakata has a wide sandy beach from where one can see both the sunrise and sunset.

Table 1: Tourist spots in Bangladesh

Name of the division Location in Bangladesh Places to visit
Barisal Southwest Kuakata
Chittagong Southern Patenga Sea Beach, War Cemetery, Port, Cox’s Bazar, St. Martins Island, Himchori and Inani Beach, Parki beach, Lalmai, Moinamoti and Shalbon Bihar, Chittagong Hill tracks (Rangamati, Khagrachari, Bandarban and Kaptai)
Dhaka Capital city Shaheed Minar, Jatiyo Smritisoudho, Ahsan Manzil, Jatiya Sangshad Bahavan
Khulna Southwest Sundarban
Rajshahi Northern Mahasthangarh,Varendra Museum
Rangpur Northern Kantagir Temple, Sayedpur railway junction
Sylhet Notrheast Jaflong, Ratargul, Madhabkunda waterfall, Satchari National Park , Bisanakandi, Srimongal, Lawacherra Rain Forest
  1. Methodology

The study is based on secondary data. The data have been collected from different reports, published articles, websites, Bangladesh Parjatan Corporation (BPC), Ministry of Civil Aviation and Tourism, World Travel and Tourism Council (WTTC), Bangladesh Bureau of Statistics (BBS), Daily newspapers etc. Analysis is based on various statistical techniques. There are several objectives to conduct this research. They are:

  1. To know about the current status and future prospects of tourism sector in Bangladesh.
  2. To identify the major tourist spots in Bangladesh.
  3. To assess the contribution of tourism sector in the Bangladesh economy.
  4. To identify the barriers for developing tourism sector in Bangladesh.
  5. To provide some suggestions for the improvements of tourism sector in Bangladesh.
  6. Data Analysis and Results

5.1. Present status of tourism in Bangladesh

The importance of tourism sector has increased overtime. In 2009-2010, 838 was allocated for tourism sector from national budget. This has been increased to 1818 in 2011-2012. However, lately there is a decreasing trend in tourism expenditure. In 2013-2014, tourism expenditure in national budget has been falling to 683. This decreasing trend may be due to the current political crisis, which has discouraged tourism in Bangladesh.

Figure 1: Distribution of money at the tourism sector in the national budget

Source: Bangladesh Parjatan Corporation

In Bangladesh, government controlled tourism organization – Bangladesh Parjatan Corporation (BPC) is doing well in terms of profit. In 2008-2009 it lost about 194 lakh taka. However, since then it is making profit. In 2009-2010, the profit was 23.41 lakh taka which has consistently increased to 612.33 lakh taka in 2012-2013. This profit has accompanied by both increasing total income and total expenditure. This total income and total expenditure in 2008-2009 were 3598.6 and 3792.35 lakh taka respectively. These figures have risen to 7168.33 lakh taka and 6556 lakh taka respectively in 2012-2013.

The number of tourist that came to Bangladesh during 2008 to 2012 are shown in Figure 2: The inbound tourism severely fall to 267,107 in 2009 from the previous year 467,332. This may be due to the global financial crisis. The number of tourist, however, show increasing trend after 2009. The inbound tourism has recovered to 303,386 in 2010 and has increased to 588,193 in 2012.

Table 2: Income, expenditure and profit of Bangladesh Parjatan Corporation for 2008-2013

Fiscal Year Total income (Lakh tk.) Total expenditure (Lakh tk.) Profit before tax (Lakh tk.)
2008-2009 3598.60 3792.35 -193.75
2009-2010 4535.88 4512.47 23.41
2010-2011 5966.71 5819.21 107.50
2011-2012 7127.82 6836.62 291.20
2012-2013 7168.33 6556.00 612.33

 

Source: Bangladesh Parjatan Corporation , 2014

Figure 2: Statistics of tourist incoming in Bangladesh

Source: Bangladesh Parjatan Corporation ,2014

5.2 Contribution of tourism in the Bangladesh economy

According to World Travel and Tourism Council (WTTC) report (2014), The total contribution of travel and tourism was 4.4% of GDP in 2013 and is expected to grow 7.9% to 4.5% of GDP in 2014. It is forecasted to rise by 6.5% per annum to 4.7% of GDP by 2024. Notable that, total contribution consists of direct, indirect and induced contribution.

Figure 3: Contribution of travel and tourism to GDP

Travel and Tourism generated 1,328,500 jobs directly in 2013 and this is forecasted to grow by 4.0% in 2014. This includes employment by hotels, airlines, travel agents and other passenger transportation services. It will increase by 2.7% per annum on average over the next ten years. The total contribution of Travel and Tourism to employment was 2.8% of total employment in 2013. This is forecasted to rise to 3.9% of total employment in 2014. By 2024, travel and tourism are forecasted to support 4.2% of total employment.

Figure 4: Contribution of travel and tourism to employment generation

Visitor exports are a key component of the direct contribution of travel and tourism .Visitor spend a good sum of money during their stay in the country. Spending on food, travels, and hotel are included in the visitor exports category. In 2013, Bangladesh generated BDT 8.3 billion in visitor exports. In 2014, this is expected to grow by 7.1%. By 2024, international tourist arrivals are forecasted to 611,000 generating expenditure of BDT 15.5 billion .Travel and Tourism’s contribution to total national investment will rise from 1.5% in 2014 to 1.6% in 2024.

Figure 5: Contribution of travel and tourism to Visitor Exports

  1. Conclusion and Recommendations

Now Bangladesh is low-middle income country. Its average GDP growth rate is 6%. The economy is highly dependent on work force export, Ready Made Garments (RMG) and agriculture sector. Other prominent sectors are shipbuilding, pharmaceuticals etc. The rate of employment is 90 %, which is below expected level. As a result, disguised employment and employment at low wage rate is rising. Many of the people are illegally crossing border in the hope of better life. In order to improve employment rate and to stop the illegal migration, government has to take and implement some projects and policies, through this, it has to try to receive the social, cultural and economic benefits of the tourism sector. As part of tourism sector development, recently government has passed the Cox’s Bazaar Development Authority (CDA) at the meeting of ministry. This is supportable but not enough. The government of Bangladesh should place equal emphasis in its policy on the development of the tourist spots all over the country. This will create employment opportunity on the one hand and on the other hand it reduces the dependence of the country on some other specific sectors.

Following measures are necessary for the development of tourism sector in Bangladesh:

  1. Up-date the present tourism policies in Bangladesh compare to the world tourism market.
  2. Tourism spot and related organization should run by the private sector.
  3. Tourism related discipline like hotel and tourism management should be start at the all university in Bangladesh.
  4. Infrastructures around the tourism sector should be built and maintained. Rail connection between Cox’s Bazaar and Chittagong is necessary. Because, present communication system is not enough for tourist attraction.
  5. Political stability should be maintained to attract the foreign tourist.
  6. Government should take the actions about the security system at the tourist place.

 

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MULTISTAGE SAMPLING

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Multistage Sampling refers to sampling plans where the sampling is carried out in stages using smaller and smaller sampling units at each stage.

Multistage Sampling can be a complex form of cluster sampling… Cluster because sampling is a type of sampling which involves dividing the population into groups (or clusters). Then, one or more clusters are chosen at random and everyone within the chosen cluster is sampled.

Using all the sample elements in all the selected clusters may be prohibitively expensive or unnecessary. Under these circumstances, multistage cluster sampling becomes useful. Instead of using all the elements contained in the selected clusters, the researcher randomly selects elements from each cluster. Constructing the clusters is the first stage. Deciding what elements within the cluster to use is the second stage. The technique is used frequently when a complete list of all members of the population does not exist and is inappropriate.

In some cases, several levels of cluster selection may be applied before the final sample
elements are reached. For example, household surveys conducted by the Australian Bureau of Statistics begin by dividing metropolitan regions into 'collection districts' and selecting some of these collection districts (first stage). The selected collection districts are then divided into blocks, and blocks are chosen from within each selected collection district (second stage).
Next, dwellings are listed within each selected block, and some of these dwellings are
selected (third stage). This method makes it unnecessary to create a list of every dwelling in the region and necessary only for selected blocks. In remote areas, an additional stage of clustering is used, in order to reduce travel requirements.

Although cluster sampling and stratified sampling bear some superficial similarities, they are substantially different. In stratified sampling, a random sample is drawn from all the strata, where in cluster sampling only the selected clusters are studied, either in single- or multi- stage.

Advantages
 Cost and speed that the survey can be done in
 Convenience of finding the survey sample
 Normally more accurate than cluster sampling for the same size sample

Disadvantages
 Not as accurate as Simple Random Sample if the sample is the same size
 More testing is difficult to perform

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Performance analysis of Islamic financial transaction terminology

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View With Charts And Images..
“Performance Analysis of Islamic Financial Transaction Terminology”

Chapter 01

1.Introduction

1.1 Objectives of the Study:

The objective of the report is to comprehensive study on Al Arafah Islami Bank Ltd and to find out the opportunities for the Islamic Banking Service. The objective of the study is also to identify the Islamic Banking Procedure based on Shariah and the Holy Qur’an and also it’s marketing process. The primary and secondary objectives of this report are as follows:

(a) Primary Objectives:

· Identifying the ways how an Islami bank runs its business through investment without interest.

(b) Secondary Objectives:

· Understanding the differences between Islamic Banking System and Commercial Banking System.

· To create a model for an Islamic Banking Services.

· Finding out whether the investment mode of the Islami bank helps economy.

· Understanding the overall picture of AIBL.

· To observe Banker- Customer relationship.

· To gain experience on different functions of the different departments of the bank.

· To know discipline and behavior of an organization that will help me to buildup my career.

1.2 Background of the Study:

This study is made for the partial requirement of the BBA program. As the internee was assigned in the “Performance Analysis of Islamic Financial Transaction Terminology” during the internship period, practical knowledge has been gathered on the sector. As observation is the main task of the division, the report is aimed to work on that topic.

Practical work situation is sometime may different from what is learn theoretically. Though the business processes are based on theory, the application has to be different to meet the requirements of a situation. The “Performance Analysis of Islamic Financial Transaction Terminology” has been observed practically and presented in this report to observe the real situation.

1.4 Scope of study:

In organization part, the report generates an overview of the AL-Arafah Islami Bank Limited. But it would be so difficult if Jinat Liala (Lecturer, University of Southeast Asia) and M. Mohiuddin Sharifi, (Manager, AIBL) did not help to generate information. The scope of the report is restricted to the collection record and disbursement process of the Islamic banking system of  Al-Arafah Islami Bank Limited. But it was not possible for me to collect any information on payroll and planning & services as their activities are highly confidential.

1.5 Justification of the Study:

As this study has been done based on imperial evidence, it will have both practical and academic value. It will help the concerned parties to get a clear picture regarding the contribution of AIBL since its inception. From this study one can be able to know about present practice of AIBL on Islamic-economic development in our country. The findings of this report will help to take appropriate actions and steps for the betterment of existing practice, which basically help the industrial development of the country on Islamic ways banking. It would also be cleared what procedures have AIBL been following to recover the Islamic banking. It is well known to everybody that institutional education and practical life is totally different. Practical life is the application of institutional education. So, it is natural to face realities of life in practical oriented life.

1.6 Benefits of the Study:

This study bridges between practical & theoretical life. It has created an opportunity to face practical life for the first time. To have obtained a comprehensive knowledge on the organization, it has made clear what procedures AIBL follow to implement how the banks run by following the Holy Quran. It has enriched my personal skills and knowledge on identification of the marketing process of Islamic banking services and measures to overcome the problem and also gained knowledge on rehabilitation programs of AIBL.

1.7 Methodology of the Study:

Correct and smooth completion of research work requires adherence to some rules and methodologies. In order to conduct the report, the decision has been taken to collect various types of primary data and secondary data. Data have been collected by oral interviewing of the responsible officers. After collecting data from the interview and material provided by them, data were first carefully scrutinized. Then the data were organized as required.

In order to make the study effective and efficient, following two sources of data and information have been used widely:

(a) Primary information/data

The primary data have been collected by oral interviewing of the responsible officers and staffs of the AIBL, practical deskwork, direct observation of the functions of various departments of AIBL and relevant documental studies as provided by the officers concerned.

(b) Secondary Information/data:

Secondary data means the existing primary data that was collected by someone else or for a purpose other than the current one.

Sources of Data:

Sources can be classified as:

(i) Primary Sources and

(ii) Secondary Sources

(i) Primary Sources :
  • Annual report of the AIBL
  • Annual budget of the AIBL
  • Various documents of the AIBL
  • Extensive literature search on the basis of these documents of publication
  • AIBL’s website (www.Al-Arafah Islami Bank.com)
(ii) Secondary Sources:
  • Practical desk work
  • Oral interview of the respective officers and staffs of AIBL
  • Direct observations of the functions of various departments of AIBL
  • Relevant document’s studies as provided by the officers concerned

1.8 Limitations of the Study:

This internship report is the first assignment outside of our course curriculum in the practical life. In performing this report our lack of proper knowledge greatly influenced the performance. Besides, some limitations in preparing this report have been faced. The main limitations are as follows:

Chapter 02

2. Background of Al Arafah Islami Bank Ltd

With the objective of achieving success here & hereafter by pursuing the way directed by Allah and the path shown by Prophet Muhammad (SM), Al Arafah Islami Bank Ltd was established (registered) as a private limited company on 18 June, 1995. The inaugural ceremony took place on 27 September, 1995. The authorized capital of the Bank is Tk.2500.00 million and the paid up capital is Tk. 1153.18 million as on 31.12.2007. Renowned Islamic scholars and pious businessmen of the country are the sponsors of the bank. 100% of paid up capital is being owned by indigenous shareholders.

The equity of the bank stood at Tk. 2037.50 million as on 31 December, 2007, the manpower was 1033 and the number of shareholders was 12013. It has achieved a continuous profit and declared a good dividend over the years. High quality customer service through the integration of modern technology and new products is the tool of the bank to achieve success. The bank has a diverse array of carefully tailored products and services to satisfy customer needs.

The Bank is committed to contribute significantly to the national economy. It has made a positive contribution towards the socio-economic development of the country with 47 branches off which 17 are authorized dealer (AD) throughout the country.

2.1 Vision:

To be a pioneer in Islamic Banking in Bangladesh and contributes significantly to the growth of the national economy.

2.2 Mission:

2.3 Zonal and Branch Offices:

Table – 01

Established : October 31, 1995
Organization : Head Office – Dhaka
Division – 5
Department – 21
Zonal Office – 3
Branch Office – 75
Manpower – 1080
Capital Structure:
Authorized : TK. 2,500 million
Paid-up : TK. 1,153.18 million

2.4 AIBL at a Glance:

Islam provides us a complete lifestyle. Main objective of Islamic lifestyle is to be successful both in our mortal and immortal life. Therefore in every aspect of our life we should follow the doctrine of Al-Qur’an and lifestyle of Hazrat Muhammad (Sm.) for our supreme success. Al-Arafah Islami Bank started its journey in 1995 with the said principles in mind and to introduce a modern banking system based on Al-Qur’an and Sunnah. A group of established, dedicated and pious personalities of Bangladesh are the architects and directors of the Bank. Among them a noted Islamic scholar, economist, writer and ex-bureaucrat of Bangladesh government Mr. A.Z.M Shamsul Alam is the founder chairman of the bank. His progressive leadership and continuous inspiration provided a boost for the bank in getting a foothold in the financial market of Bangladesh. A group of 13 dedicated and noted Islamic personalities of Bangladesh are the member of Board of Directors of the bank. They are also noted for their business acumen. Al-Arafah Islami Bank Ltd. has 53 braches and a total of 1080 employees (upto December 2008). Its authorized capital is Taka 2500 million and the paid-up capital is Taka 1153.18 million. Wisdom of the directors, Islamic bankers and the wish of Almighty Allah make Al-Arafah Islami Bank Ltd. most modern and a leading bank in Bangladesh.

We present some data on the bank below (In million taka):

Particulars 2005 2006 2007 2008 2009
Authorized Capital 1000.00 1000.00 2500.00 2500.00 2500.00
Paid up Capital 586.99 677.94 854.20 1153.18 1383.81
Reserve Fund 488.00 542.22 835.98 1091.95 905.33
Shareholders Equity 957.26 1220.16 1690.18 2037.50 2705.74
Deposit 10108.28 11643.66 16775.34 23009.13 29690.12
Investment 8150.16 11474.41 17423.19 22906.37 29723.79
Import 9337.49 12631.60 18821.4 27042.72 32685.13
Export 3639.34 4932.90 9142.7 12714.91 20176.64
Total Income 1120.85 1452.68 2172.48 2955.61 4387.26
Total Expenditure 771.96 904.48 1202.71 2199.43 2859.16
Profit before Tax 348.89 548.20 855.47 756.18 1528.09
Profit after Tax 158.76 262.90 470.02 347.31 668.24
Income Tax 157.00 215.10 385.45 235.53 590.66
Total Assets 12874.61 15336.89 21368.17 30182.32 39158.44
Fixed Assets 195.17 208.00 215.11 334.48 396.76
Earnings per share (Taka) 263.68 387.80 550.24 30.12 48.29
Profit Earning Ratio 4.89
Dividend per share 15.5% 26.00% 35% 20% 30%
Bonus
No. of Shareholders 5379 5402 4487 12013 10664
Number of Employees 803 771 912 1033 1080
Number of Branches 40 41 46 46 53
Manpower per Branch 20 19 20 23

 

(i) Deposit:

From this graph we can see that the deposit of Al-Arafah Islami Bank Ltd. has increased year by year. In 2005 the deposit of Al-Arafah Islami Bank Ltd. was 10108.28 million and after one year in 2006 it increased to 11643.66 million then in 2007 it became 16775.34 million. In 2008 their deposit was 23009.13 million and in 2009 they builtup their position to 29690.12 million.

(ii) Import:

From this graph we can see that the import of Al-Arafah Islami Bank Ltd. has increased year by year. In 2005 the import of Al-Arafah Islami Bank Ltd. was 9337.49 million and after one year in 2006 it  increased to 12631.6 million then in 2007 it became 18821.4 million. In 2008 their import was 27042.72 million and in 2009 they  builtup their position to 32685.13 million.

(iii) Export:

From this graph we can see that the export of Al-Arafah Islami Bank Ltd has increased year by year. In 2005 the export of Al-Arafah Islamic Bank Ltd was 3639.34 million and after one year in 2006 it increased to 4932.9 million then in 2007 it became 9142.7 million. In 2008 their export was 12714.91 million and in 2009 they builtup their position to 20176.64 million.

(iv) Profit after Tax:

From this graph we can see that the Profit after Tax of Al-Arafah Islami Bank Ltd in 2005 was 158.76 million and after one year in 2006 it increased to 232.9 million then in 2007 it became 470.02 million. But in 2008 their place fall into 347.31 million and in 2009 they builtup their position to 668.24 million.

2.5 Special Features of the Bank:

As an Islamic bank, we are singular in every positive aspect. We provide a bunch of state-of-art banking services within the wide range of Shariah. We are unique with our products, strict with our principles and uncompromising with our honesty. Some of our special features that make us notable in Islamic banking sectors are as follows:

The Bank believes in social and philanthropic activities and has established AIBL English Medium Madrasha and AIBL Library. More endeavors will inshallah follow in future.

2.7 Board of Directors:

The board consists of 12 (Twelve) directors. The number of the board of Directors of the bank holds very respectable position in the society. They are from highly successful and industrial group of Bangladesh. It is mentionable that the whole members of the Directors Board of the bank carried a special carrier- they are Hajji and they already committed “The whole activities in the bank will be as a ‘Ibadah’ “. Jb. Al-Hajj Md. Badiur Rahman is the Chairman of the board while Jb. Al-Hajj Md. Harun-ur-Rashid Khan is the vice President & the Company secretary is Jb. Md. Mofazzal Hossain (the Executive Vice President of the bank).

Chairman
Jb. Al-Hajj Badiur Rahman
Vice Chairman
S M Shameem Iqbal
Directors
Jb. Al-Hajj Nazmul Ahsan Khaled
Alhajj Md. Harun-ur-Rashid Khan
Alhajj Abdul Malek Mollah
Alhajj Hafez Md. Enayetullah
Alhajj Abdus Salam
Alhajj Abdul Moktadir
Alhajj Ahamedul Haque
Alhajj Abdus Samad
Alhajj Abu Naser Mohammad
Md. Ashik Hossain
Md. Rafiqul Islam
Anwar Hossain
Mohammd Emadur Rahman
Sabrina Farah Ahmed
Alhajj Niaz Ahmed
Dr. Momtaz Uddin Ahmed

2.7.1 Organizational Structure of the Bank:

2.8 Shariah Board of AIBL:

Scholars of high repute with extensive experience in law, economics & banking systems and specialising in law and finance as prescribed by Islamic Shariah make up the AIBL’s Fatwa & Shariah Supervision Board. The Board is appointed by the bank’s Board of Directors. The Shariah Board supervises the development and creation of innovative Shariah compliant investment and financing products and services. The Board is empowered to issue fatwas on any matter proposed to it by different business units of the bank. The Shariah auditors ensure that all the transactions are carried out in strict compliance to Islamic principles of banking. This framework along with a stringent compliance to rules has made AIBL the pioneering organization to practice Islamic finance in true letter and spirit. The name AIBL has come to signify innovation, financial dynamism, leadership and above all a complete assurance that all the transactions are free from Riba (interest).

2.8.1 The Board’s Role:

The Fatwa & Shariah Supervision Board oversees the application of different aspects of Shariah in the Bank. It also ensures that all transactions are in strict compliance with the right of contradicting (fatwa) any violating procedures, if found. The Board of Directors is obligated to obey the fatwas, irrespective of whether a unanimous or a majority consensus secured the decision (clause —- of the Bank’s Memorandum & Articles of Association).

Board meetings are held periodically or whenever the need arises. The rights of the Board are enshrined in Article Seven of the Bank’s Memorandum & Articles of Association (Clauses).

2.8.2 Important Duties of the Shariah Board:

2.8.3 Shariah Supervisors:

The Clause —- of the Bank’s Memorandum & Articles of Association requires the Board of Directors to appoint a Shariah Supervisor, responsible for monitoring all the Bank’s transactional procedures and assuring Shariah compliance.

Also the General Secretary of the Fatwa & Shariah Supervision Board, the Shariah Supervisor handles queries about the Bank’s administration from staff members, shareholders, depositors and customers, liaises with the Shariah auditors and provides them with guidance. He submits reports and suggestions to the Fatwa & Shariah Supervision Board and to the Chairman of the Board of Directors. The position also calls for participation in the Bank’s training programmes.

2.8.4 Shariah Auditing:

The supervisory function forms a part of the Shariah Supervision procedures, its main task is to check Shariah compliance under the guidance of the Shariah Supervisor.

The auditors continuously review the Bank’s transactional procedures to ensure adherence to the framework created by the Fatwa & Shariah Supervision Board. The Shariah auditors submit periodic reports to the Shariah Supervisor to monitor and maintain the Shariah compliance.

2.8.5 Members of AIBL’s Fatwa and Shariah:

Supervision Board are:

Sl Name of the board Designation
01 Jb. Maolana Md Siddiqur Rahman Chairman
02 Janab Al-Hajj Md. Anowar Hossain Member
03 Janab Moulana Abu Sayeed Muhammad Omar Ali Member
04 Janab Mufti Muinul Islam Member
05 Janab Al-Hajj AZM Shamsul Alam Member
06 Jb. Md. Abdur Rahim Khan Secretary (CC)

2.9 Branch-Location all over Bangladesh:

Dhaka Division (23)
Sylhet Division (06)
Barishal Division (3)
Chittagong Division (08)
Khulna Division (05)
Rajshahi Division (5)
1. Motijheel Bruch
2. Moulvi Bazar
3. Nowabpur Road
4. VIP Road
5. Corporate Branch Motijheel
6. New Elephant Road
7. Uttara Model Town
8. North-South Road
9. Bonani
10. Mirpur
11. Mouchak
12. Dhanmondi
13. Madhabdi
14. Pagla
15. Jaydebpur
16. Mohammadpur Krishi Market
17. Narayangonj
18. Mymensin
19. Dilkius
20. Islampur
21.Jatrabari(west)
22.Jatrabari(East)
23. Nikunjo
1. Laldhigirpar
2. Rupashpur
3. Zinda Bazar
4. Moulvi Bazar
5. Ambarkhana Branch
6. Beani Bazar Branch
1.Brishal
2.Jhalakathi
3. Mongla
1. Agrabad
2. Khatungonj
3.Chowmouhani
4. R Nizam Road
5. Companygonj
6. Comilla
7. Gallai
8. Jubilee Road
1. Khulna
2. Jessore
3. Banapole
4. Shakhira
5. Chuknagar
1. Rajshahi
2. Saidpur
3. Mohadebpur
4. Bogra
5. Satkhira

 2.10 Schedule of Charges: Al-Arafah Islami Bank Ltd. Schedule of Charges on Effect from 01/07/2008
 
1 Charges and fees for On line accounts:
Description of Services Charges
Tk- 20,000/- Deposits and withdrwal On line Tk-20/-
For every subsiquent deposit and withdrawal of Tk-1000/- Tk-0.5/-
Largest online Chage Tk-1000/-
1.1 Service Charges:
Al-Wadiah Current Account Tk-250/- (1/2 Year)
Mudaraba Short Notice Account Deposit Tk-250/- (1/2 Year)
Mudaraba Savings Account Tk-150/- (1/2 Year)
1.2 Service Charge:
Foreign Currency Accounts-RFCD,NFCD etc No Charge
NRB A/C for IPO/BO application Tk-1000/-
1.3 Minimum Deposit for opening Account:
Al-Wadiah Current Account Tk-2000/-
Mudaraba Short Notice Account Deposit Tk-5000/-
Mudaraba Savings Account Tk-500/-
1.4 Minimum Balance in the Account:
Al-Wadiah Current Account Tk-2000/-
Mudaraba Short Notice Account Deposit Tk-5000/-
Mudaraba Savings Account Tk-500/-
1.5 Account Closing Charges:
Al-Wadiah Current Account Tk-300/-
Mudaraba Short Notice Account Deposit Tk-300/-
Mudaraba Savings Account Tk-150/-
1.6 Dormant Account reopening charges:
To open Dormant Account Tk-200/-
1.7 Charges for issueing Cheque book: 
Charge for giving cheque book 2.5/- per page
1.8 Account Statement charges:
Regular Statement (All kinds of Accounts )1st time (Half yearly) No Charge
Duplicate Statement (All kinds of Accounts) Tk-200/-
Monthly Statement/Daily Statement Tk-100/- (One time)
1.9 Charges for Certificate/ report:
Balance /Profit Certificate Tk-100/-
Solvency Certificate Tk-500/-
Tax/Vat Certificate Tk-200/-
Credit/Solvency Information (Local) to 3rd Party Tk-500/-
Certificate of Inward remittance Tk-200/-
Certificate of Purchase /Encashment of Boand /Securities Tk-200/-
Duplicate Advice more than 6 Month old Tk-300/-
Issue of any other certificate Tk-300/-
Issue of any other duplicate Certificate Tk-300/-
Attestation of Certificate Tk-300/-
Attestation of Account Statement (Any type) Tk-200/-
2.0 Description of Charges and fees about Local Remittance: 
 2.1 Description of Services Charges
Bangladesh Bank Cheque Issuance Fee
Bangladesh Bank Cheque Issuance Fee Tk-250/-
2.2 Stop Payment Charge:
Stop Payment instruction on Cheque Tk-100/-(per instruction)
Stop Payment instruction Cancellation Tk-100/-((per instruction)
2.3 Cheque Return Fee:
Bounced cheque drawn on us (Cash,Clearing or transfer) Tk-200/-(per instance)
Cheque Return unpaid from Clearing House Tk-100/-((per instance)
2.4 Local Cheque Collection Fee:
Local Cheque Collection under Clearing House No Charge
Cheque Collection – where there is no Clearing House actual charge Tk-50/-
2.5 Collection of outstation cheques, Clean Bills/Documents(OBC):
Up to Tk. 25,000. 0.20% at least Tk-50/- + actual postal charge/ minimum Tk-25/-
Above Tk. 25,000 to Tk100,000. 0.20% at least Tk-100/- + actual postal charge/ minimum Tk-50/-
Above Tk. 100,001 to Tk500,000. 0.15% at least Tk-200/- + actual postal charge/ minimum Tk-50/-
Above Tk500,001. to 10,00,000 0.10% at least Tk-750/- height Tk-1,000/- + actual postal charge/ minimum Tk-50/-
Above Tk. 10,00,001 0.10% at least Tk-1000 height Tk-3,000/- + actual postal charge/ minimum Tk-50/-
2.6 Standing Instruction (Sl):
Standing instruction (Sl) creation Charge Tk-100 (One time)
Sl for Transfer of Funds between a/cs within same branch No Charge
Sl for Transfer of Funds within city branch Tk-100 (Per execution)
Sl for Transfer of Funds between inter city branch Tk-100 (Per execution)
Sl for Transfer of Funds of other banks Tk-100 (Per execution)
Failure of Sl due to insufficient fund Tk-100 (Per execution)
Amendment of Sl Tk-50 (Per execution)
Cancellation of Sl No Charge
2.7 Pay Order, TT, DD :
Upto 1 lac 20/-
Above 1 lac to 5 lac 30/-
Above 5 lac to 10 lac 50/-
Above 10 lac 100/-
2.8 Auxiliary Service Charge :
Internet Banking No Charge
SMS Banking No Charge
Phone Banking No Charge

2.11 Corporate Social Responsibilities of Al-Arafah Islami Bank Ltd.

2.11.1 Al-Arafah Islami Bank Foundation:

The Bank has a foundation launching philanthropic activities. Al-Arafah English Medium Madrasah and Al-Arafah Islami Bank Library are major two wings for launching philanthropic activities.

2.11.2 Al-Arafah English Medium Madrasaha:

Al-Arafah English Medium Madrasah has been established by the Al-Arafah Bank Foundation with a view to building next generation according to the ideals of peace and equality of Islam and to establish banking and other aspects of life through the way of Islam. The prime aim of this madrasah is to contribute towards building human resource and in the broader sense to ensure human welfare. With this view Al-Arafah Islami Bank Foundation has established an English medium Madrasah at Dhanmondi in 1999. Such institution upto O level of its kind is for the first time in Bangladesh.

2.11.3 Al-Arafah Islami Bank Library:

Library is the carrier & reservoir of knowledge. Al-Arafah Islami Bank Ltd. has shown that other than generating profit, it can also contribute significantly in the field of providing good source of knowledge by establishing a public library at 32, Topkhana Road, Chittagong Bhaban (1st floor), Dhaka, thus strengthening social development. It is situated in a sound, healthy surroundings. It harbors 23,000 books of reference for the researchers, students, professionals, bankers, physicians, engineers, politicians, writers or journalists, even for the kids. It is open to all from the year 2000 and well located & accessible to everybody. It procured some exceptional collection of books on religion, economics, banking, computer science, business administration, sociology, English & Arabic language and juvenile literature in Bangla, English, Urdu & Arabic, which are very rare.

The AIBL’s library houses a vast collection of more than 4,000 books on Islamic Fiqh law, economy, banking and Shariah. The library was primarily established with the aim of serving the Fatwa & Shariah Supervision Board’s research team and the AIBL staff. The facility is also accessible to the bank’s customers, researchers and students of higher education.

2.12 Micro Finance:

The economy of Bangladesh mostly depends on rural development. Poverty stands in the way of the growth of this economy. Although  numbers of NGOs and financial organizations work in the sub-urban and villages with a view to alleviating poverty, a very few are found working with the compliance of Islamic Sariah. It is a national responsibility to alleviate poverty from the rural area. To help change the socio-economic condition of the impoverished people of the villages, Al-Arafah Islami Bank Limited has initiated a project entitled “Krishi O Grameen Khudra Biniog Prokolpa (Microfinance)”. With this project, Bank is working for reduction of poverty, development in agricultural sectors, creation of job opportunities etc. We hope this will develop the socio-economic condition of a large segment of the rural folk.

It is a group based work. The main characteristics are:

2.12.1 Purpose:

2.12.2 Modes:

Working Capital Investment

2.12.3 Bai-Muajjal:

2.12.4 Documentation:

2.12.5 Eligibility:

2.12.6 Savings:

2.13 SME Banking:

Small and Medium Enterprise (SME) is playing a significant role to the growth of overall GDP of the country. Of all industrial productions, a huge part comes from SME. In order to boost up the small and medium enterprises of the country, Bangladesh Bank has recently advised the commercial banks to enhance the flow of investment and offered directives and policies to supervise and monitor this sector.

As SME has emerged as a thrust sector, Al-Arafah Islami Bank Ltd. also considers it importance to extend and enhance finance for the same. Keeping this idea in the forefront, the bank has prepared an integrated policies, methods and procedures for SME investment.

2.13.1 Purpose:

2.13.2 Modes:

2.13.3 Eligibility:

2.13.4 Securities Against Investment:

2.14 Foreign Trade:

Foreign Trade is one of the pioneer business activities of the bank conducted by and routed through the International Division. International Division of AIBL has been functioning successfully having a good number of skilled officials headed by Senior Vice President who has a long experience in this business line.

In order to accelarate/promote the Foreign Exchange business of the bank , man power of this Division has been exerting their all out efforts in establishing Correspondent Banking Relationship with world reputed banks , in hunting corpororate clients to boost up Import & Export business by rendering their best and skilled services.

International Division has been giving utmost importance to the functioning of treasury operation in dealing as it has always been considered as an important avenue for generating income of the bank . Besides, ID is continuing its utmost effort to establish the remmitance arrangements with the world renowned companies to bring the wage earners remmittance from the Bangladeshi nationals in abroad to contribute in widening the national revenue of the country for increasing remittance.As a result significant result has been made in the Foreign Trade.

2.15 SWOT Analysis:

 

" 6,"

A BEARER BOND

","

A bearer bond is a bond or debt security issued by a business entity such as a corporation, or a government. It is a type of bond issued by a company, a corporation, or government for which there are no records maintained about the ownership of the instrument, and whoever has the custody of the instrument is the owner of the instrument. As a bearer instrument, it differs from the more common types of investment securities in that it is unregistered—no records are kept of the owner, or the transactions involving ownership. It is a fixed-income security that is owned by the holder, or bearer, rather than by a registered owner. Whoever physically holds the paper on which the bond is issued is the presumptive owner of the instrument. These bonds are frequently used by dishonest individuals, who choose not to declare their gains on these investments, in an effort to evade taxes. This is useful for investors who wish to retain anonymity.

The bearer bond is a physical certificate with coupons attached that are used to redeem the interest payments. These bonds are fixed-income instruments whose certificates do not contain the holder’s personal information. Such bonds are held in physical form by the owner, who receives interest payments by physically detaching coupons from the bond certificate and delivering them to the paying agent.

Some of the advantages are as follows:

Recovery of the value of a bearer bond in the event of its loss, theft, or destruction is usually impossible. Some relief is possible in the case of United States public debt. Furthermore, while all bond types state maturity dates and interest rates, bearer bond coupons for interest payments are physically attached to the security and must be submitted to an authorized agent, in order to receive payment. Most bonds are issued to a particular individual in that person’s name; bearer bonds belong to whoever holds them. The bondholder is required to submit the coupons to a bank for payment and then redeem the physical certificate when the bond reaches the maturity date. Bearer bonds are unregistered. This means that the interest and principal for the bearer bond are due to whoever is in possession of the bond.

Some of the limitations are as follows:

" 7,"

A Case of Living Stone Limited With a project estimates

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View With Charts And Images

A Case of Living Stone Limited With a project estimates”

Real State is directly related to human life and therefore, its manufacturers have immense social responsibility of providing safe and effective housing, demanding uncompromising efforts, at all levels of its activities. Living Stone Limited.” The leading housing sector company in Bangladesh has been making every effort to ensure the effectiveness of the apartment that it produces. Engineers and Architects of the company reply on the efficacy of the design of Living Stone Limited.” At the time of critical needs demonstrating their confidence and trust on Living Stone products. Living Stone has a remarkable mission statement, which is being seriously pursued in its thoughts and actions. An increasing amount of contribution is ploughed back into social causes demonstrating Living Stones commitment to the nation. As we continue to grow, it should not only benefit Living Stone Ltd itself but it should also positively contribute to the nation and society where we live.

In Living Stone believe that they construct and sell apartment to provide accommodation, happiness and smile back in life of our fellow citizens. We intend to help realize the ultimate aspiration of the nation for a lifetime of security ensuring a safety tomorrow for the people.

Living Stone is a leading edge Constriction & Marketing Company, based in Dhaka, Bangladesh and is acclaimed for outstanding product quality, world-class Constriction facilities, product development capabilities and outstanding service.

We produce and market ‘branded generics’ for almost all type of apartments’ national and international markets. We also construct commercial complex, duplex villa, and bungalow international brands of leading multinational companies. We partner our activities to the humanities quest for longer, healthier, and happier life.

We employ more than 300 staff, including over 50 qualified specialists such as Architect, Engineers, Lawyers, Planer,etc.

Objectives:

The study has been carried out with the following Objectives.

Methodology:

A multi-stage research methodology was used for collecting primary & secondary data. Since there is scarcity of published materials on real estate business in Bangladesh, the study was mainly based on secondary sources of data. The company to divide Dhaka city area into several zones conducted extensive physical survey. On the basis of the survey, the Dhaka city was divided into six zones. For dividing the Dhaka city, the company basically uses the metropolitan area and on the basis of the income group, class of the society, business zones, official zones in the city. Basically there is no use of direct questionnaires to survey. It’s depending on the basis of the existing companies project location. The income level of the society and the business zone of the city select the project locations. Real estate housing association of Bangladesh and the company’s own marketing section help to collecting the secondary data. The pricing policy was collected by the training session of the company. Various data and information were reviewed from secondary sources like reports, articles, journals, prospectus and other printed materials.

Sources of data:

Primary sources:

Before discussing about the primary sources of this research project let us try to know first of the basic concept regarding primary sources. The primary sources are that information which has been collected for the first time relevant with –the research project. In this regard the primary sources are the direct personal observation from the related Person & office.

Secondary sources:

Different types of secondary data are included in this study report. Sources of secondary information can be defined as follows

Internal Sources:

· Brochures,

· Annual report.

· Unpublished information from the company

· Internal records

· Website

External Sources:

As an external secondary source of information taken data from some other reports of other companies & other sources.

Limitations of the study

Every matter has got some limitation. So, this is also not an exception. The Limitation of this report research are been stated bellow.

1) The attendants of different personnel are sometimes not co?operative in survey activities.

2) There were some restrictions to have access to the information confidential by concern authority.

3) Communication gap among different personnel because of excessive work.

4) Lack of accessibility to respondents.

5) The executives and authority were very busy.

6) Respondents were not always interested to spend time for interview

Introduction

Living Stone Ltd. Is a real estate construction and marketing company involved in developing residential and commercial projects. Living Stone Ltd. Provides an exciting adventure and experience for landowners/apartment owners to build their home with us. Our company is committed to maintaining quality while placing special emphasis on culture and style. We have already completed a number of apartment projects in areas like Dhanmondi, Old DOHS, Lalmatia, Uttara, Green Road, etc.

Our site selection, design and planning are always based on professional methodology and business acumen. At every level of work we rely on actual field tests and standard verification of super-structural raw materials. Overall supervision and monitoring fed into our Management Information System (MIS) allow us to plan, predict, and implement our work schedule in a seamless and efficient manner.

We consider Design to be one of our key strengths since we develop several alternative plans for each project before deciding on a final one. We are very critical when it comes to structural safety as we take all known measures and safety methods. In construction our strength is in the structure design and its implementation. At every phase of RCC (e.g. Foundation, column, slabs) we conduct concrete cylinder tests and reinforcement tests.

We also believe our behavior with our clients is undoubtedly different from our competitors. This of course our clients would be the best people to verify. We always try to do that little bit extra for each client depending on their specific requirements and needs of the moment. Our aim is to offer value for our products and services which are outstandingly different and wherever possible better than our competitors.

Vision

“If there is one characteristic that has typified the LIVING STONE LIMITED approach it is Vision to be the best of our nature and human resource. A vision to establish our group and country as respected and valued regional presence”.

Mission

“Each of our activities must benefit and add value of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact; namely: our employees, our customers, our business associates, our fellow citizens.

MANAGEMENT

The management of LIVING STONE LIMITED is simply exceptional in comparison to any other listed companies in this country. It has a blend of professionalism and wisdom, which plays a key role in managing the champion organization.

The Board of Directors

Harun Ur Rashid Chairman
Mohammed Iqbal MD
Mr. Romel Ahmed Director

Department Of Living Stone

LIVING STONE operates its business through extensive departmentalization as needed. This is for specified effectiveness of the tasks. The business activities of LIVING STONE are directed, controlled and monitored from the head office of LIVING STONE LIMITED. Located at house # 50, road # 2 Old D.O.H.S,Banani , Dhaka. Being a leading Real Estate company in the country it employs good number of people are different departments to keep its business thriving. The following major departments coordinate the activities of LIVING STONE

 

 

CPM Department

CPM stands for Central Product Management that takes care the total marketing of a product. It includes

Planning Department

The planning department ensures smoothness of total operation of LSL. It is concerned with the following:

Based on sales forecast from the CPM planning department breaks up the yearly sales forecast to monthly basis and develop the planning of Sales Promotion, Construction, purchase and stock of raw material. It also initiates the negotiation of Sales. It refers the suppliers’ quotations to the purchase departments.

Planning department try to ensure buffer stock of three months of all the raw materials to meet any untoward events or circumstances in market.

Marketing & Promotion Dept:

Advertising and promotion are an integral part of our Social and Economic system. In our complex society, Advertising has involved into a vital communications system for both consumer and business. The ability of advertising and other promotional methods deliver careful prepared messages to target audiences has given them a major role in the marketing programs of most organizations. Companies ranging from large multinational corporations to small retailers increasingly rely on advertising and promotion to help them market products and services. In market based economies, consumers have learned to rely on advertising and other forms of promotion for information they can use in making purchase decisions

Sales Department

To follow the recent management of the business world the sales department has been completely separated from marketing department. It sets the forecast in coordination with marketing department and upon fixation of the sales it is the responsibility of the sales department to realize the yearly sales volume forecasted.

Marketing Executives are farthest unit of the organization. They are to generate demand for products. They are trained before sent for field.

Purchase Department

Training Department

Training department is to provide the training to the all executive medical representatives of the company. This training is necessary to improve the quality of job-related function. The curriculum of training varies from group to group. The department basically offers 4 types of training programs:

International Marketing Department

Functions of the international marketing department are.

Marketing of apartment product in abroad is not like as it is in Bangladesh. Product can not enjoy advertising like any other consumer products. So personal selling is the way the products can be advertised and sold. As OTC products do not require any rules to buy or sell it has a chance to go through print advertising and TV advertising. But, marketing of POP and apartment products can be done by personal selling.

After analyzing the buyer’s attitude, the second important factor is to make the sales force effective and efficient. International marketing department determine the process in which way they will market the products. It depends on the various factors.

MIS Department

The MIS department is the department that takes care of total automation of LSL. It supports the hardware and network of the company. It maintains the automation regularly and keeps the pace with the global IT. The MIS department also maintains the telephonic conversation between all side office and the head-office.

Though separately dealt before, recently software department has been incorporated with MIS department. This software section is to work for developing software solutions as per organizational requirements. It also supports the other companies’ requirements of the Constriction division. The facilities of MIS department are available round the clock for 24 hours.

Marketing Strategies of Living Stone Limited

Sales and Marketing Strategies

The following variable plays the most important part behind the success of Living Stone Limited In Bangladesh and also across the globe. They are

Quality Controls

Quality is the ultimate factor that works in the mind of the customers which create brand image at the end of day. The Living Stone Limited is known for its products. The strength of LSL lays in its quality controls system and up to date construction facilities. It has established construction facilities conforming to global standards. During all stages of construction operation from receiving raw material to the release of the finished product the requirement are strictly adopted.

Product Innovation

Product innovation is successive factor behind the success of Living Stone Limited in the construction company of Bangladesh. LSL knew that in order to survive in this challenging market product innovation is need to focus on deeply. So, as result research and development department were established in order to innovate new product, improving construction process, product quality for further strengthen the position of LSL in the company.

Use of Modern Technology In Construction

Living Stone Limited is equipped with modern and updated technology in their constriction process. In the production process LSL is adopting all modern technology which strengthens the quality of product in more efficient manner. From my point view I think this is another reason for the success of LSL i.e. Bangladesh and also across the globe.

People

LSL’s most vital resource is its people. Its dedicated team of professionals form various disciplines are integrated in conducive environment to achieve companies objective. The people of LSL strongly believe in the company’s philosophy of serving the nation and contributing to the society. LSL’s over 150 young, energetic, professionals ensures the timely promotion and smooth running of the product to every parts of the country. Thus this is another factor for the success of LSL.

At the conclusion of this section I would like to say that now LIVING STONE is a name of unique quality, commitment for society, customers and all parties involved with LSL. Co-ordination of this factor is another reason behind the success of LSL. If LSL could not make the co-ordination between these variables then the situation might have been different from now.

Marketing Mix

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. Marketing mix is the set of controllable variables of marketing .In brief it is termed as the 4Ps of marketing which stands for product, price, place & promotion.

Product

LSL does not simply believe in introducing new product it also believes in creating the difference in the market place by offering impeccable quality. LSL stands on the heritage of bringing innovative building to people. LSL’s products are all intended to help people to live healthy & happy lives. LSL’s portfolio o features a range of high quality, effective products, some are the first of their kind and many are ranked number one in their area. A lean of highly people qualified people sets LSL’s product feature and attribute. Arts and science are blended together inside LSL’s products. LSL’s products are designed and engineered in such manner that their overall presentation, size, shape, location, etc are completely different from those of the competitors.

Place

The method for making your product available to the consumer marketing of product is very important no matter how good product is. In case LIVING STONE the marketing of LSL product is really good. In fact LSL has a marketing unit I & I services Ltd which is the sales divisions. It maintained a large network and cover all over the prime location of Dhaka city.

In the real estate market, sale is very important. Having made all decisions of marketing properly, a company will not be successful if it cannot sales its products well.

Price

In the real estate market of Bangladesh, there is not much price differentiation in General among the different companies due to the highly competitive nature of the company. Whatever price differentiation is there, it is between the quality and the commitment of the companies.

More over, pricing is not a very important factor due to the nature of the product. Quality is more important. However, the purchasing capacity of the buyer is also an important consideration. This fore, it is important for the companies to charge a reasonable price for their living stone product.

Promotion

Due to high competition in this sector among the different players in the market, aggressive marketing have been adopted by the different companies. In this regard, promotion has become a useful tool to fight competition. More over, promotional materials of companies have an impact on buyers needs. Therefore, different companies have set out different promotional tools to increase market share.

How apartment building business works

Developer and landowner:

Development buys the land or come in to an agreement with the landowner to develop the land. The basis of agreement may be the sharing of apartments or cash payments or both. Sometimes the landowner may take initiative and find a suitable developer for development of this land with the aforesaid agreement. But the very recent phenomenon is different that the developers are searching for vacant land for developing projects because number developers increased as compared to vacant and suitable land in the urban areas.

Designer:

Any developer or landowner may come up with the design. Usually the developer sets the design with the consent of landowner is other party.

Financier:

Finance is the vital factor of the development of apartment projects, For starting a project huge amount of cash is required, some arc fixed capital and some are working capital. There are so many specialized financial institutions, both govt. And private sector e.g. BHBFC, DBH, NHFI and commercial banks, private as well as govt. Sector.

Marketer:

The developer performs the entire jobs relating to marketing of the projects.

Contractor:

The Developer or Any Other Constructing Firm Appointed By Them

Construction time:

The developers in Dhaka city to take on an average 2.5 years to complete the construction of the apartment from the date of first installment given by the buyers. Interestingly, there is no provision for any kind of delinquent charge be the developer to the buyer if the developers breaks the commitment and makes deliberate delay in completing the projects or handing over the actual possession of the apartment to the buyer.

Mode of payment:

In this survey it is found that the payment mode completely varies from case to case. Basically the developer starts the project after receiving 15% to 20% of the apartment price from as many apartments as possible. After receiving the down payment, the developers then split the remaining amount, to be payable, into 5 to 8 installments that varies from case to case as per negotiation between the buyer and the developer,

Transfer of ownership:

As there is no provision for registration of apartment, the title of the land determines the ownership of the apartment. Developer and landowner enter into a contract for the sale of the land. Due to high cost of land registration and to keep low investment by not purchasing the land, developers agree to give some apartment to the landowner. So the developer docs not have to transfer ownership into his name and in return the landowner issues an irrevocable power of attorney to the developer authorizing him to retransfer ownership to the ultimate to the ultimate owner of the apartment. There arc two types of ownership adjustment of the apartment.

Joint registration:

In case joint or proportionate registration the developer directly registers the ownership of the land in the name of the buyer. That is if there are 10 apartments on a 10 katha land then the ownership will be transferred in the name of each apartment buyer by registering 1 katha land, l-‘or RAJ UK leasehold property, the land is jointly registered in the name of all apartment owners along with a Baina Nama (apartment distribution schedule) to distinguish ownership of each apartment. However, an individual document for each apartment is drawn up so that subsequently each may be independently.

Cooperative ownership or shareholding in a limited company:

In this process the buyers from cooperative society a limited company. The title of the land is transferred to the name of the society. Leach member of the SOCIETY. Being an apartment owner, holds an equal share of the society and is free to transfer the ownership of the apartment with apartment distribution schedule clearly specified.

Identifying the location of the projects:

Prospective buyers of the real estate property consider the locationbefore taking a final decision to buy. It is well to keep in mind, while land and improvements arc stationery, the surrounding neighborhood or the community in which the property is situated is in a significant state of flux and movement Changes in the immediate environment have a significant effect upon property values.

J M C Tower

House – 18, Road – 13 (New),

Dhanmondi, Dhaka.

 North Facing
2100 sft
11 Storied & 10 Apartments
Handover in 1998
Avalon

House – 28/A, Road – 3,

Old DOHS, Banani, Dhaka.

 Park View Corner Plot
3300 sft
6 Storied & 6 Apartments
Handover in 1999
Ivory Crest

House – 8/A/D, Road – 13,

Shobhanbagh, Dhanmondi, Dhaka.

 West Facing
1750 sft
9 Storied & 7 Apartments
Handover in 2001
Touch Stone

Plot – 25/11/A, Tallabagh,

Indira Road, Dhaka.

 East Facing
800, 1165 & 1780 sft
9 Storied & 24 Apartments
Handover in 2002
Silver Crest

1/8 Road – 5, Block – A,

Lalamatia, Dhaka.

 South Facing
2100 sft
9 Storied & 14 Apartments
Handover in 2003
Zenith Tower

House – 8/A/1, Road – 14 (New),

Shobhanbagh, Dhanmondi, Dhaka.

 South Facing
1100 – 2260 sft
15 Storied & 60 Apartments
Handover in 2003
Mile Stone

Plot – 2, Road – 6,

Sector – 3, Uttara, Dhaka.

 South Facing
2637 & 2784 sft
6 Storied & 10 Apartments
Handover in 2004
Green Stone

7 & 8 Green Square, Green Rood, Dhaka.

 South Facing
800 – 2000 sft
12 Storied & 42 Apartments
Handover in 2005
Stream Stone

Plot – 16, Road – 1,

Sector – 10, Uttara, Dhaka.

 South & Lake Facing
2765 sft
6 Storied & 7 Apartments
Handover in 2005
Villa Feroza

7/18 Block – B, Lalamatia, Dhaka.

 South Facing
1426 & 1420 sft
9 Storied & 16 Apartments
Handover in 2005
Shimmering Leaves

Plot – 53, Road – 6,

Block – C, Banani, Dhaka.

 Park Facing
1855 sft
6 Storied & 10 Apartments
Commercial Cove

Plot – 56, Road – 132,

Gulshan – 1, Dhaka.

 South Facing
Up to 3438 sft
9 Storied & 8 Commercial Floors
Handover in 2007
Park Stone

Plot – 32, Road – 7,

Block – F, Banani, Dhaka.

 Park & South Facing
1910 sft & 2642 sft
6 Storied & 11 Apartments
Handover in 2007
Glowing Stone

Plot – 54, Road – 11,

Block – C, Banani, Dhaka.

 South Facing
Up to 3552 sft
6 Storied & 5 Commercial Floors
Handover in 2008
Pearl

Plot – 36, Road – 13,

Sector – 3, Uttara, Dhaka.

 South Facing
2209 sft & 2177 sft
6 Storied & 12 Apartments
Handover in 2008
Silver Stone

Opposite Old Airport,

651, Shaheenbagh, Dhaka.

 South West Corner Plot
1573, 1465, 1345 & 1305 sft
9 Storied & 14 Apartments
Handover in 2008

Complete Projects

Ongoing Projects

Babylonia

116, Kazi Office Lane,

Boro Maghbazar, Dhaka.

 South Facing
5th Floor = 1058 sft;

10-14th Floor = 635 sft;
1 & 2 Beds
15 Storied
Blue Stone

Plot-68, Road-10/B,

Sector-10, Uttara, Dhaka.

 East Facing
A = 1250 sft; B = 1250 sft; C = 1100 sft.
3 Beds
9 Storied
Dream Stone

House – 91/M, Road – 7/A,

Dhanmondi R/A, Dhaka.

 South Facing
1st Floor = 2679 sft;

11th Floor A = 2000 sft;

11th Floor B = 2386 sft;
4 Beds
12 Storied
Living Al-Baraka

Plot – 66, Road – 5,

Sector – 12, Uttara, Dhaka.

 West Facing
A = 900 sft; B = 900 sft
3 Beds
6 Storied
Living Carnival

Plot – 1, Road – 14,

Block – J, Baridhara, Dhaka.

 East Facing
A = 1234 sft; B = 1230 sft;
3 Beds
6 Storied
Living Crystal

Plot – 50, Road – 10,

Sector – 10, Uttara, Dhaka.

 South Facing
A = 2003 sft; B = 2003 sft;

C = 1387 sft; D = 1387 sft;
3 Beds
13 Storied
Living Dhara

Plot-12, Road-2,

Block-J, Baridhara, Dhaka.

 North Facing
A = 1125 sft; B = 1125 sft;
3 Beds
6 Storied
Living Enam

Plot – 186, Road – 9/A,

West Dhanmondi R/A, Dhaka.

 East Facing
A = 840 sft; B = 800 sft;

C = 700 sft; D = 720 sft;
2 & 3 Beds
6 Storied
Living Jasmine

Plot – 18, Road – 1,

Sector – 10, Uttara, Dhaka.

 South & Lake Facing
A = 1452 sft; B = 1452 sft;
3 Beds
6 Storied
A = 1452 sft; B = 1452 sft;
3 Beds
6 Storied
Moon Stone

Plot – 12, Road – 2/F,

Sector – 4, Uttara, Dhaka.

 West Facing
A = 1763 sft; B = 1721 sft; C = 1315 sft;
3 Beds
6 Storied
Sand Stone

9/3 Progoti Sharani,

Shahjadpur, Dhaka.

 South Facing
A = 860 sft; B = 535 sft; C = 725 sft;
2 Beds
9 Storied

Up Coming Projects

Living Park

65 South Bashaboo, Dhaka.

 North East Corner Plot
1132 sft; 1033 sft;
3 Beds
8 Storied

Factor to Be Considered

For

Property Buyers & Sellers

Guideline For First Time Home Buyers.

1. Advice to help when you’re buying a Home

First time home buyers might fell better to know that there’re not the only ones who feel confused about the process of buying a home. Nearly all home buyers feel the same way, even if they’ve bought a house in the past, because it’s easy to forget the home buying steps you took to get there once the event is behind you. Get Educated

Before you begin, get educated about the home buying customs where you live. Relatives or friends who live in another state might have some good general advice for you, but chances are the process is very different in their area, so avoid the mistake of relying solely on their advice to make important decisions.

2. So How Do You Get Educated

Talk to a real estate agent about the typical home buying scenario. This is not a meeting that should lead to an agreement for the agent to represent you.

It’s simply a general discussion about the real estate customs in your area. An agent who won’t take fifteen minutes to help you understand what to expect when you’re buying a home isn’t much of an agent, so if the first few calls don’t produce someone who will help, keep looking. If you don’t want to talk with a real estate agent how about a bank loan officer or mortgage broker? They look at home buying from a different perspective, but can usually give you a basic overview of the process.

3. Questions to Ask

If you decide to work with an agent, will the agent help you compose you offer to purchase a home? If not, who does help?

If the agent uses fill-in-the-blanks forms, ask for a blank sample copy to take home and study.

What types of disclosers are sellers in your area required to give to buyers? Can the agent give you a sample copy of typical disclosures?

What types of home inspections are standard in your area? Are there other inspections that the agent recommends?

How much do the inspections usually cost? Are they regarded as a buyer expense?

When are inspections done?

Is a survey required for most transactions? If so, who typically pays for it, the buyer or the seller?

Who does the title search to verify that the deed is problem free, attorneys or a title company? What’s the average cost for that service?

Who acts as settlement agent, the person who puts together final paperwork for you to sign? (Attorney, title company personnel, real estate broker, other)?

Other than loan costs, what’s the average total cost for other closing fees?

Taxes, settlement agent fees, etc.

4. How long does it usually take to close on a home once an offer is accepted?

That’s a good start. After you have the answers to those questions, you’ll have a better feeling for the basic customs in your area. Always Keep a Cool Head Even simple problems can be a burden when you have so many details to take care of, so don’t over-react if you hit a few snags on the way to closing. Keep a cool head and work with the people helping you through the transaction to resolve any issues that pop up.

At this point, you remaining steps are no different than the steps nearly every home buyer must take. It’s time to start digging into the details you need to get through the home buying process.

10 Things You Shouldn’t Do When you’re Buying A Home

Its Not Yours Until the Paperwork is Complete The sellers accepted your offer to purchase. The home is officially under contract and you’re counting down the days to closing. The lender pre-approved you, so buying the house is a sure thing, right? Sorry, but nothing is certain until the keys are in your hands. There are still major hurdles to get past before you close and your actions between now and closing can create headaches, slowdowns, and even break the deal.

Don’t Make a Major Purchase

  1. You’ve just found out your credit is A+. That’s great news, because a new car would look fantastic in the driveway of your new home. But hang on-if you are depending on a mortgage to move in, you’d best wait until after closing to buy the car. An increase in your debt to income ratio reduces the amount of monthly income avail-able for your mortgage payment.

If you tack on a higher car payment, the bank might decide you cannot afford the home. Using cash reserves when approving your mortgage. If you must make a major purchase before closing, talk t your loan officer before you do it.

  1. Don’t Change Jobs Unless It’s Necessary

Banks like to see a consistent job history. They aren’t usually as nervous if you change jobs within the same field, but it’s better to stay put until the keys to the house are in your hand.

  1. Don’t Give an Earnest Money Deposit Directly to a For Sale By Owner Seller

Your good faith deposit should go into a trust account. Some for sale by owner sellers don’t understand that funds are to be applied to your expenses at closing. I’ve heard many stories about sellers who spent buyer’s deposit money prior to closing. When the transactions didn’t take place for valid reasons-such as financing or repair problems, the buyers had to many fight to retrieve their funds. Find and attorney or other neutral party who will hold the deposit for you until closing day and make sure your contract dictates what happens to the funds if the transaction doesn’t close.

  1. Don’t Let Your Emotions Take Over

Keep a cool head during the entire closing process, especially during and after an inspection. Be realistic. No home is perfect, especially older homes. Don’t let the seller’s refusal to do a small repair kill the deal on a home you truly love. It’s not at all unusual for new owners to take care of some repairs themselves. On the other hand, don’t fall so much in love with the house that you’ll buy it no matter what needs to be done-unless you’re absolutely sure you can handle it emotionally and financially. Decide what type of repairs you can realistically tackle, the stick with the decision. Background Reading Do you need a Home Inspection? And Taking Your Final Walk Through

  1. Don’t Forget to Switch Utilities

That sounds simple, but you’d be surprised how many people forget to apply for utility service at their new home. Call the utility companies as soon as you have a contract. Find out how many days lead time they need to switch the service, then get back with them when you have a firm closing date. Don’t forget to discontinue services at your old home.

  1. Line Up Your Hazard Insurance

A no-brainer, right? But it’s another often-forgotten task that buyers scramble to take care of at the last minute. Before closing. Your lender will want to see an insurance binder showing you have coverage for the new home. Get it as early as possible so that closing won’t be delayed. In some locations, additional types of insurance coverage might be necessary. Talk to your lender about insurance requirements well before the closing date. Background Reading Insuring Your New Home

  1. Don’t Become Best Friends with the Seller

I’ll get some flack on this one. It’s great to be friendly, but don’t get into too many long discussions with the sellers, because personality conflicts often cloud judgments. Remember, this is their home. You’re no doubt excited about moving in, and if you didn’t like the house you wouldn’t have offered to buy it. But you’ll make changes-everyone does. A casual statement about “ripping up that ugly carpet” might be hurtful enough to keep the seller from negotiating with you about repairs or other issues that crop up.

  1. Don’t Panic if the Appraisal Comes in Low

At least not a first. There ate some things you (and your agent) can do to correct the problem. Study your options.

Don’t Go It Alone

  1. If you’re working with an agent, it’s the agent’s duty to help you make it to closing. The agent should be tracking many of the day to day details that involve the lender, the seller, or the seller’s agent. Background Reading Working with Agents
  1. Don’t Ignore Lender Requirements

Know what is expected of you and take care of it. For instance, a Certificate of Eligibility is required to move forward on a VA loan. That’s something you must handle yourself. Answer lender questions and provide required paperwork as quickly as possible-your closing depends on it. Important disclaimer information about this about site.

10 Steps You Should Take Before You Sell Your Home

01. Essential Home Selling Decisions

The home selling process differs from state to state, but there are some important steps that all home sellers should take before they put their homes on the market. Get Pre-Approved for a Home Loan. I’ve known sellers who signed a contract to sell their house before they knew if they were qualified to buy another. Either their financial circumstances had changed since their last purchase, and they could not longer quality for a loan, or they weren’t able to sell at a price that allowed them to buy the type of replacement house they wanted. They ended up renting or buying something that was far from ideal

.

Before you decide to sell the house, get pre-approved by a lender you trust and research the housing market in the area where you wish to live so that you have a good idea how much it will take to buy a replacement.

How To Start Researching? Start looking for two types of real estate: houses that seem to match the one you’d like to buy and houses that seem similar to your current home.

How do the categories compare in price? Can you handle the difference if you’re planning a step up? Pick up free For Sale publications outside the grocery store, or wherever you find them in your town.

Search the Internet for homes for sale in your area and read real estate ads in your local newspapers. You won’t find house locations without making phone calls, but browsing the general market is a good start.

See: Are You Pre-Approved for a Mortgage? And to compare for-sale homes to your own, learn how to Measure Residential Square Footage.

Check Your Mortgage Payoff

Make a call to your lender to check the payoff for your current home mortgage. You’ll need the figure to complete Step 6.

How Much Is The House Worth

Determine your home’s fair market value. Real Estate agents will usually help you determine value as a courtesy, but you might prefer to order an appraisal. Do both of the above if you want to be sure the price is right.

Estimate Your Costs to Sell

Real estate commission if you use an agency to sell. Advertising costs, signs, other fees if you plan to sell by owner. Attorney, closing agent or other professional fees.

Excise tax for the sale.

Prorated costs for your share of annual expenses, such as property taxes, home owner association fees, and fuel tank rentals.

Any other fees typically paid by the seller in your area (surveys, inspections, etc.)

If you are unsure of costs, ask a real estate agent. Agents deal with transactions every day and can give you a very close estimate of seller closing costs.

  1. Determine You Costs to Acquire a New Home

Total your costs to acquire a new home: moving expenses, loan costs, down payment, home inspections, title work and policy, paying for a new hazard insurance policy-all expenses related to buying a home. Your lender should give you a disclosure of estimated costs when you apply for pre-approval.

  1. Calculate Your Estimated Proceeds

Deduct your mortgage payoff from your home’s fair market value.

Deduct your costs to sell from the remainder to get an estimate of the proceeds you will be paid at closing.

Will your closing proceeds cover your costs to acquire a new home? If not, do you have cash or other funding to make up the difference?

  1. Make Necessary Repairs

Make all needed repairs unless you want the house to be regarded as a fixer-upper. I’m not referring to cosmetic updates, but to items in need of repair. Anything that’s obviously broken gives potential buyers a reason to submit a lower offer.

For a preview of several repair hot spots that worry buyers the most, read Passing Your Home Inspection.

  1. Get the House Ready to Show

Most houses need at least a little sniffing up before they are shown to potential buyers. Great curb appeal, fresh paint indoors (and sometimes out), organized closets and cabinets, sparking clean windows and appliances, and a clutter-free atmosphere are essential if you want the house to appeal to buyers.

Read: The Importance of Curb Appeal and Getting the House Ready for Showings for more prep advice.

  1. Get Psyched Up to Let People In

If you’re listing with a real estate agent, she’ll no doubt ask you to leave when the house is shown. Why? Because lurking sellers make buyers nervous-they don’t feel comfortable inspecting the house when they feel they are intruding.

Unless there’s a real reason for it, don’t ask your agent to be present for all showings. That’s the kiss of death for the best showing rates. Other agents want privacy with their buyers and they don’t usually have time to work around your agent’s schedule. Make the house accessible. That means it’s always ready to show. Many agents won’t bother showing a house that takes 24 hours to get into.

For more about showing your home, read Preparing Sellers For Home Showings.

  1. If you’re ready to sell, Move on.

Buying A Home With Good Resale Potential

For faster-growing equity and a speedy sale when it’s time to move. You might think it’s strange to consider selling a house you don’t even own yet, but what if you decide to move? Do you want a house that has grown in value and sells quickly? Sure you do. Most of us won’t live in the same house for the rest of our lives, so it makes sense to begin analyzing resale values from the very first day we set out to buy a home. Buying a house with good resale value might take a little longer, and it might take a bit more work on your part, but it’s worth the effort. Location Comes First Locations regarded as most desirable today might not keep that status forever, but they’re good models.

Why are those neighborhoods in demand and how long have they been top choices?

Are there areas in town that are increasing in desirability?

Does new growth seem to be headed in one direction? Will there be plenty of services (groceries, shopping, schools) in that area?

Are the community changing-with residential areas shifting over to commercial properties? (That can sometimes be a plus for eventual value, but a negative while you live there.)

Home Buying Tip: Always choose a home that suits your needs, but if you can, find one in a location that others seem to want, too.

Who’s Moving In

Who are the primary buyers in your town? If it’s seniors-or a crowd getting close to that age, your best resale potential might be a one level home. Seniors don’t like to do steps.

If the majority of buyers in your area are young families with children, consider a house with a large yard that’s not fronted by a busy street. Or a house with plenty of bedrooms and baths.

Home Buying Tip: Browse your local real estate ads. A feature that’s mentioned in numerous ads is likely one that’s in demand.

Avoid Outdated Features

One-bath homes sell for significantly less than homes with a least two baths-and they take longer to sell.

Electric baseboard heat and electric ceiling heat are not as desirable as central heating systems.

Tubs and showers in outdated colors, or scratched from years of improper cleaning, might be hard to change without ripping out doors or walls.

Popcorn ceilings date a house—you know-those bumpy ceilings that were so popular in the 1970’s.

Home Buying Tip: Outdated features are usually a negative, but you can turn them into a positive if you buy a home under market value and make updates. Before you make a decision, analyze the update costs and determine how much they will add to the home’s value.

Don’t Sweat the Cosmetics

Fresh paint is a quick and relatively inexpensive fix-and sometimes makes the home look like it’s had a complete overhaul.

New appliances freshen up a kitchen cabinets gives them a new look.

Skylights and sun tunnels brighten a dark home. Be sure to buy top-quality products and install them with care.

New light fixtures do wonders to lighten rooms and enhance character.

New switch plates are and inexpensive way to make a room look nicer. Browse the options at your hardware store.

Home Buying Tip: Sometimes attention to cosmetics is all a home needs to make it shine. Watch for homes in need of cosmetics, because they’re often priced under market value.

What Are Buyers Looking For

Closets-lots of closets, preferably walk-in, and as much additional storage space as possible.

The term light and bright is a little overused, but it’s an accurate description of one buyer favorite. Homes with lots of natural lighting are very popular.

Split bedroom plans, with bedrooms on each end of the home, are increasing popular with buyers.

If you live in a scenic area, having a view can help you sell.

Home Buying Tip: Popular features differ from region to region, so try t determine what’s hot in your town. Ask your real estate agent which features are always in demand.

Bottom Line

Your first objective is to buy a house that’s right for you, but do consider its resale value before you make the final decision, especially if you know you’ll move again within three to five years. A careful purchase now will help give you extra funds to move up with the next time you buy a home.

Dealing With Incompetent and Unethical People

Overseeing Your Real Estate Transaction

Are your uneasy about the events taking place during your real estate transaction? Is your real estate agent, attorney or other person involved less than helpful-or worse, unethical? There are questions every day on the Home Buying and Selling Forum from unhappy buyers and sellers who are (rightly) confused about the path their transactions are taking. What’s unfortunate is that many of them feel uncomfortable confronting the people who are not doing the job they are being paid to do. Don’t let that happen to you! You’ll find as many unethical and incompetent people when you buy and sell real estate as you do in other situations. I’m referring to everyone who’s involved with the sale-real estate agents, attorneys, buyers, sellers, mortgage people, appraisers, surveyors-everyone.

Don’t assume that any person or group is incapable of ethics problems. It’s Your Money, Your Time, Your Future…

Would you put up with poor service at your auto dealer or from the plumber who fixes your kitchen sink? Of course not, so don’t let it happen when you purchase a home. Never let anyone push your questions aside or talk you into doing s

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A Case Of Lotus Design & Development Ltd

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Lotus Design & Development Ltd

Part-I

Introductory Part

1.0 Introduction:

In today’s world, business houses create a tremendous and continuous positive contribution on national and international economy. It is multipurpose server by huge production, distribution, export and import. Business houses are developing and modifying day to day towards a successful and performance oriented organizations. These organizations are now a days finding out their key factors for both the existence and success in today is corporate and fast paced business environment. It is for not only the business organizations, all service producers, educational institutions, non-government organizations even government organizations are concern today for providing better and competitive service. Some modern organizations put their steps in the field of corporate social responsibility. These include national, international or multinational companies. Even today, we see several financial institutions, banks, mobile phone companies are working for the greater welfare of the ordinary people. This is now happening in our country. This is a positive change of the attitude of the management of the companies. Managements have started to care about their soul-forces, which are their human resources. We have to look before some couple of decades ago when employees were treated as like as machine. Days started to be changed by some noble pioneers who taught to treat employees as human resources not as people at work. With the passage of time, organizations become employee-friendly.

This is not happened universally, all over the world but generally, even in our country. With the change of thinking of managements, employee attitude also reached on a platform where employees want to provide better service. In this context, this is an attempt to reach a conclusion that what employees do and realize their duties, responsibilities, work environment with their pay-package. A firm has been selected as subject where the entire job is done. This work will reveal employee satisfaction level in context with their salary, duties and work environment and ultimately employee attitude towards their management. Multifoods options have been justified to enrich the work. Employees with higher salary and better environment, higher salary with typical environment, ordinary package and better environment or even ordinary package with typical work environment etc. employee duties, responsibilities have also considered with these functions as catalyst. This work will also disclose the best policy of the management that it supposed to perform for the best of all the stakeholders of the organizations.

1.1 Background of the Study:

It is a great opportunity to learn about the corporate culture during the internship and as an executive of Lotus Design & Development Ltd. Of the topic HRM Practices and Employee Satisfaction of real estate, firm Lotus Design & Development Ltd. This opportunity helps HR Directorate and learns about the administrative. Lotus Design & Development Ltd. is a real estate company and the member of REHAB.

1.2 Importance of the Study:

As it is said earlier, organization is now-a-days performance based and employee oriented. This work will clearly expose the final statement regarding a better condition of the organizations where employees are treated as human resources and employees are also enjoy a really soothing work environment with satisfactory pay-package with future safety and security with some other beneficiary activities of the organization.

There is a high degree importance of the subject. Research says all the organization, which are treated, as successful business houses are more concentrated on the well management of its stakeholders. All the most high-ranking organizations of the world have come to the zenith due to this reason. Machine without man is nothing even liability, management is failed when it has dissatisfied employees and even management sometimes cannot find out how much it could achieve more if it has a group of satisfied employees. Satisfaction is not only related with the salary even not only with the employee’s duties and responsibilities, it is highly and remarkably related with the work environment and the treatment of the management extended towards its employees.

Management can achieve its goal by utilizing all resources including human resources with dissatisfied groups of employees. This is theoretically and practically possible. However, the thing is that, management cannot realize or even think that what degree success or progress they fail to achieve due to having dissatisfied employees. A satisfied employee is the real key force of the organization. In Japanese management, employees feel dissatisfaction due to own realization that they might do more for the company, still though they are efficient enough. Management is also highly satisfied on them. This is an unusual picture. However, for development and progress of the organization and betterment of the employees this is very much essential.

Human being is virtually created as honest. Earthly environment, its affects, competitive advantage & disadvantage sometimes make human being impatient. Human being as employees is not exceptional from this reality. Salary, inter-person relation, promotion, motivation, bossing, entire work environment affect on employees. Sometimes this is positive and of course sometimes negative. Positive affect brings satisfaction and devotion to work while negative affect brings dissatisfaction on the work. This work will help managements to take decision about management of human resources and ultimate progress of the organization with the devoted and really deserving employees.

1.3 Real Estate Phenomena in Bangladesh:

Dhaka city, born during the Moghul Empire and grown with the British rule, is expanding rapidly. From the beginning of the 20th Century its growth and latter development is marked with sheer lack of proper and far-reaching planning. The impact is now being felt at the end of the century. Dhaka City is undergoing terrific growth phase throughout the last two decades. While there are so many real estate developers in the market, there are also very few of them who have maintained the quality, safety and customer preference. It is customary in the country that the first day quality and impression is lost after a while when people start getting a bit of familiarity. This happens due mainly to lack of professionalism. Sometimes the consumers here are in a fix to choose a particular brand out of many.

A good number of real estate companies are working under one umbrella association named ‘Real Estate and Housing Association of Bangladesh’ (REHAB). Almost 120 Companies are at present affiliated with this association, while more than 380 companies are working independently. Lotus Design & Development Ltd. took a leading role in the formation of the industry association and is one of the members of the REHAB.

1.4 Objectives of the Real Estate Business in Bangladesh:

The main objectives of the Real Estate Business in Bangladesh are given as follows-

1.5 Market of the Real Estate Business:
Real estate business especially apartment projects has started in late 1970s in Dhaka City. But from early ’80s the business started to grow and flourish. At present, more than 250 companies are active in business but 95% business is still dominated by of top 10 Companies. Present market is growing at the rate 15%.

1.6 Reasons for the Development of Real Estate Industry:
The main reasons why real estate business developed in Dhaka city are as follows:

1.7 Research Problems:

The main focus of this report is to analyze the HR practices in the Lotus Design & Development Ltd. and determine the employee satisfaction level of the organization. It also helps to bring the idea of the overall functions and situation of the real estate organization. Real Estate sectors now a first growing sector and for the economic development and improvement of the country it needs to emphasis the overall condition. Human Resources and their thinking are the main equipment for the development of this sector.

1.8 Scope of the Study:

This particular study will approach only the employees of Lotus Design & Development Ltd. conducted for fulfillment of Bachelor of Business Administration degree.

At the outset, the paper discusses various condition or state of employees with the work environment and management. Then the paper studies and tries to find out the reason and factors for those various conditions. Finally, the paper suggest with few policy recommendation for effective and better work environment for the employees.

1.9 Objective of the Study:

1.9.1 Broader Objective:

This dissertation paper is undertaken as an assignment for fulfillment of the requirement for completion of the BBA in Finance. This paper aims to find out the actual work environment where employees feel the organization of their own. They feel home in work place and they feel work as worship.

1.9.2 Specific Objectives:

To analyze and evaluate HR practices in Lotus Design & Development Ltd. some objectives are identified and these may include:

Part-II

Methodology of the Study

2.0 Methodology of the Study:

In order to conduct this small-scale evaluative study the following methodological rigor will be adopted.

2.1 Sampling:

Stratified sampling technique is analyzed for selecting the sample of the population. Out of 150 employees 66% (99 employees) of the Lotus Design & Development Ltd. was and sometimes chronologically selected for interview.

A schematic presentation of the sample design

Figure: 2.1 A schematic presentation of the sample design

Since this is a small-scale study-work for identify the employee satisfaction level and I try to find out the HRM practices based on both primary and secondary data. Participants who are regular in work and at least three years passed with the organization will be approached for collecting data.

2.2 Types and Sources of Information:

Both primary and secondary source were used to collect information for this action research and report. Following information/ variables were considered to conduct a study that is illustrated below:

2.3 Following Key Variables were selected for This Study:

Characteristics of each individual employee; weakness of employee to organization; vindictiveness of employee to organization; obstacles of employee to disclose proper information; fulfillments of expectation of some employees; feelings of some deprived employees; employee’s knowledge; educational back ground; activities; thoughts; feeling and behavior; human resources development; office automation; central decision making; improvement of overall performance; Employee’s career development thoughts; decision making ability; ability to instant trouble shooting and handling; developing administrative capacity; motivated employees; employee’s working experiences; training background and nature of organization will also be taken as one of key variables.

2.4 Sources of Primary Data:

Primary sources of information include data collection from the study locale with the help of questionnaire, observation methods with the respondents. However, it is mainly interview based

2.5 Secondary Sources of Data:

For the purpose of reports and statistical inferences, some vital statistics of such type of previous base line survey report of such kind (if any) records of the previous study, reports prepared by various similar natures of organizations

2.6 Limitations of the Study:

There are certainly some limitations of study. There is only one subject field was selected for the entire works. The subject matter was a real estate firm, which is not enough. Number of interviewee was also limited with the company. There was a high probability that the employees would be tuned with the management. Different types of employees were over there as interviewees. There was a probability that different educational and family backgrounds might affect the study. There was a limitation of period. Top management was not included in the study. There was a great probability how the truth became known. The main limitation of the study was the question of proper mental and physical condition of the interviewees.

In spite of above-mentioned limitation, there are some strong considerations for the work or study. In Bangladesh, all the real estate companies are more or less same in nature and procedures. It may be mirror image to take several subjects, which is huge time consuming. For this reason a well reputed, established and client supported company namely, Lotus Design & Development Ltd. was selected for the study. It is quite old as said earlier but it has already passed twenty-five years of successful operation in different parts of the mega city Dhaka. The number of interviewees was 99. In addition, this number of interviewees is considered more than enough for this type of study. As there was an excellent combination of different employees, it might expect that the outcome of the study is true and genuine. All the interviewees were tuned to be honest and frankly to the interviewer. Moreover, it was done in different alternative ways for genuinely.

Part-III

About Lotus Design & Development Ltd.

3.0 Lotus Design & Development Ltd.:

Success lies in the ability to adapt with changing times. That is something that Lotus Design & Development Ltd. has learnt since 2008. Understanding the changing nature of the real estate sector Lotus Design & Development Ltd. proceeds to build homes, introducing daring and innovative living concepts.

Lotus Design & Development Ltd. believes that architecture can captivate the essence of time. Lotus Design & Development Ltd. Monuments capture accordingly a particular period and yet continue to be appreciated eternally. To each development, Lotus Design & Development Ltd. adds that extra touch of magic, which makes it a home.

Lotus Design & Development Ltd. is one of the pioneer real estate companies of the country involved in the sector since 208. Apart from being the member of the Real Estate and Housing Association of Bangladesh (REHAB), Lotus Design & Development Ltd. was the renewal construction company.

The experience of more than three years in the real estate business has spurred completion and successful hand over of more than 80 projects to satisfied owners of Dhaka and Cox’sBazar.

Lotus Design & Development Ltd. Not only believe in quality as a mere vision statement but also implement it in every aspect of our operations and the way Lotus Design & Development Ltd. of doing business. To bolster Lotus Design & Development Ltd.’ is core values of quality and excellence, we have taken on board a team of dedicated and skilled professionals consisting of architects, engineers, designers, planners etc.

At the heart of our operations – the key word is “Integrity”. In addition, this integrity has ensured our growth even in the face of stiff competition and volatile business environment year after year.

3.1 Overview of Lotus Design & Development:

  1. Incorporated in 2008
  2. Pioneer in the real estate sector
  3. REHAB Membership No. 675
  4. Handed over more than 800 flats

3.2 Features of Lotus Design & Development:

  1. RAJUK approved projects
  2. Dispute free lands
  3. High quality construction
  4. Modern Functional Design
  5. In time handover
  6. After Sales Service

3.3 Vision of Lotus Design & Development:

Lotus Design & Development Ltd. shall endeavor to excel in every aspect of their operation and thereby provide quality products and services to their customers. The organization will have a challenging and satisfying working environment so that the talents and potential of their human resource is given the full opportunity to blossom & grow. Lotus Design & Development Ltd. shall maintain a high degree of integrity in their business conduct and this characteristic will prevail in their dealings with their customers, their suppliers, their contractors, their financiers, their employees & indeed their entire society.

3.4 Mission of Lotus Design & Development:

3.5 Targets:

The targets of Lotus Design & Development are to enhance our property development line and continue to use it as a platform on which constantly extends its broad spectrum of activities both in Bangladesh and abroad and is able to compete and survive in any operating environment. The management’s philosophy focuses on the following goals:

3.6 Future Plan of Lotus Design & Development:

Lotus Design & Development Ltd. is committed to expand and diversify in the years to come. It has taken on board a number of projects, which will have a definite impact on the socio-economic fabric of the country and play a dynamic role in the overall economic development of Bangladesh.

3.7 Quality Policy of Lotus Design & Development:

Lotus Design & Development Ltd. will provide leadership in quality in the Real Estate Development sector.

They will provide quality in their construction work, their management systems, and their customer services so that they can fulfill or exceed their customer’s expectation.

Their human resource will always be their greatest asset and they will provide regular training and opportunity to our people so that the quality of their work is constantly improved.

3.8 Quality of Lotus Design & Development:

Lotus Design & Development Ltd. is undoubtedly one of the leaders in the field of Real Estate Development in Bangladesh. Lotus Design & Development Ltd. is the renewal Real Estate Developer in Bangladesh to be given this prestigious, internationally recognized accreditation. They believe that it is their organizational strength that has enabled them to achieve market leadership.

3.9 Business Development:

Teamed up with a band of highly motivated professionals, the business development division explores new business opportunities and comes up with the best options to meet the growing demands in the marketplace. The Business development department is responsible for locating the most valuable land in Dhaka, Chittagong, and Cox’sBazar and negotiates with landowners to ensure a win-win joint venture or to outright purchase the land.

3.10 Design & Development:

Lotus Design & Development Ltd. has been known for its spectacular and innovative living concepts and daring architectural designs. This has been possible by the dedicated full time professional architects and designers who constantly delve into the realms of innovation and uniqueness.

3.11 Engineering & Construction:

Well experienced engineers with both local and international exposure are responsible for management of this department. The teams of highly qualified civil engineers carry out direct supervision to ensure the highest quality of workmanship. Standard Operating Procedures (SOP) are in place for Quality Control (QC) of concrete and other completed work samples at every stage of the construction process.

3.12 Marketing & Brand Management:

A truly professional Marketing & Brand Management Team is in place at Lotus Design & Development Ltd. to nurture and communicate numerous product offerings to its customers. The tools and techniques applied by the Marketing Department complements the efforts of the Sales Department and help to put Lotus Design & Development Ltd. image and products in their right perspective.

3.13 Sales:

A pro-active sales team is always in touch with Lotus Design & Development Ltd. valued customers to update them on the latest product offerings. Every member of the Sales Team is given extensive on-site training so that the person is totally familiar with construction procedures and acquires full product knowledge.

3.14 Customer Service:

A full fledged Customer Service team remains constantly in touch with customers for any modification or optional works desired by the customer during construction of projects. Customer Service Department aims to provide full satisfaction to the customers by always being on hand to satisfy any query they may have about their cherished home.

3.15 Maintenance:

A dedicated maintenance team is fully active to maintain the relationship with Lotus Design & Development Ltd. Customers’ Headed by a Sr. Maintenance Engineer, the department starts working just after the project handover. All the customers’ complaints are addressed as Lotus Design & Development Ltd. Team looks after all civil, electrical, and sanitary and plumbing works. In addition, this service is given free of cost for two years if within the purview.

3.16 Finance & Accounts:

Finance & Accounts personnel are responsible for putting in place appropriate financial control methods, cash flow management and maintenance of proper accounting principles.

3.17 Human Resource & Training:

Lotus Design & Development Ltd. recognizes that their people are their greatest asset. Thus, development, professional evaluation and motivation of Lotus Design & Development Ltd. human resource are a very important goal and objective of the company. The human resource department is staffed with a competent team of HR professional who ensure the above goal.

3.18 Administration:

Lotus Design & Development Ltd. admin department ensures safety, security and maintenance of our sites, our corporate building and all our movable and immovable assets. A dedicated team is totally focused to protect the interests of the company.

3.19 Corporate Affairs:

Lotus Design & Development Ltd. Corporate affairs department maintains liaison with all external agencies such as, PWD, CDA, City Corporation etc. As a responsible corporate citizen, Lotus Design & Development Ltd. ensures integrity and professionalism in its dealings with all external agencies.

HRM Practices on Lotus Design & Development Ltd.

Lotus Design & Development Ltd. knows that their people are their greatest asset. Thus, development, professional evaluation and motivation of Lotus Design & Development Ltd. human resource are a very important goal and objective of the company. The human resource department is staffed with a competent team of HR professional who ensure the above goal. Some of the HR practices of the building technology and ideas ltd are given below:

4.0 Human Resource Development

To get the maximum outcome from the human resources it is obviously necessary to implement and invent new way to complete the work activities and systems. HRD is related to upgrade the working system. It depends on some relevant information. It helps to improve the skills, requirement, control measures and training needs. Lotus Property

Management Limited has been always conscious to improve the HR processes and working environment day by day.

The HR Department deals with five core areas of operations. It includes planning for organizations; jobs and people; acquiring human resources; building individual and organizational performance (training and development); rewarding employees; maintaining human resources.

FIGURE4.0: HRD ACTIVITIES

4.1 Human Resource Planning and Information System:

Lotus Design & Development Ltd. plans the human resources and information system. It is a process of deciding in advance, what is to be done regarding human resource acquisition to its proper utilization. It is obvious that without proper planning human resource activities cannot be implemented as per desire or the management. It deals to identify the current work

force position and desire work force position. It helps to forecast the future skills and assess HR requirements, determine training levels and arrange management development program and future accommodation. One sample framework of HR planning is given below:

FIGURE 4.1(1): FLOWCHART OF SAMPLE FRAMEWORK OF HR PLANNING

Human Resources are also depending on the information system. In Lotus Design & Development Ltd. management Information System, (MIS) gives a great contribution for the flow of the information system and management of the information system. The components and process by which HRIS and Management information system done the duties are given below:

FIGURE: 4.1(2): THE COMPONENTS AND PROCESS BY WHICH HRIS AND MANAGEMENT INFORMATION SYSTEM DONE THE DUTIES

4.2 Recruitment and Selection:

An organization’s success depends on its human resources. No matter how much an organization invests in other assets if it is human, resource does not have the competence then the organization will be unsuccessful. Even when deciding which fixed assets to invest the organizations go through many hurdles, so when it comes to human resource they have to be even more careful.

First, an organization conducts human resource planning to identify their personnel needs. Once these needs are established a job analysis is conducted, which clarifies the job being done and the individual qualities necessary to do these jobs successfully. Then based on this information a pool of qualified applicants is recruited. The next step calls for selecting the most suitable person for the job, which is the major objective of selection process.

To outline the standards those are expected of new recruits to the Bank, and the processes that will be followed during recruitment and selection. The foundation for this policy is that recruitment should only occur when there is a specific business need to be met i.e. vacant post and that the selection of the appropriate candidate will be on the basis of qualification, performance, potential and aptitude.

4.3 Recruitment Decision:

The decision as to who should be recruited is taken by the General Manager of Human Resources and Departmental head and other Executives relevant to the position to be filled.

4.4 The Selection Criteria:

Candidates are selected after full consideration of the following factors:

4.4.1 Need:

There must be a legitimate need to increase the company’s hand count. In all cases the Department Manager who considers that they have a legitimate need to increase their hand count, either because an existing employee has resigned or because the expansion has been agreed as a part of the Area Operating Plan, must submit a request to HR Officer for consideration within existing manning levels and current business priorities for approval by HR Panel. If the request is in line with the Area Operating Plan and current business priorities HR Officer will begin the recruitment process.

4.4.2 Advertising:

It is the company’s policy to advertise its vacancies to potential candidates both externally and internally. To meet the occasional need to recruit specialist-experienced employees, advertisements will be placed in professional journals and newspapers both within Bangladesh and overseas as necessary or give advertisement in the reputed job site.

4.4.3 Qualification:

Job specifications and job vacancy advertisements will indicate the experience that is required for each job.

4.4.4 Aptitude:

Candidates for all vacancies will be asked to undertake a range of ability tests prior to their recruitment. The company uses standard, professionally developed tests that are considered relevant to the positions of respective posts. Candidates who successfully pass the ability test will be invited to attend interviews with members of the Human Resources Panel and other Executives deemed appropriate in light of the particular vacancy to be filled.

4.5 The Process of Recruiting and Selecting of Lotus Design & Development Ltd.:

Need identified in accordance with Area operating plan
External Vacancy advertisement placed (if necessary)
Candidates short-listed according to job Criteria match
Candidates undertake ability tests
Candidate undertake customer service questionnaire
Candidates are interviewed by Human Resource Panel
Candidates are offered a position dependent on satisfactory
References and medical examination
Candidate is appointed to probationary staff
Candidate is appraised ruing the probationary period
Candidate is appointed to the permanent staff

FIGURE 4.5: THE PROCESS OF RECRUITING AND SELECTING OF LOTUS

DESIGN & DEVELOPMENT LTD.

4.6 Sample of Request for Recruitment:

FIGURE 4.6: SAMPLE OF REQUEST FOR RECRUITMENT

Lotus Design & Development Ltd. Recruitment and Selection process follows a standard pattern. It begins with advertising and concludes with the final employment decision.

4.7 Steps of Recruitment and Selection Process:

4.7.1 Advertising:

Lotus Design & Development Ltd. advertises in the national newspapers and professional journals and to reputed job site.

The advertisement includes mainly two things:

4.7.2 Initial Screening:

The provision of screening interviews (Preliminary Interview)

Some of the respondents are eliminated based on job description and job specification. Factors that lead to a negative decision at this point include-

4.7.3 Ability Tests:

The Ability Tests are concentrated to judge the candidates:

4.7.4 Interview by Human Resource Panel:

The candidates who have so far survived after all the tests at this step will face the Human resource Panel and will have to give a comprehensive interview. The interview panel may consist of:

The candidates are most likely to face questions concerning:

This interview is designed to probe into areas that cannot be addressed by the application form or tests. These areas usually consist of assessing one’s motivation, ability to work under pressure, and ability to ‘fit-in’ within the organization.

4.7.5 Appointment as Probationary Staff:

At Lotus Design & Development Ltd., the new employees are initially employed under probation. The employee will be given a certain time to prove his or her ability in those preferred area. The period is called probation period. If the employee is succeeds to show his or her ability and worth in the job field, only then the job will become permanent for the new comer.

This is done to judge whether the employee is able to fulfill his or her job requirements, whether that person could cope with the organization’s environment etc.

4.8 Training and Development:

Training is a learning process whereby people skills, concepts, attitudes and knowledge to aid in the achievement of goals. There are many objectives works behind the training and development. In Lotus Design & Development Ltd., there is a huge opportunity to get the training and nice accommodation is established for the training process. The schedule of training and performance is excellent. General Manager, Human Resources look after the whole process where the training and development needed. Some of the objectives for conducting training and development are given below:

4.8.1 Methods of Training and Development:

Some of the training methods are normally follow in Lotus Design & Development Ltd. The immediate supervisor mainly responsible for giving the instructions and training to the subordinates. Some of the ways of training method like power point presentation, meeting, discussions etc. The specific topic is mention for the training like time management, computer maintenance etc.

4.9 Performance Appraisal:

The employees should be evaluated on a number of specific dimensions of job performance. Each of the specific dimensions of job performance used to evaluate an individual’s performance should be developed so that it is not deficient, contaminated, distorted, or irrelevant.

The responsible person for conduct performance appraisal system that is in Lotus Design & Development Ltd. is given below:

For appraisal of the employee, the following process is follow:

FIGURE 4.8: APPRAISAL OF THE EMPLOYEE

4.9.1 Methods Using for Appraisal:

Lotus Design & Development Ltd. uses specific ways in which HRM can actually establish performance standards, devise instruments to measure, and appraise an employee’s performance. Three approaches exist for doing appraisal: employees can be appraised against

1. Absolute standards

2. Relative standards

4.10 Dimensions of HR Practices in Lotus Design & Development Ltd.:

In Lotus Design & Development Ltd., the HR and TRG Department follow all the dimensions and requirements for the HR processes. The development of the HR processes are strongly observed and improved. On the other hand all the day-to-day activities are continuing. It is necessary for the improvement of the organization. HRM practices are strongly related to the development of the organization so it needs to give emphasis on this area.

Part – V

Activities of the impact study of the Employee Satisfaction Level of Lotus Design & Development Ltd.

5.0 Activities of this Impact Study:

Activities of the proposed study can be organized under three phases, such as

Phase I : Inception Phase

Phase II : Survey/ Data Collection Phase

Phase III : Reporting Phase

A table given below will clearly explain the above-mentioned three phases of activities of the proposed study.

Phases Activities
Phase – I

Inception PhaseCollection and review of relevant documents, Development of Data Collection Instruments (DCIs) and techniques, Developing Guidelines for Focus Group Discussion (FGD), Preparation for Field Investigation, Pretest of DCIs, FGD guidelines in consultation with the Lotus Design & Development Ltd. authority.Phase – II

Survey/Date

Collection Phase/

Field WorkDevelopment of Data gathers, monitoring and supervision of the work of field data collection, Development of Tabulation and Data Analysis, Plan and techniques, Field Data Collection.Phase – III

Reporting PhaseCollection of field in DCIs, coding and code verification, Editing Data, Data Computation, Analysis of Data and Preparation of Tables and prepare graphical presentation, submission of tables and reports to proper authority

FIGURE 5.0: TABLE OF THREE PHASES OF ACTIVITIES OF THE PROPOSED STUDY

5.1 Data Collection Instruments:

In conducting this study-work, interviewing method will be used for data collection, while a checklist would enable to record direct observation. A combination of structured and unstructured interview schedules would help generate information for this study. Along with interviewing techniques, Focus Group Discussion technique will also be used to approach the various issues to assess and to generalize information within a very short period.

The following Table gives a preliminary description of type of data needed, sources of data and instruments to be used for collecting data

Type/Class

of DataSourcesData Collection TechniquesData Collection ToolsApplication

Of KnowledgeSample

RespondentsInterviewing, Administering

Written Questionnaire, Focus Group DiscussionChecklist,

Questionnaire,

Guideline for FGDImpediment

Related to

Application of

KnowledgeSample

RespondentsFocus Group DiscussionGuideline for FGD

FIGURE 5.1: DATA COLLECTION INSTRUMENT

5.2 Work Plan:

The proposed work plan is presented in next table. The plan shows detail tasks, their inter-relationship and time requirement to complete the task.

SL.

No.ActivitiesTrainingWeeks  In days

1 2 3 4 5 6 7 8 9

1Mobilization of study team2

2Determination of data requirements and data specification5

3Determination of sources primary and secondary data2

4Design & preparation of questionnaire/ schedule for data collection, guideline for FGD3

5Pre-testing of data collection instrument2

6Finalizing of questionnaire, checklist, guide for data collection2

7Reproduction of questionnaire & tools2

8Collection of primary data interviewing & FGD14

9Editing, completion & analysis of collected information9

10Preparation of the draft of he final report12

11Submission of the draft report1 12Incorporation of contents, suggestion and preparation and printing of the final report9

13Submission of the final report

63

FIGURE 5.2: WORK PLAN

5.3 Data Collection and Analysis:

In the light of variables, data collection tools and techniques discussed above, a general format will be prepared for gathering data related to effectiveness of the study work, a special format will be devised for assessment of all required information.

Part-VI

Major Analysis of the Problems

6.0 Major Analysis of the Problem:

From the analysis of the observation, face-to-face interview and answering of questionnaire some factors are found of the HR practices and employee satisfaction. Mainly the outcomes of the analysis are mention in the report. 99 employees of Lotus Design & Development Ltd. were selected for this study work. Among them all were be observed minutely at their work in different times in different condition and situation. All of them were interviewed in course of time with individual and common questionnaire. Written answer sheet was also collected from the interviewees under multiple-choice system. The three instruments of data collection in this regard were:

6.1 Observations:

The methods, questions of face-to-face interview and answering of questionnaire are includes in the appendix part of this report.

Part-VII

Findings of the Study

7.0 Findings from the Study:

" 9,"

A Report Of NARI MAITREE

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1.0: NGO background:

Nari Maitree is a non-government development women organization. In 1983 the organization was established by a group of women activist in order to build the capacity of women, children and adolescent for establishing their rights in the society.

NM has special interested to work with the children. At present Nari Maitree runs 17 different projects those are directly or indirectly have some impact on children especially deprived children. As a whole NM intend to work in a holistic approach for the best interest of the children. As children are not apart from the society and family, therefore, NM also works with the family and society to bring positive change in the life of children. From the working experience Nari Maitree felt that most of the disaster situation like flood and other natural calamity, children position is most venerable and their lives are in thereat from the context of physical and mental health development. During these time children are in more vulnerable situation in terms of sexual, physical and mental exploitation and abuse.

According to the National Sample survey of Child Labor by Bangladesh Bureau of Statistics (2002-2003), 17.5 per cent of the total child population was child laborers. However, this survey did not include figures from several parts of the informal sector, in which the largest numbers of child laborers are found, e.g. child domestic workers. Among 12.1 million working children (5-12 age group), boys were 8.8 million and 3.3 million were girls. Child laborers of age group 5-17 years are 3.38 million (Boys: 2.58 and girls: .8 million). Only 7.1% of the child labor (5-17) was in the formal sector, the rest of 92.9% were in the informal sector. About 65.4% of working children were employed in the agricultural sector. By residency, number of working children is 20.7 million among them 16.05 are in urban area and 22.0 are in rural area. They work for a minimum of 9 hours to as long as 18 hours a day for very low wages.

Considering the reality and importance, Nari Maitree introduced some activities to address this immerging issue under a program with financial assistance of Danish Embassy since November 1991 to 1995. This program was introduced in some slum areas under the Dhaka City Corporation. Based on the working experience from this project, Nari Matree incepted a program namely “Education and Rights for Working Children” with financial cooperation of Red Barnet, Save the Children Denmark (Now it is Save the Children Sweden-Denmark). The project aimed at education and child rights development program in wards no 25 and 26 of Dhaka City Corporation. The project was continued up to June 1999. This project was expanded since 1999 July to December 2002 under the title of “Intervention towards Child Development”. As a continual process, a gap-bridging project for two years was incepted from January 2003 to December 2004.

With the continual partnership assistance of SCSD, Nari Maitree enhanced their capacity from the learning of previous phase and started the 3rd phase under the same title from January 2005 to 2007. This project is developed with the framework followed by Bangladesh Country Program Strategy (2005 to 2010) of SCSD.

2.0 NGO Profile:

Mission Statement:

To empower the under-privileged people by undertaking intensive and extensive programs in order to bring about changes in the family life style and social system.

Vision of NM:

Our vision is to establish an equitable society.

Objectives of NM:

· To increase education rate among the adolescents

· To aware the adolescent, women and other stakeholder about HIV/AIDS

· To establish human rights and empowering of women, children and adolescents

· To help facilities to the target people to raise their voice for social justice

· To undertake programs on preventive and curative health services

· To facilitate sustainable development

· To ensure male participation in program activities

· To promote volunteerism among the youth

· To enhance knowledge on natural and social disaster management

Major strengths of NM:

· Working experience with many Donor Agencies at home and abroad

· Strong community network in the project areas including linkage with GOBs, NGOs

· A network of its branch offices in Dhaka city and some selected districts

· Experienced and skilled human resources which can easily be mobilized for any new project

· Strong leadership by the Executive Committee

· Strong financial and managerial capacity to manage projects within time schedule and cost estimates

· Strong monitoring, supervision and quality control system

· Physical & logistical facilities, including fully equipped own training facilities of the organization

Policies of NM:

Nari Maitree has developed different types of policies to operate the organizational activities smoothly and properly. The policies are as follows;

· Human Resource Development Policy

· Financial Guideline

· Gender Policy

· Credit manual

Place where we work:

Nari Maitree covered as many as 17 wards of Dhaka Metropolitan City 21, 22, 23, 24, 25, 26, 27, 28, 31, 49, 52, 54, 55, 56, 57, 60 and 85 including 12 villages of Demra Thana. Besides, it also covered the 457,948 disadvantaged children, women and adolescents of Mymensingh, Jamalpur, Netrakona, Tangail, Tongi, Kishoreganj, Sherpur, Cox’s Bazar, Comilla, Feni and Chandpur districts

2.1 Organizational Structure

Management Structure:

NM has 39 members General Committee (GC) and eleven members Executive Committee (EC). The GC meets once in a year to approve annual budget and review progress reports while the EC meets once after three months. The EC members take decisions, review the progress, give financial approvals and consider other priority items. The Executive Director is the operative Head of the Organization and is responsible for overall program management. Under the able guidance of the ED, each Program Manager/Coordinator manages his /her program area. Program Managers/Coordinators, Area Coordinators also manage their respective programs outside Dhaka. They all report to the Executive Director.

Nari Maitree has the Management structure as below:

· Executive Committee/Governing Body

· Advisory Committee

· Professional staff

Total Staff of the Organization

Currently, NM has 359 (2007) staff who are also working in different project areas. Women constitute 70 percent of the current staffs.

Summary of NM Projects/Programs

Nari Maitree has been engaged to fulfill its objectives through the following multidimensional programs:

1. ‘Improvement of public awareness for HIV/AIDS and women trafficking’ funded by ADB through Ministry of Women and Child Affairs

2. ‘Mother and child health care and family planning program’

3. ‘Adolescent development program’ under Action Aid

4. ‘HIV/AIDS Prevention Project (HAPP)’ for Street Based Sex workers under UNICEF & NASP

5. ‘Volunteer development program’

7. ‘Better SRH service for urban adolescent and youth (RHIYA)’

8. ‘Child Development Intervention Project’ under Save the Children Sweden-Denmark

9. ‘Capacity Building, Poverty Alleviation and Sustainable Livelihood for Socially Disadvantaged Women and their Children, Dhaka’ financed by UNDP through DSS

10. ‘Capacity Building, Poverty Alleviation and Sustainable Livelihood for Socially Disadvantaged Women and their Children, Mymensingh’ financed by UNDP through DSS

11. ‘Empowering Adolescents to become the agents for Social transformation program, Dewanganj’ financed by UNESCO, Paris

12. ‘Empowering Adolescents to become the agents for Social transformation program, Madhupur/ Tangail’ financed by UNESCO, Dhaka

13. ‘Integrated Education, Health and Capacity Building for Adolescent girls in Bangladesh at Dhalpur’.

14. ‘Urban Primary Health Care project PA-5’ through Dhaka City Corporation funded by ADB.

15. ‘Violence Against Women’ at Dhaka

16. ‘Income Generating Program (IGP)’ at Dhaka funded by NM

17. ‘Training on prevention of HIV/AIDS for workers of Garment Factories’ supported by PHD.

18. ‘Action research with Child sex worker’ funded by UNICEF.

19. ‘Prevention and Protection on HIV/AIDS and STD’ funded by CARE.

20. ‘Creating awareness on HIV/AIDS prevention of urban slum adolescent and youth’ through Dhaka City Corporation funded by UNDP.

21. ‘Comprehensive Reproductive health care center’ funded by UNFPA.

22. ‘Piloting of sex worker manage health care system with in the Brothel’ funded by World Bank.

23. ‘Establishing child Led organization to ensure child participation’ funded by Plan Bangladesh

24. ‘Participation of the urban Poor in Municipal’ funded by Plan Bangladesh

25. ‘CARE income project’ funded by CARE Bangladesh

26. ‘Education for all and capacity building project’ funded by UNESCO

Net Working & Affiliations:

Nari Maitree has spread its multidimensional programs at different thanas/wards in 9 districts of the country with different target people. It is making coordination with several organizations working in the same field of activities and collaborating with each other.

In addition to that Nari Maitree is closely associated and linked to different NGO networking organizations & apex bodies as one of the significant members:

STI/AIDS Network of Bangladesh

· Voluntary Health Services Society (VHSS),

· Coalition for the Urban Poor (CUP),

· Credit and development Forum (CDF),

· Disadvantaged Adolescents Working NGOs Forum (DAWN),

· Action against Trafficking and Sexual Exportation of Children (ATSEC)

· Bangladesh Shishu Adhikar (Child Rights) Forum (BSAF)

· Girls’ Child Forum

· Together we work for working children

· International Association of Voluntary Efforts (IAVE)

Financial Management Structure

Nari Maitree is quite aware of updating the Financial Management structure from its inception in 1983. It has transformed all the Accountants of the projects by the skilled personnel after providing training. The financial programs of the projects are guided by the organization’s own Guideline but it also be followed the guidelines of donor agencies on demand. The organization took the initiatives of making advance in consolidating the financial activities of the projects in a monthly finance meeting with all Managers, project coordinators and the accountants.

Audit Management:

Nari Maitree has given special emphasis on the external audit side by side with the internal auditor of the donor agencies, NM’s own initiative and Govt. audit to bring the clarity in the accounts of the projects. The financial management is concentrated with the implementation of the recommendations of the internal auditor, external auditor and Govt. audit.

Current Donor Agencies:

Nari Maitree obtained donations/grants from the following Donor Agencies at home and abroad for implementation of different projects/programs:

· Save the Children Sweden-Denmark

· Action Aid Bangladesh

· UNESCO

· Plan Bangladesh

· Concern Worldwide

· UNDP through Social Welfare Department

· Asian Development Bank through City Corporation

· ADB through Ministry of Women and Child Affairs

· UNFPA

· OXFAM GB

· UNICEF

· USC Canada – Bangladesh

Monitoring and Evaluation:

Nari Maitree conducted the following programs:

· Monthly monitoring and preparation of Database reports

· Project based study

· Project based field visit

· Monitoring by the Donors and internal monitoring and evaluation

· Co-ordination meeting with all section chiefs

· Staff meeting

Physical Resources of NM:

Nari Maitree runs a number of programs in different parts of the country. To ensure effective program implementation and smooth operation, NM has physical and logistical facilities at Head office and field offices including equipment and instruments

Describing of THE Existing (on- going) Project(s)

It is to be mentioned here that the proposed project will be constructed on the past experience of NM in implementing health, nutrition and population based projects. NM has so far implemented different projects of similar nature, which is a major strength of the organization in proposing this project. Of them a total of six (6) projects are currently under implementation and two have been completed recently. The following are the projects:

Report title:

3.0 Summarize of the Project:

The project will cover the targeted child labourers and street children at Goran, (Ward no-25) Ragarbagh (Ward no-28), Bashaboo (Ward no-27) and Lalbagh (Ward no-60) of Dhaka City Corporation. As a preventing aim the proposed new phase will include to motivate the parents, children, guardian, community people and employers to realize their responsibilities and accountability towards reduction of child labour and participation of working children as rights holder to demand their rights. As a curative the project will include basic services like non-formal education, vocational and skill development training, credit support and psychosocial rehabilitation and life skills. Throughout the next 3 years, 36 children will be mainstreaming from NFE to formal school. 150 children will receive vocational training including computer operating, sign board writing, mobile servicing, tailoring, beauty parlor, block batik, embroidery, electric and electronic, provide credit support to 135 children and 150 children will get job placement and self employment opportunities.

Finally Nari Maitree together with other Save Children Sweden-Denmark’s partners who work with child labourers problems will establish an active implementing sub-network for combating child labour. Nari Maitree prefers the other partners in the formal and informal network and consultants contribute to solve common identified problems and develop needed tools, materials and methods.

The partnership co-operation between Save the Children Sweden-Denmark (SCSD) and Nari Maitree has been excellent. Nari Maitree and Save the Children Sweden-Denmark (SCSD) have together explored the various complexities of working with child labor in the local slum area and Nari Maitree is playing a vital role in the implementation of the Save the Children Sweden-Denmark (SCSD) strategy in Bangladesh. SCSD provides technical support to Nari Maitree staff to heighten their capacity in this regard.

Nari Maitree is one of the members of Together with Working Children (TWC) networking forum. It is a strong network forum which is working for a long time for child labor on advocacy issue at local and national level. We hope that in future we will able to work with this forum very effectively which will be help to sustain the program for working children.

Regarding sustainability through the awareness raising activities on child rights issue children, parents and community people have been disseminated within the next generation. After phase out of the project Child forum will be community based children organization and community based resource centers will also be established, which will be run by children and local community people in the project areas. These resource centers will be consist of a library, indoor-game material, child rights related books and information, cultural and recreational materials. Moreover, children who will over the age of 18 years we will linkage them with local “youth club”. In future they will be able to continue the children organizational activities from their own views and capacities. Participation of community people is another dimension, which have been worked for the sustainability of the project. Finally, CMC (Center Management Committee) has been formed by the project which consists of local government, local elite people, teachers, employers, parents’ etc. People of different classes and levels have been included in the CMC to get the necessary support and feedback from the local community people. Gradually, it is expected that CMC help to resolve different problems of children and have taken different activities to establish the child right after phase out of the project.

The project is based upon the assumption that the political environment will remain stable. It is also assumed that is will be possible to establish contracts to employers among the middle class without major obstacles.

Total budget for this project is Tk. 11,815,784/= for the period 2008-2010.

3.1 JUSTIFICATION OF THE PROJECT:

The project has been developed following a series of consultation through FGD, workshop, formal and informal meeting or discussion with the participation of children, parents, employers, community people and project staff. In deed, Nari Maitree aims to involve community people in the project design to make the sense of sustainability real. Eventually all the lessons learnt has been incorporated in the new proposed project.

Project Document was prepared through stakeholder analysis. During the stakeholder analysis beneficiaries, caregivers, duty bearers, support groups as well as the opponents groups are considered. Their problems, their interest and stakes, their potentials as well their linkage are considered in the present undesirable situation.

During the development the project document Logical Framework Analysis (LFA) is followed which was practiced through a workshop in presence of all thematic partners. Team has identified core problem through analyzing the cause effect in the context of project learning and experience. On the basis of the problem, the development and immediate objectives, outputs and the project matrix have been reformulated in the light of GIM dimensions and CRP approaches.

Recently a base survey and situation analysis has been conducted at Nari Maitree project areas by INCIDIN Bangladesh. Number of focus group discussions was held during the survey and situation analysis. Reflections from the focus group discussion were also analyzed and learning was considered for PD development.

Lesson Learn from previous Phases:

In Nari Maitree working areas, most of the families live in the slums and living below the poverty line in Dhaka City. Generally people migrated from rural areas due to river erosion that makes them land less, and other natural calamities bring them in the slum areas. These areas are densely populated, characterized by huge scarcity of water, sanitation, medical facilities and other facilities of urban life. The poor parents could not provide nutrition, clothing and education, health care, recreational facilities. Due to this situation children are growing up without enjoying their minimum rights. Generally they involved in hazardous work. Without any exception, the working environment of these children is hazardous also.

Child Forum was developed to ensure children participation in different level, make the children voice stronger on CRC in local, national level, develop their leadership capacity through create a child friendly space. By this time they have achieved, confident to interact with each other, create a good position & acceptance in their family & community, children are able to improvised drama, capable to write newsletter, some children are involved in family decision-making & solving problem, children are involved in raising awareness family, community & national level. Through strong participation of different activities children are more disciplined, organized, socialized. They have strong contribution to, reduced early marriage, physical & humiliating punishment, working time in their community.

Through the consultation with disadvantaged children it is found that the stakeholders are aware about the child rights, employer become sensitize on child labour issues. In community level people are encouraged for birth registration, increasing knowledge of child rights and understand bad consequences of child labour. This result came out through massive initiative have been taken during the last phases on code of conduct and PHP.

From the consultation of the center management committee members it is found that they are very much interested to organize meeting with community people to sensitize the child rights issues to the community which will ultimate reduce the child labour as per their opinion.

Nari Maitree considered itself as a learning organization. Therefore, the organization aim is to acquire knowledge from the experiences of its own project and also from the other projects supported by Save the Children Sweden-Denmark. We have links with Save the Children Sweden-Denmark partner NGOs like SEEP, CPD, SUF, Shoishab Bangladesh, INCIDEN, UCEP and UDDIPAN, TWC, CC Project. The areas of collaboration are education, skill development training, job placement, micro credit, recreation, health, awareness raising, networking and advocacy.

From our consultation meeting with children and parents of our project areas it reveals that still now many children are deprived from their basic rights. It is found that most of the working children are Muslims and very few are Hindus. Most of the working children families are consisted of 5-6 members. Parents of working children are engaged in small traders, small factory workers, garments workers, drivers, vendors, baggier, day labor and rickshaw puller. Most of the parents are illiterate. So, parents are not aware about the importance of education of their children. Children do not get any participation scope in their family. Moreover children face physical and mental violence from the family member.

The recommendations from midterm evaluation are as follows:

· The project should extend NFE centers in other localities including more children.

· The existing non-formal education curriculum should include lessons /training on life skill education for the children/adolescents for more clear conception.

· More parents/guardians meetings should be organized and CMC meetings should be held at the Project areas to make community involvement in the program.

· Limited stipends could be granted for the interested and meritorious children/ adolescents so that they could participate at the computer education from the distant places of their home

· Existing networks and coalitions should be strengthened to advocate for rights of working children at the national level

· Necessary steps to recruit quality/appropriate resource persons for conducting different trade based training for the children/ adolescents of the center

· The project should closely develop linkage with the local organizations/companies for employing the adolescents who have received skill training.

Recommendation from Project Base line and situation analysis 2007 are as follows:

· Micro finance assistance to parents

· Rehabilitation services for potential child laborer with no of parents/ caregivers:

· For child workers code of conduct should be introduced to bind the employers with responsibility of child’s well being.

· Raising awareness of the household members on equal rights of the girls especially in terms of access to protection and development resources (such as health, education etc.).

· The culture of early marriage has to be challenged not only at family level but also at broader community level. In this regard a comprehensive awareness campaign has to be carried out.

· The family heads and the employers of the marginalized children (both working and non-working children) need to be sensitized on the advantages and rights of the children in participating in decision making process with respect to work major decisions concerning their wellbeing (e.g. health, education, work, leisure and marriage etc.).

· Initiation of community-based advocacy program is needed to create a collective space for the realization of provisional rights of the children

· The access of the working children in health services needs to be expanded both in terms of knowledge and health support services

3.2 Relationship to other SCSD projects

The current 4th phase of the project is a part of Save the Children Sweden-Denmark’s Child Labour theme programs. Save the Children Sweden-Denmark has gradually built up its partnership cooperation with this group of like minded local NGOs. Central in the screening for partners has been shared visions, willingness to work with a right based approach and willingness not only to implement their own project but also contribute to the implementation of a coherent program. So every project of these organizations is a part of the theme.

Working many years with child labor, Nari Maitree has observed that there are good laws to eliminate or reduce child labor in Bangladesh. But unfortunately, these laws are not properly implemented. It is true that project has been able to bring many children from hazardous works to soft works/non hazardous works. But the employers and owners of those factories have employed other children in that place. Other children instantly fill up the gaps created in those places of hazardous works that means. So the efforts made by Nari Maitree and other like-minded organizations, which are working for the elimination or reduction of hazardous works, are jeopardized to some extent. So, Nari Maitree feels that the government should come forward in this regard and make sure that the laws concerning child labor are properly implemented. The authority of the organization also feels that stern and punitive actions should be taken against those employers who break these laws. A joint monitoring cell can be formed comprising government organizations and Non Government Organizations (NGO) to monitor the factories and places of hazardous child labor to make sure that no employers employ any child laborers in hazardous works. Advocacy work should be accelerated to implement this plan. SCSD also feels in the same way. So, such plan of Nari Maitree matches with the framework of SCSD. On the other hand, if the common people are made aware of the bad effects of child labor, they will come forward to reduce this from society. So, in the long run child labor will be reduced in the informal sector as well.

The current 4th phase of the project is developed within the framework of Save the Children Sweden Denmark program. The framework of the SCSD program started to work in relation to cross cutting issues like: Physical and humiliation Punishment (PhP), Child Sexual Abuse Exploitation and Trafficking (CSAET), CRP, Media-communication, and Emergency. Project will maintain relation with the CRP thematic group for capacity building on human resource development, researching on child rights issues, Documentation and child rights policy. Through the relation with the media-communication of SCSD, project will create space for children participation in media. Besides, the accountability, non discrimination, child participation in development activities, awareness development on HIV/AIDs, gender development, and empowerment and trafficking issues are considered as cross cutting issues. Considering the country strategy of SCSD above mentioned interventions were incorporated in this project.

CC Project is one of the rural based child led organization. Nari Maitree has aim to acquire knowledge from the experiences of CC Project. In this regard Nari Maitree maintain network with this project. In future Nari Maitree will utilize related experience in this project which will improve this project activity also. On the other hand Nari Maitree has good practice in relation with children organization which will be introduced and incorporated in the CC project also.

Together with working Children (TWC) is one of the Child labor base forums. Nari Maitree is one of the members of this forum. Nari Maitree is working with this forum for local and national level advocacy work very actively and cordially. Nari Maitree believes that joint forces are needed to strengthen any initiative, especially National level advocacy work.

3.3 Relation to Nari Maitree’s Organizational Strategy:

This project objective fully coincides with the vision and mission of Nari Maitree. Moreover Nari Maitree has special competence to address the problems of child labor in the working areas. Nari Maitree has a long attachment to work on child rights issue especially on child labour issue that gives a wider insight to the staff working with the organization. This organizational learning through experiences to work on Child Labour issues strengthens the competence level of Nari Maitree as a whole. Nari Maitree intervention rescued the child labor from hazardous work and provided them with skill training and credit to select their own trade to be self-employed. Besides these, Nari Maitree has taken awareness program for the parents and the employers about danger of hazardous job performed by the children.

Competency of Nari Maitree to deal with CL issue:

Based on the working experience from July 1999 Nari Maitree started another project titled “Intervention towards Child Development” with the financial and technical support from saves the children Denmark. Till now Nari Maitree is working with Save the Children Sweden- Denmark with very good relation and cooperation. As a result NM has working since long towards the change of the child labourer lives. According to our last few years experience many of the parents become aware to support their children in pursuing their studies. The children being aware of their rights and oriented towards learning while in NM’s schools have been pursuing their education. As a part of project achievement Child labourers are facing lesser instance of physical punishment and verbal abuse both by employers and parents. The children face less exploitation as the working hours in factory have reduced with out any reduction in their wage. Discrimination against girl children with respect to education and participation have reduced a lot which is manifested in their enrollment and continuation in schools and involvement in the cultural activities and other recreational & mobilizing activities organized to mobilize community’s opinion in favour of child rights.

3.4 Nari Maitree Project at a glance in child sector:

Name of the projects Project Areas/Ward Funding sources Core objectives Major beneficiaries
Adolescent Development Project Word no-27Dhaka Action AidBangladesh To increase health & nutrition statusTo aware about their raise voice 1500 targeted Adolescent
Capacity Building Property Alleviation of Disadvantage Women & Their Children BGD/97/029 Ward no –85Dhaka UNDP To create alternative jobTo empower & aware women

To increase their economic status

 2000 sex worker & their children
Creating Awareness on HIV/AIDS Among Urban Slum Adolescent & Youth of Dhaka City Ward No:25,26,27,28 and 31

Dhaka city

 UNDP Increase awareness on HIV/AIDS among adolescent 3360 Adolescent & youth
Adolescent Health & Education Project UNSCOParis To develop capacity & health of Adolescent 1200 Adolescent
Action ResearchWith Child Sex Worker in Dhaka Ward no-31 Dhaka UNICEF To change their life styleTo aware on health & nutrition issues 75 Child sex worker
Improving quality of life of Child domestic workers Dhaka ILO-IPEC To reduce worst form of Child labour for domestic child workers 1000 Child domestic workers
Urban primary Health Care Dhaka ADB through DCC To improve health status of urban population 400000 population in five zone of DCC

Staff capacity

Nari Maitree has overall 346 staff where 72% are women. But in ITCD project that is supported by SCSD, total staff is 9. Project Coordinator will carryout the over all Child Labor project with the support of program officer, supervisors, four organizers and accountant.

Capacity need:

Nari Maitree is one of the community trusted organization. Nari Maitree works with local government as well as community people. In community and national level organizational value of Nari Maitree is very high. In the non-formal education sector Nari Maitree use CRC based curriculum, flexibility in program designing, maintain child friendly environment. In health side Nari Maitree provide health service through referral service and through linkage.

The capacity building is needed both for organizational & program level. Capacity building is necessary for facilitation area so that most of the staff and trainer team of child forum could conduct training as well as they know how to facilitation the children organization. Moreover, basic and refresher training on CRP & CRC should be continued. The capacity building on the following issues is needed for the project staff & beneficiaries: First Aid Training, Leadership training, communication skills, Monitoring and Supervision training is an essential part to proper implementation of the program or project objective, Training on accountability. Another capacity building area is Record keeping, reporting and documentation for making accurate planning. Advocacy training is also very much necessary for field staffs. Capacity building is also needed for children, community people and others duty bears like school teacher, religious leaders, ward commissioner for improving their contribution in the project.

Local resources and knowledge

Executive Director of Nari Maitree is a member of the local government school committee, Bangladesh Shishu Adhiker Forum (BSAF), ATSEC Bangladesh Chapter, Voluntary Health Services Society (VHSS), Coalition for the urban poor (CUP). She is well experienced in education and project management and she has good relations with the education resource person of the country. She has received different development related training both for overseas and national label training.

Vice president of Nari Maitree is an assistant headmistress of the local high school. The Executive Director (ED), as operative head of the organization is responsible for the overall management of organization as well as programs. Under the guidance of ED, each program Manager/Coordinator manages implement her/his program as per agreement between NM and donors. Area Coordinators and Program Coordinators also manage their respective programs in the local offices outside Dhaka. The ED also acts as the member secretary of the Executive Committee. Currently Nari Maitree has 246 total staff. Besides, 56 Volunteer Staff (48 TBA and 8 peer educators) work in different projects.

NM has skill staff-members that are volunteer-minded. When there is insufficient fund they can with small salary. Even thought they could work without salary for month after month.

It is mentionable that NM has 13 projects funded by different donors. Among them two projects (Women Development Programme and Income Generation Programme) have been running without donors ie those projects have been going on from the NM’s own fund. In every project there are credit programme. It is also notable that the Women Development Programme is based on Credit.

Legal status:

Nari Maitree is registered with the Department of Women Affairs, Directorate of Family Planning and NGO Affairs’ Bureau. The details of the legal status of Nari Maitree are given below

Registration Authority Registration Number Date & Year
Department of Women Affairs MWA-299/84 15 October, 1984
Directorate of Family Planning No.43 17 April, 1986
NGO Affairs Bureau FDR 326 19 November, 1989

Affiliation status

NM is a member of the NGO apex bodies like the Association of Development Agencies in Bangladesh (ADAB), Voluntary Health Services Society (VHSS), and Bangladesh Shishu Adhikar (Child Rights) Forum (BSAF), Coalition for Urban Poor (CUP).

Staff recruiting policy

There is staff recruitment committee in Nari Maitree. Staff recruiting policy is maintains through the gender policy. Gender policy has been address gender sensitiveness among the staff. During the recruiting of staff NM maintain non-discrimination process.

4. PROJECT LEVEL

4.1 Child rights context at National Level:

Child labor is considered to be one of the most important child rights violations in Bangladesh. Large numbers of children are contributing directly to their household economy and work in hazardous environment. Children work full-time as well as part-time; they are engaged in wage employment as well as in non-income generating activities. Child laborers face several problems. They are deprived of their childhood and they often work very long hours under hazardous working conditions, which represent a threat towards their physical health and psychological-social development. Many child laborers are also exposed to different forms of abuse, including sexual abuse, which represent not only a physical but also a mental health hazards. The vast majority of the child laborers are denied their rights to education. They are also more prone to be trafficked especially the working children on streets. Child labourers are mostly live in the slums or street and other peripheral area.

Children, adolescents of urban slums and streets are marginalized group who are most vulnerable groups in this scenario. Problems of security and violence are predominant and most importantly violence against children, child abuse, trafficking, drug use & selling, the rising number of street children and their associated vulnerability have put forward a major development challenge to the urban society. The whole environment is not protecting child rights & not supporting in creating enabling environment for their normal growth. This situation is crippling our next generation.

Within the urban slum context children are exposed to a series of risks and vulnerabilities that affect their interests and their rights for survival, development, protection and participation. Their risk and vulnerabilities increase due to discriminations regarding income, age, gender, and ethnicity; decisions and life strategies adopted by individuals and households that could harm children’s interests when family’s interests are considered as more important; due to inadequate government policy, lack of meaningful coordination among the development actors in urban contexts that generate child labourer.

445,226 street based child workers are engaged in different kind of jobs in six divisions of Bangladesh. Out of them 334807 street workers are alone in Dhaka cities; of which 54% illiterate, 44% can read and sign only and 1.1% attend NGOs school according to Baseline survey (DSS and UNDP).Street children working time is not fixed it varies from early morning to even midnight. Street based child workers are currently involved mainely day labourer, shop keeper, vendor, restaurant helper and vagrants (Tokai)

Child labourers have little participation in decision making process either in family or community level. Children are not allowed to raise their voice by their parents and are taught to be quiet. Street and domestic children have less access as they are struggling to make a livelihood. Govt. pays little attention to poor underprivileged children’s participation.

4.2 Child rights context in Dhaka City:

Dhaka, the capital city of Bangladesh, has one of the fastest urbanization rates in the world. Now, it is the 11th most populous city in the world. Slum is one of the major problems that are occupying 30% land of the city. There are about 3,000 slums and squatters settlements which houses about 1.3 million poor people.

In the city, there are children and families who live and work in the streets in an unhealthy, unsafe and unprotected environment. During day time they do odd jobs or collect garbage for their livelihood and in the night they sleep in street/path. They are vulnerable to violence as they grow up without adult care or guidance. Harrassment by police, mastans, security guards and elders and abused by interest groups are part of their everyday life. Children engaged in domestic work are abused and tortured frequently. Around 334807 children (ARISE Report) are street children.

In Dhaka City there are children who live in slum and street in an unhealthy, un-safe and unprotected environment. Child labor constitutes about 12% of the total labor force in the country. According to the National plan of Action for children in 1997-2002 adopted by MOWCA the number of children working in urban areas was 2-4 million which has probably increased to 3 million now. Around 1.1 million children live in the Metropolitan Cities. Many of them are living in slum areas under the most unhygienic conditions, are engaged in hazardous jobs, working on an average 48 hours per week and earning less than 1500 taka in a month. In practice child labor laws in Bangladesh do not protect working children. Employers prefer children as they are cheap, productive and obedient. Children working in the industrial sector have no contract of employment and so it is difficult to stands up for themselves and fight for their rights.

4.3 Child rights context in Project level:

The proposed area for the project is Goran, Bashaboo, Razarbagh and Lalbagh. These are located at the east and south part of Dhaka City.A common scenario in the project area is, like other areas of Dhaka that small portions of population control the big percentage of asset. The economic gap between rich and poor within these areas is widening at an increasing rate and poverty has afflicted in the city. Poor people are not uniform. Poverty has different dimension as well as absolute and relative poverty. It is still in project area the highest number of people living in poverty.

According to the situation analysis conducted in 2002, the population of the four areas (Goran- Ward 25, Bashaboo- Ward 27, Rajarbagh- Ward 28, Lalbagh- Ward 60) where Nari Maitree has been working was 571000 in 2001. The said area is comparatively poorer and underdeveloped. The proposed area is densely populated and everyday in migration is taking place, as this is a growing new township with lots of small and medium size factories are developing. During our situation analysis it came out that approximately 4800 children live at Shobuzbagh Khilgoan and Lalbagh Thana and out of which 3300 are engaged in hazardous child labour.

Shobuzbagh and Khilgoan Thanaarea started getting inhabited especially in the 1960s. At that time, as a result of increased access to economic activities of the East Pakistanis following the Indo-Pak independence in 1947, people of even relatively lower economic echelons started settling here in order to make a more prosperous urban living. There are two adjacent natural lakes that are prone to over flooding even early in the rainy season. Most roads get inundated in floodwater, especially in the rainy season. This area has not been blessed with any flood protection initiative as those in the western side of the city. In the aftermath of flood and other natural disasters, there is outbreak of different diseases like diarrhea, scabies, malaria, and dengue. As a result, life becomes difficult for people. Those who are involved in different small business cannot make any profit. Their very existence is jeopardized due to such natural disasters.

The flow of in migration is higher in this area because of the mentioned reasons. The employers get Child Labour from mentioned areas. As a result of increasing poverty and growing population, there is a huge demand for child labour from different Khilgoan, Shobujbagh and lalbagh Thana.

From the working areas it has been seen that children are mostly involved as Garments employee (21.1%), handicrafts labourer (karchupi/jori/embroidery/small cottage) (19.9%), domestic labourer (14.8%), low salaried government/non-government employee (10.5%), small business (8.6%), low income work (8.2%), day labour (6.6%), unskilled labour (4.7%), Assistance Wielding/automobile (4.7%), others (Soil digging, Beggar, Carpenter, Mason, Hawker, Sales man, Shoe making, Office assistance, Butcher ‘s shop) (4.8%) etc.

4.4 Findings from base line and situation analysis:

From the situation analysis (under the title of Base line and situation analysis for child labour projects of Nari Maitree Project area, conducted by INCIDIN Bangladesh) it is found that significant number children engaged in work in some earlier occasions i.e. 10.3% boy and 9.6%girl. Girl children are more vulnerable to that of the boy children almost fifty percent children working against their will. It is also found that in all respects work hours per day of the studied children reflects severe rights violation of the working children. Regarding holidays, children are worked seven days in a week. Significant number children mentioned that their employers behaved rudely. Regarding freedom to leave employment, a significant number of children (20% boy children and 25.7% girl) denied of this participation rights by their employer. It also revels that a significant number of under non-working children showed their ignorance of the marriage age. Regarding right to play and recreation a number of children expresses that they have no chance or time to play. Another instance is that a significant number of children can play after launch time that means after providing their labor at the first half of the day. In considering all it is found that children are far behind to that of the level standardized in CRC.

The baseline study concluded that the vulnerability of the children into child labour is proportional to the size of the family of the children. Also children from the broken family who are living at female headed households are more vulnerable for being economically active than the male headed households. Adolescent age (15-17 years) is the most vulnerable period for potential child labour irrespective of gender. More than half (53.7%) of the children are in between 10 to 14 years. That means more than half of the children are in their post puberty.

Child labour Characteristics: Handicraft works controls the invisible child labour market at the working areas of Nari Maitree. The average work hour of the child labourers is 9.5 hours per day. The mean working days for the children, according to the WRC stand 6 days. It can be pointed that almost every household have 0.79 (working children / Household) working children. More than half of all child labourers (52.2%) are working 7 days per week, and the other nearer to half (40.0%) work with a leave of one holiday round the week (6 days). Only small percentages of child labours (6.9%) are working 4 – 5 days per week. Working children bear or contribute 20% to 50% of the monthly household expenditure of the family. Almost one-third of the working children do not have any scope to enjoy themselves with recreational activities.

Decision making regarding well-being of the children: More male household heads (90.1%) within their household take decision on behalf of their family members on what they can do or not. About children’s education male household head is the major decision maker.

Educational status of the working children: The educational status of the working children depicts an alarming situation. Non-working children are currently attending school 7.3 times more than working children. Presently, only a little number of working children have access to mainstream education. Economic vulnerability as the most common reason for being dropped out from the school. Children consider NGO school as a ray of hope for the enjoyment of their participation rights regarding scope of association, participation and access to information.

Knowledge base on the child rights: More than half of the household heads (66.0%) heard about child rights. Among the HH heads neighbor is the second main source of dissemination of information on Child Rights, after mass media. Most of the HH heads firmly hold education as an important element for the well being of the children. More than three quarter of HH heads believe child abuse as a punishable act.

5. PROBLEM ANALYSIS/CAUSALITY ANALYSIS

5.1 Causes of the child rights Violation:

One of major cause is inadequate income of the families forced the children to hazardous work which lead the prevalence of Child Labour in the country. About 55 million people live below the poverty line in Bangladesh because most of the poor households have large family size moreover their job opportunity is very much limited in their locality. Beside this, income is very poor from the existing job. In the context of Bangladesh, most of the family are male dominated, female member are not allowed to go out side work for income. So children of the family become bound to involve in hazardous work for survive.

Lack of job opportunity at rural level a bulk proportion of unskilled children migrated to suburbs area of city. As they are very much unskilled, they have no bargaining capacity for benefits. It is one of the great opportunities for small scale informal factory owner. So, unskilled migrated children are high demanded to them.

The children of Bangladesh are in a vulnerable position, trapped in their current situation by an interlinking network of forces, including poverty, vulnerability, lack of access to basic services, broken family, inadequate knowledge of parents and employers about hazardous child labor, lack of employment opportunities, limited mobility, lack of awareness on issues affecting their health, increased rural-urban migration, life choices and self-development, and an inability to exercise their basic rights. As a result Children as well as their parents are not aware about the child rights also. They do not aware and do not know the bad consequences of child labor so, they are engaged the children in work.

The children have little control over resources such as land, money or household assets, and mobility, particularly for girls, is limited for cultural and traditional reasons. Children are not usually involved in decision-making processes, and decision related to their own lives, for example marriage choices, their parents or guardians make education options. The target children have almost no access to information regarding issues affecting them, and are unaware about their basic legal and child rights. Even those who are aware of their rights do not know how to exercise them, and have no means of involving themselves in legal processes, as they are not acknowledged by local leaders as active community participants, employers, parents and even the law makers.

Traditional norms, values still exist in our society. There is no life oriented education rather parent’s perceptions greatly influence their children’s participation in the labor force. The education system of the country in general does not provide any immediate prospects of better jobs or their levels of income. Low return of education and poor parents are not conscious about value of education. Naturally, poor parents fail to appreciate the long-term values of education. In many cases, the male children of the household are expected to help the father in the field and the female children the mother with the household work. Moreover, parents consider their children’s employment in certain occupations like in the engineering workshop as a rare opportunity to learn employable skills. To them, it is an alternative education with much more practical values than the traditional primary education. Even though the government launched the Compulsory Primary Education Program all over the country since January 1993, education remains very expensive for a poor family, which is expected to bear the costs of uniform and transportation. In some areas of the country the expenditure on primary level students represents one-third of the entire income of a typical poor family, tough most families have more than one child of the school-going age. Many children are, therefore, forced to work to pay for their own education.

Child marriage in these areas is quite prevalent because of socio-economic reasons. Such as men demanding smaller dowries for younger brides, or the social perception of girls as being a financial burden on parents, parental anxiety regarding their children’s social security, the maintenance of social prestige, and local customs and traditions. In traditional communities such as these, there is invariably a large age gap between women and their husbands, usually between 7-9 years, but for adolescent females whose marriages were arranged when they are between the ages of 12 to 14, the difference can be up to 18 years. Adolescent females in these circumstances have no access to information relating to the procedures for marriage registration, legal rights of women regarding dowry, early marriage, polygamy and divorce. Lack of adequate legal awareness among adolescent females makes them unable and sometimes unwilling to play a more proactive role in exercising their rights.

The target children live in communities where there is little or no awareness of issues relating to gender relations or equality, and females are not offered the opportunities or life choices afforded to males. Children from these poor communities have little opportunity to receive formal education, and subsequently their prospects of finding work and improving their socio-economic situation in the future are limited. Neither male nor female adolescent

" 10,"

A REPORT ON WASTE MANAGEMENT

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1.1    SUMMARY AND OVERVIEW

Over the past few decades, increasing importance has been attached, by all branches of industry worldwide, to the ecology alongside economy and quality considerations. The leather industry is no exception. The relationship between price and quality used to be the dominant consideration in times of rapid industrialization, but consumers and manufacturers have since become much more conscious of health, safety and environmental protection issues.

Tanneries can only survive in the future if they manufacture leather of the required quality, discharge treated effluents that comply with authorized limits and appropriately manage the disposal of wastes. Since the advent of legislation prohibiting the untreated tannery waste disposal emanating from leather manufacturing operations, pressure has been put on tannery related personnel.

Continuous observations from past few years have introduced various types of wastes producing from tanneries and their sources. From raw stock treatment to final finished leather there emanated a huge amount of wastes.

Different altered and surprising parameters are found which suggest the planned and successful systems to recover or treat these vast effluents. Contributions of several organizations as well as individuals worldwide have also introduced us various fruitful treatment methods which can verily relieve or minimize the load of a series of waste products.

However, all these treatments though can easily be practiced in the developed countries; we can not make a best use of them all for the lack of our limited and broken economic infrastructure. Yet the proposed methods and systems stated in this book can once be effective in course of time in future when tanneries will be set up as per environmental safety issue.

The tanneries in Hazaribagh have already been proposed to be transferred in Savar. Universally accepted treatments can be practiced as much as possible then.

Suggestions have also been included here for a typical small and large Tannery as per their location and criteria of systematic waste management,

1.2   INTRODUCTION

Tanning hides and skins is being practiced from ancient time which has become an inevitable industry in this modem age of glamour and fashion as because there is no material in the world like natural leather in the midst of variety of synthetic and artificial materials which can be used to make outstanding goods specially dresses, bags and foot wears.

But as a matter of irony, tanneries are isolated from human habitations as for their characteristic odor and mode of pollution since a tannery deals with tanning raw hides where a series of chemical operations are undergo to convert putrefying raw hides into non putrefying leather.

There is no single process for producing leather. Depending on the circumstances prevailing, different options for unit operations will be used. Accordingly, different wastes will be emanated and different possibilities will exist for reuse or conversion of residues as waste management systems.

The potential environmental impact of tannery effluents is widely acknowledged. It has a long-term negative impact on the growth potential of a country. From an economic viewpoint the discharge of residues is a waste of scarce resources, whether chemicals, energy or raw materials.

1.3 HISTORICAL     BACKGROUND     OF    WASTE  MANAGEMENT

The historical development of waste treatment and disposal has been motivated by concern for public health. The industrial revolution between 1750 and 1850 led a massive expansion of the population living in towns and cities migrated from rural areas which gave rise in the volume of wastes. This led to an increasing awareness of the link between public health and environment.

To deal with this potential threat to human health, legislation was introduced on a local and national basis in many countries. For example in the UK, throughout the latter half of the nineteenth century, a series of Nuisance Removal and Disease

Prevention Acts were introduced which empowered local authorities to set up teams of inspectors to deal with offensive trades and control pollution within city limits.

Following the Second World War, a series of incidents in the late 1960s and 1970s highlighted waste as a potential major source of environmental pollution. A series of toxic chemical waste dumping incidents led to increasing awareness of the importance of waste management and the need for a more stringent legislative control of waste-Besides, the massive adverse publicity and public outcry led to pressure for the problem of waste disposal to be more strictly controlled by the legislature. Still now environmentalists are researching and inventing newer cleaner technologies to Minimize and reuse wastes. In Bangladesh also waste minimization techniques are thought to be launched though it was negligible in previous times. But some tanneries like Apex and BATA have already started these projects in their leather industries.

1.4     DEFINITIONS OF WASTE

The definition of waste can vary as what represents waste to one person may represent a valuable resource to another. It is clear from several standpoints that accurate definitions and classifications of waste are required. By its very nature, waste is a heterogeneous material and difficult to describe, define and classify. In many instances the waste will be a mixture of different types, or may be on the border between two categories.

However, the term ‘waste’ can lexically defined as any material that has no use and is thrown away. (Oxford)

According to Environment Act 1995, a waste is defined as any substance or object which the holder discards or intends to discard. A ‘holder’ means the producer of the waste or the person who is in possession of it. This Act sets out different categories of waste to which the definition of waste applies.

  1. Production or consumption residues not otherwise specified below.
  2. Off-specification products.
  3. Materials contaminated or soiled as a result of planned actions.
  4. Residues of industrial processes.
  5. Residues from pollution abatement processes.
  6. Residues from raw materials extraction and processing.
  7. Any materials whose use has been banned by law, etc.

Some particular waste definitions are stated below according to the EC Waste Framework Directive (91/156/EEC):-

Controlled Waste

Household, industrial and commercial wastes those can be controlled by any means are known as controlled waste.

Uncontrolled Waste

Some of wastes emerged from industrial, commercial or agricultural Sources are known as uncontrolled waste.

Hazardous Waste

The list of generic wastes which if they contain properties is rendered as hazardous, such as, corrosive, toxic, reactive, carcinogenic, infectious, irritant or harmful to human health and environment.

1.5 CLASSIFICATIONS OF WASTE

As stated earlier the classification of waste is difficult since there can be great variation in composition between different loads of waste, However, according to Porteous (1992) waste can be classified as their-

  1. a) Origin- e.g., household or urban solid wastes, industrial wastes;

 Form- e.g., liquid, solid, gaseous, slurries, powders;

  1. Properties- g.,    toxic,    reactive,    acidic,    alkaline,    volatile,
    carcinogenic;
  2. Legal definition- g., special, controlled, industrial, commercial.

According to the Development of a National Waste Classification Scheme 1995 (UK) waste is classified into six categories:-

  1. a) The industry producing the waste:

What kind of industry is taken under consideration includes this type.

  1. b) The process producing the waste:

The mode of processes involved in generation of waste includes this category.

  1. c) The waste category:

The key area of flu’s classification is the waste description and detailed composition.

  1. d) The properties of the waste:

This includes the properties like explosives, oxidation, irritation, toxicity, infection, odour, etc.

  1. e) The physical form of the waste:

This includes whether the waste is solid, liquid or sludge etc.

0  The information label:

The labels like S, special waste; H, hazardous waste; P, packaging waste; C, clinical waste show their information.

1.5 Beam house operation:

“The term “Beamhouse” refers to the processes in the tannery between the removal of the skins or hides from storage and their preparation for tanning. This includes trimming, soaking, green fleshing, unhearing liming, lime fleshing, lime splitting and trimming, deliming, bating, pickling and chrome tanning. The term dates back to the time when the hair was removed from the skins by means of a hand beam, i.e. on a sloping, curbed table or large fog using a two-handed knife. This working if the most modern and sophisticated facilities, some hand work on the beam is needed occasionally for quality improvement.

The beam house operation has the distinction of being the most disagreeable step in learner manufacture. It involves the use of bad smelling concoctions which have been responsible for much of the poor name of the leather industry in its community relations. The beam house operations are also of tremendous importance in the ultimate quality of the leather. Indeed, in the opinion of most practical tanners, ‘leather is made in the beam house/ Beam house operations also employ complex principle of biochemistry and inorganic chemistry and are the most difficult areas of leather manufacture of the uninitiated to understand. Practical beam house operation, however, can be reduced to relatively simple steps, and good quality leather can be made by close attention to detail and empirical observation of cause and effect.

1.6 SOURCES, QUALITY AND CHARACTERISTICS OF BEAMHOUSE WASTES

The typical wastes generating from beam house can be categorized as three significant forms:

  1. a) Solid wastes
  2. liquid wastes and
  3. c) Gaseous wastes

1.7. Waste generated during Beam house operation from tanneries in Bangladesh

Liquid Waste Process Sequence Solid/Gaseous Waste
Blood flesh, proteolyses and unused Sodium Chloride Soaking Flesh, hair etc.
Unused Calcium Hydroxide, Sodium Sulphide and Sodium bi sulphide Unhearing and Liming Fat and flesh, hair

eic
  Fleshing Fat, flesh
Unused Sodium meta-bi-sulphide, Sodium sulphide, salt of Ammonia, Alkali etc. Deliming and Bating

Bating

 Sulfur-di-oxide and Ammonia gas.
Unused Sulphuric acid. Formic acid. Sodium Chloride. Pickling Chlorine.
Unused Chromium sulfate, Sodiurn-bi-carbonatc, Sodium carbonate and Sodium formate. Chrome Tanning  

Methodology for the production of Shoe upper from wet blue cow hide

Wet blue cow hide two pcs

Samming by samming machine

Splitting by splitting machine (thickness-1.5 cm)

Trimming by hand knife.

Shaving by Shaving machine (thickness-1.1cm)

Take shaved weight. (All based on this shaved wt)

Name of Operation      %of chemical used    Time Analytical    checking.

Wet Back:      200%  water

0.2%  Supratan UF (wetting agent)

0.25% Atlasol 177C ( Fat)       Run 45’

:                        Drain wash

Rechroming:

100%  Water at N.T

0.2% Formic acid                  Run 10’

Check PH 3.3

+ 2.0%  Relugan GT-5             Run 30’

+ 1.0%  Black PNT                  Run 10’

+ 8.0%  Chrome powder

1.0% Atlasol 177C               Run 30’

+ 2.0% Chrome syntan           Run 60’

+ 2.0% Relugan RF                Run 30’

+ 3.0% Sod. formate               Run 30’

+ 1.0%  Sod. Bicarbonate       Run 60’

Check PH 3.8-3.9

Leave 0/N. in the bath

Next day Drain wash well

Neutralization:

150% Water at 450C

+ 2.0% Sellasol NG

1.0% Sod.formate

0.3% Sod. Bicarbonate           Run 60’

Check PH 4.5-4.6   Drain wash

Retanning & Dyeing-

100%  water at 450C

4.0% Relugan RE Run 15’

+1.0% Ingrassante VFM         Run 15’

(synthetic fat)

+ 4.0% Intan 806

4.0% Basyntan N

4.0% Butan 7813

2.0% Mimosa

2.0% Quebracho

2.0% Dye stuff                       Run 90’  Check penetration.

 

Drain wash.

 

Fatliquoring:

                        2.0% Butan 7818 (Filler)        Run 10’

                        3.0% Ing. VFM

1.5% Ing. VA2

1.0% E-123 (Natural oil)

0.05% Biocide C-3                 Run 45’

+ 2.0% TP-340 ( Resin)          Run 30’

+2.0% Formic acid                  Run 10+30’

Drain wash

 

Top Dyeing:

                        200% Water at 500C

1.5% Dye stuff

1.0% Chrome Run 20’

+ 1.5% F. acid Run 20’

+ 0.25% Cat S Run 10’

Check PH 3.6/3.7

Drain wash, Hours up o/n

     Basic Finishing Procedure

Staining:

Metal complex dye(liquid)   200p

Solvent                                  200p

Water                                    600p

Spray 2x , dry well.

 

Base Coat:

Pigment                         30p

Polymer binder            150p

Casein binder              30p

Water                          790p

Spray 3x .dry well

 

Pigment coat:

Pigment                       50p

Polymer binder            100p

Casein                         20p

Water                          830p

Spray 3x .dry well

 

Fixation:

Formaldehyde (30%)  300p

Water                          650

Acetic acid                  50p

Spray 1x .dry well

 

Top coat:

P.U lacquer component           100p

Organic solvent                       150p

Cross-linking agent                 50p

Spray 2x .dry well

Different types of wastes with their salient features are discussed below-

Soaking effluent:

Soak liquor contain soluble proteins like albumin and are a major source of proteolytic and other bacteria. Suspended matters like dirt, dung and blood adhering to the hides and skins are discharged intermittently with the soak liquor. The salinity of soak liquor is very high varying from 15,000 to 20,000 mg/L (as Cl) soak liquors undergo putrefaction very rapidly since. They contain a large amount of impurities and a favourable pH for the growth of bacteria. The biochemical oxygen demand (BOD) of the soak liquor is usually between 1100 to 2500 mg/L and the quantity of the soak liquor discharged will be 250 to 400 litres per 100 kg of hide or skin tanned.

Liming Effluent:

Lime liquors contain suspended and dissolved lime and sodium sulphide. The discharged of the spent lime liquor in intermittent and its average quantity is about 650 to 1000 litre per 100 kg of highly processed. It is highly alkaline and is one of the heaviest of the fractions in terms of biochemical oxygen demand (BOD) and suspended solids. This waste contains high concentrations of sulphides when sodium sulphide is used in the liming process. This waste contains high ammoniacal nitrogen content. The BOD varies from 6000 to 9000 mg/L.

Unhairing and fleshing effluent:

The effluent from the unhairing operation is more or less continuous and contains mostly air and sulphides, fleshing. This operation gives rise to an effluent which is also more or less continuous and contains fatty and fleshy matter in suspension.

Deliming effluent:

Spent deliming which are discharged as waste also carries a significant pollution in terms of BOD, The BOD of this waste varies from 1000 to

2000 mg/L. The quantity of waste discharged is about 700 to SCO liters per 100 kg of hide processed

TABLE-1

SOAKING WASTES

Estimated volume 3-7 M3/1000 Kg

Parameter                                            mg/L                            Kg

Total solid                                           40.000-50,000 200- 230

Total Suspended

Solid)                                                  5,000 -10,000  25 – 50

Total Dissolved                                   30,000 – 40,000    50 – 200

Solid

Biochemical Oxygen                           1,200-2,000          6-10

Demand

COD                                                   3,000-5,000                 15-20

Alkalinity                                            1,000-1,500                 5-7.5

Sulfide                                                None                           none

Chromium                                           None                           None

pH                                                       7.5-9.0

Spent bate liquor:

It has a high amount of organic mailer and ammoniacal nitrogen due to the presence of soluble skin proteins and ammonium sails used in bating BOD is usually low.

Spent pickle liquor:

Chrome tanning effluent-

The spent chrome liquor is greenish in colour and highly acidic. The waste contains high concentrations of trivalent chromium (Cr3+) ranging from 100 to 200 mg/L. Hexavalent chromium is not generally present in the waste chrome liquor because of the reducing agent used and one bath process utilized. The average discharge of the waste chrome tan liquor is about 400 to 500 litres per 100 kg of hide or skin tanned. BOD of the waste is usually about 1000 mg/L.

TABLE-3

CHROME TANNING WASTES

Estimated Volume 3-7 M3/1000kg

Parameter                                            mg/L                                        Kg

Total solid                                           30,000 – 60,000                      150-300

Total Suspended Solid                        1,000 -1,500                            5-11.5

Total Dissolved Solid             9,000-37,500               145 – 287

BOD                                                   400-800                                   2-4

COD                                                   1,000-2,000                             5-10

Oil and Grease                                    600-1200                                 3-6

Acidity                                                2,000-5,000                             10-25

Chromium                                           2.000-5.000                             10-25

Sulfide                                                none                                        none

Ph                                                        2.5-4.5

Composite effluent:

The composite effluent from the tannery is highly colored and bad smelling. It is highly alkaline with high amount of suspended and dissolved impurities. BOD of the effluent varies from 2000 to 3000 mg/L.

TABLE-4

VEGETAIILE TANNINC WASTES

Estimated volume 3 – 6 M3/ 1000 Kg

Parameter                                            mg/L                            Kg

Total Solids                                        25,000 – 60,00O         125 – 300

Total Suspended Solid                        5,0000 –  10,000          25 – 50

Total Dissolved Solid             20,000 – 50, 000          100 – 250

Biological Oxygen Demand  6,000- 18,000  30 – 90

Chemical Oxygen                               15,000 – 40,000           75 – 200

Demand

Oil and Grease                                  200-400                       1-2

  Acidity                                               2,000 – 4,000  10-20

Chromium                                        none                           none

Sulfide                                               none                            none   

 pH                                                     3.5-5.0

TABLE-5

Composition of typical unreacted combined tannery effluent . Units are mg/L unless otherwise indicated (Source – UNIDO)

Parameter                                                                                           Chrome
Vegetable

Tannage                                                                                                         Tannage

pH                                                             9                                       9

total solids                                             10000                                      10000

Total ash                                                 6000                                         6000

Suspended solids                                   2500                                         1500

Ash in suspended solids                          1000                                           500

Settled solids                                           100                                              50

BODs                                                       900                                          1700

Potassium permanganate                         1000                                         2500

COD                                                       2500                                         3000

Sulphide                                                   160                                            160

Total nitrogen                                           120                                            120

Ammonia nitrogen                                    70                                               70

Chrome                                                     70

Chloride                                                  2500                                         2500

Sulphate                                                  2000                                         2000

Phosphorous                                               1                                                  1

Ether extractable                                      200                                            200 

1.7    WASTES AND THEIR IMPACT ASSESSMENT ON environment-

Though it is a very common trend all over the world that tanneries are the culprits of producing strict odor, today the impact of their wastes discharged is the most concerning matter. It should be noted that in high density industrial areas, the environment can no longer assimilate some natural substances such as nitrogen and phosphorous. For aquatic life this is a serious problem for eutrophication. This level of wastes as effluent requires immediate treatment as being urged by the environmentalists upon the tanners.

Now we will take a look over the impact assessment of various wastes on

environment.

1) Effects on Land:

When the tannery waste gains access to cultivable lands or when the land Is irrigated with such waste, losses its fertility. The effluent may. change the characteristics of the soil and also may interfere with the water uptake of the plant. The presence of chromium in the effluent influences the metabolic activities of the plants, resulting into reduced yield.

2) Effects on Surface Waters:

The disposal of effluents from a tannery into any water coarse interferes with the physical, chemical and biological characteristics of the receiving water. The high chloride and sulphide content of the waste affect the quality of the water courses and impart bad taste and odour. The presence of suspended matter as lime, hairs, flesh etc makes the water turbid. Due to the excessive organic content of the waste, it exerts a high BOD demand depleting the oxygen content of the receiving water. The colour of the waste is highly persistent and presents an unsightly appearance. The alkalinity, high pH and the presence of sulphides are detrimental to fish and other aquatic life. Due to conversion of Cr3+ to Cr6+ the waste makes the receiving water much more toxic.

3) Effects on Ground Waters:

Tannery waste may gain access to ground water strata through percolation, when the raw waste gets stagnated or is used for irrigation. The washings from the waste salt dust dumps outside the tanneries and the soak and pickling dump waste cause increased salt content in the ground water. Liming and Deliming wastes cause increased hardness.

4) Effects on Sewers:

Tannery effluent is known to cause depositions of calcium carbonate inside a receiving sewer and choke it. Lime is converted to calcium carbonate by the carbon dioxide produced by decomposition of the organic matter present in the effluent and the hair and fleshing help to form a binder with the calcium carbonate which finally where and build up gradually on the inside surface of sewer and ultimately choke it.

5)   Effects on Air Quality:

Biological decomposition of organic materials as well as sulphide emissions from waste waters, are responsible for the characteristic objectionable odours from tanneries. Ammonia emissions from unhairing and delime liquors and fleshings are also important potential sources of odour.

6)   Waste Dumps:

Industrial waste dumps containing hazardous chemicals are highly noxious owing to odorous wastes. The presence in dumps of unwashed containers from industry may result in the poisoning of people who try to reuse such containers.

7)   Other Effects:

A variety of other minor effects such as air emissions from open burning or other operations and unsightly visual impacts may unnecessarily make

The tanning industry a bad neighbour.                                                                                                                                      

1.8  WASTES   AND   THEIR   IMPACT   ON    HUMAN HEALTH:

Direct contact with some industrial chemicals can cause disability, illness and death. Even relatively minor exposures, if they occur frequently, can eventually build up to toxic levels. Following health hazards may occur in tanning industries in Beamhouse operation :

1.Chemical Poisoning

  1. Skin Afflictions
  2. Bronchitis
  3. Carcinogens
  4. Brucellosis
  5. Leptospirosis 

TABLE-6

Some serious health hazards due to chemical wastes from tanneries in Beamhouse operation

Health Hazards Responsible chemicals Diseases
1)Chemical poisoning Sodium sulphide, caustic solution, mineral acids, certain solvents etc Irritation,          allergy, nausea,    vomiting    to unconsciousness
2) Skin affliction Salt, sod. Sulphide, caustic solutions, chrome powder, certain dyes, preservatives Rashes, itches, redness, swelling
3)  Inflammation   and burning of lungs Chrome powder, pigments, shaving dust, etc Bronchitis
4) Carcinogens Basic chrome powder, preservatives, benzidine based dyes Cancer

1.9ENVIRONMENTAL PARAMETERS WITH RESPECT TO TANNERY WASTES AND THEIR EFFECTS:

There are certain parameters which go with the environmental influence by means of those we can assess the lethal impact of the wastes on our environment as well as our health. 

A.Odour:

The high chloride and sulphide content of the tannery waste affect the quality of the water and impart bad odor. Organic impurities in tannery effluents give off strong odors which considerable smell nuisance. Strong odor sometimes causes vomiting to the passers-by. 

B.COLOUR:

Tannin substances, sodium sulphide, dye stuffs etc, give particular colour 10 the receiving water. The colour of the waste is highly persistent and presents an unsightly appearance. Colour imparted to receiving water by such tanning substance, dye stuff etc. is not tolerated by the public who use this receiving water for drinking and bathing purpose,

  1. SUSPENDED SOLID;

Due to the heavy suspended solids present in tannery effluents sludge banks are formed in the receiving stream and present an unsightly appearance. The suspended matter gets deposited on the bed of the stream and kills aquatic organism in the stream bottom. The floating solids may interfere with the streams ability for self purification by re-oxygenalion, by causing mechanical interference with the absorption of atmospheric oxygen and by interfering with the photosynthetic activity of the streams plankton and aquatic plants. Turbidity caused by the suspended solids may cut down the penetration of sunlight into the water thus reducing the photosynthetic activity.

IX DISSOLVED SOLIDS:

  1. Sodium chloride:

Chloride is one of the important indicators of pollution. Common salt adds to salinity of water. The salt concentration level more than 2100 mg/L is harmful to plant life. Salt reduces the fertility of agricultural land. The salt build-up in soil exceeds the trees or crops salinity tolerance, reduction in growth or even death. The high content of salt in sludge might prevent its use for composting and soil conditioning. Also the accumulation of Na in the soil can cause deterioration in soil physical properties especially in porosity and permeability to water. Chloride corrodes metal parts also. High concentration of sodium affects the fertility of the soil. This is called “Sodium hazard” to the soil.

  1. Chromic oxide:

The soluble chromium salt present in the tannery wastes exert an inhibitory action on the activity of fish and microorganism present in the stream and also render the water unsuitable for domestic or other purposes. Chromium which is directly toxic to biological life of the stream may inhibit bacterial activity and thus delay the decomposition of organic matter and may cause profound changes in the content of native flora ‘and fauna. High concentration of chromium in soil might inhabit the germination of seeds and retardation in the growth of plants. The Merck Index (1989) states that chromium (III) compounds are generally non-toxic, non irritant, non carcinogenic and immobile. But hexavalent chromium is highly toxic. Cr3+ is converted to Cr6+ by oxidation in the process of heating or by means of enzymes or by favorable pH condition. Chromium can also be oxidized in an environ­ment or during drinking water chlorination. Hexavalent salts of chromium are irritants, corrosive and in some instances carcinogenic. All chromium compounds- are sensitizers and may cause contact dermatitis, some may be a cause of occupational asthma. Long term exposure to chromium compounds may cause1 perforation of the cartilaginous nasal septum and occasionally lead to chromic rhinitis and chronic bronchitis.

Hexavalent chromium compounds also cause coughing, wheezing, aspirator, pain, fever and loss of weight. Prolonged skin contact may lead to local irritation and if skin damage is extensive, sufficient compound may be absorbed to cause renal damage and death. Cr6+ is carcinogenic which can cause lung cancer and sino nasal cancer. Various Cr6+ compounds induce a variety of gene-toxic effects, including DNA damage, point mutation system, chromatid exchange, chromosomal aberration, aneuploidy, germ line mutation, Cr3+consumes oxygen when converted into Cr thus reduces dissolve oxygen in water.

Sulphate content:

Sulphates

can readily be reduced to sulphide by an aerobic bacteria in sludges and liquid effluents. The presence of Na and MgSO4 In drinking water beyond the prescribed limit may cause cathartic action. Sulphate destroys concrete,

  1. Sulphide content:

Sulfides are odour producer and toxic if the concentration exceeds 5 mg/L. They combine with metal to form black precipitate rendering unsightly appearance. Sulphide is the gaseous form is an asphyxiant, Toxicity of hydrogen sulphide gas is

similar to hydrogen cyanide. Sulphide poisoning may cause death to the people. Hydrogen sulphide gas affects the human nervous system, It can cause respiration difficulties, bronchitis, skin disease etc. Sulphide is also a known corrosive element eating the metals. Crown corrosion, incrustation and blockade of pipes are consequences. Micro organisms capable of reducing organic matters are also destabilized and biochemical decomposition arrested by sulphide exceeding 200 mg/L .

Tannin Content:

Tannin both synthetic and vegetable are toxic if present in the effluent in high doses. Toxicities on Tubules, Daphnia and Assails species are 200 mg/L for vegetable tannin and 1-10 mg/L for syntans

  1. pH:

The inorganic soluble chemicals like acid, salts, alkalis etc. change the pH of the receiving water which brings the aquatic condition unfavorable for aquatic life. Alkaline pH affects the aquatic population adversely. Acid condition of the receiving stream will liberate H from dissolve salts-Effluents with low pH will corrode metals and concrete in sewerage system and have a sterilizing effect reducing inhibiting microbial activity,

Total acidity and free mineral acidity:

Acidity of the effluents lowers the pH of the receiving water which can cause the death of aquatic life. Strong acid like sulphuric acid causes wounds on the human skin and may cause cancer ultimately. Weak acids both organic; and inorganic are more toxic than strong acids. Weak acids can kill fish even if the pH of water is within the safe range 5.0-9.0.

BOD (Biological Oxygen Demand):

BOD of tannery wastes represents their pollution potential. The tannery wastes are characterizer by a high BOD. High BOD usually indicates high concentration of organic matter. If wastes containing high BOD are discharged into a stream, it results in development of the growth of masses of sewage fungus that cover the bed and sides of the stream and prevent growth of animals and plants which serve as food for fish.

  1. COD (Chemical Oxygen Demand):

COD represents chemically oxidisable load of organic matter in water. High COD of receiving water indicates the high strength of organic matter and low DO of water. In high COD aquatic life can not exist high value of COD in the pollutants can starve aquatic animals,

Total Nitrogen:

Toxicity of nitrogenous compounds is considered to be one of the most serious problems in the present aqua culture. High levels of ammonia can results in nitrite which is toxic to fish- Ammonia gas causes headache, nausea and drowsiness. Ammonia salts are harmful for the reproduction of fish. Ammonia- nitrogen content stimulates growth in plants and causes water weed problems. High level of nitrogen in water is also deleterious to health. When people inhale ammonia gas it inflames upper respiratory passage.

WASTE MANAGEMENT SYSTEMS IN BEAMHOUSE OPERATION

2.1 CLEAN TECHNOLOGY- REMEDIAL STEPS FOR BEAMHOUSE EFFLUENTS-.

Clean technology in a tannery is a coordinated effort of planned processes for proper disposal, reduction or recycling of wastes created at different stages of leather production. It involves the following leather processing techniques:

5} Use of chrome liquor, split and shaving

6) Disposal of organic soluble and other vapours.

The choice of treatment system depends on the location of the plant with respect to neighboring land uses. If several tanneries exist closely, a cooperative treatment operation will lower the cost of treatment of each tannery. The Final choice depends on the tannery and discharge standards.

Specific technological choices will fall under the following headings:

  1. Pre-treatment Screening

Prior to treatment it is essential to screen all effluent streams to remove the large fragments which needs regular cleaning and maintenance. Up to 30-40% of total suspended solids can be removed by a properly designed routing screen.

Settling

A preliminary settling operation can remove up to 30% of COD,

Flow equalization (balancing)

Flow balancing and combining of the effluents are needed to deal with peak flows. After sulphide and chrome removal, liquor of volume of less than 30% is taken in equalizing tank. As equalization promotes neutralization and precipitation, liquors are well-mixed.

  1. Primary treatment technologies

Sulphide liquors

In catalytic oxidation of sulphides, Mg catalyst is used in aeration. Approximately 60 Quebec meter of air is needed for each Quebec meter of effluent. Bui this is not a suitable process. In Direct precipitation, ferrous sulphate and ferric chloride can be used to remove sulphides from solution.

Removal of Chromium

Here major chrome bearing liquors are used to precipitate. To obtain an almost chrome free supernatant, pH should be greater than 8 taken in a sedimentation vessel which is further treated for BOD reduction.

Physical-chemical treatment for BOD and solids removal relatively simple technology allows the removal of up to 95% of suspended solids and around 70% of BOD through this treatment. Ferrous sulphate is advantageously used in this method.

  1. Secondary treatment technologies

In case of high effluent quality requirement, a secondary treatment is necessary. The choice of treatment systems will be among:

— lagooning (aerated, facultative or anaerobic).

  1. Tertiary treatment technologies

Water may require reduction of the nitrogen load discharged by large installations. Where replacement of ammonium salts is not feasible, nitrogen removal through nitrification or denitrification will be needed. In sedimentation and sludge handling horizontal and vertical flow tanks arc used. Sludge from primary sedimentation may be only 3-5% solids and a clarification efficiency of 95% gives a removal of 1250 Kg/day of dry solids. Dewatering also reduce sludges.

  1. Best treatment option

The best treatment option under any given circumstances depends on both technical and economic factors. The available technologies economically achievable by new plant are —

  1. Recycle of chrome and vegetable tanning solutions
  2. Fine screening
  3. Sulphide oxidation
  4. Chrome removal
  5. Equalization
  6. Aeration
  7. Filtration
  8. h) Sludge handling and disposal

2.2 OPTIONS   FOR   CLEANER   TECHNOLOGY   IN LEATHER PRODUCTION:

The minimization of pollution load due to leather processing can be summarized by prevention, reduction, recovery, reuse and regeneration. The first approach is to address the source of generation by using or developing cleaner process. In feather industry, the use of some sorts of recycling systems has already begun especially for economic reasons. Nowadays, nearly every part of the tanning process has several cleaner and waste water management systems.

TABLE-6

Possible technological solution for clean technologies in leather production

Process Technological options
Preservation # Green processing

# Drying # Dry pickling

# Chilling
Green fleshing Best when   fleshing rendered  at abattoir
Soaking # Mechanical desalting to reduce salt content in waste water. #      For      surfactants      alcohol ethoxylates   replace   nonylphenol ethoxylales
Unhairing Sulphide     reduced     liming     to minimize    sulphides    and    COD content. Direct liming floats or hair saving unhairing used in bio filter systems.
Deliming # Reduction of nitrogen content in waste water by adopting ammonia free operations like carbon dioxide deliming. #      Elimination      of     hydrogen sulphide.
Pickling # Salt free pickling * Recycle of pickle liquor.
Chrome tanning

»

 # Reduction in chrome wastage by direct liquor recycle process, # Precipitation and reuse process # High exhaust system # Best result for combining both direct and precipitation for reuse, # Split limed hides can be used in chrome waste reduction, #More   effective   fungicides   are needed.
Alternative tannages # Gluteraldehyde tanning

 

  # Vegetable tanning

#Organic tanning materials
Retnning, dyeing. Falliquoring # High exhausting

Use of non toxic dyes

Feed processing
if Reuse ofliquors

# Amphoteric polymers are very
effective.
Finishing # Aqueous systems

#Equipments  to  reduce  wastage
like     roller     coater     or     spray
economizers

#          Less toxic cross linking agents

#          Use   of  non   toxic   dyes   and

pigments
Utilization of waste 1     Green    flesh:     fertiliser    and

compost 2) Chrome shavings: isolation of chromium and collagen and their reuse.

3)    Leather   wastes:    Incineration
with    recovery    of    energy    and chromium may be feasible.

However, it must be noted that the above mentioned options are just annexed at a glance and there are so many choices of clean technologies worldwide as newer and modified methods are being invented and practiced every day by either any organization or an individual,

2.3VARIOUS WASTE MANAGEMENT SYSTEMS IN
THE TANNING PROCESS (BEAMHOUSE):

TREATMENT OF SULPHIDE WASTES BY PRECIPITATION:

In any unhairing system using sulfides the concentration of the sulfides in the combined spent solutions will be near 1000 mg/1 more or less depending on the details of the system. Because of dangers of toxic accidents from sulfides3 treatment for the destruction of the sulfides is strongly advised even if not required by the Local regulations.

The most common method used in the industry is the oxidation with air using a manganese catalyst. All of the sulfide bearing wastes are collectedg wastes, and pumped into a treatment tank. The catalyst is added to the tank The amount is not critical, but 5 -1 Kg of Manganese Sulfate pr M of combined wastes is normal. In any system the optimum cost effective quantity of catalyst should be done by performance tests.

The reaction is the same as has been described in the addition of sulfide bearing wastes into a river the difference is that the reaction is speeded by the catalyst and the oxygen is replenished by the spurges.

Theoretically, the amount of oxygen needed is half the weight of the sulfide to be oxidized- The actual efficiency of the reaction will be somewhat less than 30 %. An example of the calculations is as follows; –

The reaction tank can be steel corrosion protected or concrete, and should have a volume twice the expected volume of wastes to be treated. The freeboard of this open topped tank is desirable to prevent overflow due to foam formation. The air is introduced into the reaction tank through a pipe and spargers, as in secondary treatment. A simple pipe with holes about .5 mm in diameter is often used in small reactors. The better the spargers system the more efficient the oxygen transfer and the shorter the reaction time needed. In most systems about four hours are needed to bring the concentration of the sulfides to below 5 mg/1. To reach less than 1 mg may take assume that the combined sulfide bearing wastes from 1000 K.g ot hides is 20 cubic meters containing 5Kgof sulfide (S ion).

The reaction tank- would be 2 X 20, or 40 cubic meters. With a depth of the solution of 2 M. the tank could be. 3M X 3. X 4M this would give the desired freeboard and allow for some over-loading in an emergency

The Oxygen required would be 2.5 Kg. Since air is about 20% oxygen, 12.5 Kg of air would he needed. The efficiency of the system will be, at best, 25-30%. The design should provide for 40-50Kg of air. Air weighs L2 g per liter so 40,000 L of air in 4 hours is a reasonable design level. The air rate would be 10,000 per hour or 166 L 1m,The efficiency of a system cannot be precisely determined in advance so some over engineering is advised-Completion of the oxidation can be qualitatively observed with Lead Acetate papers. For quantitative data the Iodine titration as described in the methods section of this handbook can be used. It is necessary to test all batches for completion of the reaction. Common practice is to collect all of the sulfide wastes for the day into one batch rather than treat several small batches. The treated lime wastes may then be mixed with other tannery wastes to neutralize acids and aid in precipitation of the combined wastes.

One of the problems often encountered with treated tannery wasted is that there may be a continued breakdown of the organic and inorganic sulfur compounds with the formation of additional free sulfides. Samples to be analyzed must be stabilized by the addition of Zinc Acetate if the analysis is not to be done immediately. The delayed release of sulfides is usually only a very small amount and seldom causes a problem in the receiving stream or the municipal collection and treatment system.

In the following figure-1 we can have a clear idea on the mechanism cited above:

RECYCLING CHROME TANNING MATERIALS BY PRECIPITATION:

In this most common method of chrome recovery, the separation of the precipitated chromium from the solution is usually done by decanting the supernatant liquid which is drawn off and chromium hydroxide slurry pumped to a dissolving tank. The precipitation with calcium or magnesium hydroxide works for the formation of a precipitation that will settle well. The next figure-2 shows an illustration on the mechanism of the chrome recover, through precipitation:

Chrome Recycling Drum   System

A WASTE WATER TREATMENT:

A prescribed treatment for waste water has been elucidated below by a block diagram where the waste water storage is treated through mechanical, chemical and biological treatment consequently. After any of the operations, sludge is come out at the end. Separation, preclarificalion, setting and removal of sediment take place in mechanical operation while colloidal removal with pit adjustment is added with chemical operation. In biological treatment through biochemical degradation main drain is discharged after clarification.

 

Now we will observe the figure-3 which will depict the above process-

FIGURE-3

WASTE WATER TREATMENT:

Juwel er ETP plant set korte hobe

AN ETP PLANT

Screening (Bar screening)

At first the raw effluent come from the process section through the screen chamber to equalization tank. The suspended coarse solids are separate from waste water by the bar screen

Fig. Bar screen chamber

Equalization and Aeration: The effluent is then passed  through a grit chamber and collected in equalization tank provided with submerged ejector aerators. The aerators sucks air from atmospheric medium and passes into bottom of the tank and it facilitates to disturbance to settling, reduction of BOD and COD in subsequent treatment units. The ejector aerators homogenize the effluent, besides oxidizing sulfides present in the raw effluent and facilitate the bacterial breakdown of oxygen demanding wastes.

Fig. Equalization tank

The purpose of equalization is to minimize the wide fluctuation in effluent flow rate and variaton in composition of the effluent. No treatment is achieved in equalization itself. However, the uniformity of effluent produced by this process improves the consistency of performance in subsequent treatment. Here the pollution load are given below-

Table

Parameters BOD mg/l COD mg/l TSS mg/l TDS mg/l
Concentration 1380 4639 2368 6402

It is homogenised character of effluent obtained from time to time during the flow and also the filtrate from dewatering unit that mixes with the equalization tank. Here the PH values lies within a range of 5.8-6.5

 Chemical treatment (coagulation, flocculation)

The equalized effluent is then pumped to the flash mixer, where alum, lime and polyelectrolyte is added.

Chemicals are added in order to improve and accelerate the settling of suspended solids, especially of fine and colloidal matter. In wastewater treatment operations, the processes of coagulation and flocculation are employed to separate suspended solids from water. These terms are often used interchangeably, or the single term – be it “coagulation”

or “flocculation” – is used to describe both; sometimes “flocculation” is understood as the second stage of “coagulation”. In fact, they are two distinct processes usually carried out in sequence as a combination of physical and chemical procedures. Finely dispersed solids (colloids) suspended in wastewater are stabilized by negative electric charges on their surfaces, causing them to repel each other. Since this prevents

these charged particles from colliding to form larger masses, called flocs, they do not settle.

Coagulation is the destabilization of colloids by neutralizing the forces that keep them apart. Cationic coagulants provide positive electric charges to reduce the negative charge (zeta potential) of the colloids. As a result, the particles collide to form larger particles (flocs). Rapid mixing is required to disperse the coagulant throughout the liquid. Care must be taken not to overdose the coagulants as this can cause a complete charge reversal and thus re-stabilize the colloid complex.

Flocculation is the action of polymers to form bridges between flocs and bind particles into large agglomerates or clumps. In this process it is essential that the flocculating agent be added by slow and gentle mixing to allow for contact between the small flocs and to agglomerate them into larger particles.

The newly formed agglomerated particles are quite fragile and can be broken apart by shear forces during mixing. Care must also be taken not to overdose the polymer as doing so will cause settling/clarification problems. Once suspended particles are flocculated into larger particles, they can usually be removed from the liquid by sedimentation, filtration, straining or floatation. The flocculation reaction not only increases the size of floc particles in order to settle them faster, but also affects the physical nature of flocs

making them less gelatinous and thereby easier to dewater.

The inorganic coagulants are compounds that break colloidal suspensions and help floc forming. The most frequently used coagulants in tannery effluent treatment are:

– alum: industrial aluminium sulphate Al2(SO4)3 · 18H2O

– lime: industrial calcium hydroxide Ca(OH)2

Coagulant aid – flocculants – are water-soluble organic (anionic) polyelectrolytes that support agglomeration

of colloidal and very fine suspended matter thus enhancing the impact of coagulation.

Figure 16. Schematic view of the coagulation and flocculation system

For optimal results, appropriate dosing is essential; It can be adjusted by jar test.

Optimization of concentration of chemicals at Flash mixture

Capacity of lime dosing tank 3.30 m3 (3300L)

Amount of lime dosing at a time 40kg

Concentration of lime solution 12.12 gm/L

Capacity of alum dosing tank 1.21m3 (1210L)

Amount of alum dosing at a time 50kg

Concentration of alum solution 41gm/L

Capacity of polyelectrolyte dosing tank 500 L

Amount of polyelectrolyte dosing at a time 125g

Concentration of polyelectrolyte solution 0 .36 g/l (360 ppm)

Flow rate of raw effluent 150 L/mins

Flow rate of Lime solution 15 L/mins

Flow rate of alum solution 7 L/mins

Flow rate of polyelectrolyte 230 ml/mins

Table-1

SL Raw effluent(ml) lime(ml) alum(ml) polyelectrolyte(ml) Coagulation & flocculation
1 1000 100 40 1 poor
2 1000 120 50 1.5 better
3 1000 130 50 2 good
4 1000 150 60 2.5 poor

From above experiments it is clear that 1.5ml polyelectrolyte gives better result

Table-2

SL Raw effluent(ml) lime(ml) alum(ml) polyelectrolyte(ml) comments
1 1000 120 40 1.5 not clear
2 1000 120 50 1.5 good clear but settle slowly
3 1000 120 60 1.5 good clear & settle fastly
4 1000 120 70 1.5 poor clear & not settle

From above experiments it is clear that if 60ml alum is added better result is obtained

Table-3

SL Raw effluent(ml) lime(ml) alum(ml) polyelectrolyte(ml) PH

 

 comments
1 1000 110 60 1.5 7.5 not clear
2 1000 120 60 1.5 8.0 good clear but settle slowly
3 1000 130 60 1.5 8.5 good clear & settle fastly
4 1000 150 60 1.5 9.5 poor clear & not settle

From above experiments it is clear that if 130ml lime is added better result is obtained

So, the ratio of dosing effluents, lime, alum and polyelectrolyte is 1000: 130: 60:1.5 i.e, 16.67:2.16:1:0.025.

  1. Biological (secondary) treatment

2.1 Objective and basic principles

The main objective at this stage is to further reduce the amount of organic (expressed as BOD and COD) and other substances still present in the effluent after the primary treatment and thereby satisfy the standards/limits for discharge into surface waters (rivers, lakes).

The biological treatment duplicates processes that take place in nature, but under controlled conditions and, especially, at a highly accelerated pace; however, the efficiency of this treatment largely depends on the biodegradability of the polluting substrate, i.e., its inherent capacity to decompose by biological processes. The remaining suspended and colloidal solids are removed by flocculation and adsorption. While biological treatment may be aerobic, facultative or anaerobic (or some combination thereof), in practice, almost only aerobic systems are used; exceptionally, in countries with a hot climate and where a lot of land is available, facultative (preferably aerated/facultative) lagoons are also used.

Due to the inherent characteristics of tannery effluents, primarily their sulphide/sulphate content, in practice, anaerobic treatment is used only in sludge digestion. Among many variations of the aerobic process, the most widely used method is (complete-mix) activated sludge treatment with extended aeration; despite some very interesting features, membrane bioreactors (MBRs) have not made significant inroads in the tanning sector.

The activated sludge process is an aerobic, biological process, which uses the metabolism of microorganisms to remove substances causing oxygen demand. The qualitative biochemical reaction taking place in the organic matter stabilization process can be summarized in the following manner:

Inert matter + organic matter + oxygen + nutrients + micro-organisms =

new micro-organisms + CO2 + H2O + additional inert matter.

Simply said, we stimulate micro-organisms to convert (eat and digest) harmful, oxygen-demanding organic compounds into an environmentally more acceptable form (micro-organisms) and low-energy, stable compounds like water and carbon dioxide. The microbial community that does that job comprises various species of bacteria, fungi, protozoa,

Figure28. A simplified flow diagram of the activated sludge process

Generally, the biological stage is the most complex part of the overall effluent treatment process, with highest investment and operational costs, its day-to-day running requiring considerable skills and experience.

  1. Advanced (tertiary) treatment

Often, wastewater from secondary treatment receives tertiary treatment. Depending on the quality on the treated effluent, a second chemical dosing and settling may be applied to reach the required standards and color removal before discharge. Aluminium salts and polyelectrolyte are commonly used, forming very fine flocks. These can be settled out using specially designed settling tanks, but often large shallow lagoons are employed. Effective biological treatment can also be provided by reed beds. Other techniques include sand filtration activated carbon.

3.1 Pressure Sand Filter: The treated water is pumped through a pressure sand filter to remove any fine solids that might have been carried over the water. The water from the pressure sand is collected in collection sump-II.

3.2 Activated Carbon Filter: The water of collection sump-II is slightly colored. To remove this color we transfer it through the activated carbon filter.

Fig. Sand filter & Activated carbon filter

After all the process we check the parameters of the treated water. If it complies with the specification the treated water is discharged into inland water. Otherwise it is recycled into equalization tank to treat again.

Characters of tannery effluent in different units of ETP

Table-4

Parameters Raw Chemical treatment Biological treatment Tertiary treatment
PH

BOD

COD

DO

TSS

TDS

Cr-III

 5.8

980mg/l

2250mg/l

0 mg/l

2560mg/l

4500mg/l

 

 8.0

452mg/l

1450mg/l

2.6mg/l

220mg/l

2500mg/l

 

 7.0

58mg/l

235mg/l

4.5mg/l

115mg/l

2200mg/l

 7.2

42mg/l

110mg/l

4.7mg/l

68mg/l

1760mg/l

Table-5

Parameters Raw Treated water DOE Standards
PH

BOD

COD

DO

TSS

TDS

Cr-III

 5.8

980mg/l

2250mg/l

0 mg/l

2560mg/l

4500mg/l

 

 7.2

42mg/l

110mg/l

4.7mg/l

68mg/l

1760mg/l

 

 6-9

50mg/l

200mg/l

4.5-8mg/l

150mg/l

2100mg/l

3mg/l

Sludge handling:

Sludge from primary clarification, sludge from secondary clarification and tertiary clarification are transferred to sludge thickener through pump.  For drying of sludge it is transferred   from sludge thickener to sludge drying beds. In case bad weather it is transferred to Centrifuge for mechanically dewatering. When the sludge dry  it is used for land filling and with mixing some additives this sludge can be used for making bricks..

RECOVERY AND REUSE

3.1 RECOVERY AND REUSE: SOME DEVELOPED TECHNIQUES OF THE BEAMHOUSE EFFLUENT TREATMENT SYSTEMS:

There are several reuses and recovery options of the beamhouse effluents. Here is a chart which will give us some useful ways of this regard.

TABLE-8

Sources and uses of solid wastes from tanneries:

Solid                Place of production          Possible application waste

Non proteinious wastes

1 . Used salt Salt dusting Regeneration for salting and pickling
2. Lime sludge Lime pelts As material of construction and soil conditioner
3. Spent tan bark Tannin extraction Carton industry as fuel
4. Tan liquor sludge Vegetable tanning Reduction of chrome tan liquor, boiler compounds
5. Fat Defatting of hides or skins Soap industry
Primary and

biological sludge

 Treatment of tannery effluents Tipping or composting

Non collagenious protein

1 . Lime protein Lime yard Substitute of casein, animal food
2. Pig bristle Beam house Brushes
3. Tail and body hair Beam house Drugget and carpet industry, cushions

Untanned collagen

1 . Untanned trimmings and shavings, lime split, etc Beam house Glue, gelatine, protein degradation products
2. Fleshings Beam house Glue and gelatine manufacture

Tanned collagen

1 . Chrome tanned

Shavings

 Chrome tanning Glue, gelatin, protein degradation products
2. Vegetable tanned leather shavings Vegetable tanning Artificial fibre leather, leather boards
3. Formaldehyde tanned leather Sulphochloride tanning Artificial fibre leather
4. Whitening Finishing of russet

leather

 Recovery of fat, artificial fibre leather
5. Tanned splits Splitting after finishing  
6. By-products skiving leveling by splitting and fabrication Stitching and cutting of leathers Fibre leather, sole patches

mosaic leather

 Removal   of  Chromium   from   Tannery(Beamhouse)  Effluent   Using Powdered Leaves:

  1. Suseela, M. Shivaparvathi and S. Nandy showed a preliminary investigation where dried fallen leaves were used for the removal of chromium from tannery effluent. Effects pf factors like the concentration of leaf powder, treatment period, pH of the effluent liquor, temperature and the concentration of in the spent chrome liquor were studied. Chromium removal was unaffected by different types of leaves but when dry leaf material was used in powder form the removal effect was improved. Leaf material could also absorb other heavy metals like copper, iron, sodium and nickel. Using this simple technique it may be possible to treat exhausted chrome-tan baths and minimize the disposal problem to a considerable extent.

Exhausted Chrome Tanning Solution Regeneration Method:

Some Russian scientists have developed a method where exhausted tanning solution containing toxic chromium compounds are first settled and filtered to remove suspended and fat substances after which solution is treated with oxidant on heating until dissolved organic impurities are destroyed. Organic free exhausted solution is then mixed with fresh tanner and returned into process.

Characterization of tannery(Beamhouse) effluents and study of the water hyacinth in chromium recovery:

Alvarez, Maldonado, Gerth and Kusehk established a method where four types of effluent were sampled from a tannery having a treatment plant. After four weeks effluents were evaluated in phytoremediation assays using water hyacinth for the efficiency of chromium removal under tannery water injection conditions of 4 L/day and 8 L/day. This affected the life of water hyacinth. It is concluded that the high concentrations of the parameters measured made phytoremediation impossible for this type of effluent, making primary treatment necessary in order to decrease the load of compounds present.

Sulfur recovery from beamhouse waste water:

Tannery “waste water was treated in pilot plants in India and Netherlands. The plants comprised an aerobic biological treatment system and a sulfur recovery system. Those removed a large part of COD, sulfate and sulfide, while biogas and elemental sulfur were produced. An Upflow Anaerobic Sludge Blanket reactor was used in which COD was eliminated and converted into biogas while all sulfur compounds were converted into sulfide. In this method 70% of COD and 90% of sulfur compounds can be removed. Apart from these two countries Bangladesh is also interested in this practice as the report says.

Centriquip- A case study of simple solids removal:

In Scotland, Ireland, England, South Africa, Brazil this system was practiced. Centriquip were approached by a tannery producing wet-blue from bovine hides and having an effluent discharge of approximately 700 m3/day needed to process in 16 hours. The average suspended solids were 8000 mg/litre and average COD of 9000 mg/litre. Effluent costs were more than 600000 GBP per annum.

An initial one week test with a 2 m3 /hour mobile pilot plant indicated that a centrifuge would clarify the effluent resulting in a dry almost crumbly cake and water suitable for direct discharge to the sewer. The larger trial unit was installed which could process 40 m3 /hour. This was successful and led to the client placing an order to purchase the trial unit as well as a new unit capable of 50 m3 /hour. Suspended solids were reduced to 400 mg/litre; COD reduced to 4500 mg/litre resulting in effluent charges being reduced to less than 200000 GBP per annum. The unexpected benefit of residual hydrogen sulfide was seen.

The utilization of soaking liquors for irrigation using silicates:

Former Principal Dr Fazlul Karim of Bangladesh College of Leather Technology, being one of the fellow researchers of a team of Munz, Banaszak, Chandra Babu, Quadery (BCSIR) and others was involved in this research.

A series of carefully controlled investigations was performed to study the effects of both sodium chloride and silicates on crop irrigation. Salinity levels of tannery effluent were 10,000 mg/1 for Sodium Chloride.and 1700 for Sodium Silicate adjusted to pH 7.0 using formic acid.

Five major crops were grown in controlled fields trials over 2 years. One crop (tomatoes) was grown under green house conditions. Four other crops were grown outdoors. Each crop was sub-divided into three sections, each being irrigated with water, silicate and saline solutions. The outdoor crops showed common trends. Findings showed that silicates can replace salt as a solution of effluent treatment and be used for irrigation on a wide variety of crops.

Gasification of tannery solids and generation of power by the Pyro Arc Process:

Developed by a Norwegian company a gasification process is coupled with the verification of inorganic residues into insoluble slag. The technology enables both heat recovery’ and generation of electricity.

Here solid material is fed into the gasifier through a lock-hopper arrangement where the level in the feed pipe below the hopper controls the feed sequence. The upper, middle and lower zones of the gasifier involve temperatures of 400-600 °C, 1000 °C and 1500 °C respectfully.

A resultant combustible gas is evolved which after cleaning can be used as a fuel for gas engines for the production of electricity. The solids being disposed is a mixture of dewatered sludge from the effluent treatment plant, fleshings, chrome shavings, leather trimmings, pallets, plastics, buffing dusts, etc , amounting to about 840 tonnes each month,

Biomethanation of fleshings and sludge from tannery and effluent treatment plants:

A joint venture of CLRI, Chennai and UN1DO in January 2000 has installed a 130m3 capacity two-digester Biomethanation plant which was designed to take 5 t/d of waste – about 3 t/d of fleshings and 2 t/d of primary sludge to generate 312 m3 of gas and 700 kWh of electric power daily.

The plant consists of a mincer for preparing the fleshings, feed chamber digesters, gas holder, H2S scrubber and a dual-fuel power generator, with necessary pumps and control mechanisms. Fleshings are delivered to the sump and minced. The ground fleshings are delivered to the second sump and blended with sludge from the Common Effluent Treatment Plant (CETP). The blended solids are delivered to the feed container as 1 tonne lots by volume. The solids are pumped to one of the inter-Hnked reaction vessels for the biological breakdown to generate methane. A unit volume is drawn off from the reaction vessels to equalize the volume within the biomethane unit.

 Industrial composting of solid organic tanning wastes:

This is a process known as ‘Silo-Cage Continuous Flow Thermophilic Composting System’ which is a continuous aerobic composting operation with low energy requirements. This system holds 32 m3 of mix. Bulking agents complementary to the target waste are used in the mix to provide an aerobic structure for active composting. An overhead feeder shreds and feeds 2.5 m3 of the mix into each cage daily.

In the first temperature zone, rapid degrading of the waste begins at 70-80 °C. After 24-36 hours the composting mix passes into a second zone at 60-65 °C for 6-7 days, then exists at 50 °C after a processing time of 14 days. The volume is reduced to 70 and the solids removed by a slowly rotating auger which traverses beneath the bank of Silo-Cages.

Salt recovery from hide preservation brine and the drying of sludges:

This system is practiced by Sibus Ltd., UK with Rapid Air Swept (RAS) dryers where the slurry is introduced along with hot air in a co-flow design. A range of sludges has been dried, in many cases together with a dry fibrous waste, to produce either a fertilizer or secondary fuel source. This project also developed a treatment process to convert blood contaminated brine into clean, white, reusable salt. The first stage of this process involves the pretreatment of the red/brown brine at 30% solids to remove the discolouration thus providing clear liquor.

The second stage is to premix the liquor with a quantity of dried salt via a Sibus Continuous Turbo Blender. The resulting slurry is then dried in the RAS drying system as the third stage. This produces a dry, white, clean and reusable salt.

Low temperature conversion of tannery sludges:

Lederinstitut Gerberschule Reutlingen (LGR), Germany, established a process of effluent management system where production of Cr+6 due to oxidation of Cr3+ was prevented by a pilot project comprising a direct fluid bed dryer and a conversion system. The direct flue gas dryer has a maximum water evaporation capacity of 90 kg/hr with an energy demand of 3 MJ/kg of evaporated water. The conversion system consists of two converters having a maximum throughput of 20 dry kg/hr. The sludge is heated in the absence of oxygen to around 400 °C. The solid residue is converted to char and usable oil.

It is noted that the oil produced from tannery sludge range from 4.3 to 14.7%, whereas undigested domestic sewage has range from 20 to 30%. The main product of this system is the char amounting to 55 to 77% of the processed sludge. Another product is oil containing only a small portion of non-volatiles and 90% evaporates at 350 °C. In this project 0.167 kg of diesel is required to produce 1 kg of dried sludge,

 Reducing chemical consumption and waste water COD loadings by recycling in conjunction with membrane filtration:

This system was governed by a German scientist, K. Hellinger, where separation is continued in two phases; in the first phase, called retentate. the usable materials are concentrated for recycling.

The second phase, known as the permeate, is low in these usable products and either discharged or used with fresh water in making up the process float during the recycling procedure. After preliminary tests on model floats, the reduction in COD of the permeate was found significant, especially leathers based on chrome-free processing. After a series of recycling, it was found that 75% retentate recycling provides 50% savings in fatliquor and syntans without any loss of quality or differences in physical properties. Recycling six times caused no problems in process or to leather quality, producing an effluent reduction of 20% and materials savings.

 Total dissolved solids (TDS) management in tanneries:

UNIDO, Chennai, has recently developed practices regarding TDS management systems in tanneries which suggested various desalting procedures as common salts are responsible for TDS problem in tanneries. The quantity of common salt used in curing is about 40% of hides weight most of which is absorbed by hides, yet some remains stuck to the surface. Four techniques are so far successful to remove this salt.

In the perforated drum, holes made of 85mm diameter spacing of 130mm is effective for desalting where 15% of salt in curing can be removed and recovered. A brush-type desalting machine having a cylindrical roller with hard nylon bristles with widths of 1500mm, 1800mm and 2100mm can recover 6-7% curing salt. Though labour-intensive, hand brushing is also effective in this case. The Dodeca Wooden Frame can recover 7% of this salt; it is has a dome-like top frame over which the salted hides are shaken off to loose the extra salts.

Also in soaking, solar evaporation reduces salt discharge up to 50%. Besides, if soaking is done in two installments of 150%, same result will produce. Again 80% of salt and 25% of formic/sulfuric acid can be saved if pickle float is recycled before mixing with tanning float. If chrome powder is used rather than liquor, a good result will come. Direct recycling of spent chrome liquor not only reduces chrome salts but also recovers salts.

 TABLE-9

Salt balance as applied to one tonne of raw hides/skins

  Average quantity

(kg)
1 . Applied during curing 400
2. Discharged as leachate during curing as a result of dehydration of hides 60
3. Present on the surface 160
4. Fallen from the raw stock during handling 40
5. Fallen during cutting, trimming, etc 15
6. a) Manual desalting 70
b) Mechanical desalting 60
c) Brush type desalting 60-70
7. Washed off in first soaking 120-145
8. Washed off in second soaking 50-55
9. Carried over by hides to further operations 30-40

TABLE-10

Leather production — Environmentally friendly processes and products

Soaking –   Using fresh raw hides free of salt           –   Biodegradable surfactants
Liming –    Low-sulfide or sulfide-free processes –   Hair-saving processes
Deliming/Bating –   Low-ammonium       or       ammonium-free processes –   Low-ammonium bating
Degreasing –    Replacement   of   solvent   degreasing   by aqueous processes
Pickling – Low-salt or salt-free processes
Tannage –   Chromium recycling –   Improved chrome exhaustion and fixation –    Alternative tanning or pretanning techniques
Retannage

 

 –    Retanning agents and processes with high exhaustion –   Retanning    agents    with    low    residual monomer and salt contents
Dyeing –   Dyes   dyeing  auxiliaries   leading   to  high

exhaustion
Fatliquoring – Fatliquors with high exhaustion
Finishing –   Aqueous finishing systems –    Pigments free of heavy metals

Utilization of tannery by products:

Raw hides:

Raw trimmings can be unhaired then dried to recover both protein and grease.

Green fleshings:

Quality grease and proteins can be recovered without use of chemicals.

Lime fleshings:

Grease and proteins can be extracted from limed fleshings for animal food stuffs and recovered greases as a replacement for boiler fuel.

Lime trimmings:

Can be used to manufacture industrial glue.

Lime splits:

The trimmings can be processed to obtain gelatin, proteins, hydrolysates. dog chew products and casings. Additional uses are found in cosmetics and medical products. Extracted amino acids are used as nutritional supplements.

Sludge following solvent degreasing:

Waste obtained from degreasing sheep skins after solvent recovery can be used as boiler fuel.

Wet blue trimmings shavings:

These materials can be pulverized and dried, then used in the manufacture of light boards for insulation, or as a polishing material for metals. Major uses include leather board production for shoe insoles and fancy goods. Hydrolysates are being produced in significant volumes as fertilizers, animal foodstuff supplements, and for various industrial applications. Due to properties including mould ability, sound proofing and fire retardancy gear box tunnels for automotives have been formed, and roof linings and door panels for truck cabs. An unusual line of investigation has been the manufacture of brake linings. Fresh opportunities may be found by the use of additives to the latex or specialized binders.

Vegetable tanned shavings:

This can be utilized as slow release fertilizers.

TANNERIES

IN BANGLADESH

4.1 THE CONDITION OF THE TANNERIES IN BANGLADESH WITH RESPECT TO WASTE MANAGEMENT:

In the midst of multifarious industries in Bangladesh, tannery industry restores a place of dignity as per a first row foreign currency earner whose contribution in building national revenue with a strong earning in a fiscal year. But as an irony, though this is a dominant industry with a prospective alleviated future for the development of Bangladesh, due to various problems like mismanagement, inferior technology, negative approach towards industrialization and last but not the least, lack of proper waste management systems emerging a series of detrimental effects on environmental balance, leather industry is facing threatening to hold its position in the world market.

As for international awakening in the protection of our environment declaring ISO 14000, we can not produce any leather which is harmful to the environment. So if our tanneries do not manufacture environmentally friendly finished leathers, it will extinct in the long run.

There are about 270 tanneries in this country. Of them 90% tanneries are situated at Hazaribagh in Dhaka. 6% tanneries are in Chittagong and rest of 4% are in other places. Total 8.47 million liter liquid waste and 98 MT solid wastes are generated from all tanneries.

7.70 million liter liquid waste and 88 MT solid wastes are emanated daily from Hazaribagh tanneries. The rest 0.77 million liter liquid and

10 MT solid wastes are produced from the tanneries situated in other places of the country. This huge amount of wastes has become a direct threat to the envkonment of our country for the lack of proper treatment plant. All the liquid wastes are discharged into the Burigonga river without treatment which cause severe envkonmental pollution.

Liquid waste generated daily

Total                      – 8.47 million liter

Hazaribagh        –   7.70 million liter Other Places       –  0.77 million liter

Solid waste generated daily

Total                     –    98 Metric Tons

Hazaribagh       –   88 Metric Tons Other Places      – 10 Metric Tons

CONCLUSION

Some of the important matters which have been concluded in the report are laid down here below:

# An assessed calculation of total amount of beam house waste is not specifically checked out even today for the lack of which there can not be estimated the degree of environmental and health hazards in a technical way.

# The treatment plant must be set up by sufficient prior investigation and in a well planned way.

# The beamhouse operational obsoletes should be properly reused or made into various useful products.

REFERENCES

Tanneries and the Environment Technical Guide Tannery
Operations, UNIDO

Thomas C. Thorstensen, Fundamentals of Pollution Control for
the Leather Industry

S.S. Dutta, An Introduction to the Principles of Leather
Manufacture

P.R. Trivedy and Gurdecp Raj, Environmental Industrial
Pollution Control, Vol-4

P.R. Trivedy and Gurdeep Raj, Environmental Industrial
Pollution Control, Vol-5

R.K. Trivedy, Advances in Environmental Science and Technology

World Leather, Vol-12, No-7, November 1999

World Leather, Vol-13,No-5, September 2000

  1. World Leather, Vol-13, No-7, November 2000
    l0.World Leather, Vol-14, No-2, April 2001
  2. World Leather, Vol-14, No-7, November 2001 12.World Leather, Vol-15, No-3, May 2002 13-World Leather, VoI-13, No-3, May 2000 H.World Leather, Vol-19, No-3, May 2006

Leather, June 1995

Leather, September 1997

Leather, July 1999

R.N. Trivedy, A Textbook of Environmental Pollution and Control

S.K. Agarwal, Industrial Environment Assessment and Strategy

Williams, Waste Treatment and Disposal

Journal of the American Leather Chemists Association, Vol-85, I9»y

  1. journal of American leather chemist association, vol-95,2000Journal of the American Leather Chemists Association, Vol-84, 1989

Journal of the American Leather Chemists Association, Vol-95, 2OOO

Journal of the American Leather Chemists Association, Vol-100 2005

V.K. Sharma, Environmental Chemistry

  1. Environmental Commission of I.U.L.T.C.S: IUE Recommendations on

Cleaner Technologies for Leather Production. Updated Document London, 1997

  1. Environmental Commission of I.U.L.T.C.S: Tvoical Performance for

Tannery Waste Water Treatment London 1997

  1. Environmental Commission of I.U.L.T.C.S: IUE Recommendations for

Solid By- product Management London 1997

  1. BuljanJ: Raw Hide, Preservation, Trade. Proceedings of me XXIH.

I.U.L.T.C.S. Congress. Friedrichshafen, 1995

  1. LudvfkJ., Oriita,A: Influence of the Preservation Method of Hides on

Tannery Wastewaters. Kozarstvi 26,1986, p.83

  1. Frendrup.W: UNEP Cleaner Production Industrial Sector Guide, Leather

Industry. Taastrup, 1995

  1. Korenek^Z., LudvikJ., RuzickaJ: Hair Saving Liming in Kozeluzny Ltd

Otrokovice. Proceedings of the XXffl. I.U.L.T.C.S. Congress.                 Friedrichshafen, 1995

  1. Taeger.T: Enzymes in me Tannery. Leather Manufacturer 103.1985, No. 12, p.21
  2. SmideU., Heidemann.E: Entwicklung von sulfidfreien und sulfidarmen

Enthaarungen. Das Leder 38,1987, p.48

  1. Dederle.T., Rehak,?., Svoboda.V., LudvikJ: Deliming and Bating. Kozarstvi 34 ,1984,p.45
  2. Streicher,R: Entkaelkung mit ammoniumsaizfreien Entkaelkungsmittein

Leder u Hflutemarirt 39,1987, No. 14, p.7

  1. Germannja.P., HummeLA: Untersuchungen zur Entkaelkung mit

Kohlendioxid Das Leder 44,1993, p.269

  1. Toifl,G: Deliming with Caroon Dioxide. Proceedings of the Workshop on Pollution Abatement and Waste Management in me Tanning Industry for Countries of me Danube River Basin. Ljubljana, 1995
  2. Covington^A.D: Chrome Management Proceedings of the Workshop on Pollution Abatement and Waste Management in me Tanning Industry for Countries of the Danube River Basin. Ljubljana, 1995

40   Rehak, DederleJ., Svoboda.V: Tanning with a High Utilisation of Chrome Salts H. Recycling of Waste Chrome Tanning Liquors. Kozarstvi 33,1983,   p.132

  1. POntener.A: Oekologie und modeme Lederherstellung. Leder-u. Hautemarkt 47, 1995, No. 21, p. 4
  2. Francke.H: Oekologische Probteme der Nasszurichtung. Das Leder

44,1993, p.89

  1. Mageikurth3: Retanning, Dyeing, Fatiiquoring and Finishing. Proceedings of me XXm. LU.L.T.C.S. Congress. Friedrichshafen, 1995
  2. Simoncini,A., Sammario.U: The possibility of Reducing the COD Deriving
  3. From the Fatiiquoring of the Softy Leathers in Residual Baths. Proceedings of the XXffl I.U.L.T.C.S. Congress. Friedrichshafen, 1995
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A simple banking software design and development using VB. Net

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A simple banking software design and development using VB. Net

1. Background of the Report

With a view to acquire an in-depth knowledge about the practical orientation and experiences of dynamic software and business applications world, it is obligatory to undertake an extensive study to prepare a project and project paper by the students of Department of Computer Science and Engineering, World University of Bangladesh, who are desirous to the successful completion of their B. Sc. degree. During the preparation of the project paper, the students are guided and supervised by the teachers of the department with whom they are attached to. Each student is required to work on a specific topic relevant to his/her learning with the attachment with any organization.

In this backdrop, this report is prepared for fulfilling a partial requirement of the B. Sc. in Computer Science and Engineering Program. Mr. Md. Zahangir Alom, Lecturer of the Department of Computer Science and Engineering, World University of Bangladesh authorized the topic of this report. This report was an attempt to map out a document, which clearly explains the phases of banking application development, different application methods, engineering processes in a comprehensive way regarding the sample “Simple Bank” banking application software.

1.1 Objectives of the Study

The objectives of the study are:

· To learn practically how an application is developed.

the practical banking activities

1.2 Scope of the Study

The Report focuses comprehensive analysis on the topic. Specifically it has covered the following aspects:

q Host Organization: Banking Sector in General

q Location: Branch of a Commercial Bank

q Host Platform: Personal Computer with Windows XP, Windows Vista or Later

q Development Platform:

Front End: VB.Net

Back End: Access 2000

Data Model: ADO.Net

Report Engine: Crystal Report

q Object: Simple Bank- A sample Banking Software Solution

q Output: Application software and a document which clearly explains the phases of banking application development, different application methods, engineering processes and documentation.

1.3 Methodology

With a view to complete this study, the basic strategy and research method have been followed which are stated bellow:

1.4 Source of information

The project developed and the report has been written on the basis of information collected from-

1.4. A Primary Sources of data

1.4. B Secondary Sources of data

1.5 Limitations of the study

The limitations of this project and project report are as follows:

? The knowledge constraint of the project developer, especially regarding banking.

· Another main constraint of the study is time limitations many of the aspects could not be programmed and discussed in the present project and report such as General Ledger, Remittance sytem, Interest and Charges Calculation modules and Security and Encryption. In further increment this modules can be added in future.

· Availability of data was limited. No original data set could be collected from banks due to their principle of customer information secrecy. Dummy data has been used.

? As the literature reviews/documentation regarding banking software development

was not very available. Different banking software developers don’t want to show their

code to others.

1.6 THE PROJECT MANAGEMENT SPECTRUM

Four P’s have a substantial influence on software project management—people, product, process, and project. People must be organized into effective teams, motivated to do high-quality software work, and coordinated to achieve effective communication. The product requirements must be communicated from customer to developer, partitioned (decomposed) into their constituent parts, and positioned for work by the software team. The followings are the 4 P’s of the project:

1.6. A PEOPLE

One, the developer himself. To compensate the hunger of experienced analyst and developers needed in this kind of project, suggestions from banker/ex-bakers and experienced programmers are resolved.

1.6. B PRODUCT

A Core Banking Software Solution can be called “Simple Bank”.

The product objective has been defined as to deliver core banking service at a state of the art way promptly, efficiently and flawlessly.

And scope of the project is defined by answering the following questions:

Context: How does the software to be built fit into a bank business context and what constraints are imposed as a result of the context?

Information objectives: What customer-visible data objects are produced as output from the software? What data objects are required for input?

Function and performance: What function does the software perform to transform input data into output? Are any special performance characteristics to be addressed?

Additional questions also self analyzed are:

• Who is behind the request for this work?

• Who will use the solution?

• What will be the economic benefit of a successful solution?

• How would you (the customer) characterize “good” output that would be generated by a successful solution?

• What problem(s) will this solution address?

• Can you (Bank Officer) show me (or describe) the environment in which the solution will be used?

• Will any special performance issues or constraints affect the way the solution is approached?

The set of questions enables me to gain a better understanding of the problem and the customer to voice any perceptions about the solution.

After scoping Problem decomposition or partitioning or problem elaboration has been done by me to elaborate the scope of the project. Each of these features represents a sub function to be implemented in software

1.6.c PROCESS

Choosing the software engineering paradigm that is best for the project and the software engineering tasks was a difficult decision. A relatively small project that is similar to past efforts might be best accomplished using the linear sequential approach. But the project “Simple Bank” comprises not a small project. So the linear sequential approach is rejected. If very tight time constraints are imposed and the problem can be heavily compartmentalized, the RAD model is probably the right option. Here the project has to be accomplished at a very tight schedule but the human resource is not adequate to run a RAD model. So the RAD model is rejected. If the deadline is so tight that full functionality cannot reasonably be delivered, an incremental strategy might be best.

In this project it is considered that the incremental process model will best serve the product development. The incremental model combines elements of the linear sequential model (applied repetitively) with the iterative philosophy of prototyping. The incremental model applies linear sequences in a staggered fashion as calendar time progresses. Each linear sequence produces a deliverable “increment” of the software. In this project, banking software developed using the incremental paradigm can deliver basic banking activities such as an account opening, cheque book maintenance, payment processing, summation of transactions and document production functions in the first increment; more sophisticated editing and report production capabilities in the second increment; parameterized system implementation in the third increment. The Interest and charges application module will be delivered in the fourth increment in future, and if necessary further addition will be made in further increment. The process flow for any increment can incorporate the prototyping paradigm. When an incremental model is used, the first increment is often a core product. That is, basic requirements are addressed, but many supplementary features (some known, others unknown) remain undelivered. The core product is used by the customer (or undergoes detailed review). As a result of use and/or evaluation, a plan is developed for the next increment. The plan addresses the modification of the core product to better meet the needs of the customer and the delivery of additional features and functionality. This process is repeated following the delivery of each increment, until the complete product is produced. So, here the core product (mainly the transaction screen) is developed in first increment and after evaluation next additions such as account opening, cheque book maintenance, parameter, user activity in further increments.

Figure 1: The incremental process model used in this project

The chief reason to select the incremental process model for this project is that it is iterative in nature. But unlike prototyping, the incremental model focuses on the delivery of an operational product with each increment. Early increments are stripped down versions of the final product, but they do provide capability that serves the user and also provide a platform for evaluation by the user. Incremental development is particularly useful for this project because staffing is unavailable for a complete implementation by the project deadline that has been established for the project. Early increments have been implemented by only one people- here the developer himself.

1.6.d PROJECT

In order to manage successfully the software project, I have tried to understand what can go wrong by the following ways:

1. Start on the right foot. This is accomplished by my working hard (very hard) to understand the problem that is to be solved and then setting realistic objects and expectations

2. Maintain momentum. My emphasizing is on quality in every task the project/software performs.

3. Track progress. In this software project, progress is tracked as work products (e.g., specifications, source code, sets of test cases) are produced (using formal technical methods) as part of a quality assurance and easy scalability activity.

1.6.e PROJECT SCHEDULE

This Software development project schedule was very hard to estimate accurately. But as an examination project my effort to develop the software was in 4(Four) months.

No. Work Task Nov-08 Dec-08 Jan-09 Feb-09
1 Identify Project Steps
2 Meet with bankers
3 Establish product statement
4 Define desired output
5 Scope detection
6 Define function/Behavior/ Processes
7 Collect Common Products
8 Make data flow diagram
9 Make data dictionary
10 Make E-R diagram and relationship
11 Make Physical Database
12 Make User Interface
13 Coding
14 Testing
15 Documentation

Table 1: Project Schedule

2. PROJECT OUTLINE

2.1 IDENTIFY PROJECT STEPS:

The project steps are outlined as follows:

Step 1 Identify Project Steps
Step 2 Meet with bankers
Step 3 Establish product statement, Problem of the current system
Step 4 Define desired output
Step 5 Scope detection
Step 6 Define function/Behavior/ Processes
Step 7 Collect Common Products
Step 8 Make data flow diagram
Step 9 Make data dictionary
Step 10 Make E-R diagram and relationship
Step 11 Make Physical Database
Step 12 Make User Interface
Step 13 Coding
Step 14 Testing
Step 15 Documentation

2.2 MEET WITH BANKERS:

To gain an insight about banking and the manual system the first practical work was interviewing of bank professionals. I have gain knowledge about bank products, daily operations and different terms of banking from Mr. A. Qaium, Senior Officer, BRAC Bank Ltd. To know the problem of the manual system I have extensively interviewd Mr. K. M. Najmul Ahsan, Asstt. Operation Manager of Sonali Bank Ltd. Through them I have also interviewd several colleages of the said two. I have prepared questionnaires (Appendix 1-4) for the interview which helped me a lot to prepare the outline of the proposed software system.

2.3 ESTABLISH PRODUCT AND PROBLEM STATEMENT

In-promptness in payment system, hard labor requiring in maintaining daybook and ledger, Inconvenience in maintaining precision in summation and balancing, Inability to give any kind of bank service one stop, manual working for interest calculation and charges deductions, Inability to get customer account statement on the go – are the most objectionable characteristics of manual bank system. On the contrary, in the proposed system a passing officer can get a customer signature card on the computer screen when he just enters the customer account number and if the cheque leaf presented in the counter for payment of that account holder is registered/entries in the system earlier against that account then the cheque can be easily recognizable as valid for payment provided that the balance of the account held sufficient for the transaction without any obligations. This dynamically reduces passing time of a cheque for payment in a bank counter than that of a manual system. In the new system account statement of a customer can be given instantly. I wanted to introduce a feasible system that faster and convenient.

2.4 DESIRED OUTPUT

a. Transaction processing screen

that can provide party account balance

that can process credit transactions

that can process debit by cheque transactions

that can process debit by voucher transactions

that can provide other operational status of a party

b. Customer Account Statement

c. Daily Transaction sheet/ Day Book

d. Cheque Book statement/Register

2.5 SCOPE DETECTION

To determine scope I have answered the following questions:

• How the software to be built does fit into a bank business context?

The new system will take place of the manual day book, ledger, and registers and will assist the users/officers to take prompt action providing various information and constraints automatically.

• What function does the software perform to transform input data into output?

The software will permit the data to enter if it is a valid transaction and will store the transaction in physical database. The output of the data will be daybook, account statement, updated account balance etc.

• Who is behind the request for this work?

The customer of the bank will request a service such as payment of a cheque, or may request his account balance or may request for a cheque book to the Bank Officials.

• Who will use the solution?

Bank officials of different mid level position such as Asst. Officer, Jr. Officer, Officer, Senior/Executive Officer, and Senior Executive Officer

The development environment scope is defined as followed:

q Host Platform: Personal Computer with Windows XP, Windows Vista or Later

q Development Platform:

Front End: VB.Net

Back End: Access 2000

Data Model: ADO.Net

Report Engine: Crystal Report

2.6 DEFINE FUNCTION/BEHAVIOR/ PROCESSES

Several functional areas in general banking are identified as:

a. Account Open

b. Cheque Book / Receipt Block Issue /Stop Payment

c. Debit Party Account

d. Credit Party Account

e. Summation of Party Account Balance in Ledger

f. Bank Statement Issue

g. Change Party Account Status

a. Account Open

When a customer first come to a bank to transact on a relationship basis- the bank opens an account in the name of that customer and thus the banker-customer relationship builds. Commercial banks offer many deposit and advance products to their customers to choose and then open the customers account on the selected/intended product ledger. Such as a man named A. Latif came to a bank to open an account in which he can transact by depositing and withdrawing from his balance. In this case his preferred product is Saving Deposit. The Bank will then provide him a savings bank account opening form which he will sign, fulfill and submit to the related bank official. The bank official will check the documents and then provide an account number particular to A. Latif.

b. Cheque Book / Receipt Block Issue /Stop Payment

After A. Latif’s account opens the savings bank account holder will deposit his money to the bank. When he intends to withdraw his money in future he will need a cheque book. So after opening an account the bank will provide a cheque book. The bank will provide cheque book to the account holder broadly to the products of the category 1 and category 2

Category 1. Time and Demand Deposit (Except Fixed Deposit)

Category 2. Advances

Category 3. Fixed Deposit Alike Product Account holder will get a Deposit Block

Receipt instead of a cheque

Category 4. Annuity Deposit account holders will not receive any cheque book.

c. Debit Party Account

When an account holder comes to withdraw money he will just place a cheque (which was issued to his account earlier) to the counter. The passing officer will verify the cheque and after his full consent and passing payment will be done to the account holder. In case of annuity deposit account holders (like SDPS, DPS) the money returned by Pay Order when an application of withdrawal from the account holder received. The fixed deposit account holder will just place his Fixed Deposit Receipt to withdraw the money.

d. Credit Party Account

When an account holder comes to deposit his money the cashier will take his money and will give back the customer part of the related voucher and the banks part will be retain for transaction. An officer will then make entry in scroll and ledger to update his balance.

e. Summation of Party Account Balance in Ledger

When a transaction is done the ledger balance of that account is also updated. For a credit transaction of Tk.500/- in A. Latif’s savings account an officer will just open the account related folio in the ledger and just put 500 on the credit side. Finally he will just add 500 with the balance in the previous row to get account current balance.

f. Bank Statement Issue

Sometimes a customer may ask for his transaction statement. An officer after receiving such request will then make a hand copy of the transactions in the ledger for that account on a prescribed format.

g. Change Party Account Status

Party account status may be changed in different circumstances differently because,

1) A party may wish to close his account or 2) may gone deceased or 3) may have no transactions since 2/3 or more years or 4) may done fraudolous activities in his account. In several circumstances like these it is required that the account status is marked properly. In circumstance 1 the account status will be ‘Closed’, in 2 that will be ‘Deceased’, in 3 that will be ‘Dormant/ Inoperative’ and in circumstance 4 that will be ‘Restricted’.

2.7 COMMON PRODUCTS AND SERVICES IN COMMERCIAL BANKS

A bank has wide range of product line to suit the need of the people of all strata. In addition to convention product a Bank offers special credit products for its customer.

Deposit Product Avg. Rate
Current Deposit Nil
Savings Deposit :
Urban Area (City Corporation, OthersMunicipality, Upazila Sadar Branches ) 5.00%
Rural Area 6.00%
Savings Deposit from Foreign Remittance 6.50%
Short Term Deposit: 3.50%
Fixed Deposit :
3 Months or above but less than 6 months 7.50%
6 Months or above but less than 1 year 8.00%
1year or above but less than 2 years 8.25%
2years or above but less than 3 years 8.50%
DPS: 15.00%
SDPS/SPS/MPS:
5 years 8.00%
10 years 10.00%
SDS/RDS: 5-7 years 8.50%
MES/EDS: 3-10 years 8.00%
MDS/MMS/Double: 6-10 years 8.00%

List 1: Common Deposit Programs in Banks (Ref: Website)

1. Export Credit (Pre-shipment & Post shipment)

2. Facilitating Supplier’s Credit

3. LCs (Letters of Credit)

4. Guarantees in Foreign Currency

– Bid Bond

– Performance Guarantee

– Advance Payment Guarantee.

5. Bill Purchasing/Discounting

6. Remittance, collection, purchases & sales of Foreign Currency & Traveler’s Cheque.

A Bank extends multiple credit facilities to boost up trade, commerce and industry. The credit packages and interest rates are as under:

Credit Packages Avg. Interest Rates
Credit to Trade and Commerce 14%
Credit for Power Driven Vehicle/Water Transport. 14%
Overdraft against:
Fixed deposits 13%
DPS Accounts 17%
Five years period 12%
Ten years period 14%
Wage Earners Dev. Bond 13%
Housing Loan
Residential 13%
Commercial 14%
Small Loan 14%
Consumers credit 14%
Loans to Public Sector Enterprises. 14%
Cash credit facilities for Small Business enterprises 14%
Cash Credit facilities against Bricks Manufacturing 14%

List 2: Common Loan and Advance Products in Banks (Ref: Website)

3. SYSTEM ANALYSIS

3.1 FUNCTIONAL MODELING

As information moves through software, it is modified by a series of transformations. The data flow diagram is the graphical representation of the functional area that depicts information flow and the transforms that are applied as data move from input to output. The data flow model for the system designed below:

3.2 DATA MODELING

Data modeling answers a set of specific questions that are relevant to any data processing application. To resolve the database structure I questioned myself the following questions: What are the primary data objects to be processed by the system? What is the composition of each data object and what attributes describe the object? Where do the objects currently reside? What are the relationships between each object and other objects? What are the relationships between the objects and the processes that transform them? In answering these questions, I have made use of the data dictionary and entity relationship diagram. The E-R-D enabled me to identify data objects and their relationships. On diagram 2 shown the relationship view of data objects based on the E-R-D.

3.2.a Data Dictionary

Account Number month limit of transaction
Department year limit of transaction
Account Group interest-bearing
Customer first name commercial account
midname minor account
last name current balance
guardian Limit
mother name department name
gender cheque pages
profession prefix
dob number of chq books
age starting chq leaf
id/passport ending chq leaf
village lot issue date
Post office period
Police Station initial deposit
District auto renew
home phone duration
office phone installment
introducer installment per year
opening Date transaction number
expiry date transaction type
ledger number amount
Operation Mode chq leaf
Account Status particulars
Account of Caution verified
savings passing officer
current monthly savings deposit
overdraft sps,dps
cash credit loan
fixed deposit signatory

Table 2: Data Dictionary

3.2.b Relational Data

3.2.c Data Tables

Following Data tables created after normalization of data based on the data model.

Table No. Table Name Data Description
Table 3 tblaccinfo Table is used to store input data from account opening form/ Customer information
Table 4 tbltransaction Table is used to store Current date transaction
Table 5 tbldeptcharacter Table is used to store characteristics information of a product department
Table 6 tblaccspecificgrp1 Table is used to store account specific data of time and demand deposit accounts (except fixed and annuity group)
Table 7 tblaccspecificgrp2 Table is used to store account specific data of fixed deposit accounts
Table 8 tblaccspecificgrp3 Table is used to store account specific data of annuity deposit accounts
Table 9 tblaccspecificgrp4 Table is used to store account specific data of Loans and Advance accounts
Table 10 tblAllTransactions Table is used to store all the transactions done from starting.
Table 11 tblchqbook Table is used to store cheque book issue information
Table 12 tblchqlot Table is used to store cheque lot information
Table 13 tblstop Table is used to store Account status information
Table 14 tblBankBranch Table is used to store Bank name and branch information
Table 15 tblBankdate Table is used to store current bank date
Table 16 tblnotice Table is used to store withdrawal notice on an account
Table 17 tbldept Table is used to store Department code and name
Table 18 tblotherparam Table is used to store other parameters of a product
Table 19 tblrate Table is used to store interest rates for all products
Table 20 tblOld2New Table is used to store Old account number with new a/c number reference
Table 21 tblcurrentbalance Table is used to store account balance of all accounts
Table 22 tblsignatory Table is used to store signature of account holder
Table 23 tblUser Table is used to store user information

Data table structures are given hereafter.

Table 4:

Table 3: Table 5:

Table 6: Table 7:

Table 8: Table 9:

Table 10: Table 11:

Table 12: Table 13:

Table 14: Table 15:

Table 16: Table 17:

Table 18: Table 19:

Table 20: Table 21:

Table 22: Table 23:

4. USER INTERFACE DESIGN

4.1 User Login form: When simplebank starts a log on box appears. User have to input user id and password in the specified boxes and then click logon button to get logged in and the main screen appeared with menu.

Fig 1: User Login form

4.2 Menu form: Provides the entire menu for the system.

Fig 2: Menu form

4.3 Transaction form: User can simply put a customer account number in the a/c no. box and press enter. User will find that all information regarding the account holder such as name, account status, account open date, current balance etc. in different areas in the transaction screen. If User want to do any transaction on that account he can just select transaction type, fill necessary information such as amount, batch number,cheque number (if a debit by cheque transaction), particulars code etc. and then press ‘Post’ button. If the transaction is valid the account data will be updated.

Fig 3: Transaction form

4.4 Account open/edit form: User just fills up necessary information according to information and presses the create button.

Fig 4: A/C open/edit form

4.5 Signatory form: To save a signature User will click ‘take card’ button and then select the card picture and then click save.

Fig 5: Signatory form

4.6 Change Account status form: User just put the account number and change account status by selecting from status combo box and then press change status button.

Fig 6: Change Account status form:

4.7 Notice form: User just puts the account number, put amount of notice, select date of notice and press set notice button.

Fig 7: Notice form

4.8 Cheque Book Maintenance form: User just puts the account number, number of leaf the book contains, starting leaf and then presses Issue button.

Fig 8: Cheque Book Maintenance form

4.9 User Maintenance form: Super User can create a user, give power to that user, restrict his credit and debit limit here.

Fig 9: Cheque Book Maintenance form

4.10 Parameter control panel form: User can change parameter such as interest rate, charges rate, create new module here.

Fig 10: Parameter control panel form

5. TESTING

Testing is a process of executing a program with the intent of finding an error. To find an error to resolve black box testing method is used in the project. Black-box testing, also called behavioral testing, focuses on the functional requirements of the software. Through Black-box testing I have attempted to find errors in the following categories: (1) incorrect or missing functions, (2) interface errors, (3) errors in data structures or data base access, (4) behavior or performance errors, and (5) initialization and termination errors. By Black-box testing I have applied all possible sets of input conditions that will fully exercise all functional requirements for the program. By equivalence partitioning method the input domain of a program divided into classes of data from which test cases can be derived. In the test case single-handedly uncovers a class of errors e.g., incorrect processing of all character and numerical data. An equivalence classrepresents a set of valid or invalid states for input conditions. I have exercised every possible input the user can do in different controls. For example, an user may provide wrong account number or number with less or more digit, user may enter cheque prefix with less characters or no character, user may enter character where only a numeric input is required, user may provide wrong transaction code, user may provide wrong cheque book starting leaf, user may provide wrong decimal amount such as an amount with three or more digit in the right of precision point etc.All the aforesaid input conditions are handled programmatically so that user may not be able to enter invalid data. Boundary value analysis is also done to several numerical controls. All the possible minimum and maximum values are exercised to find out error in the numerical controls such as account number textbox, amount text box, batch number text box, cheque number text box etc. in the transaction form.

6. DOCUMENTATION

  1. Installation:

Step 1: Run the setupreport.exe. It will install related files for the report engine.

Step 2: Copy the Sbank.mdb database to C:\ drive of your system.

Step 3: Copy simplebank.exe and paste a shortcut in desktop.

Step 4: Step 4 is needed if the dotnet framework is not available in your system. Just run the dotnetfx.exe to setup dotnet framework 1.1.

  1. Run

Just double click the simplebank.exe and log in using valid id and password.

  1. Operation:

Log On: When simplebank starts a log on box appears. You have to input your user id and password in the specified boxes and then click logon button to get logged in and the main screen appeared with menu.

Menu Description:

a) Transaction

You can simply put a customer account number in the a/c no. box and press enter. You will find that all information regarding the account holder such as name, account status, account open date, current balance etc. in different areas in the transaction screen. If you want to do any transaction on that account just select transaction type, fill necessary information such as amount, batch number, cheque number (if a debit by cheque transaction), particulars code etc. and then press ‘Post’ button. If the transaction is valid the account data will be updated.

c) Account Open/Edit

Just fill up necessary information according to information and press the create button.

d) Account Status

Just put the account number and change account status by selecting from status combo box and then press change status button.

e) Signatory

To save a signature just click take card button and then select the card picture and then click save.

f) Cheque Book

Just put the account number, number of leaf the book contains, starting leaf and then press Issue button.

g) Seven Days Notice

Just put the account number, put amount of notice, select date of notice and press set notice button.

Reports:

a) Account Statement

Just put an account number and click account statement button to get account statement.

b) Other daily statements

Select desired options and click on radio buttons of your required report.

c) Help

Help text can be find here.

d) About The Project

Information about the project developer.

Maintenance:

a) User Maintenance

You can create a user, give power to that user, restrict his credit and debit limit here.

b) Parameter

You can change parameter such as interest rate, charges rate, create new module here.

Process:

a) Backup

Backup database.

b) Restore

Restore database.

c) Day end

Day ends if the both transfer sides are equal and given cash balance is equal to simple bank system summation. Then the next day is initialized.

7. CONCLUSION

This report was an attempt to map out a document, which clearly explains the phases of banking application development, different application methods, data and function engineering processes with self description and documentation in a comprehensive way about the sample “Simple Bank” banking application software. Today it is widely recognized that availability of efficient information and transaction systems is essential for financial organizations like banks. So definitely there is good market for banking software and banking software developers. I am confident that I have acquired in-depth knowledge about the practical orientation and experiences of dynamic software and business applications world after finishing this project.

8. Recommendation

• Back end or database can be upgraded to SQL server for greater data integrity, security and functionality.

• To enable working in Network environment .net class and SQL features can be used in future.

• Before launching the software in live mode the manual system and the automatic system should run parallel for 1 month so that any discrepancy in the new system can be detected.

• The banking system should be operated by computer literate as well as ‘Simple.

• Users should maintain their passwords secret.

• Everyday backup of the banking database is strongly recommended.

" 12,"

A STRUCTURAL CONSENSUS EVALUATION

","

Many view the maturity of a government or civilization in relation to how that community treats its most needy citizens. The UK government became a welfare state in the 1940s, (Taylor-Gooby 2004). There has recently been a shift in views on many aspects of welfare, with the future of many government programmes, or at least their scope, in question. The government and community’s struggle to improve the welfare system can be considered in light of two of the more prominent social ideologies, Marxism and conservatism. Both have strong opinions on welfare as a part of society, the role of the individual within such society, and how inequalities should be best addressed. These views are addressed more completely, however, by structural consensus theory.

Marxism sees human history as a class struggle, with oppressor and oppressed wrestling for control. The dominant class controls and owns the means of production or wealth generation, and the working class in therefore controlled by them. Welfare is a result of the strength of working-class resistance to exploitation, a concession the dominant class must make to maintain social order (Anon 2005). Programmes such as welfare and pensions help to legitimise the capitalist system with the working class. Welfare then becomes another vehicle for power and control by the dominant class. Its purpose is to placate rather than empower the poor, and seeks to reduce the individual to a state of dependency on those in power (Anon 2005).

According to Marxist theory, society has unfolded in a series of ever-progressing and better structures, as defined by their economic development and modes of production, from the primitive communal to slave-based to feudal to capitalist. The final stage was communism. This was predicted to be the best possible means of governance and structure of society, one that would erase inequalities and allow individuals to achieve their full potential and value within their community (Anon 2005). While communism has faded, at least as it was practised in the Soviet Union and similar countries, socialist ideas have strongly pervaded capitalist ideology, leading to the development of the capitalist welfare state common today.

Marxism viewed the individual as part of a collective organism, society. Inequalities in society resulted from distinction in classes, not particular individual decisions or behaviours. Conflict was between these classes, and rooted in struggle for power. Only when class distinctions were eliminated could individuals experience equality, although the theory still views them as part of a greater collective (Taylor-Gooby 2004). Marxism assumes the individual can and will contribute to the greater community as much as they are able, and will be motivated by the common good. When society has evolved or elevated itself to this place, inequalities will be dealt with appropriately (Anon 2005).

Important ideas of Marxist theory that relate to the current welfare system are the state’s responsibility to provide for its members and the need for redistribution of wealth. The idea of entitlement, that one must be provided for simply because one is a British citizen, is in keeping with these two ideas (Timmins 2004). Welfare is a good and natural occurrence in a mature society, and should be available as much as needed. If society is unable to provide a job, it should provide support; if a member of society is unable to support himself, the government should do so.

Difficulties in the application of pure Marxist ideology have led to a broadening of its doctrines. Marxism now represents a variety of ideas and opinions, grouped by their general opposition to the capitalist society. Supporters of these views have watched in dismay as welfare reform has been introduced in various countries, and at the success the US and other countries have had with the adoption of more conservative welfare policies (Barr 2004). The problem with broad application of Marxist theory is that individuals do take advantage. Easy welfare leads to many choosing to receive benefits when they could work, which weakens society. An example of this in our society is the explosion in the numbers of those receiving incapacity benefit; the number has doubled since 1993. It is possible for the unemployed to complain of mental problems say, stress or panic attacks, and be given a life-long sick note (Nelson 2005). Persons claiming incapacity when they are in fact able-bodied, then receiving government support, does not truly benefit anyone in the long term.

Well-meaning welfare provisions, such as giving increased benefit to single-parent households, has been shown to contribute to the breakdown of the family structure. An average family pays 5,000 pounds a year more in tax than they receive in benefits. If they break up, they claim 7,000 pounds more in benefits than they pay in tax (Nelson 2005). This serves as a disincentive for the poor to maintain stable family units, further eroding their independence from government support. Marxist theory would contend this is an example of a supposed benefit offered by the dominant class that really serves to oppress the working classes.

Conservative theory holds to very different tenets. Conservatives stress the need for social order and the responsibility of the individual (Taylor-Gooby 2004). Traditions, usually based on the values of the majority or dominant segment of society, are important and should be respected if not practised by all members of society (Taylor-Gooby 2004). The emphasis on individuality can also be interpreted as the assumption of inequality, that people have different abilities and motivations, and are therefore more or less able to succeed in society. Advancement is seen in terms of individual decisions and actions, rather than something dictated by society or its institutions (Anon 2005).

In regard to welfare, conservative theory minimises the need for welfare programmes, particularly those for the able-bodied unemployed and elderly who chose not to save or plan for their old age. The unemployed on welfare are often seen as lazy and unwilling to work (Johnston 2005). The individual’s ability to hold a job and succeed in society rests upon his or her own shoulders, and not working is deemed irresponsible. This opinion, voiced by Fraser Nelson in a recent The Business article, holds that welfare is not saving people from unemployment, but from unpleasant jobs (2005). Conservatives stigmatise welfare recipients, believing the stigma or negative perception by other members of society will facilitate their move off the welfare rolls. This type of mindset, at its best, leads to the creation of jobs programmes and other vehicles to assist the individual in rising above his or her need for welfare (Johnston 2005). The conservative considers individuals who do not take such opportunities as unwilling to work or become self-supporting. The social policy of the British government shifted towards conservatism under the Thatcher administration, although still providing a broad welfare programme (Taylor-Gooby 2004).

The problem with the conservative perspective is that it fails to fully consider the social, psychological, and economic depravity of certain segments of society or disadvantaged geographical areas. It expects everyone to be able to pull themselves up by their boot-straps, as the saying goes, regardless of whether society has afforded them the means or tools to do so (Barr 2004). Whilst some from a deprived environment will be able to self-equip themselves to the point they can compete, vocationally and other wise, with persons from advantaged backgrounds, this has historically not been the case for the majority.

The logic of and benefit to and individual getting off welfare in favour of a menial job is also questionable, at least from the individual’s point of view (Johnston 2005). If given the choice between working at a distasteful or unpleasant place or receiving the same monthly support from a welfare programme, many will logically take the welfare. The Centre for Policy Studies notes that A two-parent family with a stay-at-home mother on average income and a mortgage is only four pounds a week better off than a single-parent household reliant entirely on benefits (Nelson 2005). This makes encouraging the single parent to put his or her children in some type of care whilst they work a hard sell.

The Marxist and Conservative viewpoints are represented today as left and right wing politically. The left wing supports broad welfare programmes and public provision; it tends to function from a collectivist viewpoint. The Gordon Browns in this camp advocate expanding the current welfare system. The right wing supports only residual welfare, opposing public provision and championing individual responsibility (Anon 2005). The British populace has been progressively moving towards a more centrist view of welfare and public provision, although sweeping reforms are yet to occur (Johnston 2005). This gives rise to a functionalist, or structural consensus theory, attitude towards the future of welfare.

Unlike Marxism and Conservatism, Structural Consensus Theory focuses on the functional needs of society, and how society meets these needs (Taylor-Gooby 2004). It offers a future vision of society, based on ideals and agreeable relationships. These ideals include a central value system, holistic social order, stability, and that the functional needs of the society must be met. The focus is on society as a whole rather than the individual. Society is seen as having the right both to define common values and impose them on its members (Anon 2005). This strong social integration leads to social control and stability. The parts and institutions of a society contribute towards meeting the society’s functional needs. The cohesion required for these contributions is developed through shared experiences and relationship amongst members and institutions in society (Anon 2005).

It then supports aspects of both Marxist and Conservative theory. There is a legitimate, functional need for welfare in society. There will always be some people that are unable to work through no fault of their own. Society has a responsibility for the physically or mentally disabled person, for the widow with small children, for the poor older person who is past the age of employment. It has a responsibility to provide food, clothing, shelter, and schooling to children whose parents cannot or will not do so. These are widely agreed-upon needs.

The functionalist sees the institutions of society as both providing for these needs and integrating the individuals receiving support into the broader society. The unemployed on welfare are to be encouraged and included, not stigmatised, because doing so is the best course for returning them to work (Barr 2004). Inequality is not a given, but exists as a possibility. A balance between the responsibilities of society and those of the individual member of society are envisioned in balance.

Whether this future balance can be achieved is a contested topic. There is a growing concern about and resistance to immigration into Britain. Immigrants are seen as taking British jobs, for less pay, and sometimes rightfully so. A recent poll showed three-quarters of British citizens believe the number of immigrants should be cut back, up from two-thirds with this opinion in 1995 (Timmins 2004). More people are viewing immigration as a factor in increasing crime and disintegration of quality of community life (Timmins 2004). Some blame welfare recipients’ unwillingness to work as contributing to the immigration issue. Others foresee cultural changes they oppose as the number of immigrants rise (Johnston 2005). This type of divisive strife does not propel the country toward common values, stability, or social order. It also creates resentment amongst those required to foot the bill for programmes such as welfare, which they begin to see as undermining their way of life (Johnston 2005).

In conclusion, the British welfare state and social policy shifted toward conservatism in the 1980s, and is beginning to experience the effects of a more conservative mindset amongst its citizens. Whether all the tenets of structural consensus theory can be achieved remains to be seen, but the emphasis on focusing on the functional needs of society, and providing systems to meet these needs, will go a long ways toward achieving balance between the responsibility of society to its members and the responsibility of members to be independent contributors to their society.

REFERENCES

Anon 2005. The politics of welfare. Robert Gordon University Centre for Public Policy and Management [online]. Available at www.2rgu.ac.uk, accessed 28 March 2005.

Barr, N., 2004. Economics of the Welfare State. Oxford University Press, Oxford.

Johnston, P., 2005. Do we really not want to work? The Daily Telegraph, London, Features section, p. 23, 14 February 2005.

Neslon, F., 2005. How pro-poor policies are widening the welfare gap. The Business, 23 January 2005.

Taylor-Gooby, P., ed, 2004. New Risks, New Welfare: The Transformation of the European Welfare State. Oxford University Press, Oxford.

Timmins, N., 2004. Hardening attitudes to benefits mesh with government policy. The Financial Times, London, National News Politics and Policy section, p. 4, 7 December 2004.

" 13,"

AARONG PRODUCTS IN BANGLADESH 2

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View With Charts And Images 

 

CHAPTER-1

 

INTRODUCTIO N

 

Executive Summery

 

Today, few urban consumers will argue that Aarong is the local Mecca for deshi handicraft. Aarong’s product designs has brought consumer attention back to the products and styles that are indigenous to Bangladesh, its designers blending the traditional with the contemporary in a manner that has won instant consumer appeal, starting a revolution in trends that has now been taken up by countless other boutiques and stores. Aarong’s product designs focus on the diverse types and textures of crafts and patterns that have been passed along from generation to generation among weavers and artisans in craft hubs around the country.

 

Aarong also plays the role of protector and promoter of traditional Bangladeshi products and designs. It houses an extensive design library where remnants of our rich craft heritage, such as Nakshikantha art and Jamdani patterns, have been widely researched and archived for present as well as future use.

 

About the Organization

 

Established in 1978, Aarong is a fair trade organization dedicated to bring about positive changes in the lives of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and craft. Reaching out to weavers, potters, brass workers, jewelers, jute workers, basket weavers, wood carvers, leather workers and more, Aarong embraces and nurtures a diverse representation of 65,000 artisans, 85% of whom are women. Today, Aarong has become the foundation upon which independent cooperative groups and family-based artisans market their craft, in an effort to position the nation’s handicraft industry on a world platform of appreciation and acknowledgement.

 

Aarong began as a cause – a means to an end for a quiet organization fighting to uphold the dignity of the marginalized. In 1976, when BRAC- a Bangladeshi NGO dedicated to alleviating poverty and empowering the poor, first began encouraging sericulture for women in Manikganj, their only buyers were a few scattered retailers in Dhaka. Weeks, even months would pass between supply and payment, until BRAC intervened. Aarong was born out of a need to ensure that the penniless silk farmers of Manikganj were paid for their goods upon delivery, so that they could feed their families.

Today, Aarong’s reach has spread beyond Manikganj to the rest of the country. It has grown into a thriving international enterprise showcasing ethnic wear to beautiful crafts from silks, handloom cotton, endi to terracotta, bamboo, jute and much more. From a single shop, Aarong has grown into one of Bangladesh’s biggest retail chains, with eight stores spread across the major metropolitan areas of the country – in Dhaka, Chittagong, Khulna and Sylhet and one in London, UK.

Organization’s Profile

Organization Name Aarong
Country/ Territory Bangladesh (London)
Organization’s Head Quarter   Aarong Centre (Head Office)

346, Tejgaon I/A, Dhaka-1208
Tel: +880 2 8832139
Fax: +880 2 9898267
Email: export.aarong@brac.net
Year of establishment 1978
Business line A Fair trade organization produce traditional Bangladeshi products
Number of artisans   Over 65,000 (85% women)

 

 

 

CHAPTER-2

About Aarong

BRAC & Aarong

 

The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978. It is now directly handled by BRAC. The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis. It is the largest non-governmental development organization in the country. BRAC has initiated education projects in one fifth of the country’s 80,000 villages, and in 2001, they started a university. It is also responsible for thousands of health programs, numerous agriculture and food production businesses, and micro-credit initiatives.

Aarong works to empower the poor and strengthen traditional craftsmanship. The organization involves over 30,000 artisans, (85% of whom are women), employed through small community groups. They produce an impressive range of products: terra cotta; silk and cotton textiles; clothes; leather work; brass; wood; candles; basketry, and jewellery. Aarong operates eight retail stores in Bangladesh, which sell about 80% of the crafted items; the remainders of products are exported.

The women Aarong employs are among the countries most disadvantaged. Through Aarong they have been offered a way out of destitution and degradation where before they had none. And the benefits that they receive extend well beyond simply the wages they earn for their products, since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRAC’s multifaceted development programmers.

As a support entity of BRAC, a significant portion of Aarong’s earnings go directly into financing the NGO’s development programmes in healthcare, education as well as economic and social development

A fair trade organization

Aarong symbolizes fairness in the global village. The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas: lack of working capital, marketing support and opportunity for skills development. In order to bridge these gaps, Aarong provides a wide range of services to its workers and suppliers:

Spot payment on product delivery to encourage efficiency and productivity

Reach out to producers in remote areas to ensure fair value for their efforts

Marketing communication and information for artisans

Advances against purchase orders where necessary

Training & Education in skills development to raise product quality and marketability

Product Design and Support in Product Development

Quality Control to increase producer awareness of the importance of quality

These values reflect fair trade principles which have been developed by registered Fair Trade Organizations.  Fair Trade is a trading partnership, based on dialogue, transparency and respect that seek greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South (IFAT).

Press release

                 
  To:   All department heads, shop managers  
  From:   Aarong marketing  
  Subject:   Aarong won the seal of excellence award  
  Date:   1/11/06      
  Cc:   Head, Aarong        
               
               
It gives us great pleasure to inform you that Aarong has been awarded the 2006 UNESCO Seal of Excellence Award for our Terracotta Curry Bowl and Fruit Bowl. These products were designed by Fatema Akhter, and produced by Bimol Pal from Potuakhali, Baufol.  
             
   
Curry Bowl Fruit Bowl
       

 

    
             
The Seal of Excellence (SEAL) programme was established by UNESCO to encourage craft-workers to use traditional skills and materials so as to ensure the perpetuation of traditional knowledge and to preserve cultural diversity. The Seal of Excellence is effectively a “seal of approval” which guarantees that the handicraft products with this seal conform to the rigorous standards set by the programme and have potential for the world market.

The 2006 SEAL awardees will be on display at the Central Cottage Emporium Industries, Jan path, New Delhi from 1st-10th November, 2006. For more information, please visit www.unescobkk.org/culture/craftseal.

On behalf of the Aarong Management, we would like to thank the designers, producers and everyone who has helped us to receive this prestigious and honorable award.

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chapter: 3

 

Artisans’ & Story

Artisans

Holding steadfast to its original mission, Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers, 85% of who are women. More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong, Gorpara, Jamalpur, Jessore, Kushtia, Manikganj, Rajbari, Sherpur, and Pabna, Pollobi, Kurigram, Nilphamary, Jhenaidah and 653 subcentres spread across Bangladesh.

Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong. Potters, Brass Workers, Jewellers, Jute workers, Basket Weavers, Handloom Weavers, Silk Weavers, Wood Carvers, Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services.

 

Artisans: Karim Mia’s Story

Karim Mia is a bamboo tray and basket producer of Aarong. Due to extreme poverty at home, Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving.  Struck by the untimely death of his father, Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers, five sisters and his mother. Initially, Karim Mia commuted from his home district, Tangail (approx. 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka. At that time, with his meager monthly income of almost $25, he could barely support his family. After struggling for almost three years, Karim Mia came to Aarong in 1988 to show some of his samples. His self-designed samples were immediately chosen and an order was placed for 60 pieces. Since then, Karim Mia has received constant orders from Aarong for its local as well as export market.

As part of its mission to assist producers in product development and technical training, Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003. The one-week training has helped him to gain better knowledge about bamboo craft. His workmanship has also shown remarkable improvement in quality. Today, Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130. On an average, he has ten workers working under him. During the busy season he employs more than fifty workers.

Karim Mia is now married with two sons and a daughter all of whom attend school. He hopes that his children will be able to complete their education, which he could not because of financial need. About two years ago, Karim Mia bought 20 decimal lands in Tangail, where he constructed his tin-shed home. Very recently, he has built an extension room that is being used as working space and storage for the bamboo products.

 

Karim Mia feels that Aarong’s support during his needy times, the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family.

 

 

\

Chapter: 4

Production Centre & Outlets

Aarong Production Centre (Ayesha Abed Foundation)

The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for employment and income generation for underprivileged rural women. It is an enclave for women, formed to uplift them economically, through their work as producers, and also socially, through their development into entrepreneurs. The Foundation provides an appropriate working environment, financial and technical assistance, and training to develop the women’s skills in various crafts. The Foundation was established to commemorate the memory and work of late Mrs. Ayesha Abed, a co-worker and wife of the Founder and Chairperson of BRAC. The work that is done in the Foundation is a testament to her commitment to the issues of education, training and employment opportunities for disadvantaged women. It was she who in 1976 initiated all the present major activities of AAF in Manikganj.

 

The AAF aims to work with the most underprivileged women in the society. These women are often the most neglected and are in need of much assistance and support. The AAF plays the role of a facilitator. The women are placed in an enabling environment, with other women of similar socio-economic backgrounds. They are trained and then given the opportunity to generate income. One of the major challenges that these women have to face is that they are marginalized and they, on their own, have no way of becoming part of the economic system. This is where the AAF steps in, helping such marginalized women out of their peripheral existence in society, and giving them the opportunity to become involved in sustainable enterprise.

The AAF is closely interrelated with other programs, especially BRAC Development Program (BDP) and Aarong. The women workers of the AAF come from the BDP organized Village Organizations. Working at the AAF thus gives the women access to other BRAC programs. All of the AAF’s finished products are sold through Aarong, which additionally provides designs, raw materials and financial support to the AAF. Since AAF supplies exclusively to Aarong, it is treated as Aarong Production Centers.

Goals

Empowering destitute rural women by providing opportunities for employment and income generation.

Ensuring commercial success of the enterprise of women producers.

Reviving traditional skills of rural artisans.

Services

Free Medical check-up including free eye treatment, eye-glasses and treatment costs for severe illnesses

Advance wage payments for employees in need

Day care services

Workers retirement fund

   

 

 

 

 

Aarong Centre (Head Office)

346, Tejgaon I/A, Dhaka-1208

Tel: +880 2 8832139

Fax: +880 2 9898267

Email: export.aarong@brac.net

Aarong at Dhanmondi

Aarong Dhanmondi

1/1, Block-A, Lalmatia

Manik Miah Avenue

Mirpur Road

Dhaka-1207

Tel: +88-02-8111607

Fax: +880 2 8828576

Email: export.aarong@brac.net

Operating Hours: 10:00am –8:00pm

Open 7 days a week

Aarong at Gulshan

Gulshan – Tejgaon Link Road

Dhaka 1208 ,Tel: 8821052, 8825986

Operating Hours: 10:00am – 8:00pm

Open 7 days a week

Aarong at Maghbazar

Aarong Plaza, 61, Shahid Shangbadik Selina Parveen Sharak ,Maghbazar, Dhaka 1217

Tel: 9334766, 9360260

Operating Hours: 10:00am – 8:00pm

Open 7 days a week

Aarong at Uttara

Mascot Plaza (4th Floor), Plot 107/A Sector 7,Uttara Model Town

Dhaka 1230

Tel: 8916097, 8914125 ext. 501

Operating Hours: 10:00am – 8:00pm

Open 7

Aarong at Wari

36/1 Rankin Street (1st Floor) Wari
Dhaka 1203

Tel: 7114244

Aarong in Nasirabad, Chittagong

Golden Plaza (1st Floor)
1692 CDA Avenue
Chittagong
Tel: 031-654030, 06074485325

Operating Hours: 10:00am – 8:00pm
Open 7 days a week

Aarong in Halishahar, Chittagong

 

Chittagong

House: 1, Lane: 1, Block: L

Halishahar
Chittagong
Tel: 031-2515644-45

Operating Hours: 10:00am – 8:00pm
Open 7 days a week

 

Aarong in Sylhet

413 Naya Sharak
Sylhet
Tel: 6017, 0821-815988, 0821-713150

Operating Hours: 10:00am – 8:00pm
Open 7 days a week

Aarong in Khulna

Plot A43-A44
Majeed Sharani Avenue
Shib Bari
Khulna
Tel: 6016, 041-730547

Chapter: 5

Products of Aarong

Products

 

 

Men

Traditional

Executive Shirts

Maanja

Fotua

Short Kurta

T-shirts

Stoles/Shawls

Sandals

Women

Traditional

Western (TAAGA)

Nightwear

Shawls/Scarves

Shoes (Leather)

Bags (Leather)

Fabrics

Leather

Shoes

Bags/Wallets

Belts

Boxes

Photo Frames

Office

Children’s

Clothes

Toys

Books

Shoe

 

 

 

Home textiles

Bed

Table

Living

Kitchen

Kids

Rugs

Fabrics

Home accessories

Bed
Table Lamps

Photo Frames

Table
Coasters
Napkin Rings
Mats
Trays

Dining ware
Cutlery
Bowls and Platters

Living
Photo Frames
Bookends
Boxes
Decorative
Hammocks
Plant Accessories
Candles

 

Kitchen
Aprons
Kitchen Mitts

Cookbook Stand

Lamps

Jewelry

Gold

Silver

Pearl

Other

 

 

 

 

 

Gold collection by Aarong

 

Discover the mesmerizing magic of Aarong’s Gold Jewellery Collection.

 

The newest collection of gold jewelleries from the house of Aarong, are the ultimate shows stopping haute-couture pieces. Innovative designs blended with perfect cuts have created a gold collection that is sophisticated sojourn with perfection. Each piece is timeless, combining gold with brilliant semi-precious gemstones such as Rubies, Emeralds, Garnets, Sapphires and Pearls. From classic bridal gold ensembles, fusion to contemporary styles, the Aarong Gold Collection signifies everlasting elegance and élan. The newly launched gold jewelleries from Aarong are guaranteed to be 21karat, which are checked for its purity through the Gold Check Karat meter machine. Aarong has also introduced buyback facilities for its gold jewelleries.

This season, indulge yourself in a handcrafted masterpiece of exquisite design and breathtaking brilliance from the gold jewellery collection of Aarong.

Terracotta Products

Decorative

Dining
Bowls and Platters
Dining ware
Glasses/Mugs
Hot Plates
Pitchers

Lamps

Plant Accessories

Bamboo/Leaf Products

Living
Boxes
Photo Frames
Dry Decorative
CD Racks
Floor Mats

Dining
Mats
Napkin Holder
Trays
Place Mats
Coasters

 

 

 

Candles

Pillar

Floating

Decorative

Seasonal

Metal Products

Decorative
Photo Frames
Magazine Racks
Candle stands

Living
Furniture

Lamps

Jute Products

Decorative
Boxes
Photo Frames
Baskets

Personal Accessories
Bags
Sandals

Ceramics Products

Decorative

Plates and Saucers
Bowls and Platters
Mugs and Cups
Teapots

Nakshi Kantha Products

Decorative
Wall hangings
Christmas decorations

Fashion
Men’s
Women’s
Children’s

Bed
Bed Covers
Cushions
Quilts

Table
Tea Cozy
Table Cloth/Napkin
Mats

Personal Accessories
Bags
Optical Cases

Paper Products

Cards

Stationery

Wrapping Paper

Wood Products

Decorative
Photo Frames
Wall Hangings
Candle Stands
Vases

Living
Shelves and Racks
Mirrors

Table
Bowls and Platters
Cutlery
Trays
Napkin Holders

Glass Products

Table
Glasses and Cups
Pitchers
Bowls

Export: Terms and Conditions

Beneficiary

BRAC
66 Mohakhali C/A, Dhaka 1212

Bangladesh
Tel: 880-2-9885424, 880-2-8824180

Fax: 880-2-8828576, 880-2-8823614

Payment to

L/C at sight or 50% Advance* with order & 50% before shipment by T.T. to
BRAC Bank Limited

1, Gulshan Avenue, Gulshan-1, Dhaka-1212,

Bangladesh
Tel: 880-2-8824501;

Fax: 880-2-8813543

Account # 150180010606

Account Name: BRAC – Aarong

Delivery

Between 60 to 120 days, depending on volume of order, on receipt of L/C or advance BT T.T.

Port of Dispatch

By Hazrat Shah Jalal International Airport, Dhaka

By Sea: ICD Dhaka for Full Container Load (FCL); Chittagong for Loose Container Load (LCL)

Packing

Fragile items are packed individually in 3 ply carton boxes and madter packing in 5 or 7 ply carton boxes. Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (20/25 kgs. in a box.)

Freight and Insurance

Freight and Insurance to be covered by the importer which varies from port to port.

*Advance: If 50% is paid in advance against the ordered value, then the documents will be sent to the importers directly. Otherwise the documents will be sent to the bank for collection against bill of exchange

Export Product Pictures

Accessories:

 

Candle:

Home textile:

 

Jewellery:

  

Jute:

 

 

Nakshi Kantha:

 

 

Terracotta:

 

Leather:

 

 

 

 

New Collection of Aarong

To celebrate the upcoming Eid-ul-Fitr, Aarong, a leading fashion house in Bangladesh arranged a gala evening of scintillating fashion displaying their new apparels on Wednesday, August 27, at the Radisson Water Garden Hotel.

  

 

The show presented a sneak peak of Aarong’s Eid collection for children, women and men. All the outfits presented at the show, and more, will be available at Aarong outlets across the country during the month of Ramadan. This Eid collection is based on different themes and accessories with fabulous jewellery and shoes.

The show began with a brilliant ensemble of kids wear in suits and elegant silk dresses. Male tots with white shirt, black pant and coat and female tots with white and red colored dresses amused the spectators.

  

 

Dribbling with a basketball on the ramp, the men’s collection was introduced, with military styled Punjabi and boots with stripe. The colour and design of the basketball expertly displayed the power of Aarong’s signature. ‘Play punjabi’ gave an active look for the modern youth and also added boldness and bravery to traditional idea of pubnjabi. With a very exciting theme ‘Flower Power’,a refreshing line of silks and creative floral paint in saris for women was displayed on ramp, radiating with the talent of Aarong designers in the use of natural dyes and the texture.

On stage, the audience was treated to songs rendered by Arnob, with Andrew Morris on the saxophone. Arnob’s rendition of traditional songs paid fitting tribute to Aarong and its members who have worked tirelessly through the last thirty years to do creative and innovative work.

To announce the ending of the mega gala, Tamara Abed, director of Aarong, Ayesha Abed Foundation and BRAC Dairy came to the stage to thank the event partners which included media partners NTV and Radio Foorti, makeup

and hairstyling partner Farzana Shaki Makeover Salon and Hospitalit Partner Radisson Water Garden Hotel.

Chapter: 6

Aarong & its Career

Aarong in London

 

Aarong sell an assortment of own brand formal and casual wear for both men and women in London. Although Aarong sell its own products but the show room which in London is little bit different from our local shop. Because of the demand of the customers of London.

 

 

69 Vallance Rd Kingdom+44 20 72477727

London, E1 5BS, United

 

 

Career in Aarong

Aarong is committed to providing its staff with an environment in which they can flourish. We look for people with energy, creativity and commitment and give them the tools they need to fulfill creative and ambitious goals, whilst striving to attain the highest standards of professional excellence and integrity.

To apply to join the Aarong team, please submit your resume to HR Manager, Aarong HR Department at hr@brac-aarong.com.

 

 

Contact Us

 

Aarong Corporate Office

346, Tejgaon Industrial Area

Dhaka-1208
Phone: +88 02 8832139

Fax: +88 02 9898267
Email Information

 

Ayesha Abed Foundation aaf.aarong@brac.net
Accounts accounts.aarong@brac.net
Customer Service customerservice.aarong@brac.net
Human Resources hr.aarong@brac.net
Export export.aarong@brac.net
Marketing marketing.aarong@brac.net
My Aarong Rewards Program myaarongrewards@brac.net
Textile textile.aarong@brac.net

 

 

Termination

After our 15 days working period we really feel that we have learned something about marketing and marketing segmentation. This assignment was fully related with the consumer & buyer behavior and marketing activities and that is our Major in BBA. We went to the consumer directly in different retailer shop and watched their shopping. There were different age’s people, and every people there were a different ideas, choice, activities, and purchasing ability. We found that Aarong has a very strong brand loyalty to its consumer. Almost every consumer knows about Aarong which will help to capture market for the Aarong. We are very much glade to informs that, “The Nakshi Kantha has a huge market there as well as foreign market”.

Recommendation

Improve the way of advertising that they can get the minimum knowledge about the products, for example, the Eid Collection products would attract new consumers to purchase This product under the Aarong as a brand name.

Also the fact that price are being forced to fall should prove to be an opportunity for Aarong to sell to the people, who previously may have not purchased a product because of higher prices.

Bibliography

“Established in 1978, Aarong is a fair trade organization”. < http://www.brac-aarong.com/index2.php>

“BRAC & Aarong” < http://www.brac-aarong.com/aboutus.php>

 “A fair trade organization” < http://www.brac-aarong.com/aboutus.php>

 

“Artisans” http://www.brac-aarong.com/artisans.php

 

“Artisans: Karim Mia’s Story”< http://www.brac-aarong.com/artisans_cs.php>

 

“Aarong Retail Outlets”, <http://www.brac-aarong.com/retail.php>

 

“Products”,<http://www.brac-aarong.com/products.php>

“Export: Terms and Conditions”, <http://www.brac-aarong.com/exportterms.php>

“New Collection of Aarong”, <ttp://www.bracnet.net/default.aspx?si=default&debug=&xid=1519&m=web>

“Aarong in London”, <http://www.visitlondon.com/attractions/detail/265702>

 

“Career in Aarong”, < http://www.brac-aarong.com/contactus.php>

 

“Contact Us”, <http://www.brac-aarong.com/career.php>

 

 

Appendix

Abbreviation

AAF – Ayesha Abed Foundation: The Ayesha Abed Foundation (AAF) started its activities at Manikganj in September 1983. The objectives of the centre were to institutionalize the capacity of providing services to new and existing small scale women’s producer groups which would create employment and income generating activities.

There are twelve egg-rearing (grainage) centres in Dinajpur, Noagaon, Bogra, Jamalpur, Sherpur, Mymensingh, Gazipur, Manikgonj, Pabna, Rajbari, Magura, and Jessore. BRAC has five silk reeling centres in Manikganj, Jamalpur, Atghoria, Sherpur and Taraganj. There is a silk weaving centre at the Gorpara area office, in addition to weavers contracted in Kumarkhali, Shajadpur and Ullapara. There are six AAF centres in Manikganj, Gorpara, Sherpur, Jamalpur, Jessore and Kustia. Other sericulture activities are located in all the programmed areas.

 

BDP- BRAC Development Program: BRAC develop their program by doing following his work…

– Micro finance

– Employment and Income Generation (e.g.  Poultry & livestock, fisheries, social forestry)

– Social Development, Human Rights & Legal Services

– Health

– Education

 

IFAT- International Federation for Alternative Trade: international organizations and non-governmental organizations with the country or region in which their main or international office is based. Other organizations are listed on the page for standards organizations.

 

MCC- Mennonite Central Committee: MCC was founded in Chicago, Illinois, and held its first meeting on September 27, 1920. Its original goal was to provide food for Mennonites starving in Ukraine. MCC soon realized that it could not help only their Mennonite brothers and sisters and began to help anyone in need. MCC (Canada) was founded in 1963.

 

 

 

Index

Location

 

 

A fair trade organization; 5

Aarong Production Centre (Ayesha Abed Foundation); 10

Aarong Retail Outlets; 13

About the Organization; 2

Artisans; 7

Artisans: Karim Mia’s Story; 8

BRAC & Aarong; 4

Carrere in Aarong; 27

Contact us ; 27

Export: Terms and Conditions; 20

Export Product Pictures; 21

Freight and Insurance; 21

Goals; 11

New collection of Aarong; 24

Organization’s Profile; 3

Press release; 6

Products; 15

Services;11

" 14,, 15,, 16,, 17,, 18,, 19,, 20,, 21,, 22,, 23,"

Accounting System Of Local NGO

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view with charts and images

Accounting System Of Local NGO

NON-GOVERNMENTAL ORGANIZATIONS: DEFINITION & NATURE

Private, non-profit organizations, generally known as NGOs have become important agents of

social and economic development in Bangladesh. Because they focus their actions on the

underprivileged and target problems related to education, primary healthcare, rural credit,

income generation, and environment, their contribution is unique and essential. Unfortunately, concerns about the quality of the NGOs’ work are often raised. Most NGOs are small, geographically concentrated, and face some serious internal problems: funding uncertainties, staffing, leadership, and poor management expertise. As financial support from donors to NGOs has steadily increased over the last 10 years, it has become critical that adequate support in the form of training and management systems be provided to them.

CONSTITUTION OF NGO

There is a great variety of ways in which NGOs are structured. The classic model is of a membership organization, co-ordinate in a geographically-defined hierarchy. Individual people work in local groups, which co-ordinate in provinces and then have a headquarters in the capital city for the country as a whole. Such country-wide organizations are called national NGOs. Frequently, the national NGOs combine in an international NGO, or INGO, which may consist of regional groups of countries and be capped by a global body. Not all the levels of the hierarchy need exist. Many countries are too small to have provincial structures. Smaller specialist NGOs may simply enroll individual members at the national level, without having any local branches. Occasionally, individuals are enrolled at the international level. On the other hand, in large organizations, the international level often seems relatively remote and attracts little attention, even among the NGO’s own members. The group running a local family planning clinic does not necessarily know about the work of the International Planned Parenthood Federation (IPPF) at the UN World Conference on Women in Beijing. Nevertheless, such global organizations with their membership measured in millions do maintain a democratic policy-making process. While some may hold direct elections for key posts at the national level, the responsibility to the membership at the global level is always indirect, via some international council or assembly of national representatives.

It should be noted that one of the ambiguities about the term, NGO, is whether it is referring to a local, provincial, national, regional or global body. Until the early 1990s, the matter was generally straightforward in academic, news media or political discussions. The overwhelming majority of local and provincial NGOs never engaged in transnational activities. Thus NGO, by itself, usually meant a national NGO and regional or global bodies were called international NGOs. National NGOs did engage in transnational development and humanitarian activities, but, with very few exceptions, they were not, in their own right, participants in international diplomacy. When they wanted to exercise political influence at the global level, they did so through the appropriate INGO. In the 1990s, there was a great upsurge in local organizations becoming active at the global level, particularly on environmental issues, because of the Rio Earth Summit in June 1992, and on social issues, because of the Copenhagen Social Summit in March 1995. Since then, the term INGO has not been used so much and NGO, by itself, has come to cover both national and international NGOs. As an expression of the new politics, various terms then were popularized to refer to local NGOs. Grass-roots organizations, community based organizations (CBOs), and civil society organizations (CSOs), all came into currency. There is still an ambiguity whether these newer terms cover organizations that only operate at the local level or also include local branches of national organizations. Grass-roots and community organizations clearly refer solely to the local level, but civil society has connotations of any level within a single country. Indeed, it has become quite common to refer to global civil society.

Linguistic usage in the legal atmosphere at the UN used to be somewhat different. When the UN was formed, any involvement of private individuals or groups in its work constituted deviation from the norm of diplomacy being the exclusive preserve of “states”. Thus, a national organization, as mentioned in Article 71 of the UN Charter, was any NGO based in a single country. No distinction was made between an organization that covered a large constituency, over the whole country, and an organization based solely in a local community or a small section of the population. The lack of any distinction did not matter, as participation by either country-wide or more limited national NGOs was so rare in the permanent UN organs. Participation began on a small scale in the 1970s at UN conferences, on an ad hoc basis. When the ECOSOC rules were changed in 1996, to admit “national NGOs” to consultative status as a matter of routine, the presumption became that a national organization was a country-wide membership organization or a federation of local groups or an umbrella group, which is a coalition of NGOs operating in different fields. As is common at the UN, practice has not been consistent: a few local NGOs have been admitted as “national NGOs” to consultative status. The Rio conference also produced a term that has only been used in environmental politics at the UN. “Major Groups” refers to a system of categorizing NGOs from all levels, for the purposes of participating in UN policy-making processes.

Hereafter, use of NGO alone will imply that any or all levels are included, while local, national or global will be used when the meaning must be restricted to that level. Terms such as CBOs and Major Groups will also be used in the appropriate political context.

EVOLUTION OF NGO:

The term, “non-governmental organization” or NGO, came into currency in 1945 because of the need for the UN to differentiate in its Charter between participation rights for intergovernmental specialized agencies and those for international private organizations. At the UN, virtually all types of private bodies can be recognized as NGOs. They only have to be independent from government control, not seeking to challenge governments either as a political party or by a narrow focus on human rights, non-profit-making and non-criminal.

The structures of NGOs vary considerably. They can be global hierarchies, with either a relatively strong central authority or a more loose federal arrangement. Alternatively, they may be based in a single country and operate trans-nationally. With the improvement in communications, more locally-based groups, referred to as grass-roots organizations or community based organizations, have become active at the national or even the global level. Increasingly this occurs through the formation of coalitions. There are international umbrellas NGOs, providing an institutional structure for different NGOs that do not share a common identity. There are also looser issue-based networks and ad hoc caucuses, lobbying at UN conferences. In environmental politics, this occurs in the unique form of the nine “Major Groups”, listed in Agenda 21.

At times NGOs are contrasted with social movements. Much as proponents of social movements may wish to see movements as being more progressive and more dynamic than NGOs, this is a false dichotomy. NGOs are components of social movements. Similarly, civil society is the broader concept to cover all social activity by individuals, groups and movements. It remains a matter of contention whether civil society also covers all economic activity. Usually, society is seen as being composed of three sectors: government, the private sector and civil society, excluding businesses.

NGOs are so diverse and so controversial that it is not possible to support, or be opposed to, all NGOs. They may claim to be the voice of the people and to have greater legitimacy than governments, but this can only be a plausible claim under authoritarian governments. However, their role as participants in democratic debate does not depend upon any claim to representative legitimacy.

MISSION STATEMENT

BRAC works with people whose lives are dominated by extreme poverty, illiteracy, disease and other handicaps. With multifaceted development interventions, BRAC strives to bring about positive change in the quality of life of the poor people of Bangladesh.

BRAC firmly believes and is actively involved in promoting human rights, dignity and gender equity through poor people’s social, economic, political and human capacity building. Although the emphasis of BRAC’s work is at the individual level, sustaining the work of the organization depends on an environment that permits the poor to break out of the cycle of poverty and hopelessness. To this end, BRAC endeavors to bring about change at the level of national and global policy on poverty reduction and social progress. BRAC is committed to making its programs socially, financially and environmentally sustainable, using new methods and improved technologies. As a part of its support to the program participants and its financial sustainability, BRAC is also involved in various income generating enterprises. Poverty reduction programs undertaken so far have bypassed many of the poorest. In this context one of BRAC’s main focuses is the ultra poor. Given that development is a complex process requiring a strong dedication to learning, sharing of knowledge and being responsive to the needs of the poor, BRAC places a strong emphasis on their organizational development, simultaneously engaging itself in the process of capacity building on a national scale to accelerate societal emancipation. The fulfillment of BRAC’s mission requires the contribution of competent professionals committed to the goals and values of BRAC. BRAC, therefore, fosters the development of the human potential of the members of the organization and those they serve.

In order to achieve its goal, wherever necessary, BRAC welcomes partnerships with the community, like-minded organizations, governmental institutions, and the private sector and development partners both at home and abroad.

BRAC TIMELINE: MAJOR EVENTS

9BRAC, a national private development organization, set up in 1972 by Mr. Fazle Hasan Abed, began as a relief oriented organization focused on resettling the refugees returning from India after the War of Independence in 1971. This task over, BRAC turned its focus on the issue of poverty alleviation and empowerment of the poor, especially women, in Bangladesh’s rural areas. BRAC, the acronym for Bangladesh Rural Advancement Committee has become its identity and it stands for working for the poor and the marginalized. From its modest birth in 1972, it is now the world’s largest national NGO, diverse in its operations with over 27,000 regular staff and 34,000 part time teachers, working in 61,924 villages in all the 64 districts of Bangladesh. BRAC has progressed with learning from experience and through a responsive and inductive process. Adjusting its strategy to prevailing circumstances, it does not pursue any rigid development model.

ECONOMIC DEVELOPMENT

Institution Building through Village Organization (VO)

BRAC believes that a common platform that is created and owned by the poor is a prerequisite through which the poor can make themselves count in the development process. B R A C’s approach to social and economic development of the poor, especially women, involves four inter-related strategies: institution building, service delivery, social mobilization and public sector mobilization. BRAC’s core approach and competency is the delivery of health, education, microfinance, and micro enterprise services on a large scale to the rural poor, primarily women. BRAC decided to train local women to help deliver these services and organize local groups. As a result, BRAC’s service delivery contributes to building local leadership and local organizations.

Social Mobilization

BRAC believes that women must be aware of their legal rights to protect themselves from being discriminated and exploited, and that the sociopolitical relationships and power structures within village communities need to be changed. BRAC feels that it can assist poor women obtain access to these services, either through legal aid clinics or by helping women report cases at the local police station or when seeking medical care like the case of acid victims.

Microfinance Program

The microfinance program of BRAC is a tool for poverty alleviation and empowering the poor. Lack of access to the formal banking system deprives them of the facilities to borrow, save and invest in productive activities, and this is a major reason why poor people remain poor. The formal banking sector also requires collateral. Making credit available to the rural poor enables them to become involved in different income generating activities, which, in turn, allows them to become economically self-reliant. Through this process, BRAC’s micro-finance program works to create a self-sustaining and reliable financial service program for the poor.

i) Credit

Credit is provided to its VO members to initiate different income generating activities. While loans for individual and joint activities do not require collateral, members must have some savings with BRAC before they are eligible for loans. Credit operations are carried out through a Revolving Loan Fund (RLF). This RLF consists of donors’ fund, members’ savings, Polli Karmo Shohayok Foundation (PKSF) loan and other loans. Loans realized from VO members are credited to and form part of the RLF for extending further credit. A 2% loan loss reserve is kept to cover the risk of bad debts and death. Regular borrowing and payments allow the borrower to take larger loans.

ii) Savings

Savings is an important component of microfinance services. Experiences show that there is a positive correlation between savings and sustainable credit operation. From the member’s point of view, savings represent an opportunity to save in small amounts to form a lump sum that earns interest. This is an opportunity that the formal market or regular financial institutions do not provide.

iii) Death Benefit

A death benefit policy has been introduced for its VO members since June

1990. The key features of BRAC’s death benefit are:

• All VO members irrespective of borrowers are entitled to this benefit.

• Death benefit service provides US$ 86 (Tk 5,000) to the dependants of the deceased member.

• No premium is charged to the members. The cash benefits are paid out of the service charge earned through BRAC credit program.

• Outstanding loans of the deceased are written off.

Vegetable Export Program

BRAC started this program in 1997-98 with particular focus on vegetables that have high demand in the European markets and could be grown in Bangladesh. In the first year, 27 tons of beans were exported successfully to England, France, Belgium and Holland and in 1999; 26 tons of fresh potatoes were exported to Singapore. BRAC has exported 621 tons of fresh vegetables and 350 tons of potatoes in 2002 to the wholesalers and supermarkets in England, France, Germany, the Netherlands, Belgium and Italy in Europe, and the UAE, Bahrain, Singapore, Malaysia and Hong Kong in Asia. In addition to French beans, Broccoli and Green chili demand oriented new items have been selected with the total export target of 800 tons of fresh vegetables and 1000 tons of potatoes for the year 2003.

Rural Enterprise Project (REP)

As the scope of employment and income earning sectors are limited, new livelihood opportunities are essential for reducing rural poverty. Moreover, many traditional livelihoods are becoming marginal and new opportunities are opening up with growing urbanization and globalization. However, the poor may not be able to gain from these opportunities without support. This realization led BRAC to initiate the Rural Enterprise Project (REP), to encourage employment and income generation through entrepreneurship. The project is involved in innovating non-traditional activities and introducing them to the program participants.

Income Generation for Vulnerable Group Development (IGVGD)

The Income Generation for Vulnerable Group Development (IGVGD) program covers the poorest women who own no land, have little or no income, are widowed or divorced and with no able bodied male member in the family. The objective of the IGVGD program is to alleviate poverty of the hard core poor by providing long-term sustainable income and employment opportunities through food assistance, training and access to credit facilities. The Vulnerable Group Development Program (VGD) cardholders receive a monthly ration of 30 kg of wheat for 24 months. BRAC provides various skill training to these women in different income generating activities, mainly in poultry, goat and cattle rearing and vegetable cultivation.

BRAC’s Urban Program

Urban poverty and slums are closely linked. Considering the needs of slum dwellers, BRAC conducted a survey of urban slums in 1991 and found that a substantial number of slum children had no access to education. In 1992, BRAC opened urban schools and at the beginning of 1997 started the urban credit program. BRAC plans to construct a hostel for garment workers. It has also started absorbing a number of retrenched garment workers into microfinance program with an average loan size of US$ 86 (Tk. 5,000). The goal of the program is to support the war-affected Afghan people. The components of this program are:

* Education Program

* Health Program

* Livelihood Program

* Small Enterprise Program

BRAC-Afghanistan: At a Glance

(December 2002)

HEALTH

Essential Health Care (EHC)

The essential health care (EHC) package is delivered primarily through the Shastho Shebika (SS), a female community health volunteer. Shebikas are health cadre in the community and the frontline workforce in BRAC’s health program. Each BRAC area office covers 12,000 households with a population of approximately 60,000. They also organize one issue based meeting each month to discuss topics related to health, nutrition and family planning in the community. Components of EHC include water and sanitation, family planning, immunization, pregnancy related care, basic curative care, and TB.

• Water and Sanitation

Safe water supply and household sanitation program emphasizes on development of awareness and capacity building at different levels. There is a close co-ordination with the government and other supporting agencies to ensure effective implementation of this program.

Family Planning

During household visit, the Shastho Shebika motivates women to use modern methods of contraception. She provides pills and condoms to the clients through doorstep service. For other temporary and permanent methods, she refers the clients to the government union and upazila health facilities. She also counsels and refers for side-effects, if necessary. A total of 395,055 couples received contraceptives in program areas in 2002.

• Pregnancy Related Care

BRAC has been providing the community based pregnancy related care to rural women. This is done by BRAC’s present health program has evolved from a series of lessons learned over the years in providing basic health care services at grass root level.

• Basic Curative Services

Illness is a major factor for ‘income erosion’ among the rural poor. About 60-70% of the common diseases could be treated at community level through basic curative services. The Shebika is responsible for diagnosis and treatment of ten common diseases diarrhea, dysentery, common cold, halmenthiasis, anaemia, ringworm, scabies, hyperacidity, angular stomatitis and preventive service for goiter.

• Nutrition

In issue-based meetings, Shebika discuss nutrition topics such as natural source of vitamin A, appropriate nutrition during pregnancy and lactation. They also motivate the community to cultivate vegetables and fruits in their homesteads. Each Shebika distributes 50 packets of different types of vegetable seeds twice a year. Every pregnant woman receives iron and folic acid during antenatal care services. A total of 312,382 pregnant women received iron and folic acid in 2002.

• Tuberculosis Control

During her household visit, the Shebika identifies suspected persons with cough for more than 3 weeks and refers them for sputum examination. Shebika gives identified patients Directly Observed Treatment Short courses (DOTS). Patients come to the Sebeka’s home every day for taking drugs during the intensive phase of the treatment. Afterwards patients receive drug from Shebika once a week. Patients are requested to deposit Tk.200 and sign a bond as a guarantee of treatment completion. Upon completion Tk.125 is given to the Shebika and Tk.75 is refunded to the patient.

EDUCATION

Non Formal Primary Education (NFPE):

BRAC’s NFPE program was initially designed for children aged 8-10 years (70% of whom are girls) and to progress them through Grades I–III over a three year period. Recently, the program has extended to provide education of a five year curriculum in four years. The teachers are mostly locally recruited married females, 72% of whom have passed Secondary School Examination and above. The percentage of graduating students who have completed Grade V and progressed to secondary schools has gradually increased from 90.1% in 1999 to 94.3% in 2002.

Basic Education for Older Children (BEOC)

BEOC or Kishor Kishori (KK) schools were established in 1987 to cater for the children aged 11-14 years who previously had no access to education. The ratio of girls to boys was 70:30. The BEOC school design is similar to the NFPE but it differs in that it offers 3 years of basic education. There are 8,940 BEOC schools in operation. BEP, however, has decided to change the KK curriculum from 3-year basic education to primary education–covering grades I-V over the period of four years from 2004-2009.

Educational Support Program (ESP)

The ESP started in 1991 to expand NFPE coverage through partnership with small NGOs. Through this program BRAC provides technical and financial support to a number of small NGOs who, in turn, replicate the NFPE model in remote areas of the country where BRAC is less represented. ESP schools follow the BRAC approach including material and textbooks and offer 3 years of primary curriculum to the poorest children of the rural community.

Rural Library (Gonokendro Pathagar)

In 2002, there were 700 Rural Libraries which provided access to reading materials and a venue for socio-cultural activities. These were mostly set up in secondary school premises or at the centre of a Union near other important rural institutions and run by local communities with active support from BRAC. Each library has a children’s corner to focus on increasing the number of child readers. Under the program, a student is eligible to borrow a set of books for an academic year. The libraries also act as centers for socio-cultural activities, sports, and training on computer and other skills.

Training of the Secondary School Teachers

BRAC observed that even many teachers of secondary schools find it difficult to understand some of the topics of the new curriculum. To identify the problem areas an intensive need assessment exercise was done by BRAC. Under the assessment, BRAC organized several focus group discussions with subject (mathematics and English) teachers in almost all the 22 schools and organized workshops with the Head Teachers, Asst. Head teachers, and members of the School Management Committee (SMC).

SUPPORT PROGRAMS

BRAC Training Division

Training has been considered an integral part of BRAC programs since its inception. The BRAC Training Division (BTD) is responsible for capacity building and professional development of BRAC staff and the program participants through a wide range of training and exposure initiatives. It has established 12 residential Training and Resource Centers (TARC) and two BRAC Centre for Development Management (BCDM). NFPE schools teachers’ capacity building, capacity building of the Adolescent Development Program staff, communication skills development, promotion of sales skills, etc. were arranged for the staff. In addition, this division organized and facilitated a number of external training courses and exposure visits to develop the capacity of the staff members of the Government of Bangladesh and other development organizations. The BTD has also been instrumental in creating a work force that believes in the vision and values of BRAC.

Global Partnership

The Global Partnership (GP) for NGO Studies, Education and Training is a consortium of three educational centers: BRAC in Bangladesh, Organization of Rural Associations for Progress (ORAP) in Zimbabwe, and School for International Training (SIT) in the United States. The GP offers the comprehensive diploma and masters degree program especially designed to respond to the realities faced by the NGO leaders from grassroots to the global levels. Under the partnership, BRAC offers the postgraduate diploma in NGO Leadership and Management leading to Master’s degree. ORAP Zenzele College is the venue for the Diploma in Grassroots Development and NGO Management lead to Bachelor’s Degree. SIT in Vermont, the USA is the venue for Bachelor and Master’s degrees offered by the GP. Since 1997, the inception of the postgraduate diploma in NGO Leadership and Management at BRAC, 126 graduates from 24 countries have completed their postgraduate diploma at BRAC, and 42 of them have completed their Masters program from SIT. In 2002, a total of 21 students, including 6 female attended the diploma course.

Research and Evaluation Division (RED)

RED conducts multidisciplinary studies on a wide range of issues and subjects. These include poverty alleviation, socio-economic development, agriculture, nutrition and health, population, education, environment, gender and related fields. Although RED concentrates its activities on BRAC programs, it also maintains strong linkages with the government organizations and a number of academic institutions at home and abroad. In the year 2002, RED undertook 23 collaborative projects with organizations like National Institutes of Health (USA), International Rice Research Institute (Philippines), Aberdeen University (UK), Cornell University (USA), Umeå University (Sweden), Micronutrient Initiative (Canada), UNICEF Bangladesh, Campaign for Popular Education, Bangladesh, International Centre for Diarrhoeal Disease Research, Bangladesh (ICDDR,B), Population Council (USA), Karolinska Institute (Sweden), Imperial College (UK), and the government of Bangladesh. RED’s major work on Economic Development Program concentrated on targeting the Ultra Poor to bring them into mainstream development program. RED has been all along involved in the nationwide Education Watch since 1998 to examine the state of 40

Special Projects

Vocational Training

BRAC vocational training program, introduced in 2001, has brought 1,439 retrenched female garment workers under its pilot “Skills Training for Employment of Retrenched Garment Workers” project. This project was undertaken to help reemployment of female garment workers who suffered retrenchment due to closure of large number of garment factories caused by global economic recession and unfavorable trade policies internationally. Through the project the retrenched workers were provided skill training on candle making, bag making, small enterprise development, embroidery and stitching along with facilities of micro credit. Majority of the reskilled workers have been able to get employed.

Road Safety

Bangladesh has one of the highest fatality rates in road accidents. More than 73 deaths per 10,000 registered motor vehicles occur every year. BRAC workers, who travel a lot by motor cycle and bicycle and its program participants who travel mainly on foot fall victims of road accidents. Road accident being such a major national and organizational issue, BRAC prompted to develope a “Community Road Safety Project”. Certain activities of the project like road safety training for staff, forging a network of NGOs committed to road safety, road use awareness through popular theatre and developing road safety lessons in Non Formal Primary Education are being implemented. A research study has been conducted on Community Traffic Policing in partnership with Transport Research Laboratory of the UK with a view to conceptualizing the idea, improving the institutional framework and to identifying pilot program.

Human Rights and Advocacy Unit

The Human Rights and Advocacy unit was set up to support the needs of the ultra poor in particular and cover BRAC’s initiatives in promoting socioeconomic equity at the local, national and international level. In the last eight months some major activities as per plan were: two workshops to develop strategy and identify core advocacy issues, and three district level and four upazila level workshops. The unit conducted other social mobilization activities with partners and allies while developed communication materials.

Commercial Ventures

In the past few years BRAC has been involved in socially useful commercial ventures. As a major shareholder in the Delta BRAC Housing Corporation Limited, a public limited company and a non-banking financial institution approved by the Government, BRAC is promoting affordable home ownership by financing and contributing to the growth of the housing sector. Realizing the need for keeping up with technological innovations, BRAC has involved itself in the field of information technology. BDMail Network Limited is an internet service provider company of BRAC. BRAC Information Technology Institute (BITI), was set up in 1999 to provide training and education to develop professionals in IT, is now a part of BRAC University.

Aarong

Aarong, meaning a village fair, was established in 1978 with objective to bring support services and marketing facilities within the reach of rural artisans, expand domestic markets and promote the export of traditional and non-traditional crafts. BRAC’s job creation projects for rural women in Manikganj, Jamalpur, Sherpur, Jessore and Kushtia areas are based on traditional and non-traditional craftskills. Nearly 30,000 artisans, mostly women, are involved in these groups. Many other independent cooperative groups or traditional family based artisans like potters, brass workers, jewellers, jute workers, basket weavers, handloom weavers, silk weavers and different artisans from all over the country come to Aarong for marketing and support services. Over the years, Aarong has earned a name of itself as one of the finest rural crafts producers and market in

Bangladesh. Experiences encourage BRAC to look forward to a continued partnership in development with the rural artisans of Bangladesh.

BRAC Bank

BRAC realized that there is a vast group of small and medium entrepreneurs in the country, who have no access to institutional credit. BRAC Bank, inaugurated on July 4, 2001, functions as a full-fledged commercial bank with a special focus on providing financial services to those Small and Medium Enterprises (SME). Till December 2002, BRAC Bank disbursed US$ 5.73 million (Tk. 33.25 crore) through seven branches in Dhaka, Chittagong and Sylhet, and 79 Unit Offices all over Bangladesh.

BRAC University

BRAC University (BU) is another addition (April 2001) to the family of BRAC initiatives. Its mission is not only to impart knowledge but also to act as a centre of excellence in knowledge creation through research that connects with practice. This, BRAC believes, is fundamental to creating professionals with the vision and ethics needed to foster national development that is inclusive, pro-poor and just. The goal of BU is to provide high quality broad-based education for students to equip them with the skill and knowledge necessary for taking on the challenges of development, both in Bangladesh and beyond. At present more than 1,000 students are studying in BU in Bachelor of Business Administration (BBA), Bachelor of Science (BS) in Computer Science, Bachelor of Social Science (BSS) in Economics, Bachelor of Arts (BA) in English and Bachelor of Architecture (B.Arch). Under the Postgraduate Programs BU is offering three courses: Master of Business Administration (MBA), Master of Development Studies (MDS) and Diploma in Computer Science.

C E

BRAC ACCOUNTING SYSTEM

Part 1

Voucher:

A voucher is a form ,prepared and used within the business, on which a transaction is:

Types of Voucher:

Generally four types of voucher is used:

  1. Debit voucher- For cash/Bank payment.
  2. Credit voucher- For receiving of cash/bank.
  3. Journal Voucher- For non-cash transaction.

4. Transfer voucher- For the amount deposited to and withdrawn from bank.

Supportings of voucher:

v Debit Voucher: The following information should be disclosed in preparing a debit voucher:

be in the bill.

v Credit voucher: the following supporting should be included with the credit voucher:

ü In case of cash receipt, cash memo should be used.

ü The quantity, rate

ü Nature and price of the selling goods should be disclosed in the cash memo.

ü The signature of cash recipient must be in the cash memo.

v Journal voucher:

The following things should be included with the journal voucher:

ü In case of provision, the amount of provision along with the list working papers .Ex: The schedule of interest on savings.

ü The copy of the adjusted documents .Ex: challan, Debit note.

ü In case of rectification, in which sources rectification is occurred, the copy of those documents. Ex: Audit report, Workings of Vouching.

v Transfer voucher: generally in case of transfer voucher, no extra supporting is needed. The pass book, Bank statement, Deposit slip is treated as the supporting .the above documents should be preserved carefully in the office.

BRAC

Project RCP location pabna code 816 vouchar no. 165

Debit voucher date 28.05.97

explanation Amount(dr.) Cash/bank (cr.)
title number Taka
Being the amount paid to Utilities 1503208 50
Mr. Md. Ashraful Alam (O.A) Stationary and supplies 1503209 210
Against utilities, office stationery Maintenance 1503210 250
Etc. as per bill attached General expanse 1503211 265
TotalLtaka seven hundred and seventy five only

————- ———— —————– —————

Payment received originator checker please pay

Signature ————————

————- —————————

Name in full———————– cashier authorized signature

BRAC

Project RCP location paba code 816 vouchar no. 165

——————-

journal voucher date 28.05.97

Financial year ending on 31st December 1997

Heads of account Account no. Debit credit source Particulars
taka Taka
Progamme assistant salary 0404205 2200 RCP cash Being the amount
Progamme assistant salary 0409205 2200 Book Transferred from
To H.O. account 0425125 4400 RCP against program
Assistants salary
Total: taka four thousand four hundred only 4400 4400

Prepared by checked by approved by

BRAC

Project RCP location pabna code 816 vouchar no. 55

——————–

credit voucher date 28.05.9

Heads of account Account no. Amount Number Particulars
Taka
Loan realised 1509553 50000 Amount received
Own contribution 1512127 10000 Against collection
Pass books and others 1510032 25 Of loan, savings & sale of pass book as per daily collection register
Total: taka four thousand four hundred only 60025 Five only

Payment received

Signature………………….

NAME IN FULL………………… Accountant Authorized Signature

Verification of Voucher:

Debit voucher:

Emphasis should be given to the following subject, as the above information related to debit voucher is maintained accurately:

  1. Does all the vouchers decorated according to the serial number?
  2. Does the amount prescribed in the voucher is accurate?
  3. Does the disclose expenditure is similar with personnel procedure, circular , minutes, budget and other rules and regulation of the institution?
  4. Is it applicable with the payment of various purchases approval , Budget ,work order,Quation?
  5. Does the stamp is fitted with the supporting perfectly?
  6. Revenue expenditure should not be recorded as capital expenditure and capital expenditure also should not be recorded as revenue expenditure.
  7. Does the expenditure recorded accurately?
  8. The total amount of voucher will be written in words and with figure.
  9. If any differences are seems to be occurred, necessary document will be checked.
  10. In case of salary payment and receiving goods, it should be find out that entry is recorded in the registrar book.
  11. When payment is made through cheque, the cheque no., date should be described.
  12. Does the different cell of voucher is filled up, should be identified and signature also be made.

Credit voucher:

  1. Does the credit vouchers are arranged sequentially according to serial number?
  2. Does the prescribed amount of money in voucher is similar with supporting and the daily receive registrar?
  3. Sufficient cash receipt memo should be verified.
  4. Does the receipt amount is record accurately?
  5. Does the total sum of money o voucher is equal to the supporting sum of money and the sum of money is written in words?

Journal voucher:

After checking whether the pre-mentioned subject matters regarding the journal voucher are

properly maintained, the following matters should be given importance:

1. If the vouchers have been arranged according to their serial no.

2. If there is necessary supporting in case of adjustment, rectification, transfer, provision etc.

3. If adjustment, rectification, transfers, provisions etc are properly done.

4. If the amount of money of the adjustment, transfer, rectification, provision etc.

5. If it is properly signed and endorsed.

Transfer Voucher

In case of Transfer Voucher, it may be ensured whether the date and amount of money in the Passbook, Bank Statement, Deposit Slip and Cheque are properly recorded as they were recorded in the Cashbook.

Cashbook Writing:

The transaction should be recorded into the cashbook according to different accounts with voucher number. If the transaction is in cash, it will be in the cash column or if the transaction done by bank, it is recorded in the bank column. Narration of every account will describe shortly if it is needed. If a clear-cut idea is known from an account, no narration is needed.

Ledger:

The statement, prepared by arranging briefly all the transactions in the name of any person, enterprise, income-expenses, assets separately, is called an account. An enterprise has to keep so many accounts in a separate book. The book in which all the transactions are written permanently in brief in the different heads of account from the primary book of records is called a ledger.

Similarity of cashbook with ledger:

The cashbook has done the function of ledger as well as the journal. The accounting philosopher recognizes the cashbook as ledger as cashbook is the cash account of ledger. On the other hand cashbook is also known as journal as it s the primary book.

Rules of posting to general ledger and subsidiary ledger:

According to BRAC traditional system, posting is done from cashbook and journal to ledger.

a. Cash book:

Cash book is a journalized ledger i.e. it is separated as different books for benefit of the working process, so when any transaction is recorded in the cash book, according to double entry system where one entry is recorded as in cash and bank account, other in this case only one more posting is needed for completing the double entry process.

When posting as made from the Cashbook to the Ledger, the particular entry that is posting from ledger the recorded date of the transaction of cashbook will be maintained. In the ‘Folio’ cash book to general ledger, if it is in the debit side of cash book, then it will be shown as credit (taka.) in the particulars column as By Cash and vice-versa. In the Date column of the general column voucher number will be written according to the cash book. Then the actual amount of money is posted in actual account will be insured by checking with Debit, Credit and Transfer voucher. In this case, it should be remembered that no posting is necessary for the Contra Entry.

b. Journal Voucher:

When posting is made to the ledger account from the journal voucher in which account the posting is done, if it is recorded in the debit side of the journal voucher, it also should be recorded in the debit side of the general ledger. The name of account will be written in the particulars column after writing ‘To’ and the vice-versa also for the credit side. The date and no. of general voucher should be written in the Date and Folio column of the ledger.

Balancing:

a. Cash Book:

Prior the balancing of the Cash book, it has to be checked that whether all the necessary credit vouchers from the cash receipts and the debit vouchers from the cash payment and the transfer vouchers from the bank transactions have been prepared and the prepared vouchers are properly debited and credited respectively in the cash book. If all the debit, credit and transfer vouchers are properly recorded in the cash book, then the amounts of cash and bank column of the cash and bank column of the payment side are to be sum-up. Then all the amounts of cash and bank column of the receipt side are to be sum-up a little below the payment side’s sum-up result. Then the sum-up result of the receipt side should also be written in the payment side below the sum-up results o the cash and bank column. Now the balances of the two sum-up results in the middle of these two results and in the particulars column ‘closing balance’ is to be recorded and finally cash and bank deposits should be compared with the closing balance.

b. Ledger Accounts:

At the end of the month, prior the balancing of the ledger accounts, it is to be checked that the recorded vouchers in the cash book in different dates are properly posted in the related ledger accounts according top their transactions. Besides this, if the journal vouchers of that month posted duly are to be checked. After all the transactions are duly posted to the related ledger accounts, if there are amounts in both the debit and credit column, then the amounts are to be added and the sum-up results are to be written using pencil. Then the differences of the results are to be added and subtracted with the previous month’s balance in the Balance column. At the end of the month, closing debit balance is to be written in the ‘Dr. or Cr.’ Column as debit and the Closing Credit balance is to be written as credit. After preparing the ‘Receipts and Expenditures Statement’, all the pencil writings are to be written by pen.

Preparation of Monthly Receipts and Expenditures Statement:

At the end of the month, the related balances of the general ledgers are to be written in the ‘Cumulative’ column in the ‘Receipts and Expenditures Statement’ against the related accounts and codes. Then at the last date of the month, the closing balances of the cash and bank column of the cash book are to be written in the ‘Cumulative’ column of the Cash Receipts and Expenditures Statement’ against the cash and bank balances and Net debit and credit balances of current month of every accounts are to be recorded in ‘For the Month’ column. It is mentionable that if the sum-up result of the debit column of any ledger accounts more, then the deducted result of the debit and credit sum-up result is to be written in ‘For the Month’ column against the related accounts and codes as the debit balance of that. Similarly, if the sum-up result of credit column of any ledger account is more, then the deducted result of the credit and debit sum-up results is to be written in ‘For the Month’ column against the related accounts and codes as the credit balance of that month.

Any credit balance is closed with a first bracket like “(———-)”. After writing the sum-up results according to the paragraph in the Receipts and Expenditures Statement it is filled in the Gross Total column. When the sum-up results of both the Receipts and Expenditures sides are the same, then it is assumed that ‘Receipts and Expenditures Statement’ is perfectly prepared.

Others:

a. For the clear understanding about who get money from the BRAC Fund, necessary no. of vouchers are to be prepared for all the transactions instead of a single voucher.

b. for the non-cash transactions, a debit and credit voucher should not be prepared at all. In this case, Journal voucher should be prepared. As for example, adjustment of loan’s due through the savings.

c. To understand the credit voucher easily, necessary no. of vouchers, should be prepared according to the chronology of the transactions and their nature.

PART-2

INTEREST ON LOAN:

In BRAC’S Accounting system, interest on loan provision is kept every month. The journal entries corollary with provision is given below-

  1. 15% interest provision on monthly total disbursed loan ;

Interest realization A\C Dr.

Interest income in advance A/C Cr.

  1. Due to Interest provision of previous month , the following journal has to record by taking the sum of “This month interest” column of Branch Summary of MLR( Monthly Loan Realization) Record relating to the current year .

Interest receivable A\C Dr.

Interest income A\C Cr.

  1. The Interest which is collected in the previous month have to separate from the loan collected & entry should be made in the Interest realized account. Total monthly collected Interest is recorded in the Interest realization column separately in the computer sheet . By taking the total of that column the following entry is passed:

Loan realized A\C Dr.

Interest realized A\C Cr.

4. The amount of interest which is shown in the “Interest receivable A\C” in the previous month has to reduce by the amount of interest collected (Interest Receivable) in that month. The journal entry should be given for that amount for which the journal entry (2) has given|

Interest income in advance A/C Dr.

Interest receivable A\C Cr.

For example:

In May 1997 distributed loan was 20100000 taka in Darshana. According to the Monthly Loan Realization record installment collected was amount to Tk. 19,52,444. In April 1997 the Receipt &Expenditure statement has shown the following balances:

REVOLVING LOAN FUND Tk.

loan disbursed (1509551) 82273953

Interest receivable (1509552) 12417507

loan realized (1509553) (71465187)

Interest realized (1509554) (10244165)

loan outstanding ***** 12982106

Interest receivable (1509557) 1692638

loan outstanding ***** 14674744

in April 1997 the Branch summary of MLR Records was as follows:

Date: 26-05-97 branch summary of MLR Records

Area: Darshana (402) LIST FOR THE MONTH of April 1997

VO. CODE Interest outstanding OPENING THIS MONTH INTEREST PRINCIPLE

outstanding OPENINGOPENING OVERDUEPRINCIPLE REALISATION123456AREA TOTAL2142942560441442335917966421367545

Interest Realisation Excess Realisation Total Realisation Interest outstanding closing Principal outstanding closing Overdue closing
7 8 9 10 11 12
254685 4 1622234 215616 13085230 1792270

The journal entry relating to the interest provision is following

1. for collected interest of total disbursed loan amounting to 2010000 in May 1997

Interest Realisation A\C Dr. 301500

Interest income in advance A\C Cr. 301500

2. for recording the amount of provision receivable interest of April 1997as income in May 1997

Interest receivable A\C Dr 256044

Interest income A\C Cr 256044

3. for separating the interest from the loan installment of April 1997as income in May 1997

Loan realized a/c Dr 254685

Interest realized a/c Cr 254685

4. for adjusting the debited amount in Interest receivable A\C at April 1997 by the collected interest

Amount for that month

Interest income in advance a/c dr. 256044

Interest realization A\C cr. 256044

INTEREST ON SAVINGS

Provisions upon savings is kept 4 times in a year on a quarterly basis. Interest Provision is kept in march upon balances of savings at Decembers, June upon march, September upon June & Decembers upon June month also.

Procedure for calculating interest on savings:

March quarter = SAVING balances of December of previous year * 6/100*3/12

June quarter = SAVING balances of March * 6/100 * 3/12

September quarter = SAVING balances June * 6/100 * 3/12

December quarter = SAVING balances June * 6/100 * 3/12

Journalization of provisionalised interest upon savings:

The journal entry for recording interest savings is

Interest on savings a\c Dr

Outstanding liabilities a\c Cr

Note: For R.D.P/ IGVGOP region the interest on deposit a\c is debited instead of interest on savings a\c.

For example :

For R. C. P. Chandina region , the different monthly savings balances are –

December1996 saving balances = 35250 tk.

March 1997 saving balances = 37100

June 1997 saving balances = 39600

September 1997 SAVING balances = 40500

The interest provisions on savings for yr 1997 are given below in char

Name of month Calculation of interest journal
March’97 35250*6/100*3/12=529 Interest on savings a/c dr. 557

Outstanding liabilities a/c cr. 557June ,9737100*6/100*3/12=557Interest on savings a/c dr. 529

Outstanding liabilities a/c cr. 529Sep’97(39600*6/100*9/12)-(529+557)

=696Interest on savings a/c dr. 696

Outstanding liabilities a/c cr. 696Dec’9739600*6/100*3/12=594Interest on savings a/c dr. 594

Outstanding liabilities a/c cr. 594

" 24,"

ADVERSE HEALTH EFFECTS ON MARIJUANA USE

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The popular notion seems to be that marijuana is a harmless pleasure, access to which should not be regulated or considered illegal. Currently, marijuana is the most commonly used “illicit” drug in the United States, with about 12% of people 12 years of age or older reporting use in the past year and particularly high rates of use among young people.The most common route of administration is inhalation. The greenish-gray shredded leaves and flowers of the Cannabis sativa plant are smoked (along with stems and seeds) in cigarettes, cigars, pipes, water pipes, or “blunts” (marijuana rolled in the tobacco-leaf wrapper from a cigar). Hashish is a related product created from the resin of marijuana flowers and is usually smoked (by itself or in a mixture with tobacco) but can be ingested orally. Marijuana can also be used to brew tea, and its oil-based extract can be mixed into food products.

Adverse Effects of Short-Term Use and Long-Term or Heavy Use of Marijuana.

Effects of short-term use
Impaired short-term memory, making it difficult to learn and to retain information
Impaired motor coordination, interfering with driving skills and increasing the risk of injuries
Altered judgment, increasing the risk of sexual behaviors that facilitate the transmission of sexually transmitted diseases
In high doses, paranoia and psychosis
Effects of long-term or heavy use
Addiction (in about 9% of users overall, 17% of those who begin use in adolescence, and 25 to 50% of those who are daily users)
Altered brain development
Poor educational outcome, with increased likelihood of dropping out of school
Cognitive impairment, with lower IQ among those who were frequent users during adolescence
Diminished life satisfaction and achievement (determined on the basis of subjective and objective measures as compared with such ratings in the general population)
Symptoms of chronic bronchitis
Increased risk of chronic psychosis disorders (including schizophrenia) in persons with a predisposition to such disorders
" 25,"

AIRRYS EASY MOBILE PHONE TRACKER

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Introduction

I would glad to introduce our new technical product under our existing company “AIRRYS Bangladesh Ltd.”. This is a totally new different product for mobile phone users. This product is act as a police when thief steals our favorite mobile phone sets or we lost our valuable mobile phone sets. To maintain brand strategy we have decided a brand name of our product. Our Product’s name is “AIRRYS Easy Mobile Phone Tracker”. And our positioning statement is “We made products for giving security to your mobile phone set”. This product can save our mobile phone sets and can be took top place of the market by its exciting feature and technology.

Goal Settings

As a new comer, we also set some marketing goals for our management. The primary marketing objectives of this new product plan are to achieve fist-year Bangladesh technology market share of 30 percent and unit sales of 8,00,000.The primary financial objectives are to achieve first-year sales revenues of TK 4 billion, keep losses to less than TK 5 million and break even middle in the second year.

Current Marketing Situation

AIRRYS, founded 12 months ago by one entrepreneur with experiences in the Mobile Phone Market, is about to enter the Mobile Phone Accessories market dominated by Anik Telecom. Anik Telecom sold maximum mobile accessories in current market for different mobile sets. In our mobile phone market many different mobile phone sets manufacturers exist and they produce different types of mobile phone sets. Now, however, overall Mobile Phone Accessories sales slowed and profitability has suffered because of the set producers have give the maximum accessories with the mobile phone set’s packet.

But the country added over one million mobile phone subscribers a month in 2007 as the total number rose to 34.37 million at the end of the year, up from 21.77 million in 2006, according to the Bangladesh Telecommunications Regulatory Commission (BTRC).

Currently in Bangladesh Nokia, the market leader dominates the mobile market of Bangladesh with a market share of 34%. Motorola, an aggressive number two that is the market challenger attracted a 22% share. Samsung is in the third position with 11% market share, where Sony Ericsson and LG are held 13% share. 20% of market share held by BenQ Mobile and others. The following pie chart shows the relative market share:

Table 1
Mobile Terminal Sales in Bangladesh to End-Users in 2006 (%)

Company 2006

 Market Share (%)
Nokia 33.6
Motorola 21.9
Samsung 11.1
Sony Ericsson 6.7
LG 6.3
BenQ Mobile* 3.2
Others 17.2
Total 100.0

Note: This table includes sales of integrated digital enhanced network (iDEN) terminals. It excludes shipments from original design manufacturers to original equipment manufacturers.

* Shipments of BenQ and Siemens combined.

Source: Gartner Dataquest (August 2006)

The emergence of new mobile phone accessories has increased competitive pressure. The estimate size of the market for the mobile phone accessories is increasing rapidly. So this huge amount of sets lack security and increase competition. To gain market share in this environment, AIRRYS must carefully target specific market segment.

Market Description

AIRRYS’s market consists of consumers, employed and business users who need to communicate exchange and secure mobile phone set on the go. Specific segments being targeted during the fist year include geographic, demographic, psychographic, behavioral variables.

Easy Mobile Phone Tracker is a new product and initially it has no competitors. AIRRYS licenses the market dominant Anik Telecom because thousands of mobile phone accessories are produced by Anik Telecom and our product must have to comfortable with these accessories. Product proliferation and increased competition have resulted in lower price and lower profit margins. Lower price are helping sales of mobile phone accessories in the lower end of consumer market, but at the expenses of gross margins. Customers with mobile phones are always waited for new mobile phone accessories.

Product Review

Our first product, the Easy Mobile Phone Tracker, offers the following standard features:

First-year sales revenues are projected to be TK 4 billion, based on sales of 8,00,000 AIRRYS Easy Mobile Phone Tracker units at a wholesale price of TK500 each. During second year, we plan to introduce the AIRRYS Easy Mobile Phone Tracker 2 as a higher-end product with the following standard features:

Distribution Review

AIRRYS branded products will be distributed through a network of select store and non-store retailers in the all Bangladesh markets. Among the most important channel partners being contacted are:

SWOT Analysis

AIRRYS has several powerful strengths on which to build, but our major weakness is lack of brand awareness and image. The major opportunity is growing demand for mobile phone that delivers communication-specific benefits. We also face the threat of ever-higher competition and downward pressure on pricing.

Strengths:

AIRRYS can build on three important strengths:

  1. Compatibility: Our AIRRYS Easy Mobile Phone Tracker is a totally new product in Bangladesh. Initially we do not have any competitors except one, Samsung gives this facility only for their sets but our product is for all sets.
  2. Pricing: Our product is priced lower than any high quality mobile phone accessories models which give us an edge with price-conscious customers.

Weakness:

By waiting to enter the mobile phone accessories market until the initial shakeout and consolidation of competitors has occurred, AIRRYS has learned from the successes and mistakes of others. Nonetheless, we have two main weaknesses:

Opportunities:

AIRRYS can take advantage of two major market opportunities:

Threats:                                    

We face two main threats at the introduction of the AIRRYS Easy Mobile Phone Tracker:

Objectives

We have set aggressive but achievable objectives for the first and second years of market entry.

AIRRYS marketing strategy is based on a positioning of product diversification. Our primary consumer target is lower to upper income professionals who need one portable security device to protect their mobile phone sets. Our secondary consumer target is high school, college, graduate student, unemployed and also housewives who need a security device for their valuable cell phone set. This segment can be described by the mixed of geographical, demographical and behavioral variables.

Our primary business target is mid- to large-sized corporations that want help their customers save their mobile phone set on the go. This segment consists of companies with more than TK 6 billion in annual sales and more than 500 employees.

Each of the four marketing-mix strategies conveys AIRRYS’s diversification to the target market segments identified above.

Market Segmentation:

Target Market and Consumer Profile

Age                                                                 : 14 – 25, 25 – 35, 35 +

Gender                                                            :  Male & Female

Family Life Cycle                                           :  Young, single, married, married with children, older, under18.

Occupation                                                      : Professional and technical, managers, officials and proprietors, clerical, sales, craftspeople, supervisor, Operatives, farmers, retired, students, homemakers, unemployed.

Social Class                                                     :  Lower Lowers, upper lowers, working class, middle class, upper middles, upper uppers

Monthly income                                              : Below 5000/=, (5000–10000)/=, Over10,000 Taka

Size of potential market                                  : Total population of Bangladesh.

Geographical Location                                    : Rural, Semi-Urban, Urban

Life Style                                                        : Achievers, strivers, survivors , Simple & fashionable as well.

User status                                                      : Potential user, first time users & regular users

Usage rate                                                       : Light user, medium user & heavy user.

Readiness stage                                               : Aware, informed, interested, desirous and intending to buy

Marketing Strategy

AIRRYS’s highlighted marketing strategies are:

Positioning

Using product diversification, we are positioning the AIRRYS Easy Mobile Phone Tracker as the most versatile, convenient, value-added model for personal and professional use. The marketing strategy will focus on the security with voice-recognition system as the main feature diversification the AIRRYS Easy Mobile Phone Tracker.

Product Strategy

As we already know our product name is AIRRYS Easy Mobile Phone Tracker. The AIRRYS Easy Mobile Phone Tracker, including all the features described in the earlier Product Review section, will be sold with one-year warranty. We will introduce a more compact, powerful high-end model (the AIRRYS Easy Mobile Phone tracker 2) during the following year, with GPS functionally and other features. Building the AIRRYS brand is an integral part of our product strategy. The brand and logo will be displayed on the product and its packaging and reinforced by its prominence in the introductory marketing campaign.

Pricing strategy

The AIRRYS Easy Mobile Phone Tracker will be introducing at TK 500 estimated retail price per unit. We expect to lower the price of this first model when we expand the product line by lunching the AIRRYS Easy Mobile phone Tracker 2, to be priced at TK 850 wholesale per unit. These prices reflect a strategy of (1) attracting desirable channel partners and (2) taking the most of market share as a leader.

Distribution Strategy

Our channel strategy is to selective distribution to have AIRRYS Easy Mobile Phone Trackers sold through well-known stores and online retailers. During the first-year, we will add channel partners until we have coverage in all major Bangladesh market and the product is included in the major electronics catalogs and web sites. We will also investigate distribution through cell phone outlets maintained by major carriers such as Nokia. In support of our channel partners, AIRRYS will provide demonstration products, detailed specification handouts, and full-color photos and displays featuring the product. We will specific trade terms for retailers that place volume orders.

Marketing Communication Strategy

By integrating all massages in all media, we will reinforce the brand name and the main points of product diversification, especially our exclusive voice-recognition feature. Research about media consumption patterns will help our advertising agency choose appropriate media and timing to reach prospects before and during product introduction.

@TV Advertisement

Television is the most effective to create brand assurance. BTV, NTV, ATN, CHANNEL- I are the most popular TV Channel in Bangladesh and all kind of audiences are watched TV once in a day and all the premium brands of mobile set accessories are presently focusing through electronic media campaign. So, to choose the TV advertisement as the prime options according to the budget and the promotional expenditure available for the quarter is obvious for us. AIRRYS media planning will also include the selection of right program, at the right time for the right group of viewers and we are preparing through this way.

@Radio Advertisement

A huge number of our targeted consumers are rural based where radio coverage and listeners are large in number. Some of the special sponsored programs will be developed focusing the stories of our brand. Recently some new radio station is introduced and getting much popularity especially from younger. So, we should use this media for our campaign.

@Outdoor Advertisement

We plan to have an exciting, informative, and actively managed outdoor advertisement. We will campaign via outdoor events like concert, theater etc. There will be wall painting all around the country.

@Press Conference

We will undertake a considerable amount (based on promotional expenditure) of press advertising in order to advertise our special promotion like consumer offer and to enhance our brand image activity. More often our targeted potential consumers go through daily newspapers, magazines so we decided to target this media. And we will advertise in this media until our brand image will establish.

Marketing Research

Using research, we are identifying the specific features and benefits that our targeted market segments value. The company should measure brand awareness before, after and during the marketing campaign, study consumer satisfaction and identify opportunities will help us to develop the AIRRYS Easy Mobile Phone Tracker 2. To determine the effectiveness and efficiency of our messages and media, brand awareness research will help us.

Marketing Organization

AIRRYS’s chief marketing officer, Md. Ashraful Islam, holds overall responsibility for marketing strategy and direction. Figure-1 shows the structure of the eight-person marketing organization. AIRRYS has hired worldwide Marketing to handle national sales campaigns, trade and consumer sales promotions and public relation efforts.

Figure-1

AIRRYS’s Marketing

 Organization

Md. Ashraful Islam

Chief Marketing Office

Md. Riazul Islam                          Md. Aminul Islam                           Md. Shakibul Haque

Sales Manager                            Advertising Manager                          Promotion Manager

Raj Pal Yadav                          Md. Ahsan Hossain Bhuiyan                      Fahmida Haider

Regional Manager                           Advertising Analyst                        Promotion Analyst

ACTION PROGRAM

The AIRRYS Easy Mobile Phone Tracker will introduce in July. Through a series of scheduled program AIRRYS will carry out its marketing strategy and achieve its objectives. A monthly basis detail about these programs are given below

June

July

August

FINANCIAL PROJECTION

Total first-year revenue is Tk.4 billion; average wholesale price is Tk.500 per unit. Variable cost per unit of TK 250 for units sales volume of 8,00,000. We anticipate a first-year lose of TK 5 million on our product.

On quarterly basis AIRRYS Easy Mobile Phone Tracker projects sales of Tk.70 million on 1st quarter and consequently Tk. 150 million, Tk. 50 million and Tk. 130million.

IMPLEMENTATION CONTROLS

This product plan includes a detailed budget, schedule, and managerial assignment for every action program. We are planning tight control measures to closely monitor quality and customer service satisfaction. This will enable us to react very quickly in correcting any problems that may occur. Other early warning signals that will be monitored for signs of deviation from the plan include monthly sales (by segment and channel) and monthly expenses. A contingency plan, attached, has been developed for implementation in the context of severe downward pricing pressure.   

" 26,"

Al Barew Development Ltd: A Housing Company

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View with images and charts

Al Barew Development Ltd: A Housing Company

1.1 COMPANY OVERVIEW

Al Barew Development Ltd. is one of the newly establish housing company involved in the sector since 2008 and member of the Real Estate and Housing Association of Bangladesh (REHAB).

Al Barew Development Ltd, not only believe in quality as a mere vision statement but also implement it in every aspect of our operations and the way we do business. To bolster our core values of quality and excellence, we have taken on board a team of dedicated and skilled professionals consisting of architects, engineers, designers, planners etc.

Features

2.2 VISION

We shall endeavor to excel in every aspect of our operation and thereby provide quality products and services to our customers.

Our organization will have a challenging and satisfying working environment so that the talents and potential of our human resource is given the full opportunity to blossom & grow.

2.3 MISSION

Customer Policy: To always focus on the customer; because the customer’s satisfaction is our inspiration.

Business Policy: To conduct the business with high integrity.

Employee Policy: To nurture the best human resource through training & motivation.

Quality Policy: To consistently developed high quality real estate to keep our standard above others.

Environment Policy: To address environmental issues aptly & carry on our activities in line.

Future Policy: To endeavor innovation to excel in every aspect of our operation.

2.4 FUTURE PLAN

Al Barew Development Ltd is committed to expand and diversify in the years to come. It has taken on board a number of projects which will have a definite impact on the socio-economic fabric of the country and play a dynamic role in the overall economic development of Bangladesh.

Interaction of Urbanization with Population Growth

3.1 Interaction of urbanization with population

Growth

High population growth and rural-urban migration intensify the problems of urbanization in Bangladesh, as in all developing countries. For Bangladesh the problem is further aggravated by limited land supply in urban areas, lower land utilization and lack of proper policy and planning of land-use. The ever growing urban population is creating an increasing demand for space. This rapid influx of population to the (capital) city results in sky rocketing land prices and provides some stimulus to construction of tall buildings.

During the last four decades, metropolitan Dhaka has recorded a phenomenal growth in ~terms of population and area. Dhaka at present is one of the fastest growing metropolises in the world. After the war of independence of 1971, Dhaka’s provincial capital status was raised to national capital overnight and its population increased manifold in the subsequent decades. The land area and population of Dhaka is usually expressed in terms of two boundaries. One is Dhaka City Corporation (DCC) and the other one is the larger boundary of Rajdhani Unnayan Kartripakkhya (RAJUK). Within DCC limits (with about 520 square kilometer i.e. 200 square mile); there are already over 1 million people and growing possibly at 5.5 percent annually. Gross density is 11,570-13,500 persons per square kilometer (30,000-35,000 persons per square mile). In some parts density of over 38,580 persons per square kilometer (100,000 persons per square mile) exist, with an average of 3 stories for pucca development or one story for kutcha development. But at such high densities, we do not get enough road space or open space or other non-residential space either. Outside DCC, but within RAJUK limits, there are 1008 square kilometers (about 390 square miles), wherein live another 2 to 3 million people. Densities in such areas vary from very high to very low. In fact much of the RAJUK areas, beyond DCC, are not ready for proper urban development yet. There are low lands, liable to annual floods, and to deep flooding during abnormal floods. But urban expansion takes place even in such marginal lands through gradual earth filling.

3.2 Housing of Dhaka city

Housing conditions of Dhaka City vary greatly between high and low-income groups as well as by area. The gap is obvious between luxurious high income apartments/houses which exist in highline one areas such as Guishan, Baridhara, Dhanmondi, Uttara areas and poorly constructed temporary housing (Jhupri) with extremely small floor space, very densely located on the lands prone to floodDisasters.

About 30% of the slum dwellers live in Jhupri, 24% in Chhai, 13% in Tong, 30% in Tin-shed, 2.5°/o in Semi-pucca and O.5% in Pucca type of structure. Housing requirements in Dhaka is 218,000 units including dissolution of backlog until 2001 and replacement, wherein the requirements of urban poor are 140,000 units, which share almost two-thirds of the total requirements. In terms of tenure, 54% of the households are on private rental basis while 31% are owned. Only 1.2% is on social housing.

It can be pointed out that people from all socio-economic backgrounds in Dhaka are facing housing problem of one type or another. The low-income families are in need of low cost flats or plots and the middle and upper income families are complaining that the cost of a decent plot or a decent flat is going beyond their means. The solution to the problems of these different groups is also different and mainly lies in the hand of the policy makers and the government.

In recent years there has been a new trend of housing development mainly in the private sector. A new type of residential development has come on the scene, which can be broadly termed as apartment development. In most of the cases an individual or company constructs one or more buildings comprising of several apartments, which are later sold to individual purchasers. This has prompted many individual entrepreneurs to develop apartment buildings resulting in an increased number of real estate companies in the city. There has been considerable criticism regarding apartment development as well as real estate development in Dhaka City in recent years. While many of these criticisms are valid, others are distorted based on misconceptions and/or inaccurate information.

3.3 Housing access and affordability

The rapid growth of city population has led to a phenomenal increase in housing demand in the city. The housing market of the city consists of five tenure groups — owner occupied, private rental, rent free, squatters and slums. Physically, housing has extended from makeshift arrangement and permanent houses. Dhaka City has a very high proportion of poor population (65%) and as such affordability of housing is significantly affected by the income distribution. The access of poor to housing is constrained by high land and material prices. In one study (DMDP, 1995), it has been observed that the first quintile of city household has zero affordability to housing; the second quintile can afford Tk. 140 to Tk. 300 per month; the third quintile can afford Tk. 300-400 per month; the fourth quintile of household can afford Tk.500 to Tk. 600 per month and the fifth quintile of household can afford Tk.

1000-2500 per month. Only 3.85% of household can afford above Tk. 2500. The affordability indices of Dhaka City imply that the govt. has to play the role of both provider and facilitator/enabler for different income groups.

3.4 Apartment/real estate development in Dhaka city

Three decades back the city dwellers were reluctant to live in flats while ten years back some one would have thought twice before buying an apartment/flat. But in the last couple of years people have shown an increased interest in owning apartments.

As mentioned earlier the main reason is economic due to increased land cost as well as construction cost. There are also other reasons such as reluctance of individuals to spend time and energy in house construction, increased awareness of apartment living, and western influence. As a result apartment-owning is becoming increasingly popular. Moreover the absentee i.e. the wage earners in Middle East and other countries are also a major contributing factor towards the increasing demand for apartments. As a result of increased demand, many apartment builders have appeared in the market in recent years. Twenty years ago there were fewer than five companies in Bangladesh engaged in developing apartments while today there are more than 600 developers. It may be mentioned here that in 1988 there were less than 20 such developers in Dhaka. At present there are 350 such developers working in Dhaka City who are members of Real Estate and Housing Association of Bangladesh (REHB). But there are many other companies/individuals engaged in such development in smaller scale and selling apartments to friends and relatives only.

3.5 Construction and development process

The contribution of construction industry in the Gross Domestic Product (GDP) is 12.14%. Over the last 15 year the Real Estate Development sector has made significant contributions to many sectors of our economy. Since 1985 this sector~ has created homes for over 12,000 families in the metropolitan thousands of areas of land have been developed into housing estates where lower middle and middle-income families can construct-their own dwellings.

The fact that many cement manufacturing industries have now been set up in Bangladesh is a reflection of the impetus the Real Estate Development sector has given to our economy. In the last decade many steel mills would have shut down had it not been due to the support of the Real Estate Development sector. Several new mechanized construction material manufacturing industries have recently come up due to the existence of this sector. Today about 200 architects and consulting engineers are directly supported by this sector; over 500 graduate engineers are holding management positions in this sector and almost 2500 diploma engineers are engaged by this sector.

The construction sector is directly linked with employment. There are both formal and informal building firms, who undertake works. In the period 1985-90, this sector contributed more than 5.55% in GDP. It is estimated that about 1.77 million man/ year in 1994/95 (according to Fourth Five year plan) were engaged in this sector. A large number of companies/firms in Dhaka are engaged in construction activities.

3.6 Development of high-rise building

High-rise buildings probably were first constructed in response to the corporate need for increased direct communication and expansion of business operation. Businessmen understood the need for proximity and personal communications and quickly recognized the value of “going vertically up” within a compact business core in the central city.

The corporate world is not the only beneficiary of high-rise development; often other enterprises that serve corporate business or its employees also locate themselves in high-rise structures. Offices for lawyers, accountants and other business related professionals are established in close proximity to the corporations, often being located in the same building. Medical and dental practices open where they can capture and serve office workers as well as the general urban population from a central location. Even where the structure bears a corporate name and was built specifically for a corporate tenant finally ends up catering to various professional and business clients. Today’s high-rise building usually contains a variety of tenants.

Depending on overall factors, during the last three decades, Dhaka City attempted to expand vertically to meet the problems of urban population explosion, scarcity of land and spiraling land price. High-rise structure also has a positive influence on city form and organization.

The tallest building in Dhaka (30 stories) has been constructed at Motijheel for office purpose. High-rise buildings for residential purposes are being seriously considered to provide an answer to urban housing problems. How far this is tenable in context of conditions prevailing in developing countries must be studied in greater depth so that planned growth in high-rise housing construction can be promoted.

Because of the great size and height the development of tall buildings usually involves active interaction of public and private decision-makers. Successful public private collaboration usually revitalizes the urban environment. Thus, tall building development in the form of office towers, hotels and residential apartment buildings can. Become a critical part of revitalization in major cities of the world, including Dhaka.

In terms of Dhaka, it can be seen that the location of the majority of the high-rise structures are clustered in the business districts and central city areas where land value is highest.

The reasons of this development are as follows:

1. Easy access.

2. Proximately of supporting facilities of offices.

3. Higher rate of return on investment.

4. Besides the land value there are other reasons for the construction of high-rise structures to accommodate office staff where land is limited.

Prospects & Problems of High Rise Building

4.1 Current state of tall building in Bangladesh

The history of tall building in Bangladesh is only four decades old.

Broadly speaking two types of high-rise buildings are constructed in terms of use type:

1. Institutional buildings including government & commercial office buildings,

hotels etc.

2. Residential buildings particularly for middle class low income groups.

The trend that started in 1963 with the construction of 11-storied WAPDA building at Motijheel, the Central Business District (CBD) of the capital city Dhaka has currently gained a tremendous momentum. Although tall buildings are being constructed in few numbers in other cities at the country, almost all the existing and under-construction tall buildings of the country are located in the capital city. In Dhaka, there are about 120 such notable buildings clustered mainly at the Motijheel commercial area and in places like Eskaton, Mohakhali and Banani. If one compares the number of tall buildings in the capital city with the size of the greater Dhaka with a present population of about 10 million, the insignificant proportion of the tall buildings with respect to, the overall scenario becomes evident.

It is evident from the figure that a steady increase in the number of tall structures has taken place in the recent years. Whereas in the sixties and seventies, on an average five high rise buildings were constructed in Dhaka City, in the eighties about twenty tall buildings were constructed. Construction of tall structures attained its peak in the nineties, and, in the last five years about 50% of the total present number of all tall buildings of the capital city has been constructed. The trend of going high is still there.

4.2 Prospects and problems of tall buildings

It is almost inevitable that high rise construction will increase in future in Bangladesh. In fact, in a fast growing metropolis like Dhaka where, land is scarce and land value is high, there is no other obvious option but to go for tall structures. In a country where expatriate consultants and contractors are being inducted in almost every field of technological activity, it is interesting to note that all the tall buildings in Bangladesh have been planned, designed and constructed by local architects. But high rise buildings, both commercial and residential; of Bangladesh have already revealed their merits and demerits in the very short time that they have been serving the community.

Some of the advantages of tall buildings are given below:

1. It increases land-use density leading to proper utilization of inner city land.

2. If properly designed and constructed it can increase the user efficiency for both commercial and residential use.

3. It can bring positive effect on city form.

4. High-rise buildings and the users that occupy them usually return more revenue (benefits) to local governments than they require in services (costs) from them. This positive cost-benefit ratio is often used as a measure of the attractiveness of a development.

5. High-rise buildings have established an efficient setting for corporate business enterprise, a significant source of revenue for local government, and a business focus for the entire metropolitan area.

6. Residential uses in high-rise have resulted in both success and failure. Tall apartment buildings have successfully fulfilled the needs of upper income and middle income families in different developing countries.

4.3 Land use, land use economy and land value

The trend towards construction of tall buildings in Dhaka is very much connected with the very high price of land in the main commercial and business districts. Since land value is very high in inner city areas, population density should be increased by adoption of multi-storied construction. In less developed areas, where commercial value is less, tall buildings are virtually non-existent. It is evident from the study that only 39% of the total lands of the capital are in urban use, while 6l% has rural or semi-rural use.

High-rise buildings are constructed to ensure economical use of land in areas where land is scarce and its cost is high. Individual plot holders can save a lot of land by going in for multi-story buildings. However, the savings in a given sector of land depend on the gross densities in number of dwellings per acre including the land required for common amenities like parks, playground, schools, shops, road etc.

Dhaka has experienced an unprecedented increase in land value since the early seventies. In the past decade Dhaka mainly developed along the two main axes towards the north of Dhaka. Due to huge increase in the population of Dhaka, the pressure on land for residential use has been very high. Since the sixties until today RAJUK has provided less than ten thousand plots at subsidized rate mainly for the middle and upper income groups. The value of land in Dhaka City, mainly in the central area, has increased at a rate much higher than the increase in cost of living in Dhaka. The price of high-class residential land has increased 100 times (approx.) during the period 1975-2000. In the absence of any proper land value records it is very difficult to compare the land value over the past decades.

It has been stated that the big real estate companies are mainly responsible for the high price of land in the central area because they pay a much higher price for a good piece of land. It is argued that due to this reason middle and upper middle class families are being unable to buy land in Dhaka.

We are of the opinion; however, that Real Estate companies are just one among several reasons for the rise in price as the value of urban land is actually determined and fixed through competition in a complex economic process. Besides, there are other factors, which influence urban land value. These are social values, customs and others. On carefully analyzing the land value trend of Dhaka City and the suburbs for the last thirty years, a number of causes of high land value have been identified as follows:

a) Lack of investment opportunity; in other sectors of economy.

b) Rapid urbanization and consequent scarcity of land.

c) Uncontrolled land market.

d) Lack of comprehensive land policy.

e) Inappropriate taxation policy.

f) Political instability.

g) High rate of inflation.

h) Land speculation and the role-played by brokers.

i) Land ownership being regarded as a symbol of social prestige.

j) Inflow of foreign remittances earned by Bangladeshis abroad, especially from the Middle East.

k) Land purchase by real estate developers.

Since land value is very high in inner city areas, increasing multi-storied construction will increase the density. Many parcels of inner city land are under utilized or vacant, which should be put to proper use for balanced growth.

To achieve these objectives and to minimize the negative effects of high-rise constructions the following recommendations are suggested:

a) Proper rules and regulations for high-rise construction should be formulated and implemented.

b) In case of apartment, exclusive apartment Land dominium law) should be enacted and implemented by RAJUK and other concerned agencies.

c) Zoning law for Dhaka City in terms of use class and height class should be formulated and strictly enforced as per DMDP structure plan and related plans.

d) Particularly in the high cost areas of inner city vacant land tax and punitive tax for very low-rise construction should be enacted.

e) Building rules related to lift; parking and fire fighting should be strictly monitored and enforced by concerned agencies, as per Bangladesh National Building Code 1993.

f) In commercial areas low-rise structures should be totally discouraged by appropriate measures.

g) In high-rise/high density zones, co-ordination between utility agencies should be increased to plan in advance for high capacity utility mains.

However, in the context of Dhaka it is envisaged that in the future year’s high-rise construction will increase both for commercial buildings and residential development.

4.4 Construction industry and environment

Once undesirable environmental consequences of the use of a natural resource have been identified, there are two types of control, which can be exercised: control of the supply and control of the demand. Control of supply could be exercised by means of introducing land-use regulations, pricing of the resource and other measures, eliminating indiscriminate explosion or reducing it to acceptable levels. Demand side controls aimed to change the nature of the activity. The goal is to reduce or eliminate the demand.

In the case of construction activity, which is acknowledged to be essential for virtually every type of development, an increase rather than a decrease is desirable in all developing countries. There are many ways in which the nature of current construction activity can be changed to make it less environmentally damaging, without reducing the total amount of construction in terms of the built space created or other functions it performs.

These include:

1. Improving land-use and pollution emission legislation and control

2. Pre-construction environmental impact appraisals

3. Greater use of demolition and mineral & agricultural wastes in construction.

4. Extending the life of and reuse of existing buildings

4.5 Potentialities in construction sector

The construction sector has great potentials. The traditionally used building materials are locally produced. Cheap labor, appropriate technologies and easy transportation system have also been a positive catalyst for the advancement of the construction industry.

(a) Building Materials:

Locally available traditional raw materials can be used as effective construction materials. The government should publicize information regarding locally available building materials, its high productivity, the locations and accessibility. Local small-scale industries should be encouraged to produce quality-building materials. The Housing and Building Research Institute (HBRI) is encouraged to develop new building materials and techniques with the objectives of reducing costs and imports. On one hand, there is research into alternative and low-cost materials and techniques while on the other land; alternative building materials of indigenous sources like clay tiles get little interest.

(b) Labor Force:

Construction industries can create employment opportunities. Institutional training should be facilitated for the unskilled laborers. Special vocational training should be introduced and training made essential for creating highly skilled specialized labor force.

(c) Appropriate and Simple Technology

Building technologies will differ from place to place. Use of appropriate and simple technology is essential to improve construction productivity. In Bangladesh the Local Government Engineering Department (LGED) has developed Low Cost. Reinforced Cement Concrete (RCC) piles, which have cost similar to timber plies. These low cost piles address the deficiencies of the timber piles and also possess additional advantages compared to cast-in-situ and pre-stressed piles.

These piles can be used as compaction piles as well as load bearing piles. For small structures, the possibility of application of this pile is immense e.g., in buildings, bridges, culverts etc.

The newly evolved RCC pile can be locally produced with relatively simple technology. These piles would provide a much better alternative to the timber piles, which are, at present, being widely used. The Low cost RCC piles will contribute towards better conservation of forest resources and thereby minimize degradation of the environment.

Apartment development: Problems & Prospects

5.1 Problems and Prospects of Apartment development

Apartment development in Dhaka City, as mentioned earlier, has become increasingly popular in recent days and is likely to continue for sometime. It has a number of plus point regarding solving housing problems of the city. But at the same time it certain demerits. We propose to review critically both the prospects and problems. It may be worthwhile to describe here the types of apartments, which are now being built in Dhaka. Broadly speaking two types of apartment development can be noticed. Firstly, up to G+ 5 story walk up apartments, which are usually RCC frame structure with average fittings and fixtures (e.g. in-situ mosaic, concealed wiring with local fittings, best quality BISF sanitary ware etc.). These flats within the central areas are sold around Tk. 3,500 to Tk. 5,000 per sq. ft. excluding the cost of parking space. An apartment of this type with an area of 1400 sq. ft. (3 bed rooms, 2 + 1 toilets) and a secured parking space will cost around Tk. 50-70 Lac. The cost may be higher if the apartment is located in a major road. The second types of development are those apartments in high-rise buildings of more than six stories. But the present trend in Dhaka City is 12-20 stories. The price of such apartments is presently more that Tk. 2,500-3,000 per sq. ft. plus the cost of parking space ranging from Tk. 2.0 Lac to Tk. 2.5 Lac per parking space in a good location.

Area Selling Rate/Sft (tk) Selling Rate/Sft (us$)

(1 US$ = 70 TK)

1) Gulshan 5000-8000 71.42 — 114.28

2) Banani 4000-7000 57.14 — 100.00

3) Dhanmondi 5000-8000 71.42 — 114.28

4) Mirpur 2000-3000 28.57 — 42.86

5) Shantinagar 2500-3000 35.71 — 42.86

6) Wan 2500-3000 35.71 — 42.86

7) Moghbzar 2500-3000 35.71 — 42.86

8) Shaymoli 2000-2800 28.57 — 40.00

19) D.O.H.S 4000-5000 57.14 — 71.43

10) Uttara 2500-3500 35.71 — 50.00

Heretic has been attempted to identify the major criticisms of apartment development as cited in the media.

They are:

i. Economic:

Mainly middle and upper income families are purchasing both walks up and high rise apartments. Lower middle and lower income groups can not buy such expensive flats.

ii. Services:

In many apartment complex certain services (mainly recreational and community space, open area) are lacking. Problems associated with water supply, fire fighting and fire escape (mainly in high rise apartments), and inadequacy of lift are notable.

iii. Social:

It is sometimes argued that high-rise building prevents social contact with other neighbors, which can lead to socio-psychological problem.

The above mentioned criticisms can be contradicted on the following grounds:

i. Economic:

The private apartment developers are catering for the middle or upper income group and thereby solving the problem partially for that group. This has noting to do with the housing problems of lower income groups. Only government and autonomous agencies can be helpful by subsidizing and/or extent loans to their employees in apartment construction and/or purchase. Private sector can only be effective when soft term credit area extended to private developers for constructing apartments at lower cost catering for lower income families.

ii. Services:

Services provided are related to the cost of the apartment. In the private sector higher facilities will lead to higher cost which can be prohibitive even for upper middle income families. Lack of open space is entirely due to very high land cost in the good localities. Many associated problems regarding service and design problem can be very effectively tackled with proper institutional and design control. Sometimes these problems only arise in the cases of developers lacking in professional and financial expertise.

iii. Social:

This can be minimized by more careful planning and design of high rise apartments. Rather than constructing matchbox type structure more intimate and personal design elements can be incorporated in high rise blocks.

Besides these broad criticisms,, many small problems have been identified from the responses by apartment users in different apartment blocks in the city.

These are cited below under the following headings:

a) Planning Problems

I. Inadequate distance from one building to another.

ii. Some parts of the building are always shaded.

iii. Lack of green space.

iv. No relationship between neighbors.

v. No fire escape or fire fighting provisions.

vi. Absence of community space or any playing area for the children.

vii. Exposed gas lines inconveniently situated at the main entry, which may be

dangerously hazardous.

viii. Height variation between different closely associated buildings creating privacy

problem.

ix. Absence of lifts or inadequate number of lifts.

x. Absence of mail box.

b) Planning and Designing Problems

Parking area is paved and totally open and unsecured in many cases.

ii. Outer view is disturbed by unplanned telephone lines.

iii. Absence of garbage chute or garbage disposal arrangements.

iv. People drying wet clothes inconveniently from verandah or in ground space and spoiling the beauty of the building.

c) Design Problems

  1. Ladders are used to approach the roof, which are inconvenient. In some apartments roofs can not be used at all.

ii. Secondary entry is more utilized than the main entry as it exposes the kitchen, or toilets of master bed etc.

iii. Entry to the building is through a dark place, which is not easy to locate.

iv. Entry to the apartment with long corridor, every inch is an improper utilization of space.

v. Lack of proper outlet makes the stagnant air hot and unhealthy.

vi. Dining space is the circulation space with inadequate opening and designed without considering furniture layout.

vii. Privacy problem created between exposed living and dining space.

viii. Staggering stair cases with narrow stairs.

ix. Lack of proper ventilation or light in different rooms of an apartment due to improper planning of rooms.

x. Built-in closet is not functional in terms of sizes, shape and height.

xi. Absence of lighting arrester.

xii. No provision for installation of air-conditions units at later stage.

d) Construction Problems

i. Fitting and finish of toilet fixtures in certain cases are unsatisfactory.

ii. Constructional defect heading to cracks in the floors and walls.

iii. Dampness in external walls and in certain cases in internal walls.

iv. Excessive heats in the top floor due to lack of lime terracing.

For solving the housing problem in Dhaka city the following steps should~ be considered, some of these stapes are directly related to housing, while others are concerned with different issues having impact upon housing:

a) The growth of Dhaka City needs to be checked. This can be attained by developing small and medium towns through adoption policy of balanced urbanization decentralization. By generation employment opportunities through these intermediate cities, the migration towards Dhaka can be trapped in those towers.

b) A metropolitan housing policy should be devised in conjunction with overall metropolitan transport and land policies.

c) Provisions of areas for high-rise, low-rise, permanent and semi-permanent structures should be made in the Master plan of Dhaka City. Expensive central city areas should be reserved for high rise developments. In this way the concerned authorities can provide higher capacity infrastructure at an optimum cost.

d) Housing development both in public and private sectors should conform to the development of physical and social infra-structures like roads, electricity, water-supply, sewerage, gas, telephone and the like.

e) Sprawl development of Dhaka City in any direction should be discouraged. Underutilized land within the city limit should be developed and properly utilized.

f) Special schemes for housing the urban poor and destitute by constructing low cost core housing with provision for upgrading on self-help basis should be adopted.

g) The private sector should be encouraged to cater for the upper middle and upper income groups.

h) Walk-up row housing and tenement blocks should be developed both in the private and public sectors to house the lower income groups.

I) Credit facilities ~or housing development for individuals and institutions should be modified to increase the housing stock.

j) National and municipal policies for high rise development should be formulated.

k) To check the mushroom growth of real estate companies there should be arrangements for scrutinizing the technical, financial and institutional capabilities of prospective companies.

Developing housing sector comprises not only building of houses but also the development of socio-economic infrastructure. In fact, a separate directorate of Real Estate could be established, which will inter link all the concerned agencies, related to house construction such as RAJUK, Dhaka Municipal Corporation, WASA, PDB, Titas and House Building Finance Corporation (HBFC). This will minimize the procedures and formalities associated with house construction.

All future activities of concerned agencies involving land, finance and utilities should be forward-planned under a common framework to increase the efficiency and minimize overlapping of responsibilities. The neglect of the private sector is a fundamental defect in our housing policy. A comprehensive and pragmatic housing policy should be adopted by the government, which will expedite housing developments. The economy of land use should be given top priority in any future housing policy.

A private housing-bank could be set up for financing housing development as in the absence of such a bank; land developers and promoters are very much handicapped. Such a specialized bank to tide over the housing crises deserves serious consideration.

Conclusions

6.1 Findings & Issues

a) Lac of appropriate planning and programming for the construction project.

b) A major concern in the construction industry is the apparent backwardness in the adoption of new. Construction technologies for the adoption of new construction technologies and practices, which can reduce cost and increase quality.

c) Lac of general guidelines of building designs to prepare appropriate planning rules, building code based on the character of the area. It should also cover building regulations and related detailing of the building and also cover selection of materials.

d) It has been observed that the construction material and equipment differ from place to place, considering this fact, specialized standards and code should be made.

e) Lac of innovative technologies in the ~ sector for high productivity.

f) Lac of proper research support and financial support in public and private sectors.

g) Environmental impacts and other information are not available to the public.

h) Selection of building materials, the consultants and experienced contractors are in adequate.

i) Less encouragement of local based building materials as well as cheaper alternative/substitutes.

j) No separate financial policies for consultants/contractors.

k) Lac of management effectiveness in the construction sector.

i) No extensive and multifold regulation.

m) Lac of establishment the regulations and control procedures of the government.

6.2 Recommendation

Considering all issues, following broad general recommendations both in the public and private sector should be taken into consideration:

a) Appropriate planning and programming for the construction project would be framed based on the nature of works.

b) A major concern in the construction industry is the apparent backwardness in the adoption of new construction technologies for the adoption of new construction technologies and practices, which can reduce cost and increase quality.

c) The authority with help of professionals should formulate general guidelines of building designs. Special attention would be given to prepare appropriate planning rules, building codes etc. based on the character of the area. It will also cover building regulations and related detailing of the building and also cover selection of materials.

d) It has been observed that the construction material and equipment differ from place to place, considering this fact, specialized standards and code should be made.

e) Simple and innovative technologies should be introduced in the~ construction sector for high productivity. The attention should be given on its acceptability to the sectors. Affordability to the government as well public enterprises should be taken into consideration.

f) Research and innovation for development should be encouraged. Proper research support and financial support should be provided both in public and private sectors. Even groups of entrepreneurs and individuals should be encouraged by the policies.

g) Research outputs, available materials, energy consumption cost, environmental impacts and other information should be made available to the public through institutions and mass media.

h) Selection of building materials, the consultants are required in conjunction with experienced contractors.

I) Local based building materials as well as cheaper alternative/substitutes should be encouraged.

II) Special financial policies for consultants/contractors financing should be introduced. It would be included: i) reduction of bureaucracy ii) generous advance payments, iii) risk guaranties etc.

j) Overall management capabilities is essential for the construction sector. It should be managed through institutional basis, and the construction actors have contractors, laborers, managers and other related actors as active participants.

k) Adequate legislative support is to recognized construction sector as an important for national development. An extensive and multifold regulation is needed. It should includes civil engineering works, durability of construction outputs, all safety measures including loads, imposed deformations, environmental issues, fire and natural disasters etc.

m) The establishment of regulations and control procedures is the traditional function of the government. It is needed to recognize the construction industry as an important sector for national development. The regulations and control can contribute a strong positive impact to reduce construction cost, environment hazards, promote greater energy efficiency in building and limit energy consumption and pollution etc.

n) Special attention would be given to protect the physical environment of the project’s site. “Legal action” procedures would be updated in which legal

action can be taken against the faulty actors.

6.3 Conclusion

The planning and design approach is very important components in the construction sector specially to ensure sustainability. The technology and innovation in the construction industry may reduce construction cost and time, as well as increase safety. New technological innovations, often in conjunction with materials and equipment, should be introduced into several of the disciplines within the construction industry. Such technology also ensures higher productivity, which can bring socio-economic prosperity to the country. The Government sets regulations on construction industry (building code, land use, tendering constructor’s negotiation and environmental regulation) in national and local level. Changes are also sought to improve quality, management efficiency, material flow, and maintain schedules by better organization and controlling of design and production process.

BIBLIOGRAPHY

1. Rajdhani Unnayan KartIpakkha (R.AJUK)

2. Bangladesh Bureau of Statistics (BBS)

3. Dhaka Metropliton Development plan (DMDP)

4. Real Estate Housing Association of Bangladesh (REHAB)

1. Various documents of Al Barew Development Ltd.

7. Web Site.

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An Analysis of Reconciliation Process of BRAC Bank Limited

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“An Analysis of Reconciliation Process of BRAC Bank Limited”

Chapter 01

1. Introduction

1.1 Preamble:

Bangladesh is an overpopulated country and agricultural sector is saturated. Most of the people engage in agricultural sector so over employment problem arise in the agricultural sector. On the other hand as capital is scarce in this country industrialist should focus on labor intensive small businesses and this is the primary reason for evolving SME. SME plays an important role in the economic and social life and it can generate large numbers of non-agricultural jobs, exports, sales and value addition. They contribute to the employment creation as well as to the improvement of skills by providing job training to individuals who have little experience and knowledge. It is strongly believed that with the right policies and frameworks, SMEs have a crucial role to play for the economy of a developing country like Bangladesh by adopting new technologies and approaches.

There are at least six million small and medium enterprises (SMEs), which have employed around 80 percent of the total industrial workforce (excludes agriculture, financial institutions and forestry sector) and contribute nearly 25 percent to the Bangladesh’s gross domestic products (GDP). Nearly 95 percent of the country’s total business falls under the category of micro, small and medium enterprises that share more than 40 percent of the entire manufacturing output and therefore, SMEs can be termed as the driving force behind the expanding economy.

SME has become a common slogan today around the world including Bangladesh. It is now very much in the public and trade support institutions’ policy limelight in Bangladesh, but still SMEs are facing a lot of problems among which access to credit has been the key factor during the last two decades. Nowadays financial institutions, including state owned and private commercial banks, are also rendering their support by providing investment facilities and promotional services to SMEs throughout the country. Though the risk has been increased because lack of experience and education of proprietor, fund divert policy of entrepreneur, political instability and due to law and order situation.

1.2 Objectives of the Report:

1.2.1 Specific Objectives:

1.3 Scope:

BBL, the SME based commercial bank is under special guidelines of the central bank framed for the banking system as a whole and for bank of individual sectors. Scope of the study is quite clear. Since central support, operation help desk and reconciliation department controls the SME loan activities in the bank, studying these core themes, opportunities are there to learn other aspects of SME matters. BBL is now giving emphasis to create a constructive and meaningful competition with the private sector banking and NGOs (who are trying to develop rural life).

This study makes attempt to cover within its scope all most all the significant aspects of rural development schemes.

1.4 Methodology:

The data required for this study was collected from both primary and secondary data. Methodology that was followed to prepare this report has collected data from many sources. Such as-

1.4.1 Sources of data:

(i) Primary data sources:

(ii) Secondary data sources:

1.4.2 Data Collection Method:

(i) Personal interview: Face -to-face conversation and interview with the respective officers of the head office.

(ii) Personal Observation: Observing the procedures of banking activities followed by Reconciliation Department.

(iii) Sample size: 5 officers.

(iv) Sampling Method: Convenience sampling method.

1.5 Limitations:

The study has suffered from a number of barriers:

Chapter 02

2. Organizational Part

2.1 Preface:

BRAC Bank Limited, with institutional shareholdings by BRAC, International Finance Corporation (IFC) and ShoreCap International, has been the fastest growing Bank in 2004 and 2005. The Bank operates under a “double bottom line” agenda where profit and social responsibility go hand in hand as it strives towards a poverty-free, enlightened Bangladesh.

As a fully operational commercial bank, BRAC Bank Limited focuses on pursuing unexplored market niches in the Small and Medium Enterprise Business, which has remained largely untapped within the country. In the last five years of operation, the Bank has disbursed over 32,188.26 million in loans to nearly 67047 small and medium entrepreneurs in 2009. The management of the Bank believes that this sector of the economy can contribute the most to the rapid generation of employment in Bangladesh. The Bank’s footprint has grown to 69 branches, 429 SME unit offices and 179 ATM booths, 30 cash deposit machines, 1558 POS terminals, 19 utility services bill payment booths, 1900 remittance delivery points across the country. In the years ahead BRAC Bank Limited expects to introduce many more services and products as well as add a wider network of SME unit offices.

2.1.1 Shareholder Structure:

Name of Shareholder % of Shareholding
BRAC 31.74%
International Finance Corporation 9.50%
ShoreCap International Limited 8.75%
Non-Resident Bangladeshi 0.47%
Mutual Funds 2.42%
Institutions and General Public 47.11%
Others 0.06%

2.2 Background of the Organization:

BRAC Bank Limited is a scheduled commercial bank in Bangladesh. It was established in Bangladesh under the Banking Companies Act, 1991 and incorporated as private limited company on 20 May, 1999 under the Companies Act, 1994. The primary objective of the Bank is to provide all kinds of banking businesses. At the very beginning the Bank faced some legal obligations because the High Court of Bangladesh suspended activity of the Bank and it could fail to start its operations till 03 June, 2001. Eventually, the judgment of the High Court was set aside and dismissed by the Appellate Division of the Supreme Court on 04 June, 2001 and the Bank has started its operations from July 04, 2001. The Chairman of the Bank is Sir Mr. Fazle Hasan Abed. Now the Managing Director of the bank is Mr. Imran Rahman. The bank has made a reasonable progress due to its visionary management people and its appropriate policy and implementation.

2.3 Objectives:

The objectives of BRAC Bank Limited are specific and targeted to its vision and to position itself in the mindset of the people as a bank with difference. The objectives of BRAC Bank Limited are as follows:

2.4 Corporate Vision:

Building a profitable and socially responsible financial institution focused on markets and business with growth potential, thereby assisting BRAC and stakeholders build a “Just, enlightened, healthy, democratic and poverty free Bangladesh”.

2.5 Corporate Mission:

2.6 Departments of BRAC Bank Limited:

If the jobs are not organized considering their interrelationship and are not allocated in a particular department it would be very difficult to control the system effectively. If the departmentalization is not fitted for the particular works there would be haphazard situation and the performance of a particular department would not be measured. BRAC Bank Limited has done this work very well. Departments are as follows:

2.7 Business Units:

There are five different business units generating business BRAC Bank Limited:

All the units are being operated in a centralized manner to minimize costs and risks.

2.8 Bank’s Culture:

Bank has adopted trust as a corporate value which is acronym for team work, respect for all people, unquestionable integrity, excellence in everything BRAC Bank Limited of SME do, sense of urgency in getting things done and total commitment.

All employees are expected to conduct themselves in accordance with the rules and regulations of the bank.

2.9 Management of BRAC Bank Limited:

Boards of directors are the sole authority to take decision about the affairs of the business. Now there are 5 directors in the management of the bank. All the directors have good academic background and have huge experience in business. Mr. Fazle Hasan Abed is the chairperson of the bank. The board of directors holds meetings on a regular basis.

2.10 Performance of BRAC Bank Limited:

BRAC Bank Limited will be the most successful private sector commercial bank in our country, though it started its operation few years back. It has achieved the trust of the general people and made reasonable contribution to the economy of the country by helping the people investing and allowing credit facility.

2.11 SWOT Analysis:

SWOT analysis is an important tool for evaluating the company’s Strengths, Weaknesses, Opportunities and Threats. It helps the organization to identify how to evaluate its performance and scan the macro environment, which in turn would help organization to navigate in the turbulent ocean of competition.

2.11.1 Strengths:

(i) Goodwill:

BRAC Bank Ltd. has already established a favourable reputation in the banking industry of the country particularly among the new comers. Within a period of 5 years, BBL has already established a firm footing in the banking sector having tremendous growth in the profits and deposits. All these have leaded them to earn a reputation in the banking field

(ii) Sponsors:

BBL has been founded by a group of eminent entrepreneurs of the country having adequate financial strength. The sponsor directors belong to prominent resources persons of the country. The Board of Directors headed by its Chairman Mr. F. H. Abed. Therefore, BBL has a strong financial strength and it built upon a strong foundation.

(iii) Efficient Management:

The top management of the bank, also a major strength for the BBL, has contributed heavily towards the growth and development of the bank. The top management officials have all worked in reputed banks and their years of banking experience, skills, expertise will continue to contribute towards further expansion of the bank. At BBL, the top management is the driving force and the think tank of the organization where policies are crafted and often cascaded down.

(iv) Facilities and equipment:

BBL has adequate physical facilities and equipments to provide better services to the customers. The bank has computerized and online banking operations under the software called MBS banking operations. Counting machines in the teller counters have been installed for speedy service in the cash counters. Computerized statements for the customers as well as for the internal use of the bank are also available.

2.11.2 Weaknesses:

(i) Lack of Advertising and Promotion of SME Loan:

This is a major set back for BBL and one of its weakest areas. BBL’s adverting and promotional activities are satisfactory but it SME loan is not advertised well. It does not expose its SME product to general public and are not in lime light. As a result large numbers of people are not aware of the existence of this bank.

(ii) NGO Name (BRAC):

BRAC is one of the largest NGO of the world and it is operating its activities in Bangladesh. BRAC bank is not a NGO bank but many people of the country consider it as a NGO bank like Grameen Bank which is not correct.

(iii) Remuneration:

The remuneration package for the entry and the mid level management is considerably low. The compensation package for BBL entry level positions is even lower than the contemporary banks. Under the existing low payment structure, it will be difficult to attract and retain higher educated employees in BBL. Especially CROs are not satisfied with compensation package provided to them.

2.11.3 Opportunities:

(i) ATM:

BBL always tries to provide excellent services to its customers. By considering this BBL provides ATM cards to its customers and also provides available ATM booths at different locations in the whole country.

(ii) Diversification:

BBL can pursue a diversification strategy in expanding its current line of business. The management can consider options of starting merchant banking or diversify into leasing and insurance. By expanding their business portfolio, BBL can reduce their business risk.

(iii) Product Line Proliferation:

In this competitive environment BBL must expand its product line to enhance its sustainable competitive advantage.

(iv) Available Branches:

With its proper and useful operational network, there is an opportunity for BBL to further expand its branches in many remote and new locations of the country which will deliver services to customers and earn a healthy profit for the bank.

2.11.4 Threats:

(i) Competition:

Competition is a threat for any business. At the age of modern business the competition is increasing. Every bank has an intention to provide better services compared to others for capturing the customers.

(ii) Multinational Banks:

The emergence of multinational banks and their rapid expansion poses a potential threat to the new growing private banks. Due to the booming energy sector, more foreign banks are expected to arrive in Bangladesh. Moreover, the already existing foreign banks such as Standard Chartered is now pursuing an aggressive branch expansion strategy. This bank is establishing more branches in the countrywide and already launched the SME operation. Since the foreign banks have tremendous financial strength, it will pose a threat to local banks.

(iii) Upcoming Banks:

The upcoming private local banks can also pose a threat to the existing private commercial banks like BBL. It is expected that in the next few years more local private banks may emerge. If that happens the intensity of competition will rise further and banks will have to develop strategies to compete against foreign banks.

(iv) Contemporary Banks:

The contemporary banks of BBL such as Dhaka Bank, Prime Bank and Dutch Bangla Bank are its major rivals. Prime bank and other banks are carrying out an aggressive campaign to attract lucrative clients as well as big time depositors.

2.12 Structure of the Organization:

Chapter 03

3.Reconciliation Process

3.1 Introduction:

The SME, Probashi and Cash management business of BRAC Bank Limited is mostly dependent on corresponding banking relationship. BRAC Bank Limited has to open accounts with the other banks in the remote areas where bank’s representation is not available. The corresponding bank accounts are used for SME disbursement, realization, remittance and cash management purpose. Every month we have found a huge number of entries unreconciled between the bank and the corresponding bank’s book.

Bank has to prepare the periodic reconciliation statement to identify any mismatch. Reconciliation is the process of systematically comparing the balance of bank statement with the balance as per the company’s ledger and explaining any differences and taking necessary measures to correct the wrong entries. It is an important internal control mechanism of the bank.

The responsibilities of reconciliation of BRAC Bank Limited are centralized and given to Central Operations. There is a separate devoted team under the Central Operations for identifying the unmatched items, analyzing the same and guide the initiating departments to do the rectification. Reconciliation section of Central Operations prepares and submits a status report on monthly basis and the same to all concerned departments and Enterprises Risk Management Departments for their information and monitoring. Also submits a status report to MD & CEO and DMD for their information.

3.2 Department Structure:

3.3 Reconciliation Process Flowchart:

Reconciliation Team received Bank statement from Banking Service Dept.

 Beginning:

3.4 Statement Collection:

Wholesale Banking Operations Department is responsible for collecting the Bank statements from correspondent Bank by 7th of the following month. They keep the original copy with them and send the photocopy to Central Operations Department by 10th of every month. If there have any errors in the statements, Central Operations will return the statements to Wholesale Banking Operations.

Wholesale Banking Operations Department will communicate with the correspondent bank and send the corrected copy to Central Operations Department within five working days from the date of receipts.

Figure: Bank Statement from other Bank

3.5 Reconciliation:

After receiving Bank statements from Wholesale Banking Operations Department, Reconciliation Team takes print of the GL (General Ledger) account and cross-match all entries between Bank statements and GL account to identify unmatched entries.

Figure: General Ledger

Reconciliation statements of all unmatched entries are prepared by Identifying Team and send to Analyzing Team for adjustment.Respective departments will provide all supporting documents if required by Reconciliation Team within 2/3 working days for analyzing entries.

3.6 Analysis & Adjustment:

Adjustment Team prepares a statement of all identified mismatch entries with supporting documents and send the same to respective departments to pass the necessary correction entries for adjustments. Upon receiving the statement (Adjustment advice) from Central Operations Department, respective departments will pass the correct entries within three working days and send a copy to Central Operations Department for recording.

Chapter 04

4. Problems

BRAC Bank Limited, as we know, is one of the fastest growing banks in Bangladesh. SME banking, which has made the performance of this bank so enlightened, is its core product to offer to the small and medium business entrepreneurs. SME loan is a loan given especially to entrepreneurs who are experienced small or medium businessmen, more or less middle aged, at least moderate income generated and who have reasonable personal or family asset. In fact no businessman could ever think before that they could take loan so easily, without any collateral or going to the bank. But BRAC Bank Limited has made this improbable process so successful through SME banking. Finally, I would like to mention certain factors which do not match with modern banking system but it’s regularly practiced in this particular department:

4.1 Recommendations:

4.2 Conclusion:

Though BRAC Bank Ltd is the first growing SME bank in banking sector, it has good future. The bank is trying to show some different examples in banking section. BBL is performing SME banking and also performing modern banking system. So this bank is getting extra priority from the people who want to do business with modern bank.

The purpose of this report was to analysis the reconciliation process of BRAC Bank Limited- a study on head office.

4.3 Bibliography:

www.bracbank.com

www.bangladesh-bank.org

E-learning manual and FINACLE Core Banking System Software

Annual Report.

Manual of Credit Approval and Monitoring policies, BRAC Bank Limited, Volume 2, No. 1.

Other short notes provided by the bank in different times.

" 28,"

An Evaluation of Human Resource Policies and Practices – A case study of Jamuna Bank Limited

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“An Evaluation of Human Resource Policies and Practices – A case study of Jamuna Bank Limited”

Objective of the Study

There have two types of objective

The main objectives of the study are:

The Secondary objectives of this report are:

Methodology of the Study

Different data and information are required to meet the goal of this report. Those data and information were collected from various sources, such as, primary and secondary which is showed below:

Primary Sources of Data:

Secondary Sources of Data:

Scope of the study

Jamuna Bank Limited is now well growing and it’s containing sixty-six branches in Bangladesh. The scope of the study will be limited to the organizational setup, function and operation of the Jamuna Bank Limited in the Bangladesh. This report mainly encompasses the Human Resource Practices of Jamuna Bank Limited.

Limitations of the Study

During the study, I have faced the following limitations:

· Relevant data and document collection were difficult due to the organization confidentiality.

The Organization

History

Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Chini Shilpa Bhaban, 3, Dilkusha C/A, Dhaka-1000. The Bank started its operation from 3rd June 2001.

The Bank undertakes all types of banking transactions to support the development of trade and commerce of the country. JBL’s services are also available for the entrepreneurs to set up new ventures and BMRE of industrial units. Jamuna Bank Ltd., the only Bengali named new generation private commercial bank was established by a group of winning local entrepreneurs conceiving an idea of creating a model banking institution with different outlook to offer the valued customers, a comprehensive range of financial services and innovative products for sustainable mutual growth and prosperity. The sponsors are reputed personalities in the field of trade, commerce and industries.

The Bank is being managed and operated by a group of highly educated and professional team with diversified experience in finance and banking. The Management of the bank constantly focuses on understanding and anticipating customers’ needs. The scenario of banking business is changing day by day, so the bank’s responsibility is to device strategy and new products to cope with the changing environment. Jamuna Bank Ltd. has already achieved tremendous progress within only eight years. The bank has already ranked as one of top quality service providers & is known for its reputation.

At present the Bank has real-time centralized Online banking branches (Urban & Rural) throughout the Country having smart IT-Backbone. Besides this traditional delivery point, the bank has ATM of its own, sharing with other partner banks & Consortium throughout the Country.

The operation hour of the Bank is 10:00 A.M. To 6:00 P.M. from Sunday to Thursday with transaction hour from 10:00 A.M. to 4:00 P.M. The Bank remains closed on Friday including government holidays

Vision, Mission, Objectives

Vision

To become a leading banking institution and to play a pivotal role in the development of the country

Mission

The Bank is committed to satisfying diverse needs of its customers through an array of products at a competitive price by using appropriate technology and providing timely service so that a sustainable growth, reasonable return and contribution to the development of the country can be ensured with a motivated and professional work-force

Objectives

• To earn and maintain CAMEL Rating ‘Strong’
• To establish relationship banking and improve service quality through development of Strategic Marketing Plans.
• To remain one of the best banks in Bangladesh in terms of profitability and assets quality.
• To introduce fully automated systems through integration of information technology.
• To ensure an adequate rate of return on investment.
• To keep risk position at an acceptable range (including any off balance sheet risk).
• To maintain adequate liquidity to meet maturing obligations and commitments.
• To maintain a healthy growth of business with desired image.
• To maintain adequate control systems and transparency in procedures.
• To develop and retain a quality work-force through an effective human Resources Management System.
• To ensure optimum utilization of all available resources.
• To pursue an effective system of management by ensuring compliance to ethical norms, transparency and accountability at all levels

Functional Areas

A bank plays a vital role for developing economic growth in any country and controlling money circulation. It has a lot of functions in different ways. First we have to know about a bank, that is-

A bank means an institution, which borrows money from the surplus unit of the society and lends money to the deficit units for earning profit. The deposits are mainly accepted by the banker through current account and saving account withdraw able by cheques. Deposits are also accepted by several head of accounts. A bank includes a body of persons, weather incorporated or not, who carry on business on banking. Thus bank is a profit making institution, which deals in money and credit.

The functions of commercial banks are now wide and varied. However the function of commercial banks many broadly be classified under the following two categories:-

  1. Primary Function and
  2. Secondary Function

A. Primary Functions

The primary functions of commercial bank/ Jamuna Bank Limited are as follows.

Accepts Deposits:

The first primary function of bank is to accept deposits of money from the public or serves group. The total deposits held by the banker are broadly classified as-

a) Demand Deposit: Demand deposits are withdrawn able on demand and thus on prior notice is needed. Deposit in Current Accounts fall in this category.

b) Time Deposit: Timedeposits are repayable on the expiry of a fixed period on time only. Fixed Deposit Accounts, recurring Deposit Accounts and deposit payable at specified notice fall in this category.

The bank usually pays interest on all types of deposit accounts except the current accounts.

Lends Money:

Banking business essentially involves lending. In fact the deposits are accepted for

Lending and investment. Depending on the requirements of the borrowers, the bank lends money in the forms following:

a) Loans: In case of loan, the entire amount is paid to the borrower in lump sump, either in case or by way of transfer to his account. The borrower can withdraw the amount at any time. The loan can be repaid either in installments or in lump sump. Interest is calculated and charged on the debit balance usually with quarterly rests. A loan was repaid in full or in part cannot be withdrawn further. Thus, no cheque book is issued against the loan account.

b) Overdraft: Overdraft is usually a temporary agreement where the customer is allowed to allow withdraw money exceeding the credit balance of the current account up to an agreed limit. Unlike loan, withdrawals or deposits can be made any number of time, provided the total amount overdraws does not exceeds the agreed limit. Interest in-charged only for the amount drawn.

c) Cash Credit: A cash credit is an arrangement where the customer is allowed to withdraw money up to the sanctioned limit. Unlike overdraft this is a permanent arrangement and usually used to meet the working capital needs of business house, industries etc. In cash credit account withdrawals and deposits may be affected frequently. Interest is charged on daily balanced and thus the borrower can save interest by reducing the debit balance with his surplus amount. Cash credit arrangement is usually made against pledged or hypothecation of goods but this could also be extended against personal security.

d) Bill Discounted and Purchased: Another mode of advancing money is discounting of the issuance bill of exchange. The banks buy the bill before its maturity at a price less than the face value. The amount, which the bank deducts from the face value of instrument, is actually the interest calculated up to the date of maturity of the bill. On maturity the bank realizes the amount from the drawer of the bill.

Banks sometimes purchase the bills instead of discounting them. This Bills must be is accompanied by documents of title of goods is purchased by the bank. In such cases the bank extends credit in the form of overdraft or cash credit against the security of the bill purchase.

Creates Credit:

The creation of credit is one of the important functions of commercial bank. In the

Ordinary course of business, bank accepts deposit from the public and lends money

to its customers. When a bank extends loan, it does not pay the amount in the bank

Account of the borrower and allow withdrawing the required amount by cheques.

Creates Medium of Exchange:

Commercial banks usually issue cheque, which circulates like money in the society

And thus creates the medium of exchange.

B. Secondary function:

Modern commercial banks like Jamuna Bank Limited, besides performing the primary functions, cover a wide range of financial and non-financial service to meet the growing needs of the time. Some of these services are available only to the customers while others are available to the public in general.

The subsidiary services provided by a modern banker may be classified in the following two groups:

B.1: Agency Services:

In many case the commercial banks act as the agents of the customers. As an agent the bank provides the following services:

B.2: General Utility Services:

Commercial Banks provide a variety of general utility services to the customers.

They are following:

? Issue Letter of Credit (L/C) bank guarantee etc.

? Accepts valuables comment for safe custody.

? Conducts in foreign exchange business.

? Lease financing

? Provides inter-net banking service.

? Provides telex-banking service.

? provides home banking service.

? Provides specialize advisory service.

? Issued debit and credit cards.

? Underwrites shares and securities.

? Factoring.

? Merchants banking.

Basic Activities

Jamuna Bank Limited accepts deposits on the basis of Mudaraba in the following types of accounts, and pays profit, like that of dividend in these accounts, except Alwadia Current Account. Customers’ deposit their fund in the following types of Accounts:

1. Mudaraba Short Notice Deposit Account

2. Mudaraba Savings Account

3. Mudaraba Term Deposit Account

4. Other Deposit Scheme Accounts are following:

? Monthly Saving Scheme.

? Monthly Income Scheme.

? Double Benefit Scheme.

? Triple Benefit Scheme.

? Millionaire Scheme.

? Hajj Scheme.

? Cash waqf Scheme.

? Household Durable Purchase Scheme.

? Housing Investment Scheme.

? Women Entrepreneur Investment Scheme.

? Small Entrepreneur Investment Program.

? Medium Entrepreneur Investment Program.

5. Investments modes:

To provide interest-free Banking Jamuna Bank has adopted the following modes of investment:

Ø Musharaka (equity participation on the basis of sharing profit and loss)

Ø Mudaraba (sharing of profit and loss in business where one of the partners provides expertise and management and other partner provides capital remaining inactive)

Ø Murabaha (buying and selling of commodities goods etc. with profit)

Ø Bai-Muajjal (credit sale with profit)

Ø Ijara (leasing for rent)

Ø Hire purchase or Shirkatul Melk

Ø Bi-Salam (purchasing of agricultural products while in production and providing advance oney to the producers)

Ø Istisna (purchasing of industrial products while in production and providing advance money to the producers).

Ø Quard.

6. Computer services:

Jamuna Bank Limited is computerized and provides the following services some of these services will be introduced soon. Jamuna Bank Limited introduced a few schemes, which are very popular:

Organizational Structure

Board of Directors

It appears like this

There is a board of Directors of 18 members in the bank. The board of Directors is the apex body of the bank.

  1. Al-haj Md. Rezaul Karim Ansari, Chairman
  2. Gazi Golam Murtoza, Vice Chairman
  3. Al-haj M. A. Khayer
  4. Engr. A. K. M. Mosharraf Hussain
  5. Engr. Md. Atiqur Rahman
  6. Golam DastagirGazi (Bir Protik)
  7. Fazlur Rahman
  8. Al-Haj Nur Mohammed
  9. Md. Tajul Islam
  10. Sakhawat, Abu Khair Mohammad
  11. Md. Belal Hossain
  12. Md. Mahmudul Hoque
  13. Md. Sirajul Islam Varosha
  14. Farhad Ahmed Akand
  15. Kanutosh Majumder
  16. Shaheen Mahmud
  17. Md. Ismail Hossain Siraji
  18. A. S. M. Abdul Halim Independent Director
  19. Md.Motior Rahman Managing Director

Various Committees

Board of Audit Committees

The board of directors also decided the composition of each committee and determines the responsibilities of the committee.

Policy Committee

Al matters relating to the principles, rules and regulation, ethics etc. for operation and management of the bank are recommended by the committee to the board of directors.

Executive Committees

All routine matters beyond delegated powers of management are decided upon by or routed through Executive Committee, subject to ratification by the board of directors.

The Board of Directors has an extension as follows-

All routine matters beyond delegated powers of Management are decided upon by or routed through the Executive Committee, subject to ratification by the Board of Directors. The Executive Committee consist of 7 (seven) members of the Board of Directors and the Managing Director. The Chairman of this Committee is being selected by rotation.

Chairman

Al-Haj Nur Mohammed

Board Audit Committee

This Committee consists of 4 members:

  1. Md. Tajul Islam, Chairman
  2. Engr. Md. Atiqur Rahman, Co-Chairman
  3. A.S.M. AbdulHalim,Independent Director

4. Malik Muntasir Reza,Company Secretary

An- Overview:

Introduction

Human resource management (HRM) is a relatively modern label for the range of themes and practices involved in managing people. It is defined and described in a variety of (sometimes contradictory) ways.

Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers.

Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

Human resource (or personnel) management, in the sense of getting things has done through people. It’s an essential part of every manager’s responsibilities, but many organizations find it advantageous to establish a specialist division to provide an expert service dedicated to ensuring that the human resource function is performed efficiently. “People are our most valuable asset” is a cliché which no member of any senior management team would disagree with. Yet, the reality for many organizations is that their people remain

The rate of change facing organizations has never been greater and organizations must absorb and manage change at a much faster rate than in the past. In order to implement a successful business strategy to face this challenge, organizations, large or small, must ensure that they have the right people capable of delivering the strategy.

The market place for talented, skilled people is competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes time to develop ‘cultural awareness’, product/process/organization knowledge and experience for new staff members.

As organizations vary in size, aims, functions, complexity, construction, the physical nature of their product, and appeal as employers, so do the contributions of human resource management. But, in most the ultimate aim of the function is to: “ensure that at all times the business is correctly staffed by the right number of people with the skills relevant to the business needs”, that is, neither overstaffed nor understaffed in total or in respect of any one discipline or work grade.

Functional Areas of HRM

Human Resource Management functions may be briefly described as:

1. Manpower Planning: The HR considers the actual requirement of the staff for the organization. Because the overstaffing is wasteful and expensive, and understaffing leads to loses of the organization economics and profits.

2. Employee selection: Selection of employees for the suitable job.

3. Employees motivating: Motivating employees and encourage them to give their best in work productivity.

4. Employees relation: Keeping a healthy relationship with the employees and their problems are redressed.

5. Payroll module: Payment of salaries and wages to the workers at the proper time.

Some functional areas of HRM are given below:

Employee Motivation:

To retain good staff and to encourage them to give of their best while at work requires attention to the financial and psychological and even physiological rewards offered by the organization as a continuous exercise.

Basic financial rewards and conditions of service (e.g. working hours per week) are determined externally (by national bargaining or government minimum wage legislation) in many occupations but as much as 50 per cent of the gross pay of manual workers is often the result of local negotiations and details (e.g. which particular hours shall be worked) of conditions of service are often more important than the basics. Hence there is scope for financial and other motivations to be used at local levels.

As staffing needs will be vary with the productivity of the workforce (and the industrial peace achieved) so good personnel policies are desirable. The latter can depend upon other factors (like environment, welfare, employee benefits, etc.) but unless the wage packet is accepted as ‘fair and just’ there will be no motivation.

Employee evaluation:

An organization needs constantly to take stock of its workforce and to assess its performance in existing jobs for three reasons:

Training and Development:

In general, education is ‘mind preparation’ and is carried out remote from the actual work area, training is the systematic development of the attitude, knowledge, skill pattern required by a person to perform a given task or job adequately and development is ‘the growth of the individual in terms of ability, understanding and awareness’.

Within an organization all three are necessary in order to:

From time to time meet special needs arising from technical, legislative, and knowledge need changes. Meeting these needs is achieved via the ‘training loop’.

Recruitment and Selection of Employees:

Recruitment of staff should be preceded by:

An analysis of the job to be done (i.e. an analytical study of the tasks to be performed to determine their essential factors) written into a job description so that the selectors know what physical and mental characteristics applicants must possess, what qualities and attitudes are desirable and what characteristics are a decided disadvantage;

Compensation and Benefit:

Compensation (payment in the form of hourly wages or annual salaries) and benefits (insurance, pensions, vacation, modified sick days, stock options, etc.) can be a catch-22 because an employee’s performance can be influenced by compensation and benefits, and vice versa. In the ideal situation, employees feel they are paid what they are worth, are rewarded with sufficient benefits, and receive some satisfaction (good work environment, interesting work, etc.). Compensation should be legal and ethical, adequate, motivating, fair and cost-effective, and able to provide employment security.

Performance appraisal:

One way to assess performance is through a formal review on a periodic basis, generally annually, known as a performance appraisal or performance evaluation. Because line managers are in daily contact with the employees and can best measure performance, they are usually the ones who conduct the appraisals. Other evaluators of the employee’s performance can include subordinates, peers, group, and self, or a combination of one or more.

Just as there can be different performance evaluators, depending on the job, several appraisal systems can be used. Some of the popular appraisal methods include (1) ranking of all employees in a group; (2) using rating scales to define above-average, average, and below-average performance; (3) recording favorable and performance, known as critical incidents; and (4) managing by objectives.

Industrial Relation:

Good industrial relations, while a recognizable and legitimate objective for an organization, are difficult to define since a good system of industrial relations involves complex relationships between:

(a) Workers (and their informal and formal groups, i.e. trade union, organizations and their representatives);

(b) Employers (and their managers and formal organizations like trade and professional associations);

(c) The government and legislation and government agencies l and ‘independent’ agencies like the Advisory Conciliation and Arbitration Service.

Importance of HRM

Organizational Psychology holds that successful organizations do not owe their success solely to market realities and sustainable competitive advantages. Actually, there is a lot more. Successful companies are those that consider their human capital as their most important asset. Facts and figures are the quantitative elements of successful management, yet the qualitative, i.e. the cognitive aspects, are those that actually make or break an organization.

Human Resources Management (HRM) is the strategic management of the employees, who individually and collectively contribute to the achievement of the strategic objectives of the organization. Assuming that the employees of an organization are individuals with own mental maps and perceptions, own goals and own personalities and as such they cannot be perceived as a whole, HRM holds that the organization should be able to employ both individual and group psychology in order to commit employees to the achievement of organizational goals.

Aiming to enable the organization to achieve its strategic goals by attracting, retaining and developing employees, HRM functions as the link between the organization and the employees. A company should first become aware of the needs of its employees, and at a later stage, understand and evaluate these needs in order to make its employees perceive their job as a part of their personal life, and not as a routine obligation. To that end, HRM is very crucial for the whole function of an organization because it assists the organization to create loyal employees, who are ready to offer their best.

The HRM activities in modern organizations are typically performed in communication with the General Management in an effort to provide a variety of views when a decision must be taken. In that way, decision making is not subject to the individual perceptions of the HR or the General Manager, but it becomes the outcome of strategic consensus.

The main goals / responsibilities of HRM are:

• To retain low employee turnover rate by inspiring people to work for the company

• To attract new employees

• To contribute to employee development

To achieve these goals, Human Resources Management trains and motivates the employees by communicating ethical policies and socially responsible behavior to them. In doing so, it plays a significant role in clarifying the organization’s problems and providing solutions, while making employees working more efficiently.

On the other hand, challenges do not cease for the HRM. Modern organizations can survive in the dynamic, competitive environment of today only if they capitalize on the full potential of each employee. Unfortunately, many companies have not understood the importance of the human capital in successful operations. The recruitment and selection of the best employees is a very difficult obligation. Even companies that are voted in the top-ten places to work at, often endure long periods of hard work to realize that human element is all an organization should care about.

New challenges arise even now for the organization, and it is certain that new challenges will never cease to emerge. Therefore, the use of proper Human Resources techniques is a really powerful way for organizations to overcome these challenges, and to improve not only their quantitative goals but also their organizational culture, and their qualitative, cognitive aspects.

HRM is the legal liaison between the organization and the employees, they are to uphold the employment and safety laws (civil rights act) as well as follow the practices, which may differ within federal guidelines that the employer authorizes.

A large part of this growth is the Human Resources department of these companies, who are responsible for hiring the people with the knowledge to bring new technology into a company. To be successful in the automotive market, these companies needs a highly skilled, flexible and committed work force, a flexible and innovative management, the ability to retain developed talent, and a strong partnership between management and labor unions.

The backbone of any successful company is the HR department, and without a talented group of people to hire, culture, and inform employees, the company is doomed for failure.

Challenges of HRM

The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources.

With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organization. In order to succeed, HR must be a business driven function with a thorough understanding of the organization’s big picture and be able to influence key decisions and policies. In general, the focus of today’s HR Manager is on strategic personnel retention and talents development. HR professionals will be coaches, counselors, mentors, and succession planners to help motivate organization’s members and their loyalty. The HR manager will also promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the management of workplace diversity.

This topic will highlight on how a HR manager can meet the challenges of workplace diversity, how to motivate employees through gain-sharing and executive information system through proper planning, organizing, leading and controlling their human resources.

The Challenges of Workplace Diversity:

The future success of any organizations relies on the ability to manage a diverse body of talent that can bring innovative ideas, perspectives and views to their work. The challenge and problems faced of workplace diversity can be turned into a strategic organizational asset if an organization is able to capitalize on this melting pot of diverse talents. With the mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization can respond to business opportunities more rapidly and creatively, especially in the global arena (Cox, 1993), which must be one of the important organizational goals to be attained. More importantly, if the organizational environment does not support diversity broadly, one risks losing talent to competitors.

This is especially true for multinational companies (MNCs) who have operations on a global scale and employ people of different countries, ethical and cultural backgrounds. Thus, a HR manager needs to be mindful and may employ a Think Global, Act Local’ approach in most circumstances. With a population of only four million people and the nation’s strive towards high technology and knowledge-based economy; foreign talents are lured to share their expertise in these areas. Thus, many local HR managers have to undergo cultural-based Human Resource Management training to further their abilities to motivate a group of professional that are highly qualified but culturally diverse. Furthermore, the HR professional must assure the local professionals that these foreign talents are not a threat to their career advancement. In many ways, the effectiveness of workplace diversity management is dependent on the skilful balancing act of the HR manager.

Control and Measure Results:

A HR Manager must conduct regular organizational assessments on issues like pay, benefits, work environment, management and promotional opportunities to assess the progress over the long term. There is also a need to develop appropriate measuring tools to measure the impact of diversity initiatives at the organization through organization-wide feedback surveys and other methods. Without proper control and evaluation, some of these diversity initiatives may just fizzle out, without resolving any real problems that may surface due to workplace diversity.

Motivational Approaches:

Workplace motivation can be defined as the influence that makes us do things to achieve organizational goals: this is a result of our individual needs being satisfied (or met) so that we are motivated to complete organizational tasks effectively. As these needs vary from person to person, an organization must be able to utilize different motivational tools to encourage their employees to put in the required effort and increase productivity for the company.

Executive Information Systems:

Executive Information System (EIS) is the most common term used for the unified collections of computer hardware and software that track the essential data of a business’ daily performance and present it to managers as an aid to their planning and decision-making. With an EIS in place, a company can track inventory, sales, and receivables, compare today’s data with historical patterns. In addition, an EIS will aid in spotting significant variations from “normal” trends almost as soon as it develops, giving the company the maximum amount of time to make decisions and implement required changes to put your business back on the right track. This would enable EIS to be a useful tool in an organization’s strategic planning, as well as day-to-day management.

HRM Theory & Model

Developing HRM Plan

A broad spectrum of theories from different disciplines is portrayed in contemporary A broad spectrum of theories from different disciplines is portrayed in contemporary HRM (as a discipline of business administration). Theories from psychology, sociology and economics correspond to the variety of problems addressed in HRM which are again situated at different levels of analysis, namely on the individual, group and organizational level. This article introduces basic elements of the modern “rational choice” approach: the macro-micro-macro model of explanation, homo socio-economic as a model of man and exchange theory as a baseline model of aggregation. A final summary discusses research questions and applications of “rational choice” in HRM.

The HRM Plan is built upon an understanding of the department’s vision, mission, values, and strategic programs and challenges. Developing the HRM Plan this way links the HRM programs to business plans and helps priorities HRM programs according to business priorities

Model for Developing the HRM Plan

HRM- Two Model

The concept of Human Resource Management developed with a more strategic level of thinking about the nature and role of people (as total 24hr per day human beings) working in organizations which are ‘cultures’ in their own right. Recent thinking has moved from the control-based model to the compliance model.

The soft edge of the latter involves eliciting employee commitment and expecting effectiveness and efficiency to follow.

The hard edge of the latter involves ridding the organization of unnecessary layers of middle management which, when stripped of control functions, have very little by way of value added.

The management task is to cause the people to be as creative and productive as possible.

Policy Area Control-Based HRM Commitment-based HRM
Job Design Principles Sub-division of work; specific job responsibility – with accountability ; planning separate from implementation Broader jobs; combined planning and implementation; teams
Management Organization Top-down control and coordination; hierarchy; status symbols. Flat structure; shared goals for coordination and control; status minimized
Compensation Fair day’s pay for a fair day’s work; job evaluation and appraisal; individual incentives. Reinforcing group achievement; pays geared to skill and other contribution criteria; profit sharing
Employee Voice Unionized (damage control, bargaining); Non unionized (attitude surveys) Mutual mechanism for communications and participation; mechanisms for giving employee voice on issues
Labor Management Relations Adversarial Mutuality; joint problem-solving and planning
Management Philosophy The boss dictates; management obligated to stakeholders Fulfillments of employee’s needs is a goal rather than an end

Traditional HRM model

Customer Satisfaction Model

The customer satisfaction model from N. Kano is a quality management and marketing technique that can be used for measuring client happiness.

Kano’s model of customer satisfaction distinguishes six categories of quality attributes, from which the first three actually influence customer satisfaction:

  1. Basic Factors: (Dissatisfies. Must have.) – The minimum requirements which will cause dissatisfaction if they are not fulfilled but do not cause customer satisfaction if they are fulfilled (or are exceeded). The customer regards these as prerequisites and takes these for granted. Basic factors establish a market entry ‘threshold’.
  1. Excitement Factors: (Satisfiers. Attractive.) – The factors that increase customer satisfaction if delivered but do not cause dissatisfaction if they are not delivered. These factors surprise the customer and generate ‘delight’. Using these factors, a company can really distinguish itself from its competitors in a positive way.
  1. Performance Factors: The factors that cause satisfaction if the performance is high, and they cause dissatisfaction if the performance is low. Here, the attribute performance-overall satisfaction is linear and symmetric. Typically these factors are directly connected to customers’ explicit needs and desires and a company should try to be competitive here.

The additional three attributes which Kano mentions are:

  1. Indifferent Attributes: The customer does not care about this feature.
  1. Questionable Attributes: It is unclear whether this attribute is expected by the customer.
  1. Reverse Attributes: The reverse of this product feature was expected by the customer.

Employment & Employees

Human Resource Planning

Meaning

Human resource planning is the process of determining an organization’s human resource need. Human Resource Planning is one of the most important elements in a successful human resource management program, because it is a process by which an organization ensures that it has the right number and kinds of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall strategic objectives.

Rigorous HR planning links people management to the organization’s mission, vision, goals and objectives, as well as its strategic plan and budgetary resources. A key goal of HR planning is to get the right number of people with the right skills, experience and competencies in the right jobs at the right time at the right cost.

Human Resource planning is the processes by which management ensures that it has the right personnel, who are capable of completing those tasks that help the organization, reach its objectives.

Job Analysis

A job analysis is a systematic exploration of the activities within a job. It is a technical procedure used to define a jobs duties, responsibilities, and accountabilities. Job analysis provides information about jobs currently being done and the knowledge, skills, and abilities that individuals need to perform the jobs adequately.

The job analysis may include these activities:

Job Analysis Method

The basic method by which HRM can determine job elements and the essential knowledge, skills and abilities for successful performance include the following:

  1. Observation Method: Observation method is a job analysis technique in which data are gathered by watching employee works.
  1. Individual Interview Method: The individual interview method assembles a team of job incumbents for extensive individual interviews.
  1. Group Interview Method: Group interview method is meeting with a number of employees to collectively determine what their jobs entail.
  1. Structured Questionnaire Method: Structured questionnaire method is a specially designed questionnaire on which employees’ rate tasks they perform in their jobs.
  1. Diary Method: Diary method is a job analysis method requiring job incumbents to record their daily activities.
  1. Technical Conference Method: Technical conference method is a job analysis technique that involves extensive input from the employee’s supervisor.

HR Demand

The demand step is done both for the short and longer -term strategic horizons. Thus this step in the HRP framework potentially requires one to do a bit of forecasting, as demand is a future orientated concept (even if it’s for the immediate future). We therefore look at several methods of forecasting demand.

One of the interesting things about demand for labor is that it is a derived demand. In other words, the demand for labor is dependent on more primary demands. We have already seen how strategy creates demand for a certain level of labor. More specifically, business strategy leads to consumers demanding the organization’s products, and a greater internal demand for capacity. It is from this and other ‘primary’ demands that the demand for labor is derived. Thus the demand for labor is a secondary, dependant (derived) demand.

HR Supply

There are three steps in assessing supply capability,

1. Assess what HR capabilities currently exist in the organization to fulfill needs

2. In light of this, assess how adequately the current workforce supplies needs (is there a shortage or surplus of the right kind of staff based on forecasted demand?)

  1. Therefore, assess what changes need to be made to perfect the HR supply (strategic staffing goals and plans – do we hire / downsize / relocate / etc.)

The step looks at current people & skills. There are several (hopefully) readily available information sources within the organization that make it possible to do this. These include:

Organizational Supply Capabilities

o Skills inventory: (a register of current HR capabilities, incorporating information on each employees’ skills, demographics, and test scores etc.)

o Management inventory: (similar to skills inventory, but tailored to management, often including subjective assessments of ability etc.)

Assessing Adequacy of Current Staff

Once one has be assessed the current or future workforce capabilities, one need to assess those capabilities against demand. There are three possibilities in each case:

Ø Too few people / skills (shortage – we need to add)

Ø Too many people / skills (surplus – need to remove employees from this sector)

Ø Need to reduce some staff & hire others (it is even possible that the number of people will remain the same in this case, but the type / quality will have changed).

The third option normally involves skills (not numerical) deficiencies, where current staff lack necessary skills and cannot be trained, necessitating replacing them with adequately skilled staff for the situation. There are however potential legal problems in this regard, which should be understood and managed (see second block work).

Strategic Staffing Goals & Plans

The comparison of demand and internal supply data will lead to quantifiable objectives for strategic staffing (i.e. ‘we need to add XYZ number of so-and-so quality to our TYU division / job level’ or ‘we need to remove ABC number of staff from FGH department’). Whoever is fulfilling the HRP process will need to fulfill these objectives through choice of methods.

Recruitment

Meaning

According to Edwin B. Flippo, “Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organization”. Recruitment is the activity that links the employers and the job seekers. A few definitions of recruitment are:

Recruitment Method

A manager can recruit in two different ways:

Internal recruitment is when the business looks to fill the vacancy from within its existing workforce.

External recruitment is when the business looks to fill the vacancy from any suitable applicant outside the business.

Sources of Recruitment

i

The four most popular ways of recruiting externally are:

  1. Job centers: These are paid for by the government and are responsible for helping the unemployed find jobs or get training. They also provide a service for businesses needing to advertise a vacancy and are generally free to use.
  1. Job advertisements: Advertisements are the most common form of external recruitment. They can be found in many places (local and national newspapers, notice boards, recruitment fairs) and should include some important information relating to the job (job title, pay package, location, job description, how to apply-either by CV or application form). Where a business chooses to advertise will depend on the cost of advertising and the coverage needed (i.e. how far away people will consider applying for the job
  1. Recruitment agency: Provides employers with details of suitable candidates for a vacancy and can sometimes be referred to as ‘head-hunters’. They work for a fee and often specialize in particular employment areas e.g. nursing, financial services, teacher recruitment
  1. Personal recommendation: Often referred to as ‘word of mouth’ and can be a recommendation from a colleague at work. A full assessment of the candidate is still needed however but potentially it saves on advertising cost.

Internal sources:

  1. Transfers: The employees are transferred from one department to another according to their efficiency and experience.
  1. Promotions: The employees are promoted from one department to another with more benefits and greater responsibility based on efficiency and experience.
  1. Others are Upgrading and Demotion of present employees according to their performance.
  1. Retired and Retrenched employees may also be recruited once again in case of shortage of qualified personnel or increase in load of work. Recruitment such people save time and costs of the organizations as the people are already aware of the organizational culture and the policies and procedures.
  1. The dependents and relatives of Deceased employees and Disabled employees are also done by many companies so that the members of the family do not become dependent on the mercy of others.

Advantages and Disadvantages

Advantages and Disadvantages are given below:

Advantages Disadvantages
Internal Recruitment
  • Cheaper and quicker to recruit.
  • People already familiar with the business and how it operates.
  • Provides opportunities for promotion with in the business – can be motivating.
  • Business already knows the strengths and weaknesses of candidates
  • Limits the number of potential applicants.
  • No new ideas can be introduced from outside the business.
  • May cause resentment amongst candidates not appointed.
  • Creates another vacancy which needs to be filled
External Recruitment o Outside people bring in new ideaso Larger pool of workers from which to find the best candidateo People have a wider range of experience O Longer processO More expensiv

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AN OVERVIEW OF THE PERFORMANCE OF A CHARTERED ACCOUNTANT FIRM – A CASE STUDY ON A. MATIN & CO

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An Overview of the performance of a Chartered Accountant firm – a case study on A. Matin & Co.

INTRODUCTION
Chartered Accountants in Bangladesh
The Institute of Chartered Accountants of Bangladesh (ICAB) is the National Professional Accounting Body of Bangladesh established under the Bangladesh Chartered Accountants Order 1973 (Presidential Order No. 2 of 1973).
To meet the ever-changing global economic demands dominated by WTO regime, the ICAB is fast becoming a body of professionals whose expert services will be highly sought after-

To anticipate, meet and exceed the rising expectations of the society.
To better use of opportunities to face the challenges of fiercer global competition.
To recognize the changes in economy/ business and recognize the path to success by adopting changes in knowledge management and acquiring skills.
To recognize its role as a regulatory body to equip its members (Chartered Accountants) with top-quality education and values.
To recognize the needs known as world Class Advisors.

The mission of ICAB is to provide leadership in the development, enhancement and coordination of the Accountancy Profession in Bangladesh in order to enable the profession to provide services of consistently high quality in the public interest.
As on 01 July 2010, the Institute had 1013 members (including 32 females) of whom 865 were resident in Bangladesh and 148 were resident abroad. Associate and Fellow memberships are offered by the Institute. Persons passing the qualifying Final Examination of the Institute are offered Associate ship (ACA) while fellowship (FCA) is offered to members having at least five years post-associate ship experience and fulfilling relevant other requirements. Out of 1013 members, 315 are practicing as public accountants and the rest 698 are serving in various key positions in public and private organizations-both at home and abroad. As on the same date, there were 3926 articled students (including 327 females).

Introduction of A. Matin &Co.

Mr. A K Abdul Matin:
Mr. A K Abdul Mation was the founder of A. Mation & Co in 91 kakrail (3rd floor) Dhaka-1000. He had completed her FCA in 1989. The firm was established 20 years back in 1991. He had fulfillment of all the requirements of ICBA for foundation of a firm. This firm maintains by him. It has 29 articled student & 26 office staff. The firm maintains a ‘state of the art’ logistics support fully equipped with world’s most advanced technologies. It has a full-fledged computer sector with a well-trained staff, which ensured quicker service. The firm also uses the most advanced communication technology to ensure faster correspondence and feedback.

Matin &Co.
A.Matin & co. (Chartered Accountants) is a firm of Chartered Accountants registered with the Institute of Chartered Accountants of Bangladesh and is on the panel of auditors of Securities and Exchange Commission of Bangladesh, the central Board of Revenue, the Stock Exchange.
The general practice & style of work attracts entrepreneurs from many walks of life who feel that they will benefit from a close working relationship with A. Matin &Co. firm. It is easy to understand that different economic needs are required to be financially successful for individuals and business in today’s ever-increasing economic environment. A.Matin & co. have ability to work in Bangladesh.

A.Matin & co. will help you to their level best with you independent financial needs and requirements. With their friendly and well trained staff that has many years of experience in dealing with a variety of types of business, they will be able to guide you in the best manner, with their help and professional experience; your finance will be worry of the past.

Establishment of Firm
The firm was established 20 years back in 1991. The major source of our growth is through referrals by our satisfied clients, banks, Government department and other professionals.
The firm was originally established by A K Abdul Matin (FCA), Senior Partner of the firm.
Background

The internship Program of BBA student of the Department of Business Administration, International Islamic University Chittagong (DC),is an integral part of BBA program. Four ( 4) credit hours for this internship program out of 131 credit hours of the program. The program is of three months duration. I was assigned to A.Matin & Co. (Chartered Accountants).To compete with the supervisor of the program I have selected a topic An Overview of the performance of a Chartered Accountant firm- a case of A. Matin & Co.

Origin of the report
The report entitled An Overview of the performance of a Chartered Accountants firm a case of A. Matin & Co. has been prepared as a partial fulfillment of BBA program authorized by the Department of Business Administration, International Islamic University Chittagong (DC),

Scope of the Report

I audited different types of company through this CA firm. I had scope to learn about the group’s activities while I came into contact with different departments. I had opportunity to inform about the Audited Company’s performance and financial condition.
My internship topic is “An Overview of the performance of a Chartered Accountant firm- a case of A. Matin & Co.”. CA firm evaluate and verify all the financial and non-financial activity of its client company and give them valuation report after the end of evaluation for the fairness of the company which is most important document for a company. I was worked with this Audit group and perform my job according to the rule.

Objectives of the study
The first objective of writing the report is fulfilling the partial requirements of the BBA program. In this report, I have attempted to give on overview of A. Matin &Co. chartered accountant in general. Following are the main objectives
To become familiar with the history and operations of A. Matin & Co. in Bangladesh.
To go though the educational background of the owner A K Abdul Matin.
To go all the financial and non-financial activity of its client company and give them valuation report after the end of evaluation for the fairness of the company which is most important document for a company.
To identify the Major mistake of its client accounts.
To find out how to encourage of its clients for better performance for their business.
To understand the audit process of A. Matin & Co. for different firms.
To check the categories of audit fees for different firm.
To find out why need audit is important of different company.

Methodology of the study
I prepared this report in 3 segments. In my first part I explained about the 1st part Audit and 2nd Auditors and 3rd part I focused on the “Determination Audit fees of”. I had to collect data for analyzing Audit fees. I had to rely on Audit Report of the client company’s for regression analysis. Secondly, I talked with officials to know about the Audit fees system.

I have used both primary and secondary data to collect the information. But to collect the information I mainly used secondary data. The methodology of this report is very different from conventional reports. I have emphasized on the practical observation to write this report and have to collect some primary data. Nevertheless, eventually almost the entire report consists of my practical observation. While preparing the report, I have taken information from the following sources:

Primary Sources:
Primary data were collected by the casual interviews from senior officer of the firm.
Personal investigation with clients of the firm.

Secondary Sources:
Secondary information was collected from The Institute of Chartered Accountants of Bangladesh (ICAB), various books, journals, manuals, and also from the web sites.
Various publications on banking operation,
Website of The Institute of Chartered Accountants of Bangladesh (ICAB).
Website of A. Matin & Co.
Annual Report of the A. Matin & Co.

Limitations of the study
There are some limitations in our study. I faced some problems during the study which I am mentioning them as below-
Lack of time:
The time period of this study is very short. I had only 8 weeks in my hand to complete this report, which was not enough. So I could not go in depth of the study. Most of the times the officials were busy and were not able to give us much time.
Insufficient data:
Some desired information could not be collected due to confidentiality of business.
Lack of monitory support:
Few officers sometime felt disturbed, as they were busy in their job. Sometime they didn’t want to supervise us out of their official work.
Iv) Other limitation:
As we are newcomer, there is a lack of previous experience in this concern. And many practical matters have been written from our own observation that may vary from person to person.

Audit
Audits are performed to ascertain the validity and reliability of information; also to provide an assessment of a system’s internal control. The goal of an audit is to express an opinion on the person / organization /system (etc.) in question, under evaluation based on work done on a test basis.
Due to practical constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits. In the case of financial audits, a set of financial statements are said to be true and fair when they are free of material misstatements – a concept influenced by both quantitative (numerical) and qualitative factors.
Auditing is a vital part of accounting. Traditionally, audits were mainly associated with gaining information about financial systems and the financial records of a company or a business (see financial audit). However, recent auditing has begun to include non-financial subject areas, such as safety, security, information systems performance, and environmental concerns. With nonprofit organizations and government agencies, there has been an increasing need for performance audits, examining their success in satisfying mission objectives. As a result, there are now audit professionals who specialize in security audits, information systems audits, and environmental audits.

In financial accounting, an audit is an independent assessment of the fairness by which a company’s financial statements are presented by its management. It is performed by competent, independent and objective person(s) known as auditors or accountants, who then issue an auditor’s report based on the results of the audit.
In cost accounting, it is a process for verifying the cost of manufacturing or producing of any article, on the basis of accounts measuring the use of material, labor or other items of cost. In simple words the term, cost audit, means a systematic and accurate verification of the cost accounts and records, and checking for adherence to the cost accounting objectives. According to the Institute of Cost and Management Accountants of Bangladesh, a cost audit is “an examination of cost accounting records and verification of facts to ascertain that the cost of the product has been arrived at, in accordance with principles of cost accounting.”

Types of auditors

Auditors of financial statements can be classified into two categories:

External auditor / Statutory auditor :

External auditor / Statutory auditor is an independent Public accounting firm engaged by the client subject to the audit, to express an opinion on whether the company’s financial statements are free of material misstatements, whether due to fraud or error.
For publicly-traded companies, external auditors may also be required to express an opinion over the effectiveness of internal controls over financial reporting. External auditors may also be engaged to perform other agreed-upon procedures, related or unrelated to financial statements. Most importantly, external auditors, though engaged and paid by the company being audited, are regarded as independent auditors.
The most used external audit standards are the US GAAS of the American Institute of Certified Public Accountants; and the ISA International Standards on Auditing developed by the International Auditing and Assurance Standards Board of the International Federation of Accountants.

Internal auditor:
Internal auditors are employed by the organization they audit. They perform various audit procedures, primarily related to procedures over the effectiveness of the company’s internal controls over financial reporting. Due to the requirement of Section 404 of the Sarbanes Oxley Act of 2002 for management to also assess the effectiveness of their internal controls over financial reporting (as also required of the external auditor), internal auditors are utilized to make this assessment. Though internal auditors are not considered independent of the company they perform audit procedures for, internal auditors of publicly-traded companies are required to report directly to the board of directors, or a sub-committee of the board of directors, and not to management, so to reduce the risk that internal auditors will be pressured to produce favorable assessments.
The most used Internal Audit standards are those of the Institute of Internal Auditors.

Objectives and advantages of Audit:
The objectives of an audit may broadly be classified as:

Primary Objectives & Secondary objectives.
Primary Objectives:
The main purpose of audit is to judge the reliability of the financial statements and the supporting accounting records for a particular financial period. The Companies Act, 1956 requires that the auditor of a company has to state whether in his opinion the accounts disclose a true and fair view of the state of company’s affairs, profit and Loss Account and Balance Sheet of the state of affairs of a business, the auditor carries out a process of examination and verification of books of accounts and relevant documents. Such an examination will enable the auditor to report to his client on the financial condition and working results of the organization. While carrying out the examination of the various books of accounts, relevant documents and evidences, the auditor may came across certain errors and frauds. Despite such a possibility the detecting of errors and frauds is an incidental object. However, laymen have always associated the detection of errors and frauds as the main function of an auditor which is not true. At the same time audit also discloses how far the accounting system adopted in the organization is adequate and appropriate in recording the various transactions as well as the weakness of these systems.

Secondary Objectives:
As stated above, an auditor has to examine the books of accounts and the relevant documents in order to report on the financial condition of the business. In the process of such an investigation of accounts certain errors and frauds may be detected. These are discussed under the following two heads:
Detection and Prevention of Errors
Detection and Prevention of Frauds
Detection and prevention of Errors: Various types of errors are mentioned below:

Clerical Errors:
Such an error arises on account of wrong posting. For example, an amount received from Thomas is credited to Sunny. Though there is wrong posting still the trial balance will agree. Clerical errors are of three types as follows:
Errors of Commission:
There errors are caused due to wrong posting either wholly or partially of the Amount in the books of original entry or ledger accounts or wrong calculations, wrong totaling, wrong balancing, and wrong casting of subsidiary books. For example Rs. 500 is paid to a vendor and the same is recorded in the cash book. While posting to the ledger, the Vendor’s account is debited by Rs. 500. It may be due to carelessness of the clerk. Most of the errors of commission are reflected in the trial balance and these can be discovered by routine checking of the books.

ii) Errors of Omission:
Such errors arise when the transactions are not recorded in the books of original entry or posted to the ledger. For example, sales are note recorded in the sales book or omission to enter invoices in the purchase book. For example Rs. 200 is paid to a vendor. The entry in the cash book is made on the credit side but posting to the vendor side is omitted. Errors due to entire omission will not affect the trial balance whereas errors due to partial omission will affect the trial balance and can be detected.
Compensating Errors:
When two or more errors are committed in such a way that the result of these errors on the debits and credits is nil, they are referred to as a compensating errors. For example, Anil’s account which was to be debited for Rs. 500 was credited for Rs. 500 and similarly, Sunil’s account which was to be credited for Rs. 500 was debited for Rs.500. These two mistakes will nullify the effect of each other. Both the sides of the trial balance are equally affected. As such, these errors are difficult to locate unless detailed investigation is undertaken.
Errors of Principle:
Such errors are committed when some fundamental principle of accounting is not properly observed in recording transaction. For example, if there is incorrect allocation of expenditure or receipt between capital and revenue or when closing stock is over-valued. Though trial balance will not disagree, the Profit and Loss Account may be very much affected. Sometimes, such errors are committed deliberately to falsify the accounts or unintentionally due to lack of knowledge or sound principles of accounting. Thus, a thorough examination is to be done to locate such errors.

Detection and Prevention of Frauds:
Frauds are always committed deliberately and intentionally to defraud the proprietors of the organization. If the frauds remain undetected, they may affect the opinion of the auditor on the financial condition and the working results of the organization. It is, therefore, necessary that the auditor should exercise utmost care to detect such frauds.

Audit in Bangladesh
The Companies Act 1994 makes it compulsory for every company to have its accounts audited by qualified auditors. The desirability of this provision can be based on the fact that shareholders who contribute the capital of the company leave its management and control in the hands of directors. Auditors are there to safeguard the interest of shareholders.

The qualified chartered accountants from the Institute of Chartered Accountants of Bangladesh (ICAB) are eligible for auditing practices after getting sufficient experience in this field through a firm established through the approval of ICAB.
Chronological incidents of Company Audit (ICAB, 1999) reveal the following sequential incidents towards auditing standards and practice in Bangladesh over the years:

1850: Indian Joint Stock Companies Act (enacted in UK as the 1844 Act)
All incorporated companies required to have their annual financial statements audited. The Act did not require that the auditor be independent or be a professional accountant. The audit report was to state whether the balance sheet gave a full and fair view of its state of affairs.

1859:Nichols Case: The judgment stated that it was par t of the auditors duty to discover fraudulent misrepresentation. This was the start of fraud and error detection as the main audit objective for the next 80 years or so.
1896: Re. Kingston Cotton Mill: The judge remarked that the auditor was a watchdog not a bloodhound, and that what was required of him was the exercise of what was regarded at the time as reasonable skill and care in the circumstances.
1913: Companies Act (India): Every company required to have its accounting books and records audited. A report had to be made on the balance sheet and profit and loss account. Auditors had to be professionally qualified.
1932: Auditors Certificate Rule: A comprehensive set of rules governing the regulation and training for the auditors.
Amendments to 1913 Act: Increasing awareness took place about the importance of financial information to investors.
1947: Partition adopted by Pakistan.
1950: Auditors Certificate Rules 1950: These replaced the 1932 rules. Under these rules persons who fulfilled specified conditions in r elation to practical and theoretical training could have their names entered in the register and use the designation Registered Accountant´. Only a registered accountant could be appointed auditor of a public limited company.
1961:Institute of Chartered Accountants of Pakistan (ICAP): ICAP was formed from registered accountants. Government created department of accountancy.
1973:Formation of ICAB: Bangladesh liberated in 1971 creating a major problem because of the lack of an institute. In 1972 Institute of Chartered Accountants of Bangladesh formed under Bangladesh Chartered Accountants Order 1973 (P.O. No. 2 of 1973).
1973:Onwards: Bangladesh had been participating in the creation of International Accounting and Auditing Standards. Increasing awareness of the role of accounting and auditing was been going on.

Control, Corporate Governance and Audit:

The term control is used at a wide range of levels. At one extreme it means effects to achieve organizational goals and objectives; at another extreme the concern of control is to see if there are two approved signatures on a disbursement check; and in between there are all sorts of resources and operational activities, which must be dealt with (Chowdhury, 2004). Otley and Bery (1980) view that the study of organization and the study of control are inter elated.

According to McMahon and Ivancevich (1976), an organization implies control. The above view has support from Tannenbaum (1968) when he claims that an organization without some form of control is impossible. He states that an organization can be seen as the relationship of human beings, the exercise of power, use of resources, and the distribution of resources. All these organizational issues need to be planned, carefully designed, directed, motivated, and controlled.

There are control mechanisms internal and external to the organization. The external control mechanisms include market competition, government regulations, the market for takeovers, and corporate governance and monitoring by shareholders, auditors, and independent outside experts (Chowdhury, 2004). Committee on Corporate Governance (September 1999) suggests that external auditors shall per for m fair audits independently from the corporation concerned, its management and controlling shareholders, so that shareholders and other users may maintain confidence in the corporations accounting information. Sir Adrin Cadbury perfectly said, Corporate governance is considered withholding balance between economic and social goals and between individual and community goals. The aim is to align as nearly as possible the interests of individuals, corporations and society´ (Cadbury, 2003). Corporate governance has become a top priority for the regulatory bodies with the objective of providing better and effective protection to all stakeholder s and also to make the market confident as research reveals a positive correlation between corporate governance and share pr ices (Ahmad, 2004). Various elements of corporate governance discussion includes the legal framework, ownership structure, shareholding and protection of minority shareholders, boar d of directors, and the role of capital markets and Securities and Exchange Commission (SEC) in corporate governance, accounting and auditing standards, independent auditors report(Ahmed, 2005).Corporate Governance Committee (1997) stated remarkably, ³An audit committee is to be created within the board of directors. All the members of the committee are to be non-executive directors. Its function will be to audit the quality of compliance achievements, as well as the appropriateness of risk management of management. Auditors should audit beyond the normal inspection of compliance by management, and at the very least should make due judgments on the strategic decisions made by the board of directors. The quality of corporate auditing has to be upgraded by designating more than one independent auditors and by a more systematized auditing´(Corporate Governance Committee, 1997).

Economic significance of the audit:

Economic significance of the audit of the financial statements of the company emphasizes the great importance of the audit. ICAB well stated: In Bangladesh as in most other developed and developing societies, the owners of resources place them in the custody or stewardship of others. Examples of this process are the shareholders (owners) of a company committing the resources of the company to the stewardship of the directors; the public at large committing publicly

Owned resources to the stewardship of elected representatives. The owners hold the stewards accountable. Under the stewardship system of financial reporting, the shareholders, who defector represent the ownership of corporate entity, are distinct separate from the board of directors, who defector represent the management of the company. The share holders appoint the directors in the company annual general meeting to manage the entity in the best interest of the ownership. The shareholders need an honest, unbiased, objective, independent expert, professional opinion, and evaluation of the performance of responsibilities entrusted upon the directors. The management is unlikely to r ender that opinion and appraisal with any degree of objectivity.
Hence the auditor acts as a ³bridge´ helping to make management accountable to shareholder, through his audit report on the company’s financial information. The concept of audit independence also enumerates from the application of this system of stewardship reporting of financial reporting. The accountability is frequently in the form of annual reports incorporating financial statements. The typical example is the annual report and accounts of limited companies produced by the directors in accounting for their stewardship to the shareholder s. Before these financial statements can be accepted by the owners, they need to be examined by audit (ICAB)

Thus the role of the audit is essentially linked with the role of accounting information, and may be summarized (ICAB, 1 999):
The owners of resources ( investors) must make decisions on the employment of these resources;
(b)Such decisions are linked with the expected returns from investments;
In the absence of forecast information the investors look at historical data as a guide to the future;
Such data is provided by the stewards of the resources (e.g. the company management);
Since their interest may conflict with the investors, the audit serves the function of lending credibility to the financial statements. We have seen that the need for an external audit arises primarily when the ownership and management of an enterprise are separated. There are, however, certain inherent advantages in having financial statements audited even where no statutory requirement exists for such an audit:
Disputes between management may be more easily settled. For instance, a partnership which has complicated profit-sharing arrangements may require an independent examination of the accounts to ensure as far as possible an accurate assessment and division of those profits;
Major changes in ownership may be facilitated if past accounts contain an unqualified audit report. For instance, where two sole traders merge their business to form a new partnership;
Applications to third parties for finance may be enhanced by audited accounts. However, do remember that a bank, for instance, is likely to be far more concerned about the future of the business and available security than the past historical cost accounts, audited or otherwise;
An auditor may well discover major errors and fraud during his audit, even though such a discovery is not the primary objective of the audit;
The audit is likely to involve an in-depth examination of the business and so may enable the auditor to give more constructive advice to management on improving the efficiency of the business (ICAB, 1999).

General principles of an Audit:
The Auditor should comply with the Code of Ethics for Professional Accountants issued by the Council of the Institute of Chartered Accountants of Bangladesh. Ethical principles governing the auditor’s professional responsibilities (ICAB, 2004) are:
Independence
Integrity
Objectivity
Professional competence and due care;
Confidentiality
Professional behavior and
Technical Standards

Scope of an audit:
The term scope of an audit´ refers to the audit procedures deemed necessary in the circumstances to achieve the objective of the audit. The procedures required to conduct an audit in accordance with BSAs should be determined by the auditor having regard to the requirements of BSAs, relevant professional bodies, legislation, regulations and, where appropriate, the terms of the audit engagement and reporting requirements.

The Audit Report
The final phase of an audit engagement is reporting the findings. To meet his or her reporting responsibilities, the auditor must (1) have a thorough understanding of the four reporting standards, (2) know the exact wording of the auditor’s standard report and the conditions that must be met for it to be issued, (3) understand the types of departures from the standard report and the circumstances when each is appropriate, and (4) be knowledgeable of certain other special reporting considerations (Boynton, 2001).

Bangladesh Standards on Auditing 700: The Auditor’s Report on Financial Statements:

Bangladesh Standards on Auditing 700: The Auditor’s Report on Financial Statements described the following guidelines to comply by the auditor.
The purpose of this Bangladesh Standard on Auditing (BSA) is to establish standards and provide guidance on the form and content of the auditor’s report issued as a result of an audit performed by an independent auditor’s of the financial statements of an entity. Much of the guidance provided can be adapted to auditor’s reports on financial information other than financial statements.
Basic Elements of the Auditor’s Report According to BSA 700:

Title
Addressee
Opening or introductory paragraph
Scope paragraph (describing the nature of an audit)
Opinion paragraph
Date of the report
Auditor’s address
Auditors signature
Types of Audit Opinions:

The opinions expressed in the auditor’s report may be:
Unqualified
Other than Unqualified
Qualified
Adverse, or
Disclaimer of opinion.

Current status of Audit fees in Bangladesh according to ICAB:

Various Membership Fees and Charges (w.e.f. 01 July 2010)
Nature of Fees
For Members in Service
For Members in Service
For Members in Practice
For Members in Practice

Associate
Taka
Fellow
Taka
Associate
Taka
Fellow
Taka

Annual Membership Fees
6,000/-
7,500/-
6,000/-
7,500/-
Annual Fees for Certificate of
Practice
—– ——- 9000/- 12,5000/-
Sub-total =
6,000/- 7,500/- 15,000/- 20,000/-
Other charges
Annual Contribution to ICAB Members Welfare Fund
500/- 500/- 500/- 500/-
Cost of List of Members & Firms
200/- 200/- 200/- 200/-
Sub-total = 700/- 700/- 700/- 700/-

Total=
6,700/-
8,200/-
15,700/-
20,700/-

FEES SCHEDULE FOR PRACTICING MEMBERS

[Effective from 01 July 2004]

BASIS OF CHARGING MINIMUM FEES FOR AUDIT AND OTHER PROFESSIONAL SERVICES RENDERED BY CHARTERED ACCOUNTANTS IN PRACTICE OR FIRMS OF SUCH CHARTERED ACCOUNTANTS

Part-1
The Institute of Chartered Accountants of Bangladesh (ICAB) was established under the Bangladesh Chartered Accountants Order 1973 (President’s Order No. 2 of 1973) for the purpose of regulating the profession of Accountants and for matters connected therewith in the country.
Schedule C (Part-1) of the Bangladesh Chartered Accountants Bye-Laws 1973 framed under the aforementioned Order, stipulates, inter alia , that a Chartered Accountant in practice shall be guilty of professional misconduct if he:
Accepts a position as Auditor previously held by another Chartered Accountant without first communicating with him in writing;
accepts an appointment as Auditor of a Company without first ascertaining from it whether the requirements of Section 210 of the Companies Act 1994 in respect of such appointment have been duly complied with;
Accepts a position as Auditor previously held by some other Chartered Accountant in such conditions as to constitute undercutting;
solicits clients or professional work either directly or indirectly by circular, advertisement, personal communication or interview or by any other means;

The Council of the Institute resolved that a Chartered Accountant in practice or a firm of such Chartered
Accountants may:
Respond to advertisements inviting applications for appointment of Auditors;
Respond to tenders or circulars inviting quotations for professional services restricted to Chartered Accountants either by statute or in terms of such tenders or circulars;
Request for inclusion of the firm-name in the panel for appointment as Auditors; and
Quote fees within the framework of the enclosed Fees Schedule as approval by the Council-ICAB in its meeting held on 18, April 2004.
It shall not, however, be permissible for a Chartered Accountant in practice or a firm of such Chartered Accountants to pay earnest money, security deposit, etc. in reply to such advertisements, tenders, circulars or enquiries.
Part-II: of the Fees Schedule will not be applicable for non-audit work.

FEES SCHEDULE

PRIVATE LIMITED COMPANIES:

Category
Gross Assets or Gross Turnover, whichever is
higher
Minimum Audit
Fees

A-(i)
Amount not exceeding Tk . 10 lack
Tk . 7,500

A – (ii)
Amount exceeding Tk . 10 lac but not exceeding Tk . 25 lac
Tk . 15,000

A – (iii)
Amount exceeding Tk . 25 lac but not exceeding Tk . 50 lac
Tk . 30,000

A – (iv)
Amount exceeding Tk . 50 lac but not exceeding Tk . 1 crore
Tk . 40,000

A – (v)
Amount exceeding Tk . 1 crore but not exceeding Tk . 5 crore
Tk . 80,000

A – (vi)
Amount exceeding Tk . 5 crore but not exceeding Tk .10 crore
Tk . 1,00,000

A – (vii)
Amount exceeding Tk . 10 crore but not exceeding Tk .50 crore
Tk . 1,00,000 + TK 10,000 for every TK 5 crore increase.

A – (viii)
Amount exceeding Tk . 50 crore
Tk . 1,80,000 + TK 10,000 for every TK 10 crore increase.

PUBLIC LIMITED COMPANIES:

Category
Minimum Audit Fees

Minimum Audit Fees

Gross Assets or Gross Turnover, Listed Cos whichever is higher.
Listed Cos Non-Listed Cos
B – (i) Amount not exceeding Tk . 1 Cos. Tk . 60,000
Tk . 50,000

B – (ii) Amount exceeding Tk . 1 crore but not exceeding Tk . 10 crore Tk .1,20,000 Tk . 100,000
B – (iii) Amount exceeding Tk . 10 crore but not exceeding Tk . 50 crore Tk .1,20,000 +
Tk 15,000 for every Tk 5 crore increases. Tk .1,00,000 +
Tk 12,000 for every Tk 5 crore increases
B – (iv) Amount exceeding Tk . 50 crore. Tk . 2,40,000 +
Tk 10,000 for every Tk 10 crore increases. Tk .1,96,000 +
Tk 8,000 for every Tk 5 crore increases.

SECTOR CORPORATIONS INCLUDING INSURANCE, AUTONOMOUS AND SEMI-AUTONOMOUS BODIES:
Category
Gross Assets or Gross Turnover, whichever is higher
Minimum Audit Fees

C-(i)
Amount not exceeding Tk . 50 lac
Tk . 25,000

C – (ii)
Amount exceeding Tk . 50 lac but not exceeding Tk .
2.5 crore
Tk . 50,000

C – (iii)
Amount exceeding Tk . 2.5 crore but not exceeding Tk
. 10 crore
Tk . 1,00,000

C – (iv)
Amount exceeding Tk. 50 crore
Tk . 2,00,000

C – (v)
Tk . 2,00,000 +
Tk . 10,000 for every
Tk . 10 crore increase.

BANKS AND OTHER FINANCIAL INSTITUTIONS EXCLUDING INSURANCE:

Category
Gross Assets or Gross Turnover, whichever is higher
Minimum Audit Fees

D-(i)
Amount not exceeding Tk . 50 crore
Tk . 2,50,000

D – (ii)
Amount exceeding Tk . 50 crore but not exceeding Tk .
100 crore Tk . 3,50,000

D – (iii)

Amount exceeding Tk . 100 crore

Tk . 3,50,000 +
Tk . 20,000 for every
Tk . 20 crore increase

NON-GOVERNMENT ORGANIZATIONS:

Category
Gross Assets or Gross Turnover, whichever is higher Minimum Audit Fees
E-(i)
Amount not exceeding Tk . 10 lac Tk . 15,000

E – (iii)
Amount exceeding Tk . 10 lac but not exceeding Tk . 25 lac Tk . 30,000
E – (iii)
Amount exceeding Tk . 25 lac but not exceeding Tk . 50 lac Tk . 50,000
E – (iv)
Amount exceeding Tk.50 lac but not exceeding Tk . 1 crore Tk . 80,000

E – (v)
Amount exceeding Tk . 1 crore Tk . 80,000 +
Tk . 5,000 for every
Tk . 25 lac increase

PROPRIETORSHIP CONCERNS, PARTNERSHIP FIRMS, PROVIDENT FUNDS AND CHARITABLE INSTITUTIONS, VOLUNTARY ORGANIZATIONS AND OTHERS NOT COVERED UNDER PARAGRAPHS A, B, C, D AND E ABOVE:

Category
Gross Assets or Gross Turnover, whichever is higher Minimum Audit
Fees
F-(i) Amount not exceeding Tk . 20 lac Tk . 10,000

F – (ii) Amount exceeding Tk . 20 lac but not exceeding Tk . 50 lac
Tk . 15,000

F – (iii) Amount exceeding Tk . 50 lac but not exceeding Tk . 1 crore
Tk . 20,000

F – (iv) Amount exceeding Tk . 1 crore but not exceeding Tk . 5 crore Tk . 30,000

F – (v) Amount exceeding Tk . 5 crore but not exceeding Tk . 10 crore Tk . 50,000

F – (vi) Amount exceeding Tk . 10 crore Tk . 50,000 +
Tk . 5,000 for every Tk . 5 crore increase

EDUCATIONAL INSTITUTIONS:

In view of national importance of education and educational institutions being non-trading in nature, audit fees as prescribed by the concerned appointing authorities in consultation with ICAB from time to time shall be acceptable.

CO-OPERATIVE SOCIETIES:

The audit fees chargeable for auditing the accounts of co-operative societies including co-operative banks shall be as per provisions of the Co-operative Societies Act, 1940 and the Co-operative Societies Ordinance,
1984.

MINIMUM HOURLY RATES OF FEES CHARGEABLE IN RESPECT OF ALL PROFESSIONAL WORK AS REFERRED TO UNDER PARAGRAPHS A TO H ABOVE:

Category of Personnel
Professional Qualifications & Experience
Minimum Fees per hour
Principal/Partner
Chartered Accountant ( Practicing Member of
ICAB)
Tk . 1,500-Tk. 2,000/-

Qualified Assistance Chartered Accountant (Employee Member of
ICAB)
Tk . 1,000-Tk 1,200/-
Senior Assistant Course Completed CA Student and CA Articled
Student having completed at least 02 years of article-ship Tk . 300- Tk . 500/-
Semi-Senior
Assistant CA Articled Student having completed 1-2 years
of article-ship
Tk . 200- Tk . 300/-
Junior Assistant CA Articled Student not having completed
more than 01 year of article-ship Tk . 150/-

2.00 RATES OF FEES AS APPROVED UNDER CLAUSE 1.00 OF PART III ABOVE SHALL BE UNIFORMLY CHARGED BY ALL CHARTERED ACCOUNTANTS IN PRACTICE OF FIRMS OF SUCH CHARTERED ACCOUNTANTS OF BANGLADESH WHILE UNDERTAKING AUDIT AND OTHER PROFESSIONAL WORK WITHIN THE TERRITORY OF BANGLADESH, SUBJECT TO THE PROVISIONS AS CONTAINED IN THE FOLLOWING SUB-CLAUSES:

For the purpose of charging the minimum audit fees as approved under paragraphs A, B and C of Clause 1.00 of part III above, 150% of the previous year’s audit fees shall be deemed to be the minimum audit fees of the year if the fees calculated on the basis of the approved rates exceed 150% of the previous year’s audit fees;

For the purpose of calculating the minimum audit fees as approved under paragraphs D and F of clause 1.00 of part III above, Gross Assets shall mean and include total fixed assets and current assets excluding fictitious assets, if any, of an organization as appear on the balance sheet under audit;

While charging fees, members in practice may quote fees, broadly based on the afore-mentioned minimum rates of fees;

Notwithstanding anything contained in the normal definition of Gross Turnover, for the purpose of calculating the approved minimum audit fees of any organization, ‘Gross Turnover’ shall mean and include;

Total amount of sales including all other income and earnings of the year in case of all manufacturing and trading organizations;

Total gross premium income including all other income and earnings of the year in case of all insurance organizations;

Total amount of interest, discount, commission, and exchange brokerage and all other income and earnings of the year in case of banks and other financial institutions;

Total amount of commission including all other income and earnings of the year in case of travel agencies, indenters, brokers and other organizations running on commission earning basis;

Total income in the form of contributions, subscriptions, donations, grants, aids and all other income and earnings of the year in case of provident funds, charitable institutions and voluntary organizations ; and

Total receipt/bills accounted for and all other income and earnings of the year in case of construction companies and other organizations not covered under i to v above.

Appointment of Auditors for any special audit of branches of banks, insurance corporations companies or other organizations shall be treated as an appointment relating to a separate audit , and audit fees payable for such special audits shall be treated as part of the approved annual or statutory audit fees payable by the clients concerned;

In case of organizations under installation/awaiting commissioning, acceptance of minimum audit fees at a reduced rate of 50% of the approved minimum audit fees, may be considered until such time as such organizations go into commercial production;

In case of dormant companies (i.e. companies not in commercial operation), acceptance of minimum audit fees shall be subject to mutual consent of the clients and the Auditors;

In the context of the above-stated approved rates of minimum audit fees , ‘under-cutting’ shall not include any reduction of fees which may arise due to natural reduction of Gross Assets, Gross Turnover or Gross Grants, as appropriate, of the year under audit as compared to those of the previous year, of any organization;

The minimum audit fees calculated at the rates as approved under paragraphs A, B, C, D and E of clause 1.00 of part III above, shall mean minimum audit fees payable to each of the Joint Auditors where more than one Auditor is appointed.

Findings & Analysis
The major findings of the Bangladesh auditing Reporting is to improve the relevance, reliability & comparability of the information that a reporting entity provides in its clients financial statement about a business combination of A Mmatin & Co. Following the some major finding of this study as:

A Matin & Co. is the helpful place for any companies (e.g. public ltd, Private ltd, educational institute or other company) auditing.
It is the institute where any student can completed his Course completes (C.C.) degree.
A Matin&Co. recognize its role as a regulatory body to equip its members (Chartered Accountants) with top-quality education and values.
It has a full-fledged computer sector with a well-trained staff, which ensured quicker service.
The firm also uses the most advanced communication technology to ensure faster correspondence and feedback.
Its evaluate and verify all the financial and non-financial activity of its client company and give them valuation report after the end of evaluation for the fairness of the company which is most important document for a company.
I am working with this Audit group and perform my job according to the rule A Matin & Co.
I also know about the Auditing system of A Matin &Co. This companies auditing system is batter from others CA firm.
The firm follows the audit fees from the role of ICAB.

Recommendations
Following are my recommendations for A. Matin &Co. to increase the quality of service.
Learn to listen to your customers first. Really listen to them ask what you can do to help them. This is most important step in preventing problems and the only way you can solve complaints if they come up.
Look at all complaint about your service as an opportunity to improve. Aim to resolve any complaint quickly efficiently.
Establish at all complaint about your service is recognized and rewarded and poor service is challenged and rectified.
Have a fun staff meeting where good service elements are discussed and role played.
Ensure that your staff feels they are an important part of your success. Have fun team building days as well as formal meeting.
Lead by example – show respect for every person at every level in your company.
Do things regularly to improve the work place. Happy staff = happy customers.
Be sure your employees are aware of your experiences. Clear service guidelines and knowledge of the company’s mission are necessary.

Conclusion
In conclusion remarks I would like to say something that A. Matin &Co. is the profitable organization. A. Matin &Co. has played very vital role in his field by providing attractive service and packages to the customers. A Matin &Co. has very wide network converge in national with latest technology and provide service to its valued customers. I have done internship in A. Matin &Co. for a period of three month and this period is quiet a small period of time yet I have learn a lot. Here I apply my knowledge and get a technical practice of my knowledge. Now I know about the environment of organization and how to communicate with, colleague and boss. I learn that how to use theoretical knowledge in organization. My communicate skills are improve. My decision making power is improve. Now I have a power to deicide about future. A. Matin &Co. is a customer oriented and as well as employee oriented company so it provides a very friendly environment for the employee. Any internee has a good chance of learning new things.

Field Survey A.Matin & co.
Institute of Chartered Accountants of Bangladesh (ICAB)
List of Bangladesh Accounting Standards/Bangladesh Financial Reporting Standards.
By the web site ofwww.icab.org.bd

" 30,"

AN OVEVIEW OF PRIME GROUP OF COMPANY

","

View With Charts And Images
Human Resource Management OF Prime Group

Chapter-01
1.1 SCOPE OF THE STUDY
The scope of this paper is limited to the organizational structure, background, and objectives, functions, and investment performance of Prime Group Of Companies as a whole. The scope is also limited to different investment schemes, modes, mechanism, investment proposal appraisal procedures, monitoring and documentation of Prime Group Of Companies.

METHODOLOGY OF THE REPORT

2.1 METHODOLOGY
The methodology of the report includes direct observation, oral communication with the employees of all departments of Local Branch and Head Office, studying files, circulars etc and practical experience. This report is basically qualitative in nature. But the report includes both quantitative as well as qualitative data. In this report no hypothesis is considered

2.2 SOURCES OF DATA
This report contains both primary and secondary sources of data of Prime Group of Company

2.2.1 PRIMARY SOURCES OF DATA
The primary data are collected through:
• Open ended questionnaire.
• Face to face interview of different employees and officers.
• Personal interview and discussion with the employees
• Expert opinion.
• Personal observation of different activities.

2.2.2 SECONDARY SOURCES OF DATA
The theoretical development of the report has done collecting information from various sources. The secondary sources are given bellow:

1) Annual HRM report of Prime Group of Company 2007 – 2008.
2) Some articles
3) Desk report of the related department

2.3 DATA ANALYSIS
The primary and secondary data are edited first. These data were analyzed and processed by different established methods and statistical tools. When I prepared the report I discussed with the respective personals. The necessary improvements and changes are done according to their opinion. All the information, policies and system of Prime Group of Companies is being compared and analyzed with Human Resources Management related text books and websites and found good Performance Appraisal practice at Prime Group of Companies.

2.4 Limitations of the report

Every thing has its limitation. This report is not also free from limitations. Some limitations of this report are mentioned below:

Time constants
The time limit as presided by our department and the IBBL was not enough to conduct an in-depth study effectively.

In adequacy of data
A worthwhile study requires the analysis of much data as possible covering various aspects of the study but there was inadequacy of data.

Unavailability of documents
Unavailability to the required published documents is another limitation.

Internal restrictions
Bank has some policy for not disclosing some data and information for obvious reasons that could be very much essential.

Busyness of employees
Employees are so much busy with their regular activities and can not provide enough time for me.

CHAPTER – 2
AN OVEVIEW OF PRIME GROUP OF COMPANY (PGC)

3.1 PRIME GROUP OF COMPANY

Prime Group Is One Of The Leading Manufactures And Exporters Of Readymade Garments In Bangladesh. Since Its Inception In 1984, The Group Has Been Able To Create A Distinctive Image Amongst American & European Garment Buyers As Makers Of High Quality Garments. We Specialize In Heavier Weights & Bottom Line Garments Such As Pants, Shorts, Bermudas, Skirts & Skorts. We Also Make Overalls, Shortalls, Jackets And Shirts.

Right from its inception the policy of the company has been to provide total buyer’s satisfaction by offering quality garments in time to meet the commitments of quality and prompt delivery.

In each stage of production we maintain close monitoring and ensure quality.

Main strength manner of this company is planned infrastructure, which is reinforced by 1000 employees, who from the background of the company.

Employees are trained with teamwork culture, department are headed by qualified and experience managers assisted by executives who undergo continuous new developments training.

3.2 MISSION & VISION
“Our mission is to bring Service of international standards within the reach of every individual. We are committed to the achievement and maintenance of excellence in education, research and Service for the benefit of humanity”

3.3 HISTORY
Prime Group Is One Of The Leading Manufactures And Exporters Of Readymade Garments In Bangladesh. Since Its Inception In 1984, The Group Has Been Able To Create A Distinctive Image Amongst American & European Garment Buyers As Makers Of High Quality Garments. We Specialize In Heavier Weights & Bottom Line Garments Such As Pants, Shorts, Bermudas, Skirts & Skorts. We Also Make Overalls, Shortalls, Jackets And Shirts.

Right from its inception the policy of the company has been to provide total buyer’s satisfaction by offering quality garments in time to meet the commitments of quality and prompt delivery.

In each stage of production we maintain close monitoring and ensure quality.

Main strength manner of this company is planned infrastructure, which is reinforced by 1000 employees, who from the background of the company.

Employees are trained with teamwork culture, department are headed by qualified and experience managers assisted by executives who undergo continuous new developments training.

3.4 The Prime Group is much more than Asia’s Largest Network of Companies

Core concern

We have the following manufacturing and service units in our fold, which Equipped with modern Machineries, skilled technicians and workers.

Prime Garments Ltd.,
Prime washing Plant.
Pritam Knit Wear Ltd.
Prime Sand Blasting Unit.
Pritam Transport Agency.
Pritam Enterprise Australia.
Pritam Fashion Wear (Pvt.) Ltd.
Veinous Printing & Packaging.

Factory Information

Prime Garments Ltd. & Pritam Fashion Wear (Pvt.) Ltd.

Production Strength Prime Pritam
Production Space 13,200 SFT. 14,700 SFT.
No. Of Sewing Machines 210 SETS. 200 SETS.
Manpower in Production 495 Persons 410 Persons
Production Capacity 8,000 DZ/Month 7,000 DZ/Month
(Basic Long Pant, Skirt & Skort.)
Sample Section Standrad Standrad

U.S.A QUOTA HELD (By Category)

Prime Pritam
CAT # 342 42,000 DZS 5,000 DZS
CAT # 347 12,000 DZS 5,000 DZS
CAT # 647 4,000 DZS 1,500 DZS
CAT # 237 18,000 DZS 2,000 DZS
CAT # 334 4,000 DZS 2,000 DZS
CAT # 335 13,000 DZS 3,000 DZS

Designation Male Female
Commercial Manager 03 00
Commercial Assistant 05 00
Manager Production 08 00
Assistant Manager Prod. 02 00
Accountant 04 00
Accounts Assistant 02 00
Audit/Compliance Manager 06 01
Stores Keeper 08 00
Stores Assistant 04 00
Computer Operator 08 02
Office Peon 10 00
Driver 20 00
Security 10 00
Cleaners 10 05
Sweeper 10 02
Total : 110
10

Number of Workers

Designation Male Female
Cutting in Charge 02 00
Cutting Supervisor 05 00
Marker 08 00
Cutting Operator 20 00
Cutting Helper 12 00
Sewing Supervisor 100 290
Sewing Operators 20 140
Sewing Helpers 80 02
Quality Supervisor 04 50
Quality Inspector 08 02
Finishing incharge 10 00
Finishing Supervisor 20 00
Iron Men 20 12
Folders 20 05
Finishing Helpers 20 50
Threaden Cutter 30 30
Packers 06 20
Maintenance Supervisor 02 10
Maintenance Helper 05 02
Total 392
613

List of Machinery Prime Pritam
Single Needle Lock Stitch 114 Sets 120 Sets
Double Needle Lock Stitch 15 Sets 10 Sets
Double Needle Chain Stitch 12 Sets 13 Sets
Over Lock 22 Sets 12 Sets
Feed of the Arm 10 Sets 08 Sets
Button Hole Regular 08 Sets 05 Sets
Button Hole Eyelet 02 Sets 02 Sets
Snap Button Attached 08 Sets 05 Sets
Flat Lock 12 Sets 10 Sets
Kansi Special 02 Sets 06 Sets
Needle Detector (Convey Type) 01 Sets 01 Set
Nedle Detector (Hand Type) 02 Sets 03 Sets
Thread Sucking Machine 01 Sets 01 Set
Cutting Machine 04 Sets 04 Sets
Steam Boiler 03 Sets 03 Sets
Steam Iron 09 Sets 12 Sets
Electric Iron 05 Sets 05 Sets
Vacumm Iron 02 Sets 02 Sets
Fabric Inspection Machine 01 Sets 01 Set
Number of Cutting Table 02 Sets 01 Set
Generator 01 Set (KVS120) 01 Set KVS120)

Other’s Facilities: Standby Generator, Seperate Dining Hall, Free Transport for all Worker’s, Doctor’s Room, Baby Care Room.

Packing Facilities: 5000 Boxers Per Day
Annual Sales: US $ 12.00 Million

Prime Washing & Blasting Unit

The Plant is equipped with the latest technology. Washing Machines are from washes in the us while the plasting machines are from China. Safety standers are adhered to.

Machines Operators, Quality Controllers, checkers, and chemical analysts have received training at internationally accredited organizations.

Environmental Pollution has also been addressed through the establishment of a water treatment plant.

Prime washing plant was set up to cater to up market buyers in the USA, Canada and Europe. The plant boasts an impressive clientele including jordache, fubu, gasoline, US polo, kikit, air port and other.

Prime washing plant presently has as average capacity of 17,000 Garments a day. A number of wash types are currently undertaken including enzyme wash, garments wash, bleach was, enzyme pleach wash, garments dying, dipped bleach, prigment wash, acid wash, dirty wash. Tie dye, sand, stone and sand blasting.

Production Capacity per day:

Normal wash : 12,000 pcs.
Enzyme wash : 8,000 pcs
Tie Dye, pirgment
Sand, Stone & Bleach wash: 8,000 pcs.
Floor area : 15,000 sft.
List of Machinery

Industrial Washing Machine : 10 Nos
Industrial Sample Machine : 2 Nos
Hydro Extractor : 3 Nos
Industrial Gas Dryer : 10 Nos
Industrial Steam Dryer : 4 Nos.
Sand Blasting Machine : 6 Nos.
Other facilities : Standby Generator & Steam Boiler
Working Hour : Two Shift (24 Hours).

Vinous Printing & Packaging

Vinous Printing & Packaging Provides several options to produce world class product for our valued customers.

Advantages
– Very competitive cost base.
– Strong tradition and skills in the industry
– Good Packaging & Printing technology
– Capacity to undertake specialized and on demand printing and publishing.

Customer’s

Prime Group believes… that Quality service means an unshakable commitment to the truth. In integrity. We deliver the service we promise and will not promise what we cannot deliver.

Major Customer’s …
Wall Mart Inc. U.S.A.
Jordache Inc. U.S.A.
Target Stores U.S.A.
Sesame Street U.S.A.
Kids R US U.S.A.
Sears U.S.A.
Vanhappen Netherlands.
Zellers Inc. Canada
Intersport. Switzerland
Sugang. Hongkong
Sharpco. Hongkong
Original Marines Italy
Bepc U.S.A.

Business Terms:

1. Shipment against confirmed irrevocable letter of Credit at sight through any first class international bank.
2. Delivery lead time:
• For Garments based on Fabric to be imported from outside Bangladesh.
(a) 90 days from date of receipt of L/C in case of Denim items.
(b) 120 days from date of receipt of L/C in case of other items for
• Garments base of fabric manufactured in Bangladesh.
(a) 90 days from date of receipt of L/C.

Bankers:

Uttara Bank Ltd.
150 B.B. Road. Agrani Bank
B.B. Road United Commercial
Bank Ltd.
Narayanganj Branch Narayanganj Branch
Foreign Exchange Branch
Narayanganj -1400 Narayanganj -1400
Swift: UTBL BDDH 437 Swift: UTBL BDDHa XXX 20 Dilkusha C/A, Dhaka-1000.

3.5 BOARD OF DIRECTOR

Prime Group of Companies Have Four Board of Directors

1. Abu Zafar Ahmed Babul
2. Md. Zakir Ahmed Rubel
3. Jamal Ahmed Jewel
4. Jahir Ahmed Sohel

3.6 COMPANY FACT SHEET
Prime Group of Companies is the largest Garments in Asia. It has evolved into Garments and Fashion with interests across the entire World.

Besides owning and managing Garments and Fashion Wear, the Group has leadership positions in:
• Production Space
• NO. Of Sewing Machines
• Manpower Sourcing & Placement
• Production Capacity
• Produce World-class Product
• Strong Tradition and Skills in the industry
• Good Packaging & Printing technology
• Capacity to undertake Specialized and on-demand printing and publishing.

3.7 BRIEF OF PRIME GROUP OF COMPANIES
Prime Group Is One Of The Leading Manufactures And Exporters Of Readymade Garments In Bangladesh. Since Its Inception In 1984, The Group Has Been Able To Create A Distinctive Image Amongst American & European Garment Buyers As Makers Of High Quality Garments. We Specialize In Heavier Weights & Bottom Line Garments Such As Pants, Shorts, Bermudas, Skirts & Skorts. We Also Make Overalls, Shortalls, Jackets And Shirts.

Right from its inception the policy of the company has been to provide total buyer’s satisfaction by offering quality garments in time to meet the commitments of quality and prompt delivery.

In each stage of production we maintain close monitoring and ensure quality.

Main strength manner of this company is planned infrastructure, which is reinforced by 1000 employees, who from the background of the company.

Employees are trained with teamwork culture, department are headed by qualified and experience managers assisted by executives who undergo continuous new developments training.

3.8 AN OVERVIEW OF THE DIVISIONS

Prime Group of Companies is one such company that has to overcome a lot of hurdles to reach the position it now holds. At present, Praful B. Pawar is the Chief Executive officer & & Director Medical Services, Michael C Hall is the Director–Operations; Shahjahan Majumder Director – Finance; MS. Jacqueline Irene Flynee Director – Nursing, A. K. M. Nazrul Haider GM – IT, Nurullah Mamun Chowdhury General Manager – Human Resource and Iftikhar Husain General Manager – Material, Shatrujeet Kumar Rai General Manager – Operations, Mr. J.S. Thomas Rodrigo – Deputy General Manager – Hospitality Services, These 9 persons at the top carried out their management roles exhaustively and systematically. They equally contributed to Prime Group of Companies superior leadership, by carrying out their unique roles. They worked well together, respecting each other’s abilities, & arguing openly & without any resentment when they disagreed.

To maintain a close touch with the organization each man works in separate area of Prime Group of Company. Their offices are indistinguishable from all other cubicles where Prime Group of Companies junior executives & secretaries work in good environment. The staffs starting from the CEO to the lower operating level employees shares the same premises under one roof. This has created a management team that is unified, cohesive & energetic.

Each and every employee of Prime Group of Companies takes pride of being an employee at Prime Group of Companies and his or her pride comes from the freedom of direct communication with the top management. The management of Prime Group of Companies is supportive in the sense that the top management deliberately supports the suggestions, values, ideas, innovation and hard work of the employees and officer. Again high amount of employee participation is encountered in the management process. There are also systems for awards, incentives, and status for innovative ideas and hard works. Again the management style can also be termed as Collegial as high amounts of team work and participation exists between the top and bottom parts of Prime Group of Companies. Thus, according to my perspective the management style at Prime Group of Companies falls somewhere between supportive and collegial.

Prime Group of Companies follows a 4-layer management philosophy in Bangladesh. These are Managers, Executives, Officers and Assistant Officers. The CEO is the top most authority of all the levels. Managers are the departmental heads who are responsible for the activities of their departments. They are the heads of the department who formulate strategies for that department. e.g. Human Resources Manager. Executives have the authority next to managers. They are basically responsible for certain activities & organizational functions. e.g. Admin Executive. These two layers represent the management level of Prime Group of Companies.
Officers are the next persons to stand in the hierarchy list. They are the typical mid-level employees of Prime Group of Companies organizational hierarchy. These officers are responsible for managing the operational activities and operating level employees. The operating level employees of Prime Group of Companies who are ranked as Assistant Officer fill the last layer of this hierarchy. They perform the day-to-day operational activities of Prime Group of Companies.

3.9 CHIEF EXECUTIVE COMMITTEE

The organizational structure of Prime Group of Companies is designed according to the various service and functional departments. The Chief Executive Officer (CEO) heads the chief executive committee, which decides on all the strategic aspect of Prime Group of Companies. The CEO is the person who supervises the heads of all the departments and also is the ultimate authority of Prime Group of Companies. He is responsible for the all the activities of Prime Group of Companies and all its consequences. He administers all the functional departments and communicates with the department heads for smooth functioning of the organization. The Prime Group of Companies Chief Executive Committee is formed with the heads of all departments along with the CEO. The structure of this top-most authority is shown in the following figure. Besides the CEO the CEC is staffed with Director – Operations, Director – Finance, Director – Nursing, GM – IT, GM – Material, GM – HR, DGM – Operations, DGM – Operations, DGM – Hospitality Services.
3.10 HUMAN RESOURCE DIVISION OF PRIME GROUP OF COMPANIES

The Human Resource Manager currently heads this department. The major functions of this department are strategic planning and policy formulation for Compensation, Recruitment, Promotion, Training and developments, Personnel Services and Security. The HR department is very much concerned with the discipline that is set up by the Prime Group of Companies. Prime Group of Companies has got strict rules and regulations for each and every aspect of working process; i.e. The Dress Code. All these major personnel functions are integrated in the best possible way at Prime Group of Companies, which results in its higher productivity. The Human resource executive monitors the employee staffing and administration activities. Like that of any other organizations, the Administration of Prime Group of Companies makes sure that the organizations moves on with all its departments and staffs operating according to all the rules and regulations of the company. It also prevents any bottlenecks within the work process and ensures smooth functioning. The business support services provide supports to the departments during employee leaves and sudden terminations so that the department can function without problems The Training Manager supervise Training, development & rotation activities. The structure of the HR department is shown below:

-The structure of the HR department
CHAPTER-3
HUMAN RESOURCES MANAGEMENT
4.1 INTRODUCTION
Human Resource Management (HRM) is a core discipline, which deals with managing the work force in such a way as to maximize the output of the organization. It starts with the selection and recruitment of employees, its training and development, maintaining a consistent compensation package for the employees and to take many other initiatives to reduce the absenteeism and to motivate the employees. In the early days employees were treated as simply workers who will abide by the order of the employee ignoring the human side of the workers. As a result, the outputs of the organization were not maximized. Then more emphasis is given to improve the condition of the workers for motivating them towards work. This work force is treated as asset in today’s organization.

One of the primary jobs of HRM is the formulation of a selection and recruitment policy commensurate with the organizational policy and mission of the organization. Induction of new employee to an organization is a vital issue. Under qualified recruited employees may jeopardize the objectives of the organization. If everything regarding induction of new employee is clearly spelt out in the selection and recruitment policy then the chance of recruiting under qualified employee is less.

Another major area of HRM is the training and development of the employees. Actually training can sharpen the know how of an employee. Need for training may start with the new recruitment of the employee and continue till the retirement of the employee. Continuous training and development of the employee can help organization to achieve its goals.

4.2 FACTOR HINDERING HRM IN BANGLADESH
Bangladesh bears a colonial legacy in its entire public administration system. Present day Bangladesh was part of the British Empire for almost two hundred years. In 1947, Pakistani rulers replaced the British and dominated the area then known as East Pakistan until a blood-shedding war in 1971 brought about an independent Bangladesh. A colonial imprint persists in Bangladesh especially in political and administrative arrangements. The British tradition helped the bureaucracy to become an essential tool of governance. At the same time, it is accused of following the “Pakistani tradition of involvement in power politics” (Haque, 1995). The political system of Bangladesh has survived a series of transitions. A few years of democracy were followed by nearly fifteen years of military rule. In 1990, for the first time, Bangladesh achieved a fully functioning democratic structure. Ironically, the nature and role of bureaucracy in both the pre and post-democratic period remained almost the same except for an increase in number of ministries, divisions, departments and statutory bodies (Ahmed, 2002: 323-26).

The role of government has changed in the course of Bangladesh’s development. After independence, its focus was the attainment of development in all spheres of life by intervention and the use of administration in a constructive way. Government and administration were seen not merely as a regulator but as a facilitator.

From the beginning of the 1990s, the role of government has changed from an intervener to a referee; instead of playing the game, its main duty is to make sure that a fair game is being played. This reinvented role of the government necessitates redefining the role of the bureaucracy. Bureaucracy can be considered as an “open” system that interacts with or is affected by the environment in which it operates. Traditionally, this environment consisted of only the “domestic economic, political and social context within which the organization is located.” Now, however, “public organizations are more often faced with global threats and opportunities that affect their operations and perspectives” (Welch and Wong, 2001: 372-73). The performance of a public organization depends largely on how the domestic political institution handles global pressures as well as how it interacts with the bureaucracy.

In recent times, the term “Good Governance” has gained a lot of popularity. However, defining this particular term seems to be never an easy task and henceforth, good governance has always been identified as the absence of bad governance, which ultimately is used to measure the performance of the government. In deed in many cases, a poor performance of the government presents a scenario where,”… resources are wasted, services go undelivered, and citizens—especially the poor—are denied social, legal, and economic protection” (Grindle, 2002:1). Ultimately, the ability of government to provide services effectively and efficiently depends upon a competent cadre of civil servants. Good government has to depend on good, competent people whose presence can be felt at every activities of the government (Lavigna & Hayes, 2005:67).

However, in a third world country like us, this interaction is even more important as the government of Bangladesh has to confront a more daunting set of challenges and powerful forces — globalization, economic competition that cuts across national borders, social and political upheavals, technological change, threats of terrorism, and a rapidly-changing labor market. The success of government to respond effectively to these challenges, therefore, is dictated largely by its ability to recruit and retain a talented workforce, as- “…good government requires good people” (Lavigna & Hayes, 2005:67). In reality, nature and process of recruitment in civil service sets the tone of the civil service and thereby, dictates the particular role it decides to play at particular times.
4.3 HUMAN RESOURCES PRACTICES IN PRIME GROUP OF COMPANIES
Prime Group of Companies believes in the strength of human resource and uses the modern concept of resource utilization. Every job description is carefully designed and modified under dynamic environment. The company believes in the concept of best fit and trains and develops company personnel as the key ‘human capital’ of the company. General Manager of Human Resource department is the head of the department. The Manager HRD & Admin, two Depute Manager Recruitment and Remuneration, Sr. Executive, tree Executive Human Resources, Executive Administration, Officer Human Resources, Time office Assistant, Mailing service Assistant, Administrative Assistant work under General Manager HRD.

Prime Group of Companies believes in the strength of human resource and uses the modern concept of resource utilization. Every job description is carefully designed and modified under dynamic environment. The company believes in the concept of best fit and trains and develops company personnel as the key ‘human capital’ of the company.

The Human Resource Department thus concentrates all its activities for the development of human resource for the benefit of the company. The department also believes in maintaining harmonious relationship between the management and employees all the times. The department ensures that managerial development contributes to organizational development.

The departments’ various activities cover setting criteria for the selection procedures. Interview techniques, training standards etc. According to the PGC policy guideline, the department maintains the personnel through formulation policies on wages, fringe benefits, annual leave, training calendar, provident fund, performance appraisal etc. Remuneration is managed centrally and there is never any negotiation but settlement. It also settles with the trade union for Long Term Agreement (LTA) between management and workers and the ‘collective burgeoning agents’. As the competitive world is changing with the speed of light, Training and Development becomes an integrated part to stay on the top. Thus PGC puts great importance to training and development of managers and employees. The company has Technical Training Center at the Prime Group, which organizes different training programs for its management people around the year. As a subsidiary of PGC sends its managers and employees for training to this training program.

4.4 JOB ANALYSIS OF PGC
Job Analysis is a process to identify and determine in detail the particular job duties and requirements and the relative importance of these duties for a given job. Job Analysis is a process where judgments are made about data collected on a job.
The Job; not the person An important concept of Job Analysis is that the analysis is conducted of the Job, not the person. While Job Analysis data may be collected from incumbents through interviews or questionnaires, the product of the analysis is a description or specifications of the job, not a description of the person.
Purpose of Job Analysis in PGC
The purpose of Job Analysis is to establish and document the ‘job relatedness’ of employment procedures such as training, selection, compensation, and performance appraisal.
Determining Training Needs
Job Analysis can be used in training/”needs assessment” to identify or develop:
• training content
• assessment tests to measure effectiveness of training
• equipment to be used in delivering the training
• Methods of training (i.e., small group, computer-based, video, classroom…)
Compensation
Job Analysis can be used in compensation to identify or determine:
• skill levels
• compensable job factors
• work environment (e.g., hazards; attention; physical effort)
• responsibilities (e.g., fiscal; supervisory)
• required level of education (indirectly related to salary level)
Selection Procedures
Job Analysis can be used in selection procedures to identify or develop:
• job duties that should be included in advertisements of vacant positions;
• appropriate salary level for the position to help determine what salary should be offered to a candidate;
• minimum requirements (education and/or experience) for screening applicants;
• interview questions;
• selection tests/instruments (e.g., written tests; oral tests; job simulations);
• applicant appraisal/evaluation forms;
• orientation materials for applicants/new hires
Performance Review
Job Analysis can be used in performance review to identify or develop:
goals and objectives
performance standards
evaluation criteria
length of probationary periods
duties to be evaluated

4.5 METHODS OF JOB ANALYSIS IN PGC
Several methods exist that used individually or in combination. These include:
review of job classification systems
incumbent interviews
supervisor interviews
expert panels
structured questionnaires
task inventories
check lists
open-ended questionnaires
observation
incumbent work logs
A typical method of Job Analysis would be to give the incumbent a simple questionnaire to identify job duties, responsibilities, equipment used, work relationships, and work environment. The completed questionnaire would then be used to assist the Job Analyst who would then conduct an interview of the incumbent(s). A draft of the identified job duties, responsibilities, equipment, relationships, and work environment would be reviewed with the supervisor for accuracy. The Job Analyst would then prepare a job description and/or job specifications.
The method that you may use in Job Analysis will depend on practical concerns such as type of job, number of jobs, number of incumbents, and location of jobs.
4.6 WHAT ASPECTS OF A JOB ARE ANALYZED IN PGC?
Job Analysis should collect information on the following areas:
• Duties and Tasks The basic unit of a job is the performance of specific tasks and duties. Information to be collected about these items may include: frequency, duration, effort, skill, complexity, equipment, standards, etc.
• Environment This may have a significant impact on the physical requirements to be able to perform a job. The work environment may include unpleasant conditions such as offensive odors and temperature extremes. There may also be definite risks to the incumbent such as noxious fumes, radioactive substances, hostile and aggressive people, and dangerous explosives.
• Tools and Equipment Some duties and tasks are performed using specific equipment and tools. Equipment may include protective clothing. These items need to be specified in a Job Analysis.
• Relationships Supervision given and received. Relationships with internal or external people.
• Requirements The knowledge, skills, and abilities (KSA’s) required performing the job. While an incumbent may have higher KSA’s than those required for the job, a Job Analysis typically only states the minimum requirements to perform the job.

4.7 JOB DESCRIPTIONS AND JOB SPECIFICATIONS
Job analysis provides two types of information to HR manager job descriptions and job specifications.

4.7.1 Job Descriptions
Accurate job descriptions provide a basis for job evaluation, wage and salary comparisons, and an equitable wage and salary structure. They provide information about the knowledge, training, education, and skills needed for each job. Well-crafted job descriptions prevent unnecessary misunderstandings by telling employees what they need to know about their jobs. They also provide a basis from which to determine whether a disabled applicant is otherwise qualified for the job and, if so, to assist in determining what accommodation would be required for the applicant to be able to perform the essential functions of the position.

4.7.2 Job Specifications
A description of the worker characteristics required to perform a given job competently. These characteristics must be bona fide occupational qualifications, as opposed to requirements that are artificially inflated and not actually required for competent job performance (e.g., requiring a college degree for all exempt jobs). Specifications, commonly referred to as hiring or background requirements, should be written before advertising or interviewing candidates for an open position. They should support the essential functions identified during job analysis to reduce potential liabilities

Sample Job Description of Deputy General Manager- Materials in Prime Group of Companies
JOB DESCRIPTION
Name of the position : General Manager-Materials
Employee No. :
Name :
Department/Division : Materials
Reports to : CEO

Purpose
The purpose of this job is to contribute towards the hospitals operation with uninterrupted flow of required materials and services. Procurement of all materials in the medical and non-medical departments of the hospital. Ensure availability of materials at right time to maintain optimal service level and end users satisfaction.

Responsibilities/Tasks

1. Administrative Function

a) Head the purchase, Material store, Pharmacy Central Store and import functions of the hospital.
b) Oversee the overall functioning of the purchase, Materials Stores and Pharmacy Central Stores management functions.
c) Establish standard procedures in issuing public contracts, service contracts ensuring legal safeguard for the company.
d) Develop inventory control systems and establish procurement plans for the operational requirements of the hospital.
e) Ensure proper working capital management and efficient and effective purchase and stores functions.
f) Sourcing / obtaining of offers from manufacturers, indentors, etc
g) Control and monitor consumption and assist audit in investigating aberrations.

2. Material Purchase

a) Ensure materials are purchased at the right price, time and quantity.
b) To achieve savings in terms of procurement value.
c) Ensure materials operating result of the purchase function which involves.
a. Sundry purchase
b. Hospital supplies
c. Service contracts
d) Oversee the purchase of imported equipment and supplies for the Company.

3. Vendor Relations

a) Develop reliable source of supply. Operate with small but effective vendor base.
b) Develop vendors and review their rating so that reliability is adequately guaranteed.
c) Ensure that credible loyalty is maintained among suppliers for the hospital.

4. Stores function

a) Monitor the stores management function so as to ensure problems related to over stocking, redundancies and wastage of materials.
Availability of materials, medicines and services at optimal cost at the desired time.

Employee_______________ Supervisor_____________

Date _______________ Date _____________

4.8 RECRUITING
Emphasizing the essential nature of the recruiting function in today’s business environment, Peter Drucker notes that “every organization is in competition for its most essential resource: qualified, knowledgeable people” (Drucker, 1992). Today’s successful organizations need to hire the most qualified people they can at the most competitive price. Before an organization is able to hire an individual, it must locate qualified applicants who are interested in working for the organization. How does an organization attract these qualified people? Through the recruitment process, and it represents one of the major responsibilities of the HRM function—a responsibility that if not effectively and efficiently completed can almost single-handedly ensure limited success for today’s organizations.

Recruitment is the process by which organizations discover, develop, seek, and attract individuals to fill actual or anticipated job vacancies. Or from another perspective, it is a bridge-building activity—bringing together those with jobs to fill and those seeking jobs.

Most organizations have an ongoing need to recruit new employees to fill job vacancies when employees leave or are promoted, to acquire new skills, and to permit organizational growth. In an era when the focus of most organizations has been on efficiently and effectively running the organization, recruiting the right person for the job is a top priority if organizations are to be successful. Recruitment is directly related to both HRM planning and selection.
The Objectives of the policy of PGC
To outline the standards that are expected of new recruits to the PGC, and the processes this will be followed during recruitment and selection.
The foundation for this policy is that recruitment should only occur when there is a specific business need to be met i.e. vacant post and that the selection of the appropriate candidate will be on the basis of qualification, performance, potential and aptitude.
Recruiting Decision
The decision as to who should be recruited is taken by the Human resource Panel, consisting of the CEO & Director Medical Services, Deputy General Manager Human Resources and other Executives relevant to the position to be filled.
The Selection Criteria
Candidates are selected after full consideration of the following factors:
Need
There must be a legitimate need to increase the PGC hand count. In all cases the Department Manager who considers that they have a legitimate need to increase their hand count, either because an existing employee has resigned or because the expansion has been agreed as a part of the Area Operating Plan, must submit a request to HR Officer for consideration within existing manning levels and current business priorities for approval by HR Panel. Provided that the request is in line with the Area Operating Plan and current business priorities HR Officer will begin the recruitment process.

Recruiting Advertising
It will be PGC policy to advertise its vacancies to potential candidates both externally and internally. To meet the occasional need to recruit specialist-experienced employees, advertisements will be placed in professional journals and newspapers both within Bangladesh and overseas as necessary.
A copy of the advertisement will also be placed on the PGC Notice Board for internal candidates.

Qualifications
Job specifications and job vacancy advertisements will indicate the experience that is required for each job. Such as, when recruiting Assistant Officer’s will be that the successful candidates will posses, as a minimum, a first-degree level of academic education.

Aptitude

Candidates for all vacancies will be asked to undertake a range of ability tests prior to their recruitment. The PGC uses standard, professionally developed tests that are considered relevant to the positions of Assistant Officers, Officer and Executives. For more senior positions candidates may be required to undertake a wider range of ability tests or questionnaires and to achieve a satisfactory score in each test. Candidates who successfully pass the PGC ability test will be invited to attend interviews with members of the Human Resources Panel and other Executives deemed appropriate in light of the particular vacancy to be filled.

Recruitment Administration
References
The candidate must provide CHR with the names of three referees all of who will be contacted and references sought prior to the appointments. Referees must not be members of the candidate’s family.

Salary on commencement
The starting salary for all new Assistant Officer will be the minimum of the grade for the position to which they are recruited, unless they have prior experience preferably in a same field for a minimum of two years.

Probation Period
New employees will be placed on a probation period depending on their grade. On successful completion of their probationary period the employee will be appointed to the permanent staff.

ROT Programs

Prime Group, in line with other progressive employees, has for a number of years had programs to intensively developed a few young people who demonstrate very considerable long term potential. These programs aim to ensure that they are able to attract some of the brighter people with well balanced qualifications, graduating from universities, who have the potential to become future leaders of a very successful business which will grow to provide even more job opportunities than at present. Therefore, whilst the Group may continue to promote suitable Officers and Executives from amongst its cadre of experienced staff who demonstrates ability and management skills; it will also periodically use the ROT scheme. This scheme will fall outside our normal promotion criteria. Existing staff that meets the academic and other criteria which is published at the time of recruitment will be encouraged to apply. A separate guide is available from HR Department that provides more details of the ROT programs.
Standards for Recruitment to Assistant Officer Grade Prime Group of Company:
Age: preferable no older than28 years, unless for specialist job.
Minimum educational qualification of BCOM/BSS/BBA, preferably obtained from the Dhaka University or the IBA, Dhaka. The degree should preferably be in a discipline related to academically challenging subject, such as
Economics
Human rescores
Accounting/Finance/Management/Marketing
Business Administration
Successful completion of ability tests and occupational personality questionnaire.
Success at interview with members of the HR Panel.
Three satisfactory references.
Satisfactory medical reports.
Successful completion of the probation period.
Recruitment Process in Prime Group of Company

Sample of Request for Recruitment
Prime Group of Company-

Branch/Department:

Position to be filled:

Job Code: Job grade:

Replacement: Yes/No____________________
New Job: Yes/No__________

Recruitment justification (in terms of work load, AOP, etc.):

Approved by Human resource Panel: Yes/No________________________

Date______________________

Action by HR Department:
Authorized Signature ______________________
Date__________________

The performance appraisal/review will identify development needs and the Strategic and Area Operating plans will identify the business needs. Based on these needs appropriate training will be agreed, whether through self-study and self-development programmers, on the job coaching or structured courses. Prior to attending a training course, pre course discussion is essential between the participant and his/her manager to clarify why she has been selected to attend a specific training course, and to discuss the course contents and objectives. This may involve completion of pre-course work.

After attending the training course, a post course discussion is required to discuss the trainees’ views on the course and agree a suitable action plan. Continuous review and follow up, as well as future appraisals will help assess each employee’s need on an ongoing basis.

4.9 TRAINING
Organizations today are increasingly recognizing the importance of developing their human resources. The training function, now popularly referred to as human resources development (HRD), coordinates the organization’s efforts to provide training and development experiences for its employees. Although training is often used in conjunction with development, the terms are not synonymous. Employee training can be defined as a planned attempt to facilitate employee learning of job-related knowledge, skills, and behaviors or helping them correct deficiencies in their performance. In contrast, development is an effort to provide employees with the skills needed for both present and future jobs.
The future the only winning organizations will be those that respond quickly to the issue of training and development–related problems. If an organization wants to succeed, it must recognize the importance of investing in its greatest resource—the force working for it. developing human resources as key to organizational success. Developing human resources is the next stage in the process of achieving organizational success.
The Role of the HR training functions
The prime responsibility of the HR Training function is a coordinating role HRD. The training functions will co-ordinate the training needs each year after input via the Appraisal Performance System and Function Heads and submit the training needs for approval by GM HR via the operating Plan process. We are increasingly aware of the need to provide cost-effective training to meet specific requirement at the right time. We have therefore geared ourselves to operate a more flexible approach to training. The HR training function monitors the training budget and produces regular reports, which are sent to the CEO for expenditure and whether or not we are achieving performance improvements following training programmers via the post training action plans agreed.

The HR Department has the responsibility under ISO9002 for the following:
• Collate training needs
• Agree training solution with the supplier of the solution
• Plan/Schedule training as appropriate.
• Record training received
• Review and follow-up development.

The role of line managers in the training and development
Whilst the thrust of HR Training efforts is on classroom or Group training, the importance of on-the-job learning cannot be overlooked as playing an active role in an individual’s development. It is therefore essential that structured training courses and on-the-job coaching run side by side, as the former provides the knowledge, and guidelines that are further enhanced by the latter.
The role of a manager
The responsibility of training and developing staff working with them, is adequately spelt out in each Manager’s own job description. The manager clearly has to have committed involvement in his staff if they are fully benefit from their work environment and the training programmers that they may attend- be the job specific needs or development needs. The degree of interest and support given by the trainee’s superior will have a direct bearing on the trainee’s attitude and commitment to the programmer. It is therefore essential that staffs be briefed before being sent for training and debriefed on return to their duties.
The Line Managers responsibility under ISO 9002 is:
• Identify and report training needs to person responsible for training in HR Department.
• Identify and provide On-the-Job training solutions where applicable.
• Report all training received to the person responsible for training in HR department.
• Plan/schedule training as appropriate.
ISO 9002 Procedures
To identify Primary and Secondary Training Needs
i. Performance Appraisal:
This provides for a formal, annual review of an individual’s training needs and should be used to review and re-affirm training and development needs identified throughout the year. Interim appraisals of performance, including training needs, will be carried out. Needs noted on the Appraisal form must also be reported to the person responsible for Training form must also be reported to the person responsible for Training so that appropriate action is initiated without delay and a record of the need is provided. A suggested former for this report is the “Personal Learning Log”
ii. As the need arises Training needs may arise when:
– A staff member joins the branch/department/section.
– A staff member takes on new tasks within their current area.
– A system or procedure is introduced or changed.
– A jobholder’s performance does not meet required standards.

There is a systematic approach to the identification of training needs
? The Head of Section/ Department lists on a training matrix all the tasks carried out in the area.
? The name of each member of staff in the area is entered on the matrix.
? Probably with the help of the staff in the area, the Head of section/Department assesses the “Minimum Resources required’ in terms of fully skilled staff to ensure that the task is fulfilled effectively at all times. This is entered on the matrix.

? Then, for each member of staff, mark on the matrix whether the person is currently capable of carrying out the task. In addition, mark where staffs are approved to train others. If staff would not be expected to carry out task, ensure that this is evident from the matrix.
? The number of staff capable of carrying out the task is then compared to the “Minimum Resources Required.”

If there is shortfall of capable staff: Primary Training needs must be assigned as appropriate to ensure that sufficient staff are trained for that task.
If there is an adequate number of capable staff: Secondary Training Needs may be assigned for that to provide additional cover as appropriate.

b) To Monitor/Review Closely Staff development
Monitoring of Staff Development starts with provision of solutions to training Needs. This falls into two categories:
i. Within the department
On-the-Job training is usually the most effective method of provide technical skills training for staff joining sections or taking on new tasks. This form of training should be identified by the Head of the Section/ Department and provided without delay.
ii. By line management
Normally, the provision of other forms of training, often in respect of the non-technical skills, will be at the discretion of the line management. The person should make appropriate arrangements for the provision of training, other than On-the-Job training, responsible for trainings in liaison with the Head of Section/Department as necessary.
Evidence of adequate planning/scheduling is required where a number of training solutions are being addressed in an area. The form that these plans/schedules takes is the discretion of Quality Coordinators/Line Managers. Evidence of periodic review of progress against these plans/schedules is also required.
Reporting and Reviewing Training Received
It is the responsibility of the Head of Section/Department to confirm in writing to the person responsible for training, the agreed staff training has been completed and whether it has been effective in meeting the original need. Training log may be used for this purpose. The Training Record of the staff member is updated accordingly. These Training Records may be saved on PC. The matrix is updated regularly (and evidence by initial) by the Head of Section/Department to ensure needs are systematically and regularly reviewed.

Training programs of Prime Group of Companies
At PGC, their training programs are based on the job natures and the performance of the employees. Their goal is to attract, retain and motivate the very best and to do that they support training, development and business education through the following:
Internal Training Programs-
External Courses-
Resident Management Trainee Program (RMT Program)
Distance Learning
Role Effectiveness Training-
Super Visual Management-
IT Training-
Continuous Learning Process-
Specialized Training-
Operations:
• Top-level decision-making process on compensation, promotion, training, development & appraisal.
• Development of employee.
• Assists all HR activities.
• Communicates with the external and internal entities.
• Monitors leave, payroll, increment, & allowances etc.
• Maintain financial flow related to HRD.
• Generates Report for Audit requirements.
• Plans for the development of the employee.
• Arranges training according to the requirements.
• Ensures standard of the groups.
• Ensures cost effectiveness.
• Controls of archive & database & training & performance.
• Facilitates the training functions.
• Maintains communication among trainer & the trainee and other facilitators.
• Looks offer all the properties of the hospitals.
• Ensures operating procedures in the proper way.
• Provides full logistic support to the departments as well as employees.
• Deals with Intra & outer communication for the administration issues.
• Ensures value actability.
• Plan for the development of company.
• Facilitates admin officers’ jobs.
• Maintains all records.
• Looks after maintaining of property.
• Develops plan for support service.
• Ensures security of the company.
• Maintains monthly——— regarding HR.
• Analyses performance.
• Prepares Monthly report.
• Executes recruitment arrangement.
• Controls stationary and store.
• Deals with accounting activity related to the administration.
• Works on operational level on the support system of the company.
• Executes the requiem

4.10 PERFORMANCE APPRAISAL
The HRM activity designed to provide performance feedback to employees. This feedback serves a variety of purposes and makes potentially significant contributions to organizations and individual employees alike. Indeed, we can almost think of performance-related feedback as being like a ship’s navigational system. Without such a system, the ship’s captain would have no way of knowing where the ship was, where it had come from, and where it was heading. Similarly, without an effective performance management system, organizations and individual employees would have no way of knowing how well they were doing or where improvements might be needed. Performance appraisal is the process by which an employee’s contribution to the organization during a specified period of time is assessed. Some organizations actually use the term performance appraisal, whereas others prefer to use terms such as performance evaluation, performance review, annual review, employee appraisal, or employee evaluation. Regardless of the term used, this chapter is concerned with preparing managers and other employees to cope with today’s workforce diversity in the management and appraisal of performance.

4.11 EMPLOYEE BENEFITS AND COMPENSATION
Employee benefits typically refers to retirement plans, health life insurance, life insurance, disability insurance, vacation, employee stock ownership plans, etc. Benefits are increasingly expensive for businesses to provide to employees, so the range and options of benefits are changing rapidly to include, for example, flexible benefit plans. Compensation includes topics in regard to wage and/or salary programs and structures; for example, salary ranges for job descriptions, merit-based programs, bonus-based programs, commission-based programs.
Employee Compensation
Compensation includes topics in regard to wage and/or salary programs and structures, for example, salary ranges for job descriptions, merit-based programs, bonus-based programs, commission-based programs, etc.
Compensation is payment to an employee in return for their contribution to the organization, that is, for doing their job. The most common forms of compensation are wages, salaries and tips.
Compensation is usually provided as base pay and/or variable pay. Base pay is based on the role in the organization and the market for the expertise required conducting that role. Variable pay is based on the performance of the person in that role, for example, for how well that person achieved his or her goals for the year. Incentive plans, for example, bonus plans, are a form of variable pay. (Some people might consider bonuses as a benefit, rather than a form of compensation.) Some programs include a base pay and a variable pay.
Organizations usually associate compensation/pay ranges with job descriptions in the organization. The ranges include the minimum and the maximum amount of money that can be earned per year in that role.
Employees have certain monies withheld from their payroll checks, usually including federal income tax, state income tax, FICA (social security) contributions, and employee contributions to the costs of certain benefits (often medical insurance and retirement).
Compensation in PGC
The Prime Group of Companies maintain fair and competitive remuneration packages based on business needs and competitor practices. A compensation and benefit survey is conducted on a regular basis, which involves the Company obtaining salary information form other Company in Bangladesh such as united hospitals, Shqdar medical, square hospitals. The compensation package includes a competitive salary, and progressive benefits, all designed to influence and reward personal achievement.
PGC follows a well-defined wage structure and fringe benefits for its employees. The wage structure is updated periodically (Two years terms) by the management.

The major deciding factors are-
• Profitability of the company
• Average cost of living in the country due to year to year basis inflationary trend
• Status of wage earners in similar organization
• Restrictive conditions given by the government from time to time
• Financial benefits status in the company

Existing wage structure:
• Base basic structure
• Home rent
• Conveyance allowance
Annual Pay Increase
Annual pay increase depends on performance and as per recommendation of the departmental Heads. Under Normal policy, maximum range is 10% of basic pay but exception to the policy is at the discretion of the management on case-to-case basis
Salary
Salary is as stated in the appointed letter. However, any changes will be notified in writing. Upon satisfactory completion of the probation period a basic monthly salary increment of 10% will be awarded. Furthermore, employee’s salary will be reviewed on an annual basis in April according to his/her performance and may be adjusted at the discretion of PGC.
Salary Payments
Monthly salary will be credited into staff account, which he/she opens upon joining the Dutch- Bangla Bank. Salaries are paid on 25th of each month in arrears, plus other allowances less deductions such as Income Tax, contribution to Provident Fund etc. Each employee will receive a monthly pay statement detailing gross pay and deductions.
Allowances
Various allowances are paid in the PGC such as Housing Rent, Conveyance, Leave, Tiffin, and Medical.
Bonus
The hospitals awards bonuses in addition to basic salaries for occasions such as Ed/Christmas, as Festival bonuses.
Salary Administration Policy
In order to support the PGC’s wish to see employee

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Analysis of Customer Satisfaction on Grameenphone Ltd.

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“Analysis of Customer Satisfaction on Grameenphone Ltd.”

Introduction

1.1. Background:

Grameenphone limited is now the foremost telecommunications service provider in Bangladesh with 34.412 million subscribers as of July 2011. In the recent business world, especially in telecommunication sector, long-term customer retention, i.e., attaining sustainable marker share is a crucial issue. Project is about analyzing the present status of Customer Satisfaction level of Grameenphone and the future prediction of the product& service based on organization’s aptitude and customer expectations. Grameenphone has come a long way. It is a joint venture enterprise between Telenor (55.8%), the largest telecommunications service provider in Norway with mobile phone operations in 12 other countries, and Grameen Telecom Corporation (34.2%), a non-profit sister concern of the internationally acclaimed micro-credit pioneer Grameen Bank. The other 10% shares belong to General Public & other Institutions.

Grameenphone is seeing the Bangladeshi market as a great opportunity to do business. Grameenphone has launched the largest Initial Public Offering (IPO) in Bangladesh. It expects to raise US$70.4 million dollars through the IPO sale of 69.44 million shares. As a part of continuous market development strategy, Grameenphone needs a comprehensive study on the telecom sector and cellular industry that will help in better understanding the industry in which it is operating. The company, 55.8% owned by Telenor of Norway, has raised the same amount from institutional investors. The money will be spent on network expansion and developing its information technology infrastructure.

The company has so far invested more than BDT 10,700 crore (USD 1.6 billion) to build the network infrastructure since its inception in 1997. The population coverage of Grameenphone network was increased from 55% to 95% during the year. And Grameenphone will continue

to make the network quality and capacity improvements through the country and also improve coverage in major highways and important public access buildings. The entire Grameenphone network is also EDGE/GPRS enabled, allowing access to high-speed Internet and data services from anywhere within the coverage area. There are currently more than 3 million EDGE/GPRS users in the Grameenphone network.

1.2. Problem Statement:

This project will be titled as “Analysis of Customer Satisfaction: A Study on Grameenphone Ltd.”In the current business world, particularly in telecommunication sector, long-term customer maintenance, i.e., attaining sustainable marker share is a vital issue. This project is about analyzing the present status of Customer satisfaction. Since my responsibility in Grameenphone Center (GPC) as an Executive (Customer Manager) is to serve the subscribers face to face, under this topic I will try to give exact reflection of overall customer service way of GP.

Objectives:

Broad Objective:

Analyzing the present status of customer satisfaction level & the future prospects of the product based on the organization’s capability and customer’s expectation.

Specific objective:

The research will be aimed at fulfilling the following specific objectives:

· To describe the Service that Grameenphone provides for its customers.

· To compare the service offered by the Grameenphone with regards to their customer’s expectation.

· To find out the problems behind the service offered by the Service provider (Grameenphone) with regards to the customers’ expectation.

· To find out the overall satisfaction level of Grameenphone subscribers.

1.3. Scope of the study:

The scope of this report is limited to the overall description of the company, the industry it is existing, the way customers are served and customer’s expectation of service level. Though Grameenphone is the industry leader but still it is in its growth stage in Bangladesh; it still has to go a long way to be the industry leader in Bangladesh. This report provides a close analytical look at the subscribers’ service satisfaction level that GP is providing recently and usages with a closer to view subscribers’ expected services from GP. This report will help to gather knowledge about the services provided by Grameenphone. To remain in leading position in Telecommunication market, this research is very needful because customer is the core concentration of marketing. Their satisfaction will bring Grameenphone’s success and help to reach the goal.

1.4. Methodology:

Business research used in this report is of descriptive nature. Through this descriptive research this report seeks to determine the answers to who, what, where and how questions of the cellular industry of Bangladesh. To prepare the report, research design and methods of this study is described as follows:

· Data source:

Data for this report has been extracted from primary sources as well as secondary sources.

Figure-1

Primary Data:

Primary Data will be collected though questionnaire survey which will be done on postpaid users of Grameenphone and direct interview will be done with corporate employees of Grameenphone Limited.

Secondary Data:

Majority of the data will be collected from Annual Report, Informal discussions mainly with my supervisor, published articles on telecommunication sectors, journals, brochures, Grameenphone official web sites.

· Sample Size:

The sample size of will be 100 for this project purpose.

· Questionnaire design:

The questionnaire will be designed in such a way so that the view of respondents articulated properly regarding each and every issue.

· Data Collection:

Organization part-

Annual Report, Informal discussions mainly with my supervisor, published articles, journal, and brochures, Company websites

Project part-

· Organization part information will be provided in a descriptive manner

· Data will be analyzed by the software called SPSS

· I’ll conduct correlation, regression analysis and ANOVA to find whether the hypothesis gets proved or disproved.

1.5. Limitations of the study:

· Time constraint is a big factor could be a big issue, as I have to do this report along with my regular office work

· Data availability could be another big issue here because company might not want to disclose all the confidential information regarding their managerial strategies and plans.

· The sample population will be limited in terms of proportion and composition.Data collection is restricted within Dhaka city only, which may fail to represent the factual scenario of the relationship between measured variables.

Grameenphone Limited: An overview

2. Name and Location of the Company

Grameenphone Ltd (hereinafter referred to as “GP”/”Grameenphone”/”the company”/”the parent company”) is now the foremost telecommunications service provider in Bangladesh. It is a joint venture enterprise between Telenor (55.8%), the largest telecommunications service provider in Norway with mobile phone operations in 12 other countries, and Grameen Telecom Corporation (34.2% ), a non-profit sister concern of the internationally acclaimed micro-credit pioneer Grameen Bank. The other 10% shares belong to general Public & other Institutions.

Grameenphone is a public limited company incorporated in Bangladesh in 1996 under the Companies Act 1994 with its registered address at Celebration Point, Road 113/A, Gulshan, Dhaka, Bangladesh. In July 2010, the registered office of the company was shifted to GPHOUSE, Bashundhara, Baridhara, Dhaka 1229. GP was initially registered as a private limited company and subsequently converted into a public limited company on 25 June 2007. During November 2009, GP listed its shares with both Dhaka and Chittagong Stock Exchanges. In 2010, Grameenphone formed a wholly owned subsidiary namely Grameenphone IT Ltd (hereinafter referred to as “GPIT”/ “the subsidiary company”), to provide IT services to itself and also to external customers. GPIT launched its commercial operation from 1 April 2010.

3. Historical Background of the Company

The Telecom market in Bangladesh has differentiated characteristics of very low Tele-density, inefficiency and totally controlled by capitalization. BTTB (Bangladesh Telephone and Telegraph Board) is proved to be incapable of providing sufficient interconnections to meet the demand of mobile services providers. The state owned BTTB has been the monopoly telephone service provider. The zest of improving the efficiency and ability of BTTB, the government initiated a restructuring program in telecom sector to corporatize BTTB.

3.1. Achieving Licenses:

The granting of service license to Bangladesh Telecom Authority in 1989 paved the way for mobile service in Bangladesh. Pacific Bangladesh Telecom Limited (PBTL, now Citycell) operating under CDMA technology was offered a cellular license in Bangladesh in 1993. In 1996, Bangladesh was preparing to auction off private cell phone licenses to four companies. So October 10 in 1996, at the request of Dr. Muhammad Yunus (Grameen Bank’s founder) completely independent of Grameen Bank, a not-for-profit private company called Grameen Telecom was formed as private limited company. Grameen Telecom, in turn, created a for-profit company called Grameenphone, found a foreign partner, and put in a bid; Grameenphone received one of the four licenses.

3.2. Launching Grameenphone service:

In the midst of lack of communication means, Grameenphone launched its service on the Independence Day of Bangladesh with an effective and user-friendly mobile phone network.They started their operation from March 26, 1997 with only 72 employees. They converted to public limited company on June 25; 1997.Grameenphone put a positive impact on the lifestyle of the people of Bangladesh.

Grameenphone was the first company to introduce GSM technology in Bangladesh when it launched its services in March 1997. Since its inception, Grameenphone remains committed to providing the best service to its customers, as well as launching innovative new products and services.The Village Phone Program started in 1997 that provided a good income-earning opportunity to more than 210,000 mostly women Village Phone operators living in rural areas. Grameenphone makes its profits by serving wealthier urban customers. But from the point of view of the Grameen family and its strong anti-poverty mission, the for-profit, urban-only Grameen Phone exists for only one reason: To fund, with its profits, the extension of cell phones into rural Bangladesh in order to provide entrepreneurial opportunity to Grameen Bank members through Village Phone. As Dr. Yunus puts it, “Grameen Phone is merely what we need to do Grameen Telecom’s Village Phone.”

3.3. Journey of Grameenphone:

After a successful launching, Grameenphone introduced it services in the second largest city of Bangladesh, Chittagong In June 1998. Cell to cell coverage in the Dhaka-Chittagong corridor also enabled Grameenphone to introduce its service in a number of other districts along the way.

In 1999, Grameenphone expanded its business and started its’ business in Khulna. A good number of other districts came under their coverage because of cell to cell coverage between Dhaka and Khulna. Grameenphone was also the pioneer to introduce the pre-paid service in September 1999. They introduce the EASY pre-paid service in the local market. Besides, it established the first 24-hour Call Center, introduced value-added services such as Voice Mail Service (VMS), Short Message Service (SMS), fax and data transmission services, and many other products and services.

In 2000 Grameenphone started its services in Sylhet, Barisal and Rajshahi and brought all six divisional headquarters under the coverage of its network. The service in Barisal region was happening after the microwave link between Khulna and Chittagong was completed. After six years of operation, in August 2003 Grameenphone has more than one million subscribers. And from November 2005 Grameenphone continues to being the largest telecommunication operator of Bangladesh with more than 5 million subscribers. Grameenphone Ltd is continuing its operations with a success in 2006. In November it has just reached the mark of 10 million customers.

In 2008, Grameenphone has been listed in Bangladesh capital market after completing the largest initial public offering (IPO) ever in the country’s history. Trading of Grameenphone shares began in both Dhaka and Chittagong Stock Exchanges on 16 November 2009. The share of BDT 10 each was offered with premium at BDT 70 and on 30 December 2009 the trading price closed at BDT 187.5 in the Dhaka Stock Exchange & the present Market price is BDT148.20 (as on 08 June 2011).

AT A GLANCE

4. Name and Characteristics offounder

Grameenphone is a joint venture company comprising of:

Figure-2

Telenor – A state-owned telecommunication company from Norway. It has a long history of successful cooperation with other operators in Russia, Hungary, Montenegro, Ireland, Bangladesh, Greece, Germany, Germany, Australia, Malaysia etc.

Grameen Telecom – A sister concern of Grameen Bank. It was established by Grameen Bank to organize and assist those Grameen bank borrowers who wish to retail telephone services in the rural areas.

Marubeni Corporation – A leading investment and trading company from Japan. The company owns 9.5% of GP.

Gonofone DevelopmentCorporation – A New York-based telecommunication development company having investments in many companies in USA, Russia and other parts of Europe.Gonofone Development Corp. owns 4.5% of GP

5. Existing Share-holders

Grameenphone is the largest mobile phone company in Bangladesh. The shareholders of Grameenphone add their exclusive, in-depth experience in both telecommunications and development. Telenor holds 55.8 per cent of Grameenphone, with Grameen Telecom Corporation owning the remaining 34.2 per cent. The rest of the shares belong to General Public & other Institutions. Telenor has played a pioneering role in development of cellular communications in Bangladesh.

Figure-3

The international shareholder brings technological and business management expertise while the local shareholder provides an existence throughout Bangladesh and a deep understanding of its economy. Both are dedicated to Bangladesh and its struggle for economic progress and have a deep commitment to Grameenphone and its mission to provide affordable telephony to the entire population of Bangladesh.

6. Vision, Mission, Objectives and Strategy

6.1. Company’s Vision:

Grameenphone’s vision is “We exist to help our customers get the full benefit of communications services in their daily lives. We’re here to help”. That means Grameenphone Ltd always there to help the customers get the full assistance of communications services in their daily lives. They want to make it simple for the customers to get what and when they want it.

6.2. Company’s Mission:

The mission of Grameenphone is to be the only reliable means of communication that brings the people of Bangladesh close to their loved ones and important things in their lives through unparalleled network, relevant innovations & services. They are providing a total communication solution to its customers. To do this, the service advance of Grameenphone has extensively developed over the last few years. Grameenphone subscribers now enjoy all the modern data communication and content services. Mobile office, internet access, MMS and modern music and download services are available through the nationwide EDGE enabled network.

6.3. Company’s Objectives:

Grameenphone (GP) has been established to provide high-quality GSM cellular service at affordable prices. Grameenphone has a dual purpose:

· To receive an economic return on its investment

· To contribute to the economic development of Bangladesh where telecommunications can play a critical role.

The Company has developed its strategies so that it earns healthy returns for its shareholders and at the same time, contributes to genuine development of the country. This is why Grameenphone, in collaboration with Grameen Bank and Grameen Telecom, is aiming to place one phone in each village to contribute significantly to the economic benefit of the poor. It is on the way to get a total uprising in the telecommunication field. By accomplishing the success factors, Grameenphone would like to be recognized as a consistent, honest and committed company to its valued subscribers and stakeholders.

6.4. Company’s strategy:

Grameenphone Limited’s strategy was to effectively become the second national operator in Bangladesh. Instead of focusing on a high-end, niche market; it pursued a low tariff strategy designed to compete directly with BTTB.

Continuous to grow subscriber base:

Grameenphone’s strategy is to grow their subscriber base, while seeking to limit declines in APPM, by increasing the availability of their products and services throughout the Bangladesh and by aiming to improve customer retention.

Focusing on high value customer:

Grameenphone strive to provide superior network coverage, connectivity, quality and reliability, as well as to continue their product and service innovations through continued investment in their network and products. They are focusing on high value customer segment which they expect will grow as Bangladesh population becomes more affluent with their value-added services, in particular Internet access and BlackBerry. They intend to increase their focus on high value business segment customers, given the high usage of voice and non voice services by these customers.

Achieve capital and operational efficiencies to improve profit margins and cash flow generation:

Grameenphone’s strategy is to continue to exercise strong discipline over their operating costs and capital expenditure to achieve improved efficiency and productivity in their operations and leverage their existing capacity. They have also plan to reduce their operation and maintenance expense by, among other things, using solar power, controlling service agreement pricing and lobbying to reduce the SIM tax.

Increased Brand Awareness and reinforce brand values:

Grameenphone intend to support their brand by undertaking brand refreshment exercises from time to time. They have planned to increase brand awareness through various point of sales promotions.

Increased revenue from non voice services:

Grameenphone is offering a wide-range of non voice services, including SMS, MMS, games, information services, content download, ring back tones, Internet access and BlackBerry services. They plan to continue increasing their revenue from non voice services, developing additional services and further expanding their presence as one of the largest provider of internet access in Bangladesh.

Continue to expand their comprehensive distribution network:

Grameenphone new distribution model is to push sales to retailers by distributing their SIM cards, electronic recharge systems and scratch cards through a network of nearly 100 third-party distributors. Their objectives under this new distribution model are to improve their product availability throughout the country with the establishment of more points of sales, improve inventory management, accelerate distribution of product, provide better support to their customer base, create a strong channel of communication between Grameenphone and subscribers and obtain better market data to allow them to be more dynamic and responsive to the market.

6.5. Company’s Value:

Make it Easy:

Grameenphone believes that they are sensible. Everything they create is easy to appreciate and use as they never fail to remember that they are trying to make their customers’ lives easier.

Be Inspiring:

Grameenphone believes that they are imaginative. They convey energy and thoughts to their work. Grameenphone wants to be a collaborator in the progress of our society. They are passionate about our business, customers and country.

Keep Promise:

Everything Grameenphone set out to do should work. If it does not, they are there to put things right. They are about delivery, not over promising – actions not words.

Be Respectful:

Grameenphone shows acknowledgement and admiration the local culture. They are courteous and professional in regard to all interactions, both internally and externally. They are open, helpful and friendly.

7. Organizational Structure

Grameenphone has now more than 5000 employees. Grameenphone is divided into several departments namely technical, sales & marketing, customer relations, administration, human resource, finance and IT. Recently management has brought a change in the organizational structure in view of need of time. Management and organization structure of Grameenphone Ltd. are given in the following –

Board of Directors

Chairman SigveBrekke
Directors Nurjahan BegumHilde Tonne

M. Shahjahan

Per Erik Hylland

Md. Ashraful Hassan

Knut Borgen

SnorreCorneliussen

Independent Director

Dr. Jamaluddin Ahmed FCA

Table-1:Board of Directors

Management Team

Tore Johnsen, Chief Executive OfficerRaihanShamsi, Deputy CEO & Chief Financial Officer

Tanveer Mohammad, Chief Technology Officer

ArnfinnGroven, Chief People Officer

Kazi Monirul Kabir, Chief Communications Officer

ArildKaale, Chief Marketing Officer

Mahmud Hossain, Chief Corporate Affairs Officer

Table-2: Management Team

Organogram & Management

* Not a member of the Management Team

** Deputy CEO has a special role on Stakeholder Relation of the Company. Stakeholder Relation team of Corporate Affairs has a dotted reporting to Deputy CEO.

Figure-4

8. Operating Coverage

Grameenphone has the leading network with the widest coverage in the country. The Grameenphone network now covers over 99 percent of the population and over 87 percent of the land area with the remaining areas mostly falling under the Sundarbans and the Chittagong Hill Tract areas where mobile phone coverage is not allowed. Presently Grameenphone has covered 462 upazillas of 64 districts.

The company has so far invested more than BDT 10,700 core (USD 1.6 billion) to build the network infrastructure since its inception in 1997. It has invested over BDT 3,100 core (USD

450 million) during the first three quarters of 2007 while BDT 2,100 core (USD 310 million) was invested in 2006 alone. Since its inception in March 1997, Grameenphone has built the largest cellular network in the country with over 10,000 base stations in more than 5700 locations. A record 4181 new base stations were put into operation around the country during the year, crossing the 10,000 base station milestones in the process. In addition, the entire Grameenphone network is EDGE/GPRS enabled, allowing its customers to access high-speed Internet from anywhere within the coverage area.

9. Grameenphone’s Different Divisions and Department

In recent times management has brought a change in the organizational structure in view of need of time. Currently Grameenphone has 11 divisions and 5 departments to run its operations smoothly. The divisions are:

· Commercial Division

· Finance Division

· People & Organization Division

· MD’s Division

· Communications Division

· Corporate Affairs Division

· Technical Division

The departments are independent from any divisions. The names of 5 departments are:

· Administration Department

· Revenue Assurance and Fraud Management Department

· Information Department

· Internal Audit Department

9.1. Commercial Division:

Commercial Division is the link between the customers and the company. People in this division are mainly serving the clients. They are escalating the relationship of Grameenphone with its valued customers. This division can be subdivided as following major parts-

Figure-5

Structure of Commercial Division

Commercial Division is a combination of former Sales, Marketing & Customer Service Division. A significant amount of employees are working in this Division. Scope of work of some important departments are described as below —

Product Management Voice

· Manage product development and product life cycle management for all tangible products (SIM, SC and Device) to enable growth in core service business (voice, data, VAS)

Segments

· Campaign Management & Execution

· Conceptualize and design campaigns

· Right feedback to product management on campaign

· Ensuring timely execution

· Activity Control

· Consistency of message across touch point& Threading activities under a single theme

Customer Lifecycle Management

· Design and prioritize campaigns, Manage channel execution,

· Customer types focus & Develop and manage loyalty program

· Gather structured/unstructured information from different sources, process it and pass it to relevant parties

· Customer expectation and satisfaction management

CRM

· Managing end to end Stealth Marketing Process to bring in targeted revenue

· Manage campaign alignment activities and forums to ensure we do not go to the same sub with multiple campaigns

· Participate in the commercial roadmap process to align other divisions with upcoming commercial campaigns/activities

· Making stealth marketing process future-proof and capable of handling market dynamics

Customer Experience

· Customer expectation and satisfaction management

· Running projects to identify gaps in consistency among service channels and touch points

· Service assurance, usability, Product and process simplification

Customer Services

· Ensure Service Level & Customer Satisfaction

· Customer feedback is shared, recognized & implemented throughout the organization

· Follow-up & incorporate feedback into product design and informing customers who made suggestions

· Ensure Best quality services from Health Line (789), Study line etc.

Business Sales, Regions

· Maintain proactive, regular on site customer management & new acquisition for highly profitable Business clients in the Regions.

· Responsible and manage people development issue of the assigned team including leadership expectation of GP.

· Assist in developing DS channel strategy and coordinate product, segment and other teams to attain departmental objectives.

Direct Sales

• Responsible for retaining and driving business from High Value Key Accounts of Direct Sales comprising of top financial institutions, NGOs and MNCs.

• Maintain proactive, regular on site customer management & new acquisition for highly profitable Business clients in Dhaka.

• Act as a communication consultant to the clients and provide need based customize solutions.

9.2. Finance Division:

The Finance Division consists of almost 300 employees in its various departments. The Division encompasses all financial activities – both internal and external. Department of finance is an integral part of finance division. The main role of this department is defined in under:

· Attends to financial planning and control and

· Budget and budgetary control

· Provide management information and development of system and method

· Ensure proper internal control over the company

· Analysis of financial statement for future action

· Information flow for inter-department and external using

· Co-ordination with external organization and internal department.

· Responsible to lender, Telenor and Bangladesh Bank related to financing issues

· Liaison with foreign lenders, sponsors, bankers and regulators

Investment Control:

· Evaluation new investment proposal as project or programs

· Prepare business case

· Advice management and investment committee and re-rank the investment options

Financial Control:

· Maintain and develop internal control structure aiming at the Sarbanes Oxley Act 2002 (Section 404)

· Check compliance of financial and procurement policies

· Compliance with tax related issues and Review policies and procedure in place and pass suggestion for continuous improvement

Payroll and Taxation:

This is a very sensitive and important segment in finance department. This department compiles the Companies Act and rules regulations of the Government. This is also working as legal advisory of tax, VAT and other external affairs. There is several sections based on work volume and criteria of the extended works. The main role of this department defines as under:

· Preparation of payroll statement and bank advice

· Preparation of salary perquisite and return submission and preparation accounts and financial statement for tax and audit

· Ensure tax deduction and issuing certificate individuals and ensure treasury deposits for tax, VAT and deduction at source

· VAT return and revenue statement preparation and preparation VAT report periodically and annually

· Supervision Provident fund and ensure investment of fund and supervising welfare fund and ensure internal using

· Internal audit co-ordination and external audit finalization and Quarterly report to NBR (National Board of Revenue) regarding connection and handsets

9.3. People and Organization Department:

People and organization Department, a significant department of Administration Division plays very essential role in the total functioning of Grameenphone. Employee recruitment, selection, transfer, promotion, training, performance appraisal – all these are conducted by this division. The informal structure of HR according to its functions can be classified into three main categories they are:

· Human Resource Management (HRM)

· Human Resource Development (HRD)

· Human Resource management Information system (HR- MIS)

Human Resources Development functions aim to increase the quality of the human resources especially through training. Different divisions send their personnel requirement to HR department. Then HRD sets target, prepare recruitment planning and go for the recruitment process. When an employee is recruited a separate employee file is opened comprising of all information of the particular employee which is regularly upgraded by HRD. HR Management also deals with some personnel functions likes how cause, termination, Dismissal, discharge, and resignation. It also issues circular as & when required, conduct department inquiry, and all other functions related to HR.

9.4. Regulatory and Corporate Affairs Division:

This division looks after the regulatory and interconnection issues. It is responsible for maintaining close relationship with BTRC, MOPT, PSTN operators and mobile operators for matters related to interconnection with fixed and mobile operators, and interconnection & Revenue Sharing Agreement. This division is also responsible for maintaining relationships with Ministries, the National Parliamentary Telecom Committee, Government agencies like the Board of Investment (BOI), the National Board of Revenue (NBR), and law-enforcing agencies.

9.5. Technical Division:

The Technical Division can be considered as the brain of this organization. Most of the people in the technical division are from the engineering and technological educational background. This division is divided into three departments-

Figure-6

Planning Department:

People working in planning department build the technology. They are accountable for planning the network and equipment, taking decision about new expansion, enhancement and up-gradation and closely monitoring network performance. This department has three parts: switch planning, radio planning and transmission planning.

Implement Department:

The people of implementation department are responsible for the construction and acquisition of base station room, antenna pipe, and power supply etc., installation of new base station hardware, start-up and pilot operation of base station. It is also divided to three units: site acquisition, civil works and roll-out.

Operations Department:

Operations department is responsible for smooth operations and maintenance of the network. Their main tasks are operation, maintenance and overall management of the networks, fault detection and fault handling of networks. This department always closely monitors the network performance.

9.6. GPIT:

Grameenphone IT Ltd. is the leading fastest growing IT Company registered with the Registrar of the Joint Stock Companies and Firms of Bangladesh under the Companies Act 1994. It is a 100% subsidiary company of Grameenphone Ltd. which is the largest mobile operator company in Bangladesh with more than 30 million subscribers.

As a leading IT company, we are proving end to end solutions for Bank, Financial Institute, FMCG, Pharmaceuticals and Telecom Industry. We bring to you a team of talented individuals dedicated to creativity, service and efficiency. We are purely devoted to bringing clients noticeable transformations in their operational efficiency and we strive to provide inventive end-to-end IT solutions which are unsurpassed in value and quality. We look forward to demonstrating the exceptional skills and initiatives this country has to offer.

We aspire to leading Bangladesh into the global IT arena and would like to invite you to join the revolution. As hardworking and persistent people, we have proven capabilities in driving initiatives to surge forward a nation’s technological development. With a diverse array of IT experience, we bring to you the promise of change, the change that will take your organization into the future.

10. Industry Analysis

In the past three decades, due to significant liberalization and privatization, the entire telecommunications industry has become a dynamic environment with huge growth potential subject to new opportunities as well as threats. In recent years, in some Asian countries the number of mobile subscribers even passed the number of fixed-line subscribers. Hence, lately the strategic behavior of telecommunications companies has attracted so much attention, both in the academic literature and in the popular press. In Bangladesh the scenario is not much different. At present the socioeconomic profile of Bangladesh provides a great opportunity for the mobile industry to expand as the regulation in the mobile services is becoming more relaxed. Although the number of mobile operators is still limited to a few (five private mobile operators and one state-owned operator), aggressive competition has forced the incumbent telecommunications companies or mobile operators to reconfigure their strategy and business to sustain or improve their competitive advantage.

In order to create a stronger framework and encourage further investment and monitor and regulate the expanding telecommunications sector, in 2001 the Government of Bangladesh enacted a new telecommunications law, BTA. The BTRC is an independent commission and commenced functioning from January 31, 2002.

Under the BTA, the BTRC has the power to issue, renew, suspend and cancel licenses for establishing and operating telecommunications systems, providing telecommunications services and using radio apparatus and radio frequencies. The power is to be exercised in accordance with the objectives of the BTRC in sections 29 of the strengthens the social and economic welfare of Bangladesh; ensuring access to reliable, reasonably priced and modern telecommunications services for the greatest number of people; and encouraging the introduction of new services and creating a favorable investment climate. The BTA also requires the BTRC to maintain and promote competitions between service providers. In addition, the national telecommunications policy 1998 emphasizes the need to increase teledensity rates and expand and upgrade network coverage throughout Bangladesh, in particular by promoting greater private participation in the provision of basic telecommunications services. Bangladesh telecom (Pvt.) Ltd. (“Bangladesh Telecom”) was granted a 20-year license in 1990 covering trunked radio, cellular radio (both mobile and fixed-lines, i.e. including wireless local loop), and paging and riverine radio communications networks by BTTB. This license refers to a short agreement entered into on July 26,1989, under which Bangladesh Telecom received an exclusive right to provide telecommunications services for a period of five years.

The part of the license authorizing cellular radio telephony (fixed line and mobile) was transferred in 1993 with the consent of BTTB to Hutchison Bangladesh Telecom Ltd. (“Hutchison Telecom”) being a joint venture between Bangladesh Telecom and Hutchison Telecom. Hutchison Telecom subsequently changed its name to Pacific Bangladesh Telecom Ltd. (“Citycell”) in 1996.

The mobile phone operations decisions were never being influenced by any International agreement but held up as an independent entity for making market to grow. Self learning and liberalizing the mobile phone sector shaped up in a chronological strategy for Bangladesh. From 1993 till 1996 the mobile phone services were monopolized by one company; Pacific Bangladesh Telecom Ltd. which didn’t let the customer benefitted, however, with the commissioning of mobile phone service by Grameen Phone Limited and Robiin 1997, the situation started to improve in terms of price reduction and quality. The later period could be said Grameen phone Ltd. golden period, but the arrival of Banglalink in (2005) the mobile phone market brought immense price competition. The intensity of competition came as a blessing for the customers. This change in trend forced every player to adjust their price policy and quality.With significant reductions in tariff levels, Bangladesh is now one of the world’s fastest growing telecommunications markets with a tele-density of approximately 30 percent. This growth has supported the economic growth of the Bangladesh economy and Bangladeshi consumers have received substantial benefits. Recently, there has been more regulatory reform activity with the promulgation of the International long Distance Telecommunications Services (‘ILDTS’) Policy in 2007 and the corporatization of the BTTB to form the Bangladesh Telecommunications Company Limited (‘BTCL’). It also makes significant new policies in relation to interconnection – including voice and data, quality of service and retail tariff-ing.

Figure-7

The GSM standard, operating in the 900MHz and the 1800MHz frequency bands, is the predominant technology standard used for mobile telecommunications services in Bangladesh.

Company Technological Standard
Grameenphone GSM 900/1800
Robi GSM 900/1800
Banglalink GSM 900/1800
Citycell CDMA 800
Teletalk GSM 900/1800
Warid GSM 1800

Table-3 source: Information Telecom & Media

The Bangladesh Mobile Telecommunications services industry has experienced significant growth in recent years. The total number of mobile telecommunications subscribers in Bangladesh increased from 4.2 million as of December 31, 2004 to 78.075 million as of July 2011, representing a compound annual growth rate of approximately 81.1%. Grameenphone Limited believe this increase had been driven by various factors, including –

· An increase in the geographic coverage for mobile telecommunications services by each of the major operators in Bangladesh

· Continuing declines in the prices of mobile handsets

· An increase in affordability of mobile telecommunications services due to continuing declines in per minute prices and increasing availability of lower cost pricing plans.

The mobile telecommunications industry in Bangladesh is currently led by three major GSM operators: Grameenphone, Banglalink and Robi. Grameenphone has the largest market share with a subscriber market share of 44.1% as of July 2011. Banglalink, a subsidiary of Orascom, has the second largest market share by number of subscribers. Robi, 70.0% owned by Axiata (formerly TM International), has the third largest market share by number of subscribers. Warid, founded by the Abu Dhabi Group, entered the market in 2007 and has gained the fourth largest market share by number of subscribers. Citycell, a subsidiary of SingTel, the Singapore-based telecommunications company, has the fifth largest market share by number of subscribers, and is the sole mobile operator to use a CDMA system. Teletalk owned by the Government has the lowest market share. The following table summarizes market shares of mobile telecommunications operators in Bangladesh:

Company Market Share, 2011
Grameenphone 44.1%
Banglalink 26.99%
Robi 18.75%
Airtel 6.53%
Citycell 2.2%
Teletalk 1.45%

Table-4, Source: BTRC

Increasing competition among the major private telecommunication companies in Bangladesh is pushing them to undertake various strategic and tactical measures to attract new customers while retaining the existing customers. In this emerging market both prepaid and post-paid subscribers are not exhibiting strong loyalties or commitment to any particular service provider as they have options of switching to other service provider(s) for more convenient and suitable service offerings. Hence, the major private telecommunication companies have a stake high enough to consider how to create a loyal customer base that will not be eroded even in the face of fierce competition. Therefore, the major private telecommunication companies must realize the emergence of studying and understanding various antecedents (viz. service quality, switching cost, trust, and customer satisfaction) of the subscribers’ relationship commitment to figure out ways to create a loyal customer base.

10.1 Market Position:

Telecom industry in Bangladesh is intensely competitive. Consumer demand in Bangladesh makes the mobile market one of the fastest growing markets in the world. According to Bangladesh Telecommunication Regulatory Commission (BTRC) the total number of subscribers in the telecom industry of Bangladesh is 78.075 million as of July 2011. Grameenphone is the leading provider of domestic access and domestic services with nearly 44.1 percent of subscriber connections. Importantly, the geographic reach of the Grameenphone network is greater than 98 percent.

Table-5, Source: BTRC

10.2 Porter’s Five Force Model:

Before getting into a market, every company should have an assessment of the market environment, how that market could react in different circumstances. Porter’s (1998) five forces model has the ability to determine the competitiveness of a market. According to Porter (1998), the collective strength of five major forces determines the ultimate profit potential of an industry. But whatever the collective strength is, the strategy should be formulated in such way that the company can defend itself against these forces or influence them in its favor. And knowledge of these contending forces provides the pathway of the right strategic action (Porter 1998, p21-22). Porter’s five forces are as follows:-

Figure-8

· Barriers of Entry

· Bargaining Power of customer

· Bargaining Power of Supplier

· Available substitutes

· Level of existing rivalries

10.2.1 Barriers of Entry:

Many foreign investors are now interested to do business in telecom sector in Bangladesh which reveals that Bangladesh has become a significant hub for telecoms. All the current players are either partially or fully foreign owned – 55.80% of Grameenphone is owned by Telenor from Norway; Telecom Malaysia owns around 70% of Robiand Banglalink is 100% owned by Egyptian Orascom Telecom. Singapore Telecom (Singtel) has entered the market by acquiring 45% share in Pacific Bangladesh Telecom. Warid Telecom of Abu Dhabi has got the license and has already started their operation. And now the US giant Vodafone is investing in the mobile telecom sector of Bangladesh by acquiring significant share of Robi. A PSTN company named World Tel Ltd. whose license had been suspended, got back its license with 7.5 MHz frequency in the GSM-1800 MHz band for operation in the central zone. As the frequency is GSM, we expect World Tel may enter the mobile telecommunication market. With its insignificance license fees, revenue sharing fees and lower investment cost compared to the incumbent mobile operators, World Tel may challenge our market share.This plethora of foreign investors shows that the threat of new entrants is very high. However, the barrier to entry and exit are also high. High setup cost and high level of sunk cost acts as a screening for small investors from crowding the sector.

10.2.2 Bargaining power of customer:

In the beginning, the mobile market was a controlled by seller. When Pacific Telecom first introduced their brand Citycell, the startup connection used to sell for more than Tk.100,000. The airtime was over Tk.16 per minute. However, with the increase in competition, buyers gained more power. Currently, the market is mainly dominated by buyers. The prices have come down a lot. The low level of product differentiation and very low cost of startup connections have led the buyers to switch operators very frequently. In Bangladesh Telecom industry, there are already 6 giant companies trying to find their niche. Companies are undertaking various promotional and product strategies to reduce churn. It has been clearly noticed that, as the market is growing, proportionally all the companies are getting new subscribers depending their nationwide coverage. So it is assumed that, even if the bargaining power of the customer seem to be high, due to the high growth rate of the market, each company is somehow getting benefited. Their market share is increasing, keeping pace with the growth rate of the market. The middlemen played a major role in the determining the buyer power. Previously all the companies used external dealers to ensure the smooth flow of their distribution. The commission paid to dealers was very high. However, the dealers paid a very low level of commission to retailers, as a result controlling the market to a great extent. Grameenphone is the first company to deal with this situation. They have started their own distribution network. This has not only reduced cost in the form of dealer commission but also increased satisfaction of retailers. Thus, in a market with strong buyer power, a self-owned distribution network can only help GP in maintaining its market leader position.

10.2.3 Bargaining power of supplier:

Bargaining power of the suppliers is low in the market as there are a lot of telecom related suppliers available. More over some giant Swedish and Finish multinational companies have already established their business in the market. Since the numbers of mobile phone companies are limited the suppliers cannot switch frequently or pressurize the buyers. On the other hand suppliers like Ericsson, Nokia, Siemens and Motorola are pretty big player themselves and have specialized sales units. Thus, there was always a good understanding between the suppliers and buyers. This situation is now tipped a little bit in the favor of the mobile phone companies by the entry of the Chinese company Huawei. They are offering to supply at lower rates than the previous suppliers. As a result, companies now have the option to go for cheaper suppliers.

10.2.4 Available substitutes:

The presence of 6 competitors in the market makes high availability of substitutes and competitions. But with a lower price strategy or may be an innovative new service, this threat could be altered says the BTRC Chairman. Bangladesh has a growing economy. Per capita income is very low, but this could not hinder people’s mobile consumption. But since the income level is low, so tendency of switching seems to be ignorable. And finding have already given the idea about how the market is growing. Mobile industry is a technology based industry and like any other technology has the danger of becoming obsolete by new technology. Thus, the threat of potential substitutes is always there. Currently, the biggest substitute of mobiles is land phone. The land phone market, until very recently, had been a government monopoly. Private land phone licenses were issued in 2005 and the PSTN (land phone) companies are yet to capture a significant portion of the market. Moreover, it was found that people keep mobile phones even if they have land phone connection. Thus, the threat from land phones is not that high. Another threat to the mobile phone industry is the expansion of broadband technology. People, especially youngsters, are finding it cheaper to chat online with their friends rather than talking. Broadband provides with quite a few advantages over mobile phones: chance to communicate with more than one person, cheaper rate are a few examples. However, lack of proper infrastructure is acting as a barrier to expansion of broadband countrywide. Thus, it is yet to materialize as a real threat to the mobile industry.

10.2.5 Level of existing rivalries:

The mobile telecom industry is intensely competitive. Even a few years back the industry was not as strong as it is now. Initially, Citycell enjoyed total monopoly in this sector. After the entry of Grameenphone and Aktel (which is now Roby), the industry condition had changed. Citycell lost its place as a monopoly player as Grameenphone took over most of the market share and Roby took the second position. The scenario further changed with the entry of Orascom Telecom, the mobile giant from the Middle East. They entered the market by acquiring 100% shares of Sheba Telecom and re-launching the brand as Banglalink.

Aggressive marketing and promotion were one of their main entry strategies and it worked. The airtime rates and connection prices came down because of the competition. This was an awakening call for the other operators. Grameenphone and Roby, who were silently enjoying their market positions, suddenly became aggressive as well. There was a huge increase in promotional activities of all mobile operators. The prices also started climbing downhill. Companies focused on segment marketing as well as mass marketing. GP launched its youth brand Djuice to cater to the needs of young generation. Citycell came up with their Aalap Super and Aalap Super Plus providing free airtime whole night. Robi, which was known as Aktel also came up with new offers like Aktel JOY that catered to the need of couples. Overall, the industry became a hubbub of activities.

The following table is showing the summary of Porter’s five force analysis at a glance-

Five Force Strength
Barriers of Entry Low
Bargaining Power of customer High
Bargaining Power of Supplier Low
Available substitutes High
Level of existing rivalries: Moderate

Table-6

10.3 Company’s comparative conditions:

There are six mobile telephone operators in Bangladesh at the moment. Among them one is Government owned telephone operator: Bangladesh Telegraph and Telephone Board (BTTB) and the other five are privately owned companies namely Grameenphone Ltd., Axiata (Bangladesh) Limited, Orascom Telecom Bangladesh Ltd., Pacific Bangladesh Telecom Ltd. (PBTL) and Warid Telecom Bangladesh Ltd.

10.3.1 Grameenphone Limited:

Grameenphone Limited, the number one and leading mobile phone company in the area of telecommunications in Bangladesh. Of Six mobile operators, Grameenphone Limited managed to grab 44.1% of the market share only by providing cost-effective & best service available in the market of mobile telecommunication. Grameenphone Limited has made its expansion not only in the urban areas, but also it stretched its network in the rural areas for the economic empowerment of the rural people. It has the largest network, the widest coverage, the biggest subscriber base and more value added services than any other mobile phone operators in Bangladesh. Grameenphone Limited has a very strong competitive position in the telephone industry in the country.

10.3.2 Orascom Telecom Bangladesh Limited:<

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Analysis Report On Bio-diesel from algae

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Analysis Report On Bio-diesel from algae

BIO-DIESEL FROM ALGAE
ENERGY………the NEXT

Executive Summary

With the responsibility of global food crisis, bio-fuel is becoming notorious day by day. But it seems to be a breakthrough for mankind. Too much consumption of food grain and cultivable land to produce fuel took bio-fuel to this position. But a Bangladeshi scientist Dr Ataul Karim, head of the research department of Virginia Old Dominion University, came up with a ground breaking technology to produce bio-diesel from algae.

Bangladesh is totally dependent on imported fossil fuel, which increases the vulnerability of its energy security. This is where “GREEN FUEL” the organization comes in the scenario. With the vision to be largest renewable energy supplier, GREEN FUEL will produce bio-diesel from algae. Why algae? It is the most efficient source of bio-fuel than any others. To produce 250 metric tons of diesel, algae consumes 5 hectors of land but to produce the same amount with palm will take 40 hectors of land.

The preferred location for GREEN FUEL is Khulna because of its geographic advantages and high demand for diesel. After setting a fixed location GREEN FUEL will formulate an operational plan. The plan includes two units. They are algae cultivation and oil conversion unit. After drying algae, we can get lipid or crude oil by the means of press. And later the crude oil can be converted into diesel by transesterification process.

Only production is not the end of the journey. We need to set target market and ways to communicate the benefits and values we are offering. We will serve agriculture sector or the farmers engaged in cultivating. To communicate our values and benefits, we will first position GREEN FUEL as the most caring supplier to the farmers. We will support our positioning through distribution channel and promotional campaign. We will supply directly to farmers to improve their productivity.

Our entire plan will remain only plan, if we do not make a proper human resource strategy. We required 22 personnel in different levels of management and operation in the very first year. Although among the investor three people will hold the position of top executive of Finance, Operation and Marketing.

Now at this position, we are like an ASTON MARTIN car that cannot run. The car’s got everything except fuel. To run the ASTON MARTIN we need fuel. The fuel of our business is money that is equity. 2/3 of our investment will be invested by partners and 1/3 of the investment will come from the debt from the bank. The amount of total investment will be 75000000 in the first fiscal year. Every partner will provide equal amount of equity. We have our assumptions to conduct our entire financing plan. We have forecasted our finance plan for five years.

We assume a flat price of diesel over our forecasted five years. The cost of goods sold will be around 15%-20% of revenue. We have forecasted a NPV of BDT and IRR at .GREEN FUEL will be in the track of profit from the first year of operation.

GREEN FUEL wants maximum utilization of its Strength to grab the maximum Opportunities and work out its Weakness to reduce the possibility of Threats. There are several risks we have identified as well as alternative ways to reduce the identified risks.

Nothing is so easy in the world so is our business. But we got great opportunities and we will stick on to it unless we make the brake through.

Introduction

The reserve of fossil fuel is reducing day by day, but the alternative of fossil fuel, bio-fuel from various food grain (corn, sugarcane, palm tree, Jatropha) has led the world towards severe food crisis (Reported in UN report BIO-FUEL: CRIME AGAINST HUMANITY). “Green Fuel” the organization wants to meet up the increasing demand of diesel and reduce the risk of food crisis of the world generated by food-based bio-fuel technology. The main purpose of production of biodiesel from algae is to eliminate this problem. Algae can produce 10 times more fuel and use 10 times less land from other bio-fuel sources like Jatropha, palm etc. Low production rate and use of cultivable land is contributing highly in global food shortage. In perspective of Bangladesh, bio-diesel from algae is a unique and feasible way to meet the demand for diesel.Ultimately GREEN FUEL is working with a strategic sector of Bangladesh, which is closely related with energy security and will prevent the curse of food shortage which has been created because of existing bio-fuel technology.

The venture’s Impact

Business Type: Cultivating and Manufacturing

We will cultivate algae and use those cultivated algae to produce bio-diesel. Through this process we will get a byproduct that is massed algae, which can be used as organic fish food. So we will…

Vision

To be the largest supplier of renewable fuel to make Bangladesh self-reliant in energy.

Mission

· To provide environment friendly diesel that will meet internationally accepted straight quality standard at a competitive price.

· To earn fair amount of profit for organizational growth; and by so doing generate opportunities for both employees and shareholders to achieve rational personal objective.

· To establish an alternative source of bio-fuel that will not affect food production by using any cultivable land.

Organizational form and Management Team

· Green Fuel Will be a partnership firm.

· The organization will consist of 6 partners.

· Each will provide equal amount of equity.

· The organization structure will be flat in term of managerial Organ gram.

· There will be three Directors, who will be head of finance, operations and marketing departments.

Overview of industry

The competition may intensify if other bio fuel base company develops gradually to produce bio-diesel from other sources like Jatropha, Corn, Wood, Sugarcane etc

Primarily the potential market of “GREEN FUEL” is the entire user of diesel in Bangladesh but as our plant is located in Khulna; our potential and targeted customers will be the users of Khulna region or the southern part of the country. Last year BPC imported 2.2 million tons of diesel and .76 million tons of diesel was being supplied to this area. And almost 152,000 tons of which was used in agriculture. But this huge supply of diesel could not eliminate the shortage. We will fill up a portion of that supply gap according to our production capacity. Our targeted segment will be the individuals, who are engaged in agriculture. Our main target customers are the large farmers, who have more than 8 acres of cultivating land. But we will also serve the other types of demands for diesel. In Khulna the numbers of these type large farmers are 4153 and they require huge amount of diesel to irrigate this huge amount of land.

Main Problem of Farmers with Diesel Supply

· Untimely, short and interrupted supply of diesel in irrigation season.

· As dealers are situated in upozillas, farmers in villages find it difficult to reach them.

· To get required amount of diesel, farmers have to lose some of their working hour and the cost of transportation of diesel increases their production cost.

· Extra price charged by the dealers in times of shortage.

Overview of Promoter

The promoters are fresh graduate. They are young entrepreneurs. They have no previous experience. So it is also a green field project.

Overview of Project

We will produce Bio-Diesel from the natural waste Algae. It is available in our pond, small rivers.

Objective & Goal of Project

The main purpose of production of biodiesel from algae is to eliminate this problem. Algae can produce 10 times more fuel and use 10 times less land from other bio-fuel sources like Jatropha, palm etc. Low production rate and use of cultivable land is contributing highly in global food shortage. In perspective of Bangladesh, bio-diesel from algae is a unique and feasible way to meet the demand for diesel.Ultimately GREEN FUEL is working with a strategic sector of Bangladesh, which is closely related with energy security and will prevent the curse of food shortage which has been created because of existing bio-fuel technology.

Planning

Substitute projects

Market Analysis

Potential and Target market

Primarily the potential market of “GREEN FUEL” is the entire user of diesel in Bangladesh but as our plant is located in Khulna; our potential and targeted customers will be the users of Khulna region or the southern part of the country. Last year BPC imported 2.2 million tons of diesel and .76 million tons of diesel was being supplied to this area. And almost 152,000 tons of which was used in agriculture. But this huge supply of diesel could not eliminate the shortage. We will fill up a portion of that supply gap according to our production capacity. Our targeted segment will be the individuals, who are engaged in agriculture. Our main target customers are the large farmers, who have more than 8 acres of cultivating land. But we will also serve the other types of demands for diesel. In Khulna the numbers of these type large farmers are 4153 and they require huge amount of diesel to irrigate this huge amount of land.

Positioning

We will position “GREEN FUEL” as a cultivation partner of farmers. We will make farmer’s life easier and reduce their production cost by saving their working time and cost, consumed by fuel transportation. We will set our distribution channel and promotional campaign in a manner, which will establish our desired position in the mind of the farmers.

Marketing strategy

· Following channel differentiation strategy to establish our positioning.

· More emphasis will be given on promotional campaign rather than advertisement.

· Removing the informational barriers in creating the market for bio-diesel.

· Creating, maintaining and expanding the arena of long term relationship with the customers.

Pricing Strategy

Bangladesh Petroleum Corporation regulates the price of diesel. We will not break their regulation. In present market, the price of diesel is BDT 44/liter. We will adjust the price with BPC over the time. Excess price will not be charged in time of shortage.

Distribution Channel

Green Fuel
Farmers in targeted areas

Selling strategy:

Selling Strategy

· We will sell our product directly to the farmers by home delivery system and customer centre system in some important area.

Promotional Campaign

The objective of our promotional campaign is to communicate the benefits of using our products and establishing our positioning concept. Ultimately we will be a brand for the villagers by creating win-win situation. Our promotional campaign will be…

Competition

· The competition may intensify if other bio fuel base company develops gradually to produce bio-diesel from other sources like Jatropha, Corn, Wood, Sugarcane etc.

Technical Analysis

Production

We will lease 2 acre of land beside Khalishpur Power Plant in Khulna. Then we will build 5 raceway ponds (a special type to cultivate algae). The area of each pond will be 1500 square meters. We will install steel skeleton around each pond and cover the pond with transparent fiber. These ponds will be solely used for algae production. For the maximum growth of algae we will connect each pond with the chimneys of nearby KHALISHPUR power plant. We will cultivate, P. Tricornutuum, a type of algae. In the remaining areas we will build our fuel conversion plant, 3 storage systems, guard rooms and other facilities. We will fence around the total areas.

The process is given below in graphical form.

Algae Cultivation
Algae Dryer
Dried algae
Extracting lipid from algae by mean of press
Bio-diesel
Transesterification solvent
Lipid or Crude oil to conversion plant

Ordering: Orders will be received from local agents in targeted areas.

Delivery: We will deliver diesel in 250-liter containers by our rental transportation system.

Billing: Users of bio-diesel are required to pay the bill within 15 days of delivery.

Quality control: To ensure best quality, specialist will be engaged, at least 4 times a year from valid institutes like University scientists.

R&D: Initially “GREEN FUEL” will jointly work with botany and biotechnology department of KHULNA UNIVERSITY by sponsoring bio-fuel research.

Capital requirement

The project will required BDT 75000000 for setup cost in FY2009/2010. We need a lot of working capital in this type of business.

· From these money algae cultivation plant and bio-diesel conversion plant will require BDT 56500000.

· Rest of the outflow will be required to build storage and other facilities and working capital.

Moreover, capital expenditures during the subsequent years of operation are also regarded as capital investment, which is projected to be BDT1000000 for pickup van in 2016. Again we will invest, to expand the production capacity, in 2016 to acquire land and equipment.

Personnel Requirement

Organizational Structure: Flat managerial organizational structure.

Staffing need: Head of the departments will be taken from partners.

We need a total number of 22 people under 3 departments in the first year. Among the 22 employees there will be 2 persons specialized in botany and chemical technology. As our initial task will be to make people familiar with this kind of biodiesel, we will employ more people in the marketing sector than others. We will employ 2 managers and 4 assistant managers in the marketing department and 1 manager and 1 assistant manager in the finance department. Apart from this we will employ sales representatives in the targeted areas as well as some cultivators and some guards.

Outsourcing: We will outsource specialist in the field of bio-diesel from universities and research institutes.

Financial Analysis

Sales Projection

We are expecting that we can start the production from the second half of the very first year. Production will start to grow from the second year as the economies of the scale will take place.

The sales projection schedule is furnished below:

Particulars 2009-10 2010-11 2011-12 2012-13 2013-14
Bio diesel yield (liters) 350000 750000 780000 800000 800000
Sales price 44 44 44 44 44
Total revenue 15400000 33000000 34320000 35200000 35200000

The projected income statement for the next 5 years is furnished below:

Income Statement (Summarized)

Year 2009-10 2010-11 2011-12 2012-13 2013-14
Revenue 15400000 33000000 34320000 35200000 35200000
Cost of goods sold 3080000 5940000 5834400 5632000 5280000
SG&A 3030000 3150000 3600000 2880000 2730000
Depreciation 3416667 3416667 3416667 3416667 3416667
EBIT 5873333 20493333 21468933 23271333 23773333
Interest expenses 3500000 3500000 3500000 3500000 3500000
EBT 2373333 16993333 17968933 19771333 20273333
Tax 0 0 0 0 0
Net income 2373333 16993333 17968933 19771333 20273333

The demand of the bio-diesel is never expected to fall. However the price of the diesel may fluctuate over time. The cost of goods sold may also fall dramatically. Especially the cost of ethanol and potassium hydroxide used to produce the bio-diesel may rise over time. So for this reason we have done the scenario analysis.

Scenario Analysis

Scenario Summery Current Value Likely Worst Best
Diesel Price 44 44 40 50
Cost of goods sold 15%-20% 15%-20% 30% 12%

Net income for the first 3 years for different scenarios is furnished below:

Scenario based net income 2009-10 2010-11 2011-12
Best case 5453333 22933333 26878333
Worst case (146667) 10933333 11323333

The projected balance sheet for the next 5 years is furnished below:

Balance Sheet (Summarized)

Year 2009-10 2010-11 2011-12 2012-13 2013-14
Total Current Assets 28603334 41016667 54417802 68220135 82273467
Net Fixed Assets 53083333 49666667 46249999 42833332 39416665
Other Assets 0 0 0 0 0
Total Assets 81686667 90683334 100667801 111053467 121690132
Total Current Liabilities 5500000 6000000 7000000 7500000 8000000
Total Long-term Debt(5 yrs) 25000000 25000000 25000000 25000000 25000000
Total Equity 51186667 59683334 68667801 78553467 88690132
Total liabilities and

Equity

 81686667 90683334 100667801 111053467 121690132

Ratio Analysis

Year 2009-10 2010-11 2011-12 2012-13 2013-14
Current ratio 5.20 6.84 7.77 9.09 10.28
Quick Ratio 5.20 5.84 6.77 8.9 9.28
Inventory Turn over – 5.5 4.90 4.69 4.4
Fixed Asset Turnover .290 .664 .742 .822 .893
Total Asset Turnover .189 .364 .341 .317 .289
Basic earnings power 7.19% 22.5% 21.3% 20.9% 19.53%
Profit Margin on sales 15.41% 51.49% 52.35% 56.16% 57.59%

The huge amount of cash will be used in the fiscal year 20014-15 to pay back the 5 year debt and also for the expansion of the business. The cash could be used earlier for the same purpose but has not been used as we are the first producer of the bio-diesel in the country through algae and will be dealing with a lot of uncertainty. So we will like to reserve this cash for the contingency plan purpose in time of liquidity crisis.

Projected Cash Flow

Year 0 Date 2009-10 2010-11 2011-12 2012-13 2013-14
EBIT 5873333 20493333 21468933 23271333 23773333
Income Tax 0 0 0 0 0
Unlevered Net Income 5873333 20493333 21468933 23271333 23773333
Add: Depreciation 3416667 3416667 3416667 3416667 3416667
Less: Changes in WC -18500000 -4603334 -11913333 -12401135 -13302333 -13553332

+73673467
Less: Capital Expenditure -56500000
Free Cash Flow: FCF -75000000 4686666 11996667 12484465 13385667 87310135
PV of FCF @ 12% -75000000 4184523 9563669 8886195 8506833 49542115
Present Value of Cash inflow 80683335
Less: Project cost -75000000
NPV 5683335
IRR 14%

Here we observe that the business has a positive NPV at 12% rate of return in only 5 years. So the business is highly feasible.

Selection of Projects

Implementation Plan

Gathering required resources

With a view to implementing the plan, the first and foremost responsibility is to gather the required resources effectively and efficiently. This firm has requirement of financial, human resources and technology of both in-sourced and out-sourced. The financial resources are met up by both internal and external sourcing. On the other hand, workforce is designed mostly by external sourcing. Technological requirements will be fulfilled by outsourcing equipments and experts at different levels.

Financial resources are vital for uplifting capital investments, working capital. Human resources are significant to facilitate the monitoring of the whole production and distribution process from top to bottom. Significance of technology lies in the production process.

Risk Assessment

Risk in production process: The process of producing bio-diesel involves high degree of chemical use. Diesel itself is a flammable thing. So without proper monitoring any disaster can happen any time.

Escape Plan: Fire alarm and protection equipments, special protective suit for workers and strict monitoring system will be introduced.

Natural Calamities: Natural calamities might hinder the production of algae

Escape plan: No protection will work against calamities like sidr but strong construction will give some strength to protect our cultivation and manufacturing plant. Our production area is relatively free from calamities like flood and earthquake than the other southern regions.

Implementation Risk: The implementation of the plan consists of integrating two production units. However, quality checking is a crucial factor for each of the units. If this job is not carried on perfectly the production units may not perform at its optimum level, Thus resulting loss of sales and goodwill.

Escape plan: To synchronize all the steps in production and quality control units, we will engage expert personnel.

Supply Risk: In the production process, we need huge amount of chemicals and other raw materials. Improper supply of any raw materials can hamper production.

Escape plan: For proper supply of chemicals, we will develop an inventory management committee jointly with our suppliers. We will use alternative transportation system in time of any disturbance or natural calamity.

Innovation of Other Sources: Research on renewable energy is being conducted around the world. In near future many other sources may develop, so innovation of new source of bio-diesel can make our process obsolete.

Escape Plan: Future innovation of new source can be a risk and an opportunity both. We will follow business flexibility strategy to adopt change and make our R&D stronger with the time.

S.W.O.C Analysis

Strength

· Using algae as a source of bio-diesel, which is 10 times more productive then other sources.

· Simple procedure of producing diesel.

· Availability of core production source, algae.

· High flexibility of switching market segments.

· Sole producer of bio-diesel in Bangladesh.

Weakness

· Lacking practical experience about bio-diesel production.

· High setup cost can hamper the cash position.

· Relatively sensitive distribution channel.

Opportunity

· Short supply of diesel.

· Rising awareness about environmental threat.

· Growing shortage of natural gas supply around the country.

· Most part of the country remains out of the range of gas supply.

· High incentives for renewable energy sector from the government.

Challenge

· Growing use of gas in different sectors.

· Unavailability of skilled labor.

· Rising cost of chemicals and machineries.

· Decreasing amount of lands.

· Decreasing price of fuel because of recent global financial downturn.

Conclusion

In Bangladesh there is a huge gap of diesel. Every year a lot of currency is used to import the required diesel. At the same time the fossil fuel production is emitting CO2 which is destroying our mother earth. Our project is a small step here. If many projects like us come to light then our country will be improved, our beautiful world will be saved.

We will try our best to gift a GREEN WORLD through our project. That is our ultimate MOTO.

Appendix

Assumptions

Algae Cultivation Plant

· Around 280 gram of algae can be produced in every square meter per day.

· Each of the race way ponds will be 1500 square meter.

· Algae cultivation plant will produce algae every day.

Transesterification Process

· After cultivation the algae will be dried.

· Crude oil will be extracted from dried algae by mean of press.

· 20% ethanol and 2% Potassium Hydroxide will be mixed with the crude oil to get diesel.

Fuel Conversion Plant

· Each gram of algae contains 80%-85% of lipid or crude oil.

· More than 80% of that lipid can be converted into diesel.

· This plant will be in operation for round the years.

Others

· Cost of cultivation plant + cost of fuel conversion plant = Cost of bio-diesel.

· 98% of the production is assumed to be sold every year.

Accounting Assumption

Depreciation Policy: Straight Line Method.

Asset Type Economic Year
Race way pond 20Years
Oil conversion plant (Building) 15 Years
Oil conversion plant (Equipment) 15 Years
Other accessories 10 Years

Inventory Valuation: FIFO Method.

Tax Rate: Total tax is exempted for 5 years for renewable energy business.

Financial Assumption

· Initially the total capital expenditure will be provided by 6 partners.

· The capital requirement will be BDT75000000.

· There is an expansion plan in the 6th year.

· Selling price is assumed to be flat through 5 years.

· As there is huge growth opportunity we will reinvest 50% of the net income in the business at a required rate of return of 12%.

Organogram

Personnel Requirement

Year 2009-10 2010-2011 2011-2012 2012-2013 2013-2014
Marketing
Manager 2 2 3 3 4
Asst. manager 4 6 9 9 12
Finance
Manager 1 1 2 2 3
Asst. Manager 1 1 3 3 6
Operation(Production & maintenance)
Technician 2 2 3 3 3
Labor 6 10 15 15 20
Security Guard 6 8 8 10 10

Cost of Goods Sold

Particular 2009-10 2010-11 2011-12 2012-13 2013-14
Beginning Inventory 0 20000 20000 20000 20000
Add: Purchased Inventory 3100000 5940000 5834400 5632000 5280000
Less: Ending Inventory 20000 20000 20000 20000 20000
Cost of Goods Sold 3080000 5940000 5834400 5632000 5280000

Break-even Point

Required Capital: 7.5 crore

Total Revenue 2009-10 & 2010-11: (15400000+33000000) =48400000

Total Revenue 2011-12: (34320000/12 months) = 2860000/30days= 95333.33 per day.

95333.33*279 days= 26597999.07

So Break-even Point: (48400000 + 26597999.07) = 74997999.07

(2 Years + 279 Days)= 2 Years 279 Days (app.)

We can easily say that, we will reach in our Project Break-even Point in 2 Years 279 Days.

Income Statement

2009-10 2010-11 2011-12 2012-13 2013-14
REVENUES
From Bio-diesel 15400000 33000000 34320000 35200000 35200000
Less: Cost of goods sold 3080000 5940000 5834400 5632000 5280000
GROSS PROFIT 12320000 27060000 28485600 29568000 29920000
Less: OPERATING EXPENSES 6446667 6566667 7016667 6296667 6146667
Salary 480000 550000 650000 680000 730000
Marketing and promotion 1850000 1200000 1500000 700000 500000
Transportation rent( including agent cost) 700000 1400000 1450000 1500000 1500000
Depreciation 3416667 3416667 3416667 3416667 3416667
EBIT 58733333 20493333 21468933 23271333 23773333
Less: Interest Expanse 3500000 3500000 3500000 3500000 3500000
EBT 2373333 16993333 17968933 19771333 20273333
Less: Tax (Holiday for 5 years) 0 0 0 0 0
Net Income 2373333 16993333 17968933 19771333 20273333

Balance Sheet

Year 2009-10 2010-11 2011-12 2012-13 2013-14
Current Assets: 28603334 41016667 54417802 68220135 82273467
Cash 24103334 29516667 41417802 54220133 67473466
Accounts Receivable 4500000 5500000 6000000 6500000 6800000
Inventory 0 6000000 7000000 7500000 8000000
Fixed Assets: 56500000 56500000 56500000 56500000 56500000
Cultivation Pond 26000000 26000000 26000000 26000000 2600000
Oil Conversion Plant 28000000 28000000 28000000 28000000 2800000
Other building and equipments 2500000 2500000 2500000 2500000 250000
Less: ACCU. DEP. 3416667 6833333 10250000 13666668 17083335
Net Fixed Assets 53083333 49666667 46249999 42833332 39416665
Total Assets 81686667 90683334 100667801 111053467 121690132
Liabilities and Owners Equity
Current Liabilities 5500000 6000000 7000000 7500000 8000000
Accounts Payable 5500000 6000000 7000000 7500000 8000000
Tax payable 0 0 0 0 0
Long Term Debt and Owners Equity
Long Term Debt 25000000 25000000 25000000 25000000 25000000
Equity 50000000 50000000 50000000 50000000 50000000
Retained Earnings 1186667 9683334 18667801 28553467 38690131
Total equity 51186667 59683334 68667801 78553467 88690131
Total Liabilities and Equity 81686667 90683334 100667801 111053467 121690132

Cash flow Statement (Indirect Method)

2009-10 2010-11 2011-12 2012-13 2013-14
Cash flow from the operating activities
Net income 2373333 16993333 17968933 19771333 20273333
Adjustment to reconcile income to net cash provided by operating activities
Depreciation expense 3416667 3416667 3416667 3416667 3416667
Increase in the account payable 5500000 500000 1000000 500000 500000
Increase in the account receivable (4500000) (1000000) (500000) (500000) (300000)
Increase in the inventory 0 (6000000)

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Analysis Report On E-BUSINESS

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Analysis Report On E-BUSINESS

CHAPTER 1

INTRODUCTION OF THE TOPIC

In the emerging global economy, e-business has increasingly become a necessary component of business strategy and a strong catalyst for economic development. The integration of information and communications technology (ICT) in business has revolutionized relationships within organizations and those between and among organizations and individuals. Specifically, the use of ICT in business has enhanced productivity, encouraged greater customer participation, and enabled mass customization, besides reducing costs.

With developments in the Internet and Web-based technologies, distinctions between traditional markets and the global electronic marketplace such as business capital size, among others-are gradually being narrowed down. The name of the game is strategic positioning, the ability of a company to determine emerging op-opportunities and utilize the necessary human capital skills (such as intellectual re-sources) to make the most of these opportunities through an e-business strategy that is simple, workable and practicable within the context of global information and new economic environment. With its effect of leveling the playing field, e-commerce coupled with the appropriate strategy and policy approach enables Small and medium scale enterprises to compete with large and capital-rich businesses.

On another plane, developing countries are given increased access to the global Marketplace, where they compete with and complement the more developed economies. Most, if not all, developing countries are already participating in e-commerce, either as sellers or buyers. However, to facilitate e-commerce growth in these countries, the relatively underdeveloped information infrastructure must be improved.

HISTORY OF INTERNET

In the 50’s and early 60’s, prior to the widespread inter-networking that led to the Internet, most communication networks were limited by their nature to only allow communications between the stations on the network. Some networks had gateways or bridges between them, but these bridges were often limited or built specifically for a single use. One prevalent computer networking method was based on the central mainframe method, simply allowing its terminals to be connected via long leased lines. This method was used in the 1950s by Project RAND to support researchers such as Herbert Simon, in Pittsburgh, Pennsylvania, when collaborating across the continent with researchers in Santa Monica, California, on automated theorem proving and artificial intelligence. The Internet system was developed and ready in the Late 1980s, but The Cold War held up the progress. When it ended in 1992, the internet slowly became main stream. By the end of the decade, millions were using it for business, education and pleasure.

The Internet was designed in part to provide a communications network that would work even if some of the sites were destroyed by nuclear attack. If the most direct route was not available, routers would direct traffic around the network via alternate routes.

The early Internet was used by computer experts, engineers, scientists, and librarians. There was nothing friendly about it. There were no home or office personal computers in those days, and anyone who used it, whether a computer professional or an engineer or scientist or librarian, had to learn to use a very complex system.

WHAT MAKES THE INTERNET SO POWERFUL?

· The Internet is the lowest cost system ever developed to communicate with a potential audience of hundreds of millions of people all over the world. Even locally, the cost of a simple Web site is usually less than the cost of a modest ad in a business telephone directory. A Web site can also give more information than a telephone directory ad, including color photos, detailed descriptions of products and services, and price information that can be changed at any moment, for any reason, instead of waiting for a printed directory’s next publication cycle.

· As a news medium, the Internet is faster and more flexible than a newspaper or magazine. A story can be added to a Web site instantly at any time of the day or night. There are no deadlines (except self-imposed ones) for Internet news. The “printing press” is always on, you might say. Even television news, aside from a few 24-hour news channels, must usually wait for scheduled news broadcast times instead of breaking into entertainment programming whenever a new story comes along. Television is also constrained by its necessarily linear information delivery format. It must tell a story, then another story, then take a break for advertising, then tell another story, and so on, in sequence. A viewer cannot choose to view only a few stories that he or she finds interesting, which may occupy only five minutes out of a 30-minute newscast. On the Internet, a reader is free not only to choose to view just those stories in which he or she is most interested, but also gets to choose the order in which he or she sees them. If sports scores are the highest item on today’s agenda, click and there’s the sports section, as easy as turning a newspaper page. Another click and there’s the score from the game that just ended, possibly with video highlights only one more click away.

· Corrections, changes, and updates to a story published on the Internet can be made as fast as they come in without waiting for a printing press to roll. Breaking news alerts can be sent instantly by email to subscribers who request this service, and a reader can instantly communicate with an online publication’s editors via email or, if the publication has this facility, post his or her comments on a “message board” for other readers to see right away, without waiting for a fax or mail to get through and an editor to look the message over and perhaps include it in the “letters to the editor” section several days after the original story ran.

· An online publication can also offer an advertiser something that is not available in any other medium: ads that link directly, with one click, to a Web page full of compelling reasons to buy the advertised product or service. Even if only a fraction of one percent of all people who see a Web ad click on it, that is still an infinitely higher percentage than can click on a magazine ad or TV spot for additional information—or even to buy a product directly from the advertiser right now. Even if few readers click on an individual online ad and buy right now, a Web ad still has the same branding and general “get the name out” effect as advertising in other media. If the cost of an online ad is similar to the cost of one in another medium, it represents a better value because of the ability it gives an advertiser to give an interested person an entire Web site full of information right away, only one click removed from the online publication in which that ad is running.

· But the most direct way to make money online, no matter how a merchant gets traffic to his or her Web site, is to sell over the Internet. E-commerce has had its ups and downs, but the overall trend is upward, and it is likely to stay that way for many years to come. Putting up a “catalog” Web site is far less expensive than printing and mailing paper catalogs, and the Web site can have “instant” ordering and credit card acceptance built right into it, whereas a paper catalog can generate only phone orders that require a horde of (expensive) live operators to process or mail-in order forms that a customer must fill out And

THE ADVANTAGES OF THE INTERNET

So, let’s recap. Never have the chances for setting up and running your own successful business been easier than they are today:

You can certainly list even more reasons why it is possible for anybody with a computer and access to the Internet to establish their own business. At the same time the reality is that only a very small percentage of people who do have a computer and access to the Internet, establish and run their own business. Why is this? The answer is very simple. Most people anywhere in the world spend too much time thinking about things they do not want, instead of thinking about things they do want. As a

Result there are only a few people who have their own company and they usually earn more money than somebody with a regular job. Owners of companies usually have more personal and financial freedom than people with regular jobs. But what exactly do you need in order to own a company? Money? A University degree? The right friends? Well, maybe some of these things can help you with your business but then they are not essential and are no guarantee of success. We have analyzed a number of successful online business people and here is a list of important characteristics all of them possessed. We know that the following qualities are essential for success as a businessperson so you should take the time to go through them and check whether or not you have them. All the information about how to set up a website, how to run an email newsletter, how to get a high ranking at Google, how to generate huge traffic to your website etc. will be worth nothing if you don’t have most of the following skills and qualities.

10 SUREFIRE IDEAS TO START YOUR OWN ONLINE INTERNET BUSINESS

Become a freelancer – Do you have any specific skill? Sell it. Go to elance.com to find the job opportunities posted there.

Start information website – Do you have a passion to research any niche topic? Gather it, process it, rewrite it and start a new informational website on the researched topic.

Participate in affiliate marketing (sell others product) – Why don’t you sell manufacturer’s or marketer’s product? To be precise, sell other’s product.

Sell an ad space – If you have a website or blog sell an ad space from it. If you don’t have, try having one exclusively made for selling ad space.

Sell your own old stuffs through EBay – Start selling your product or your neighbor’s or friend’s product through EBay.

Create a Niche blog – Do you Blog for Fun? No don’t blog it. Blog to generate income out of it, get hired by companies to write blog for them. or create your own niche blog (this might over lap with any one of the above strategy).

Sell your services – If you have a talent in any particular domain, and then sell it as a service. Be an Online service provider. Example: Online Brokers (this might also overlap)

Create e-books on any subject of your interest and sell it across various channels like EBay, Amazon, etc

CHAPTER 2

WHAT IS E-BUSINESS?

E-business (electronic business), derived from such terms as “e-mail” and “e-commerce,” is the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners. One of the first to use the term was IBM, when, in October, 1997, it launched a thematic campaign built around the term. Today, major corporations are rethinking their businesses in terms of the Internet and its new culture and capabilities. Companies are using the Web to buy parts and supplies from other companies, to collaborate on sales promotions, and to do joint research. Exploiting the convenience, availability, and world-wide reach of the Internet, many companies, such as Amazon.com, the book sellers, have already discovered how to use the Internet successfully.

E-business is more than just having a web presence to facilitate buying and selling. Frank Jones, VP of IBM Corporation, provides this definition: “E-business is exploiting the combined power of the internet and information technology to fundamentally transform key business strategies and processes”.

The most common implementation of E-business is as an additional, or in some cases primary, storefront. By selling products and services online, an e-business is able to reach a much wider consumer base than any traditional brick-and-mortar store could ever hope for. This function of E-business is referred to as ecommerce, and the terms are occasionally used interchangeably.

An E-Business may also use the Internet to acquire wholesale products or supplies for in-house production. This facet of E-Business is sometimes referred to as eprocurement, and may offer businesses the opportunity to cut their costs dramatically. Even many E-Businesses which operate without an electronic storefront now use eprocurement as a way to better track and manage their purchasing. revenue from 5% in 2000 to 10% in 2007 . Asia-Pacific e-commerce revenues are projected to increase from $76.8 billion atIn addition to buying and selling products, e-business may also handle other traditional business aspects. The use of electronic chat as a form of technical and customer support is an excellent example of this. An e-business which uses chat to supplement its traditional phone support finds a system which saves incredible amounts of time while providing opportunities unavailable through traditional support. By using virtual computer systems, for example, technical support operators can remotely access a customer’s computer and assist them in correcting a problem. And with the download of a small program, all pertinent information about the hardware and software specifications for a user’s computer may be relayed to the support operator directly, without having to walk a customer through personally collecting the data. In the past few years, virtually all businesses have become, to some degree or another, an e-business. The pervasiveness of Internet technology, readily available solutions, and the repeatedly demonstrated benefits of electronic technology have made e-business the obvious path. This trend continues with new technologies, such as Internet-enabled cell phones and PDAs, and the trend of e-business saturation will most likely continue for some time.

International Data Corp (IDC) estimates the value of global e-commerce in 2000 at US$350.38 billion. This is projected to climb to as high as US$3.14 trillion by 2007.

IDC also predicts an increase in Asia’s percentage share in worldwide e-commerce year-end of 2001 to $338.5 billion by the end of 2004. Asia-Pacific e-commerce revenues are projected to increase from $76.8 billion at year-end of 2001 to $338.5 billion by the end of 2004.

SOME OF THE WAYS I CAN INCORPORATE E-BUSINESS INTO A COMPANY

The goal is to digitize transactions, which are simply defined as exchanges of information. The number of opportunities is limited only by your creativity, cost, and good business sense. The best advice is to determine the best opportunities for payback and address them first. Make sure the benefit will pay back or exceed the cost. The following is a summarized list of functions and activities where e-business applications are becoming embedded into the typical business model. Visualize, if you can, a business where each of these business activities is completely integrated with the others, to form a completely integrated e-business.

HAVING TRADITIONAL BUSINESS:

What do online customers seek?

Consumer attitudes of those who shop and purchase online are significantly different from the habits and preferences of consumers who visit stores. Their purchase decisions are driven and based on a different set of factors tied to the characteristics of the e-space environment. For an e-commerce business to survive, it is absolutely necessary to establish and maintain an intimate understanding of the customers, their behavior, and the factors that drive purchase decisions. In the current e-commerce environment, online consumers are highly sensitive to the following characteristics:

IS E-COMMERCE THE SAME AS E-BUSINESS?

While some use e-commerce and e-business interchangeably, they are distinct con-cepts. In e-commerce, information and communications technology (ICT) is used ininter-business or inter-organizational transactions (transactions between and among firms/organizations) and in business-to-consumer transactions (transactions between firms/organizations and individuals).

In e-business, on the other hand, ICT is used to enhance one’s business. It includes any process that a business organization (either a for-profit, governmental or non-profit entity) conducts over a computer-mediated network. A more comprehensive definition of e-business is: “The transformation of an organization’s processes to deliver additional customer value through the application of technologies, philosophies and computing paradigm of the new economy.”

Three primary processes are enhanced in e-business:

1. Production processes, which include procurement, ordering and replenish-

ment of stocks; processing of payments; electronic links with suppliers; and

production control processes, among others;

2. Customer-focused processes, which include promotional and marketing ef-

forts, selling over the Internet, processing of customers’ purchase orders and

payments, and customer support, among others; and

  1. Internal management processes, which include employee services, train- ing, internal information-sharing, video-conferencing, and recruiting. Electronic applications enhance information flow between production and sales forces to improve sales force productivity. Workgroup communications and electronic publishing of internal business information are likewise made more efficient.

CHAPTER 3

WHY ESTABLISH A BUSINESS ON THE INTERNET?

Fact versus Opinion

On techniques we have practised. We will be sharing with you the methods we have used to establish our own internet business rather than harping on about theories. You will be reading a real success story written by real people. Everything you will find here can be verified and put into practice by you. There is no denying that the internet has brought about a revolution. Never before have people been able to interact in such a cost effective and comfortable way. The Internet with its multiple communication channels also changes the world of business. Now it is possible for you to establish your own company with a very small financial investment or in some cases even without any start-up capital at all. The majority of people in any country in the world do not really like their regular jobs. Nevertheless they get up early every morning to go to work and when they return home tired and frustrated they switch on the TV to forget all about their problems. They often dream about a life that gives them the freedom to do what they really like with people who are friendly, intelligent, understanding and supportive. When it comes to business, most people confuse their personal opinions with facts. They believe in fact that they know something when in reality they don’t have all the data to support their beliefs. In this document section you will find factual information that is based on our experiences and our experiences Now with the Internet available in almost every household in any developed country, it is possible to achieve the type of lifestyle you have always dreamed about. The following facts will show why you really should consider establishing your own internet company:

Downsizing: Let’s face it — a computer is more productive than a human in business. areas such as accounting, administration, data management, calculating, statistics and many more activities. Whatever industry you name — new technologies increase productivity which, in turn, often leads to fewer jobs. To be sure new technologies also create new jobs but these require a much higher level of qualification and knowledge. A person who has been working in the same sort of job for several years is often not capable of acquiring all the skills and qualifications needed for a job in a new workplace.

Globalization: The world is becoming more and more interconnected. Even, or maybe especially after September 11, international travel activities have been increasing and this pattern will continue into the future. The number of companies that operate on a multinational scale is constantly rising because they need new market places. In Europe nations have agreed on a uniform single currency — the EURO, enabling the European Community to develop into a strong economic entity. The same sort of thing is taking place in Asia with China, Taiwan, South Korea and Japan forming a powerful economic alliance.

Information: More than 500 million people worldwide are using the internet on a

regular basis, with email and search engines as the most popular services. Information is power. People are able to influence, direct, convince, educate and manipulate others through one single tool: The distribution of information. Email and discussion forums allow people to share their thoughts, ideas and experiences with other people from all corners of the world.

Cost Effectiveness: The internet is by far the most cost effective communication tool. If you want to send a letter via conventional or so-called snail mail it will cost at least around $1 (assuming you restrict yourself to two single sheets of paper). Sending the same amount of information via email will be up to 100 times cheaper with immediate delivery.

WHAT DOES IT TAKE TO BE SUCCESSFUL IN E-BUSINESS?

Self-Motivation

Most people wait until someone else tells them what to do. That’s the way our society is organized. You go to school and the teacher tells you what to do. You study at university and the professors tell you what to do. Your parents tell you what is right and wrong. You get a job and there you will have a boss and colleagues who tell you what to do. Now, we all have to learn from others clearly but we do have a choice about where we get advice. If you want to know how to establish your own business, would you ask your colleague who has been working in a regular 9 -5 job for 15 years or so? Think about your teachers at school or your University professors. Do you think they know how to set up a business and become an entrepreneur? If we examine truly successful people we will find that they have a high level of self-motivation. This applies to any calling in life.

Consistency, the ability to follow through

Many people who do have self-motivation, quickly get enthused and inspired by a new idea. Getting excited or even thrilled by an idea might be great for the moment. A business, however, requires constant activity. If you want to establish and develop a company you need a high level of consistency also known as stickability. Once you have made the decision to set up your business, you must follow through this decision

with consistency. Think about your life can you come up with an example where you have proved your consistency, your stickability? Did you ever want to learn to play an instrument or a sport or a learn a foreign language? How long did you stick to your plan? How much time did you spend on your project and what have you accomplished? Chances are that you started a lot of projects and half way through the course you quit because things got tough and you lacked stickability. If this is the case fear not. You are not alone. The truth is that most people quit as soon as things get more difficult. Making a long-term commitment is not easy for most people. This applies to personal relationships too

Self-Discipline

Are you the sort of person who tends to raise your voice when something doesn’t go your way? Or do you even have A tendency to shout at your spouse, children or colleagues when you are under pressure? Whenever you start shouting, swearing or using negative language you are wasting your energy better put to use on your business venture. Swearing and grumbling kills your creativity and blocks your mind. You must be strong enough to withstand any tendency to get angry or upset or else you will never succeed in your business.

Courage

It takes great courage to make decisions and set goals because this means you have to prove to yourself that you can follow your own words through to a conclusion. Look at your friends, family and colleagues. How often do you hear somebody make a promise like «I’ll call you next week.» or «I’ll look this information up for you.» or «Sure I’ll help you when you move house, just let me know when you need me.» Those are statements, offers, promises all based on words. Yet, how often are they followed by deeds? Do you make New Year’s Resolutions such as «Next year I’ll quit smoking», «Next year I’ll start this business course at night school», and «Next year I’ll go on a trip to Paris or Egypt with you»? How many of those resolutions and promises have you kept? How many of them did you simply forget two weeks into the New Year? It takes courage to make a real decision, as you will have to make a sacrifice to follow it through. Also, when you start up a business you will be alone, at least to begin with. There will be no-one to tell you what to do, nobody at first to motivate and support you. You will have to take responsibility for yourself and to a certain degree, for any possible partners and you can only lead others if you have your own fears under control and are willing to take risks. Many people do not set themselves goals because they are afraid of failing of admitting defeat and they think the best way to avoid defeat is to simply not set goals.

Willingness to learn and the ability to change habits

When you decide to start your own Internet business you are also deciding to go back to school again. Not in a real physical sense but mentally. You will have to trawl for every single bit of information that will get you closer to your goal. To learn means you’ll need to change your habits and habits are established patterns of behaviour and thinking that everyone acquires throughout their lives. However, most people are not aware of the fact that they have to learn something new every day and that in order to learn, in order to obtain new knowledge and new skills they have to change some of these habits. If you want to learn a foreign language you have to change your daily routine. For example the habit of listening to your favourite music on the radio. Instead you could be listening to audio recordings in the language you want to learn. We all

have a tendency to get used to things that are not only comfortable but also do not require much activity on our part. We get used to watching TV in the evening and eating convenience food at the same time because this is comfortable and doesn’t require any mental activity. IF you want to establish your business, you won’t have much time to watch TV for entertainment. You have to change your habit of absorbing information passively into one of actively searching for information in order to analyze, filter and reorganize it.

Creativity

Establishing a business means creating a product, service or system that solves a specific problem or enhances a person’s life in one way or another. You can achieve this purpose when you create something new This doesn’t mean that you have to re-invent the wheel though. Examine any new product development that enters the market and you will see that this «new» creation is not entirely new but has been made up by combining existing elements in a novel way. This action of rethinking existing elements is the formula of creativity. So, in order to create something new you have first to analyze an existing product to find out how it can be improved, developed or enhanced in any way so it will do a better job. Take Google — its founders examined and analyzed existing search portals, in particular Yahoo and MSN. Based on their exhaustive studies they came up with an indexing and searching system that provides a higher search term relevancy. Study people’s behaviour — identify their latent needs and desires and you will tap into a never-ending supply of product ideas.

Vision

Vision is the ability to see things not as they are right now, but what they will be like in the future. Most people are so stuck in the moment, so preoccupied with their personal daily problems that they don’t have the time or energy to think about how a particular market can develop in the future. Look at any successful business venture and you will find that its founder was able to project into the future, to estimate how people’s behaviour will change. Your success in business is directly related to your vision capacity» and your vision capacity is determined by two factors: How far ahead are you able to see into the future and how precise are your predictions? When Larry Page and Sergey Brin founded Google in 1998, they could see well beyond the year 2003, in which they yielded A revenue of almost $ 1 billion. By 1998 Yahoo and MSN were operating worldwide known search services and no one would have thought that two students could take the lead in the industry within 5 years. Yet, Brin and Page had become excellent analysts of the web search market and they collected and recorded the necessary data to recognize a pattern in human behaviour. Based on their observations they then drew conclusions and made a prognosis. If you want to build your own business, you must be able to see into the future. You can develop «vision capability» just like you can develop any other skill. Your first step is to study and analyze human behaviour. Ask yourself this question: What are people looking for when they use the Internet?

ESSENTIALS OF E-BUSINESS

You can’t just open an online store and expect customers to flock to it. Find out if your niche market is one that you can reach through a website. How? Does your niche market have an identifiable need for your web offering? Do they have the wherewithal to pay for it? Is the niche group sizeable, i.e., will it provide enough business to produce the income you need? If the answers are yes, you have found a good niche. Now dig deep within that niche to understand the consumer behaviors that drive it. Every e-commerce operator should assume that his or her customers are sophisticated shoppers who demand prompt delivery of a product that is exactly as portrayed on their website. The most common mistake made by inexperienced web operators is to fail to be responsive to their customers’ order processing and fulfillment needs. But those services are the very underpinnings of all successful e-commerce ventures — neglect those areas and you have a business catastrophe.

To help in the follow-through, you and your customers must be able to track the status of each purchase. Most new e-commerce businesses, however, fail to integrate this necessary backend support. Another “must” is to make certain that your customers know that your web-based business will not only deliver a value online that cannot be found offline, but that it is just as responsive with customer service issues as the most well-regarded offline business.

By keeping customer service and product fulfillment as an immediate priority you can build a valuable relationship with your customer. In doing so, you earn that customer’s loyalty. That helps to stem the natural flow of attrition as customers who pursue the lowest price find that the trade-off is a void in the cut-rate business’s customer service department.

Another common problem for new e-commerce businesses is misinterpreting the power of the Web. Yes, a website with the right infrastructure can economically automate transactions. However, the real power of the Web is its role as a relationship-building magnet — through its ability to provide numerous opportunities for interactivity. If you are careless with automated processes — this very real advantage will vanish.

Use your website to provide not only useful and interesting information about your products/services, but also about your entire niche market. The group that makes up a niche market always yearns for more information. They will return time and again to your website if they are appealed to on the basis of their special interests — detailed articles and content-rich advertising specifically targeted to them.

The dot-com bust of 2000 was a failure of business plans; the concept itself has not failed. And while numerous news articles over the last few years detail how various websites lost sales and customer confidence due to inadequate prelaunch planning, there have also been many successes, especially in the small business arena.

WAYS TO MAKE YOUR BUSINESS SUCCESSFUL THROUGH INTERNET

Internet the way we do business today. It has broken physical boundaries and has provided each small, big and mega businesses a global business opportunity. Your online presence, your website provides you an equal opportunity to have your presence felt.

The irony those among the millions of websites ruling the internet world only thousands are successful. As they say you not only need a quality product or service, you need to package and most importantly sell it. That leads us to the question how to get successful online? Simple answer packages your website and makes people aware of it.

The basic rules of business apply here too with the difference that here you cater to a global market. The internet offers you with a variety of tools which applied correctly can make the winning difference.

So where do you start?

Your website needs a design and for this you need a web designer. Correct web design, colours and correct placement of web elements on your web page are important aspects for your site to succeed. Remember to maintain a contact page which mentions your contact details on the site have a sitemap and design the site for users. It is of utmost importance that you keep search engine optimisation factors in mind. Have your pages titled. For more on this contact a web designer.

If you are in business retail or manufacturing a good idea is to have your site e-com enabled. You must have shopped on the internet, if not you are among the chosen few. If you have you must be aware of the shopping cart on the e-commerce site. The shopping cart enables your visitors to manage their shopping well. You will need a payment gateway and a merchant account to receive money for sales. To test out your site integrate it with Paypal and try out the shopping experience.

1. So your site seems to be ready now. Next step. Make your site presentable and make it known. So we are now into advertising and marketing of your website. Here note this that 95% of websites gets visitors from referred from search engines. These search sites work like a gateway to the internet world.

2. Your next step towards making your site known to others is to follow the search engine optimisation tips offered by the search engines while making your site. You should look for the terms people use to search your type of service or product and create your site around it. As in the advertising world headings for your pages should be catchy. Internet visitors scan web pages for information instead of reading through them, so all the rules of advertising world which helps in writing the content for the advertisement apply here. Do it yourself, get to know what the inverted pyramid style of writing is or hire a web designer, see specialist to do it for you.

3. With pay per click, the internet advertising world has revolutionized. It offers you advertising opportunities on the net for a few shillings. Check out Google Adsense or Overture PPC campaigns. These are offered by mostly the leading search engines and your advertisements are displayed on the search result pages of these sites for keywords you choose. If controlled optimally you can benefit from these. Use PPC to get visitors to your site during the launching period. Dual benefits. One you get visitors though your site is too new and second due to advertising, your site gets noticed. If you are not aware of this, use the services of a PPC management company to do this for you.

4. So what else to look out for? Interaction. Give reasons to your visitors to come back to your site. Start a newsletter campaign. Offer your visitors something free. Give them tips. Start a blog. Make your visitors come back to your site.

5. Give them options to sign up for your newsletter free. You get their emails and use a mailer program to send out regular mails to them.

ARE INDIANS BUYING ONLINE?

Are Indians buying online? As per IOAI forecasted estimates, e-commerce transactions will cross the Rs 2000 mark (2006-2007) which translates into an increase of over 300% from financial year 2004-05.

The relationship between the Internet and commerce has passed its nascence. According to the estimates by IOAI, online shopping crossed Rs 430 crores to Rs 570 crores in 2004-05. The turnover is further expected to increase to Rs 1180 crores in 2005-06.

The Internet offers an audience that will grow to a 100 million users by 2007-08, unlimited shelf space and isn’t bound by operational timings and geographical boundaries; with an opportunity to cater to country wide city markets (for consumers and suppliers alike) at a comparative miniscule cost.

This four fold population increase raises a pertinent question to many a business and enterprise ’How should you embrace this medium?’ This research reports deals specifically with that premise and arms any reader with an arsenal of information to start/improve his online shop / enterprise in his core competitive area.

· The E-Commerce Industry:–

570 crores worth of E-commerce conducted online in 2004-2005 to grow to Rs 2300 crores by 2006-2007, an estimated 300%+ growth.

· The E-Commerce Site Visitor:–

55% of visitors to ecommerce sites have adopted the Internet as a shopping medium.

· The Regular Online Shopper:-

Of the 55% of online shoppers [Base 1716] – 87% [1493] of shoppers have shopped more than once and have been termed ’as regular shoppers’. They form the ‘base’ for this report of users who have transacted online to buy products & services ‘more than once’.

FEATURES OF SUCCESSFUL & TIGHTLY FOCUSED WEB SITES

1. ONLINE CUSTOMER SUPPORT FROM INDIA –

There is a company in Bangalore that has pioneered this idea. Aditi (www.aditi.com) provides email customer support for Real Media. The customer in America who needs support will have his problem solved via email by a team of Indians. The Internet has opened the door for this type of opportunity. It really is true that the geographic barriers are coming down.

· The Potential:- The business potential in this type venture is the cost savings of running a business in India. There is a huge labor pool of good quality English speakers who can easily handle customer support for web sites like RealMedia. The cost to hire someone to do this is about US $150-$200 per month. You can expect to hire a very nice English speaker who has had some computer training. Furthermore he or she will have a pleasant attitude, as most Indians are warm and friendly.

· The Downside:- The risk is that the customers will not be served well if the Indian staff is not trained properly. The staff needs to understand the mindset of the American customer. This can easily be overcome as long as the potential problem is recognized.

2. E-COMMERCE EXPORT OPPORTUNITIES IN INDIA –

There are plenty of things that can be purchased and exported. One young man has sought out unusual coffee and spices and now has an e-commerce site where he sells these items through the mail. Perhaps it is not even necessary to purchase and warehouse anything. Partnering and establishing joint ventures with Indian companies would give you the opportunity to handle a variety of products without the risk and cost. You could simply create a website that sells the products. This is not much different than Amazon.com. Do you realize they don’t publish books? They just sell others’. Often they have the book sent to the customer directly from the publisher eliminating the shipping and storage.

· The Potential:- The potential is to find a niche market. Perhaps this could be in the area of health care products, herbs or plants that are only found in India.

· The Downside:- The risk is that the product may not sell. Fortunately the Internet can be used to test the market before taking much risk. It is much easier to find the demand for items and then meet that demand than to start with the product. India has plenty of products that can be tested on the market.

3. EXPORT ANIMATIONS, MULTIMEDIA, GRAPHICS OR OTHER

CONTENT PRODUCTS –

Again this idea utilizes the skilled creative labor force in India. We have not been able to find a case study of a company doing this in India.

· The Potential:- The potential is to fill the huge demand for quality content that the web is creating.

· The Downside:- The downside is that it requires careful supervision to assure that the product communicates effectively to a Western audience. For example, a Westerner’s taste for colors is different to that of an Indian.

4.) EXPORT DATA SERVICES –

Any kind of outsourcing of data entry or data conversion is a good candidate for a successful start up business in India. The hottest thing these days in Bangalore is medical transcription. Doctors and hospitals in the USA send their audio transcriptions via the Internet to Bangalore, India. They send the audio file at 5:00pm which is around 5.00am in India. The workers can do their work so that the Doctor has the text document the next morning. In Bangalore you can find good examples of companies already doing this. Go to Yahoo and type in “data entry India” or “data conversion India”. You will be startled by the amount of information that is available.

· The Potential: The potential for this type of business venture is great. Many of the Bangalore companies are growing and adding employees quickly. The reason there is such a global demand for this kind of work is because companies want to have their documents in a digital format. This conversion may include scanning the document into the computer and then going one-step further and tagging and indexing them in HTML SGML or XML so that it can be put on the Internet and easily retrieved. The entrepreneurs who are willing to joint venture with Indian partners to start up a business like this will not only make money but will be doing a great service for India by providing high quality skilled jobs.

· The Downside: The risk is in, not maintaining top quality work for the client. This has been a complaint of many clients.

5. START A SOFTWARE COMPANY

There is nothing new about this. There are plenty of success stories. Bangalore already has at least 600 software companies. Most of these are Indian owned and non-resident Indians have started a few of them. For a list of Bangalore software companies you can go to resource page. Government of India and especially Karnataka (the state in which Bangalore is), is encouraging foreign involvement and investment and has turned on the green light to hi-tech companies. They have even created some tax incentives for this industry.

· The Potential: The potential is for the development of quality software using the extremely intelligent labor force in India at a lower cost. Cost savings can be found in rent, insurance etc. High quality programmers can be hired for 25%-50% of the cost of the same software programmers in the West. For a good example look at gseindia.com and read the history of this high end Swedish/Indian Software Company.

· The Downside: The downside is that there are inefficiencies related to working in India i.e.: erratic power, government bureaucracy, poor Internet connections etc. Unless the cost saving is considerable, many of the problems related to doing business in India will offset the benefit.

WHY GO TO THE WEB?

The Web opens up a whole new market for goods and services. It creates opportunity for a multifaceted arena that offers new efficiencies for sales, marketing, customer service, shipment tracking, inventory monitoring.Choice has always been the Holy Grail for consumers. Today’s consumers have a wide variety of commerce choices: traditional businesses, mega discount stores, catalogs or direct market mail, and the Web. The Web, taken as a whole, is a powerful medium where consumers browse, research, compare, and then buy online or, after doing their “window shopping” online, make the purchase at a brick-and-mortar business. Businesses that keep in mind the consumers’ desire for choice, and integrate into their website the appropriate means for customer interactions, will succeed.

This being said, the Web will not open vast new markets for every business. However, it can extend a significant degree of power to businesses that recognize how to leverage the efficiencies of this new arena. A good example is 3Com (www.3com.com) which, through its website:

In short, 3Com’s business and customer base didn’t change — the Web changed the way 3Com services its market it did not create a new market. Still, overall, 3Com’s business is enhanced by its web presence. Big companies with plenty of technical expertise and buckets of money have always been able to build their own e-commerce systems, complete with a secure server, a high-speed Internet connection, and custom software.

The Challenge

Creating a business model for e-commerce starts with the following basic challenge: Can you define your company? Next, can you state your goals for the company? Finally, — within the aforementioned context — can you state what role e-commerce can play in helping your company maintain or change its identity?

This table indicates, online sales are growing steadily

along with the total number of Internet users (148,811,000 in August 2006 to 150,045,000 users in September 2007).

Source: com-Score Media Metrix.
The Top 10 Website Categories as of September 2007
Category Unique Visitors as of August 2003 Unique Visitors as of September 2003 % Change
Retail-Food 8,324,000 9,732,000 16.9%
Weather 38,100,000 41,757,000 9.6%
Sports 48,169,000 52,633,000 9.3%
Retail-Flowers/Gifts/Greetings 23,576,000 25,373,000 7.6%
Entertainment-TV 44,085,000 47,154,000 7.0%
Hobbies-Lifestyles-Food 22,959,000 24,322,000 5.9%
Hobbies/Lifestyles-Home 26,384,000 27,909,000 5.8%
Online Trading 10,739,000 11,256,000 4.8%
Entertainment-Music 62,210,000 65,116,000

CHAPTER 4

WEBSITE MODELS

There are eight basic website models — ranging from the simple static pages of a brochureware site to richly interactive online gaming sites, to online stores chock full of products, to online auctions. Many websites combine several of these basic models. However, each model has unique characteristics that distinguish it from the other models and it is important to understand these differences.

Brochureware Site

A brochureware site is a marketing site that electronically aids in the buying and selling process. A traditional business often will build and maintain a brochureware site as a marketing tool with the objective of promoting the business and its products/services. A brochureware site is sometimes an adjunct to a business’ technical support division providing online documentation, software downloads and a Frequently Asked Question (FAQ) section. Such a website can provide detailed information about the business’s products/services, contact information including the business’s address, telephone numbers, and email addresses. It can also be a tool to provide the public copies of a company’s annual reports, press releases, and employment opportunities. Revenue from this kind of site is generated indirectly by creating an awareness of the business’ products/services. All transactions occur offline.

Savvion develops business process management software that improves business performance and reduces costs within and across functional business units. Its website, www.savvion.com, is a good example of a high-quality brochureware site. It is clean, fast loading, and has all of the elements of a good website. To demonstrate the variety of businesses that take advantage of the Web to expand their business opportunities visit the following brochureware websites: Rolledsteel.com, Cohenhighley.com, Hayproperty.com.au, and Paulcato.com.

As you can see, you don’t need to be a corporate giant to benefit from a brochureware site.

Online Store

An online store is a website where consumers buy products or services. This type of site is most commonly referred to as an e-commerce site or a “B2C” (Business to Consumer) site. In addition to most, if not all, of the content found in a brochureware site, an online store displays products/services along with detailed information (e.g. specifications and pricing) usually from a database with search features, and a method for online purchase. An online store must also provide extensive information about the products/services offered that not only aids in attracting consumers, but gives them enough confidence in the seller and the products/services to take the next step — making an online purchase.

One question the author is often asked is “what should an e-commerce site offer — online order processing, just a toll free number, or both?” The answer is: Offer both.

If you choose to take online payments, you must provide a secure, reliable, cost-effective system for authorizing payment and managing transactions. The best systems are based on the Secure Socket Layer (SSL) and/or Secure Electronic Transactions (SET) encryption technology, which provide the encryption of data and generate and display a “results page” to the customer following the transaction.

Further, a successful online store must be designed with the ability to store orders in a database or as tab-delimited text files so the data can be imported into an invoicing system. Then the website must be able to intelligently route encrypted email to the order fulfillment division.

A good example of a large online store is Healthtex.com. This is a great site in every respect. To see how a small brick-and-mortar business uses a web presence to enhance its bottom line, visit Parkaveliquor.com, where you will find an attractive, well-designed and fully functional e-commerce site that benefits both the storeowner and the customer. Other good online stores you might want to use as guides when designing your website include the Treliske Organic (www.nzsouth.co.nz/treliske), which offers “Certified Organic” Wool, Knitwear, Beef and Lamb; Badcataviation.com, a great toy airplane store; and Soccer Books Limited (www.soccer-books.co.uk) where you can find a huge selection of books, video and DVDs relating to the sport of soccer.

Another avenue that an entrepreneur might want to consider is to team with a large e-commerce site such as Amazon.com or e-bay.com to provide the e-commerce end while the entrepreneur provides the site’s “content.” Good examples of such a site are www.dolls-for-sale.com and www.politinfo.com.

Subscription Site

A subscription site can process payments offline and provide via email a user’s name and password for access, or it can provide a secure, reliable, cost-effective online system for authorizing payment and managing transactions. Again, the best systems are based on Secure Socket Layer (SSL) and/or Secure Electronic Transactions (SET) technology to encrypt the data, and generate and display a “results page” to the customer following the transaction.

E-commerce technology continues to become more sophisticated, and with every advance the financial prognosis for a subscription site should improve. A good example of a subscription site is iEntertainment Network (www.iencentral.com). This worldwide game and entertainment site offers both free ad-supported and fee-based online game channels. The site also offers a variety of monthly subscription plans.

The website Content-wire.com offers another example of a good subscription site that uses both banner ads and subscriptions for its revenue stream. This website offers a niche editorial product that covers a narrow vertical technology sector — web-based commerce. As such, it provides up-to-date news articles, produces features on a variety of subjects, and offers a good bit of research material. Although this website could be better designed, it is functional and the average surfer will find it easy to use. Because the site does derive some of its revenue from banner ads, some information offered is free (use it!). Note that surfers who pony up $100 or $200 for a subscription, there is much more data available for your perusal.

A sub-model that increasingly is finding favor is the website that offers downloadable content — via a subscription account, a la carte basis, or a combination of both. The most popular website within this sub-model is the new Napster.com. Although this digital music destination bears the same name as the famous, but defunct, peer-to-peer file sharing website, that business model is in its past. The current Napster.com is a digital music catalog site that also offers many rich community features for its customers. The new Napster.com allows consumers to choose how they want to experience music, offering both an a la carte store and a premium subscription service.

Not all digital music sites follow the subscription model, however. Apple’s iTunes.com website, which at this writing offers more than 400,000 songs from a wide variety of musicians for less than a dollar per song, states that its iTune website offers music without the need to “agree” to complicated rules. There are no clubs to join, and no monthly fees if you like a so

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Analysis Report On Grameenphone Ltd

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Analysis Report On Grameenphone Ltd

CHAPTER 1:

INTRODUCTION

1.1 Background of the Industry:

During the early Nineties the Telecom sector in Bangladesh was severely under developed when the market was monopolized by the state owned operator, BTTB (Bangladesh Telegraph and Telephone Board). BTTB provided only fixed line telephone services, which was heavily skewed in the urban areas where as 80% of the population of Bangladesh lived in the rural areas. This unequal distribution of services created the opportunity for the mobile operators. The granting of a paging service license to Bangladesh Telecom Authority in 1989 paved the way for mobile service in Bangladesh. Pacific Bangladesh Telecom Limited (PBTL, now City cell) operating under CDMA technology was first granted the operating license as mobile phone operator in 1993, and was joined by three other GSM mobile operators namely Gramophone, Aktel and Sheba in 1996, 1997 and 1998 respectively. After that, Sheba telecom is acquired by Banglalink the sister concern of an international Telecom company Orascom telecom ltd. and a new company called Warid came into the market to provide gsm telecom service to the customers of Bangladesh.

1.2 Company Overview:

GrameenPhone (GP) launched its mobile phone services on March 26, 1997 and since then has become the largest mobile phone operator in the country. Its number of subscribers has grown rapidly, as has its coverage throughout the country. The aim of GrameenPhone is to provide affordable mobile telephone facilities in urban and rural areas of the country. GP launched its service on the Independence Day of Bangladesh. In June 1998,GP started its services in the port city of Chittagong, the second largest city in the country. Cell to cell coverage in the Dhaka-Chittagong corridor also enabled GP to introduce its service in a number of other districts along the way.

In 1999, GP started its service in the industrial city of Khulna. Once again, a number of other districts came under coverage of GP because of the cell to cell coverage between Dhaka and Khulna.

In 2000, Grameen Phone started its services in Sylhet, Barisal and Rajshahi, bringing all six divisional headquarters under the coverage of its network. The service in Barisal region was started after the microwave link between Khulna and Chittagong was completed.GrameenPhone has so far been a pioneer in introducing innovative cellular telephone products and services to the market. Earlier in September 1999, it introduced the EASY pre-paid service in the local market. It also introduced the Voice Mail Service (VMS) and the Short Message Service (SMS) and other value-added services. In August 2003, after six years of operation, GrameenPhone has more than one million subscribers. In November 2005, GrameenPhone continues to being the largest telecommunication operator of Bangladesh with more than 5 million subscribers.

According to recent statistic Grameen Phone is leading the telecommunication sector of Bangladesh serving the major portion of the existing market like more than 10 millions of customers. So to provide a wide range of communication solution and other benefits Grameen phone developed a strong Human Resource team to operate their activities smoothly.

1.3 Scope of the Study:

The Telecommunication Service especially cellular telecom service sector is a very important and highly sensitive service oriented field as they are dealing with the flow of information. There is a close relationship between the service provider and the service receiver. As telecom service activities is basically performed by lots of equipments and logistic support of different kinds of automation, the importance of human being can not be neglected. Without proper combination of manpower and machineries success of such kind s of service is not possible. So the telecom companies have to hire a lot of skilled, experienced and hard working work forces to continue their work flow properly.

Among the existing mobile telecom services providers in Bangladesh, Grameen Phone is the pioneer and leading the market for a long time. At the same time they are maintaining an effective human Resource Department to recruit, select, placement and develop the employees. As far we know, Grameen phone follow the world class HR policies to motivate their employees like other multinational companies operating their business in Bangladesh. There is a lot to stir about within its massive internal field. We take this chance as a scope to work on the organization’s total motivation process. We hope that this study will help us a lot by matching our concept to that of the actual scenario.

1.4 Rationale of the Study:

At one time, employees were considered just another input into the production of goods and services. Their rights and the question of compensation was over looked just providing some cash benefits. At that time the employers used to think about only short term benefit of the organization as well as the relationship with the employees. So they didn’t put much emphasis on different beneficial, issues of the people worked over there.

What perhaps changed this way of thinking about employees was research, referred to as the Hawthorne Studies conducted by Elton Mayo from 1924 to 1932 (Dickson, 1973). This study found employees are not motivated solely by money and employee behavior is linked to their attitudes (Dickson, 1973). The Hawthorne Studies began the human relations approach to management, whereby the needs and motivation of employees become the primary focus of managers (Bedeian, 1993). Grameen phone is one of the multinational business organizations operating business in Bangladesh for more than 10 years and with the course of time and to cope up with the changing demand, they have established an effective HR department and some practical HR policies to handle different issues of their employees. Basically employment should be done in a way like a win-win situation where both the employer and the employee will be benefited. Grameen Phone is trying to create such an environment in their organization. So, doing study on such an organization will lead us to get familiar with the practical situations.

1.5 Objective of the Report:

The broad objective of this report is to find out the motivational factors those are taken by Grameen Phone to encourage their employees towards the achievement of the long term goals and other regular organizational objectives. However the following points have also considered as secondary objectives while preparing this report:

1.6 Limitations of the Study:

In every research work there exist some limitations that the researcher faces while conducting different activities. In the process of the research work, We also come across certain limitations that hampered the actual findings and analysis of my research work. Some of these notable limitations can be identified are:

· The study is mainly focused on motivational factors of Grameen Phone for their employees; beside these, Grameen Phone has a wide rage of Recruitment & selection procedures, Product marketing including individual and corporate telecom solution package, value added services, Corporate social responsibilities etc that are not be covered in this report. So being concerned only within the motivational factors seems to us as a limitation of the study.

· The personnel specially the HR officials are usually busy with their daily activities and routine tasks; therefore interacting with them during their office hours was very difficult most of the times.

· Grameen Phone corporate head office is a very secure and restricted place and the internal environment is not as casual as any other organization’s office. They have to maintain some rules and regulation toward access to information centre. So being students and outsiders, we had lots of restriction to ask for and look over all the secret and valuable confidential information about the HR policies of Grameen Phone. That might be a limitation of this study.

· The interviewees, who are the personnel involved in the various departments of Grameen Phone, Gulshan Branch, are the target respondents of this study, so the respondents may be biased on certain issues that may hamper the total evaluation of the research work.

· The study conducted can be hampered as the total evaluation of the industry cannot be covered in a short period of time. In the cumulative time period of 6-7 weeks analyzing the total motivating factors and the actual phenomenon on the performance of the strategies of the organization can just be highlighted and some issues may be overlooked.

CHAPTER 2: RESEARCH METHODOLOGY

2.1 Area of Investigation:

As the total HR activities and policies of Grameen Phone is very wide and large, therefore this study is mainly focused on different motivational factors of Grameen Phone for their employees based on the investigation and practical judgments of the employees working in their Gulshan corporate office only. We will be highlighting the different financial and non financial motivational factors taken by the Hr department of the organization to increase the productivity of the employees and make the loyal to the organization for a long time.

2.2 Data Collection Techniques:

¤ Questionnaire: Unstructured and open-ended questionnaires (please see appendix: 6) were asked to the employees working over there in the Gulshan corporate office of Grameen Phone to collect information about motivational factors and focused group interview session was arranged for further clarification and better understanding.

¤ Observations: Researcher while visiting into the office premise had used his own observation to collect certain pieces of information about the work place and the working environment of the organization.

¤ Secondary information: Secondary information has collected by reviewing websites, journals, brochures and some HR articles printed time to time and other relevant documents.

2.3 Sources of Data Collection:

¤ Primary: The primary information is gathered through informal interviews of the employees working over there under Finance and Customer Management Departments, observation while physically visiting the office premise and discussion with the potential fresh graduates who wants to join the winning team of Grameen Phone.

¤ Secondary:Secondary sources had also used to collect information. Secondary sources include:

· Different Prospectus, Brochures on HR activities and Motivational factors.

· Features and articles published in newspapers and other journals.

· Lecture Manual from Formal and Foundation Training Program.

· Their job description and working schedules.

· Visiting website of Grameen Phone Ltd etc.

2.4 Sampling Plan:

¤ Sampling Procedure: The sampling procedure has been conducted on the Deliberate Sampling method has used where the respondents and the interviewees are considered on my convenience and priority.

¤ Sampling Unit: In order to carry out the research work, the study was focused on taking the interviews of the Personnel involved in the different departments of Grameen Phone Gulshan Office.

CHAPTER 3: LITERATURE REVIEW

3.1 Definition of the Topic:

It is true in our day-to-day as well as in professional life.

If we cannot motivate people around us…

If we cannot motivate our employees…

If we cannot motivate our children…

Then, we are no one to demotivate them. If we cannot appreciate then we are no one to discourage or criticize.

There is a “Positive Side” of all incidents…of all acts and actions…of every experience. Even a stopped watch also shows correct time…twice in a day. Let’s accept the fact that none of us is perfect. We all have space for improvement. We all need support to grow and excel in life and career. There are ways to “Criticize”…ways to give “Feedback” by keeping in mind the “positives”. But if we are using any of the following syntax for giving feedback…then one day we will be alone in our department/organization, such as-

If…then

But also

Either…or

Let’s also accept that Human Resource Professionals are very poor in “Human Behavior” and “Human Psychology” and this should be a must for all “Human Resource Professionals”. Let’s understand that “One size does not fit all”. Most companies have it all wrong. They don’t have to motivate their employees. They have to stop demotivating them. In this article we will understand motivation; discuss the need for motivation; ways to motivations; expectations of employees and what they don’t want from us through a real example.

3.2 History of the Topic:

At one time, employees were considered just another input into the production of goods and services. What perhaps changed this way of thinking about employees was research, referred to as the Hawthorne Studies conducted by Elton Mayo from 1924 to 1932 (Dickson, 1973). This study found employees are not motivated solely by money and employee behavior is linked to their attitudes (Dickson, 1973). The Hawthorne Studies began the human relations approach to management, whereby the needs and motivation of employees become the primary focus of managers (Bedeian, 1993).

· Motivation is defined as:

Many contemporary authors have also defined the concept of motivation. Motivation has been defined as: the psychological process that gives behavior purpose and direction (Kreitner, 1995); a predisposition to behave in a purposive manner to achieve specific, unmet needs (Buford, Bedeian, & Lindner, 1995); an internal drive to satisfy an unsatisfied need (Higgins, 1994); and the will to achieve (Bedeian, 1993). For this paper, motivation is operationally defined as the inner force that drives individuals to accomplish personal and organizational goals.

A study of Motivation (Manfred Davidmann, 1970) of 255 U.K. directors which found that: –

· Motivating (in order of intensity of felt need):

1. Remuneration.

2. Profit sharing.

3. Share option and purchase schemes.

4. Bonus.

5. Pension.

· Dissatisfying:

6. Taxation.

· Neither motivating nor dissatisfying:

7. Job satisfaction.

He found that directors are motivated by money. They are not motivated by job satisfaction. In other words, they do not need job satisfaction because they have all the job satisfaction they need or want.

Hence definition of ‘motivation’, that is of what people will work to achieve:

‘Motivation towards better performance depends on the satisfaction of needs for responsibility, achievement, recognition and growth.
Needs are felt, and their intensity varies from one person to another and from time to time, and so does the extent to which they are motivating.’
‘Behavior is learned; earned reward encourages even better performance, thus reinforcing desired behavior’.

The term ‘recognition’ in the definition includes money rewards. Note that both job satisfaction and money are motivating. One works to achieve that which one needs and which one does not have, and this could be either one or the other or both.

Attaining goals leads to feelings of self-respect, strength and confidence. Few people are able to continue a pattern of achievement and success without the added encouragement provided by others recognizing their achievements.

Continued failure and frustration and defeat can result in feelings of inadequacy and a withdrawal from competitive situations.

Persistent lack of rewards leads to a view of society as being hostile and unrewarding. It is what one does not have that one wants, one works to achieve that which one needs.

Hence if we know what people need and want then we know what they will work for, and like working for, and so work well to achieve.

So that we can now look at the following articles: –

· Needs and Wants People Strive to Achieve:

1. First there are certain basic needs which have to be satisfied if people are to exist and survive, such as:

Food and shelter, clothing and warmth.

Affection and esteem.

Friendly and trustful co-operation and companionship.

Security from external threats (protection from attack).

2. Then other needs make themselves felt, such as:

Independence from domination by others (because of need, for example).

Security from internal threats (losing job, criminal activities, political persecution).

Housing, education, good health.

Help when in need.

Constructive work.

Constructive leisure activities.

3. To which we can add the ones we have discussed:

Challenging work, which means scope to work at increasing levels of skill and usefulness and thus of pay to the maximum of one’s ability.

Maintaining and the chance for improving, one’s position relative to colleagues.

Recognition of success by others (leads to feelings of self-respect, strength and confidence).

Fair share of the national income and wealth.

Fair share of the international income and wealth.

These then are the needs and wants people strive, indeed struggle, to satisfy and overcome. People will co-operate with each other and work hard and well to satisfy these needs and gain much satisfaction from doing so.

· Why we need to motivate our Employee?

The answer is survival (Smith, 1994). Motivated employees are needed in our rapidly changing workplaces. Motivated employees help organizations survive. Motivated employees are more productive. To be effective, managers need to understand what motivates employees within the context of the roles they perform. Of all the functions a manager performs, motivating employees is arguably the most complex. This is due, in part, to the fact that what motivates employees changes constantly (Bowen & Radhakrishna, 1991). For example, research suggests that as employees’ income increases, money becomes less of a motivator (Kovach, 1987). Also, as employees get older, interesting work becomes more of a motivator.

3.3 Recent Research of the topic:

After the year 2000, the concept of motivation changes as twenty first century changed the concept of management and the meaning of “employee and labor relationship” in each and every organization. Now the employer considers the employees as their assets and tries to nourish them for their further and long term benefits. That’s why in most of the organization prevails a win-win situation. Now employee and employer build their relationship where each party contributes for another.

The employees who work for your company are naturally motivated. All you need to do is to utilize their natural ability, which you can do without spending a dime. That’s right. No money. In fact, money can actually decrease an employee’s motivation and performance. The first step in utilizing your employees’ natural abilities is to eliminate your organization’s negative practices that zap away their natural motivation.

The second step your organization can take is to develop true motivators, which can spark all your employees into being motivated. By decreasing negative zapping demotivators and by adding true motivators, you will tap into your employees’ natural motivation. Your employees’ natural motivation relies on the fact that all people have human desires for affiliation, achievement, and for control and power over their work. In addition, they have desires for ownership, competence, recognition, and meaning in their work.

But there are several ways that management unwittingly demotivates employees and diminishes, if not outright destroys their enthusiasm.

Many companies treat employees as disposable. At the first sign of business difficulty, employees-who are usually routinely referred to as “our greatest asset”-become expendable.

Employees generally receive inadequate recognition and reward: About half of the workers in our surveys report receiving little or no credit, and almost two-thirds say management is much more likely to criticize them for poor performance than praise them for good work. Management inadvertently makes it difficult for employees to do their jobs. Excessive levels of required approvals, endless paperwork, insufficient training, failure to communicate, infrequent delegation of authority, and a lack of a credible vision contribute to employees’ frustration.

CHAPTER 4: FINDINGS AND ANALYSIS

Application in the Work place (Grameen Phone Ltd):

Grameen Phone Ltd. is the leading telecom services provider in Bangladeshi market and one of the renowned multinational companies operating their business in Bangladesh. So to know about the work environment and the compensation benefits proved by the organization, we have done a research work on them. Based on our study we found a lot of motivational factors provided by the organization to encourage improve and retain their employees. Grameen Phone maintain a well structured HR (Human Resource) department including HRM (Human Resource Management), HRD (Human Resource Development) and HR-MIS (Human Resource Management Information System) to handle human resource both effective and at the same time efficient manner (please see appendix 1). Each of the department plays their functions very carefully to make their employees more productive and enthusiastic to the work.

Grameen Phone provides the following financial and non-financial facilities as compensation and benefits package (please see appendix: 2) to make their employees more dedicated towards the corporate mission of the organization:-

4.1 Cash/Direct Financial Benefits:

4.1.1 Basic Salary:

Basic salary is an important part of employee’s salary. It is paid monthly with other admissible allowances such as house rent, medical allowances, and transportation allowances in applicable cases. GrameenPhone will provide salaries to its regular and contract staff according to grade and salary matrix of the company. The grade and salary matrix of GrameenPhone is composed of 13 classified grades and under each grade there are 10 salary steps. Each grade has salary ranges and the fixation (please see appendix 3)

of basic salary during appointment, confirmation or annual appraisal completely depends on the discretion of management. The salary structure is kept strictly confidential and not shared with employees or outside except authorized officials.

The features of the pay structure are stated below:

i) GP maintains a degree of fairness between the pay allocated to jobs having different level of skill, responsibility and experience.

ii) Each step salary (other than step 1 salary) in any grade is calculated by adding a certain fixed amount with the previous step salary. The fixed amount may vary between grades.

iii) Employees move upward in the steps will reflect the good performance, increased skills, work related knowledge and/or years of work with GP.

iv) The salary structure will be rewarded after every three years in September.

For a complete month, one month basic salary applies but for fractional period, pro-rata basic is calculated by dividing basic into 30 days as set standard.

In a number of situations, GP can deduct basic salary of the employee. They are:-

· Deduction due to absence without proper authorization.

· Deductions for damage to or loss of property/goods expressly entrusted to the employee for custody, or loss of money for which he/she is required to account, where such damage or loss of money is directly attributable to his/her neglect/default.

· Deductions for adjustment of advances or overpayment, if any

· Deduction of income tax payable by the employee and

· Employee’s provident fund.

4.1.2 Overtime Payment:

Overtime is defined as “hours worked beyond normal working hours” that has prior approval from department/section head. Company expects that employees shall have proper work plan. Disorganized or unplanned work habit that necessitates extra hour to work is discouraged. In case of emergency, employees may require working beyond normal working hours for a short duration as approved by department/section heads.

Employees in officer level or below are eligible for claiming overtime allowances. Normally overtime is calculated at the double of basic salary on standard working hours (208 hours a month). The hourly overtime rate is calculated as under:

Monthly basic

Hourly rate = × 2

176

However, for working from 10 pm to 6 am, 3 times basic salary will be applicable. Normally overtime will not exceed 30 hours in a month. In exceptional cases, second level supervisor of an employee can approve overtime beyond the limit of 30 hours.

As a standard, overtime will be claimed by using a prescribed format where in the date, time must be mentioned. The overtime claim must be endorsed by immediate supervisor and approved by Department/Divisional Head before submission. Overtime shall not apply in case of outstation travel or attending any training program. For contractual employees, a monthly overtime allowances will be applicable according to following slabs:

· Shift Allowance:-

Shift allowance is paid to managers and below level employees who work in a shift other than normal working hours of 8 am to 5 pm. The shift allowance is paid by hourly rate. There are different rates for different established shift jobs. Respective department can define shift hours according to own convenience but payment will be made as per the following table:

Shift allowance is also applicable for contract employees at the above rate. It will not be more than Tk. 4500 in a month. In case someone’s shift duty falls in 2 defined shifts then pro rata allowances will apply. For example, for working in shift from 2 pm to 11 pm, shift allowance will be calculated according to the following principle:

2 pm to 5 pm : No shift allowance

5 pm to 11 pm : 6 hours shift allowance @30 per hour

When shift time ends, and employee has to work further, he/she will be compensated for the additional hours served by either overtime (for officers and below) or extra hour allowance (for DM/DSE, Managers/SE or equivalent position) as the case may be. But during the defined shift hours, no overtime or extra hour allowance will apply.

Each employee is required to submit a monthly statement to finance in prescribed allowances format. The statement must be endorsed by immediate supervisor and approved by the department/divisional Head. In case of roaster duty pre-approvals have to be made by the divisional heads mentioning actual hours with no major deviations. The statement is prepared within the end of the month and the deadline for submitting the statement to finance is 15th of the following month.

· On Call Allowance:-

On call allowance will be applicable for all regular or contract employees in manager grade and below who may remain standby (on call duty) for emergency services to be provided for the interest of the company. This is company’s policy to compensate those employees for their extra hardship. The on call allowance rate is Tk. 250 per day. Such allowance is approved in addition to overtime allowance paid to the employee. It can not be more than 15 days in a month. At the end of each month, an on call allowance statement of each employee has to be submitted to finance upon endorsement of immediate supervisor and approval of department/divisional head.

· Extra Hour Allowance:-

Extra hour allowance will be applicable for the following managers in case they work extra 30 hours or more in a month:

4.1.3 Increment faculties:

GrameenPhone adjusts employee’s salary in a number of situations. This is one type of benefit being offered to the deserving employees with a view to recognizing their best services rendered to the company and thus keep their morale high. Regarding approval of increment, Company’s discretion is vital. Obviously, the basis is performance and any other relevant factors that the company deems fit to be given due consideration.

There are two types of salary increment:-

i) Performance Increment: An employee will receive salary increment in case he/she demonstrates excellent performance throughout the performance year and is recommended for increment by immediate supervisor according to performance appraisal process of the company.

ii) Increment During confirmation: At the time of confirmation, salary increment may be approved by HR Director based on the recommendation of Director/Divisional Head. The concerned Head/Director proposes for increment with proper justification and HR Director, upon review of the justification, finally approves increment during confirmation. This type of increment may be considered for excellent performance during probationary period.

4.1.4 Bonus Packages:

All employees are eligible for two bonuses in a calendar year which is an amount equivalent to their two months basic salary. One bonus is paid during Eid-ul-Fitr at a flat rate to all employees irrespective of the religion. Another bonus is paid as per the following festival of different religious affiliation:

Muslim : Eid-ul-Azha

Hindu : Durga Puja

Buddhist : Buddha Purnima

Christian : Merry Christmas

Two month’s basic as bonus is paid in full for a calendar year or a pro-rata amount for incomplete calendar year, whichever may be the case. The bonus will be paid according to the basic that is due on the festival day, not the basic on the payment day. An example: An employee who joins on April 1 and if there are two festival in that calendar year, then the employee will get fractional festival bonus according to the following formula:

2 months basic × days with the company

365

HR will prepare the bonus list prior to three weeks time of Eid-ul-fitr and the respective festival day and accounts, based on the list, will arrange to transfer bonus amount two weeks ahead to employee’s account. An employee who joins after festival date will be paid bonus after the end of the year. If an employee leaves the company on any day preceding to the festival bonus payment date for whatsoever reasons other than retirement, his/her festival bonus will not be paid.

4.1.5 Provident Fund:

The permanent employees of the company are eligible to become members of the provident fund. Employee contributes 10% of their basic to the provident fund and the company makes equal contribution to the fund. The company’s contribution starts once the employee has become permanent employee of the company. A provident fund trustee, with separate rules, is formed for managing the provident fund. The PF maturity period is 3 years. Employee has to serve minimum 3 years for being eligible for both employee and company contribution.

4.1.6 Gratuity:

Gratuity is paid to an employee for providing a life time service to the company. The eligibility is minimum 5 years service with the company. Gratuity amounts are linked with the respective employee’s length of services which are as follows:

Gratuity Year of service

@ 1 month’s basic/for each year 5 years

@ 1.5 month’s basic/for each year 5 – 10 years

@ 2 month’s basic/for each year More than 10 years

Gratuity is equivalent to one (or more as the case may be) month’s basic based on the last drawn basic salary for every completed year of service or for any part there of in excess of six months.

4.2 Non-Cash/Indirect Financial Benefits:

4.2.1 House rent:

House rent is another component of pay structure. The amount of housing allowance is expected to allow employees to rent a reasonable but standard house. To the extent possible, a fair level of consistency between house rent and the respective employee’s living standard is ensured. The company expects that employees rent a standard house. The housing allowance is calculated at a certain percentage of respective employee’s basic salary. The percentage is equal irrespective of employee’s place of posting.

4.2.2 Hard Furnishing:

Hard furnishing is an incentive given to employees to assist improvement in their lives by buying durable household goods such as A/C, freezer, TV, home theatre system, stereo system, washing machine, kitchen appliances, furniture etc. all confirmed employees in Manager and above level will be eligible to avail hard furnishing according to the following entitlement structure –

Payout of hard furnishing will be made on a reimbursement basis upon submission of the payment vouchers of the goods purchased by the employee. An employee will be eligible to avail hard furnishing once in every 3 years. Payout of the amount desired by the employee availing the benefit will be done by one go. If an employee avails an amount lower than his maximum entitlement, he/she will not be able to avail his/her remaining balance.

Once availed, the employee has to serve the company for 3 years from the date of disbursement of the amount. This 3 years period will be effective for any employee even if he/she avails lower than his maximum entitlement amount. If he/she is separated from the company before completing the 3 years period, pro-rata deduction on the basis of his/her amount availed will be made from his/her final settlement amount. Hard furnishing has effective from March 2006.

4.2.3 Medical Allowances:

Medical allowance is paid to the employee at a fixed amount and the monthly payment is made according to their position entitlement. This is in addition to hospitalization or on duty accident benefits, if any.

4.2.4 Employee Transportation Benefit:

Grameen Phone provides transport benefits to all employees as per the following guidelines and procedures. For administration purpose of this employee benefit, the transport section and the transport policy will be applicable. It is essential that all employees use the transport benefits as specified in this policy as per rules and guidelines described here in. For local travel outside office on official purpose, the employee will be reimbursed actual travel costs. In this regard, employees should claim reasonable transportation costs.

For all employees in the manager and below level, a lump-sum amount of Tk. 100 can be claimed as transportation allowance for each way travel to office in a weekly holiday or other holiday in case transport could not be provided even after request is made. Such request should be made by 30 minutes prior to end time of normal office hours of the last day of the week. It is essential that by no means divisional vehicle be used for employee pick and drop. The allowance for travel to office in a weekend or holiday will be claimed by using prescribed allowances format duly endorsed by immediate supervisor and approved by department/divisional Head.

Transport Benefit for employees of DM Level and below:

Transport Benefit for Managers and DGMs:

Managers/DGM level employees are provided with door-to-door pick-up and drop services with company vehicles (please see appendix: 4). However, they too can claim for transport allowance instead of pickup and drop as per their entitlement:-

Transport Benefit for AGM and Above:

4.2.5 Employee Mobile Phone:

Grameen Phone provides mobile phone to all employees that facilitates our work and establishes communication between employees and family. In regard to the use of mobile phone, there are a number of guidelines that every employee has to follow strictly.

· For regular employees:

Company approved handsets will be provided to all regular employees for a 2 year term. After 2 years new handsets will be issued. If any employee resigns before 1 year period from the issuance of handsets, then he/she has to return the handset back to GP or may keep the handset by paying the proportionate amount. If the resignation takes place on or after 1 year of the issuance of the handset, the employee may keep the handset by paying Tk. 2000 for it. If an employee resigns on or after 2 years of issuance of handset, then they can keep the handset for free.

· For Contractual employees:

The handset will be given to those contractual employees (based on requirement) whose agreement is for at least 1 year and the cost would be deducted from respective divisional budget. However, in case of business requirements, lesser duration may be considered. For resignation cases, same policy applies as of regular employee.

· For consultant (local & foreign):

The respective department/division will provide handset to consultants, based on requirement, from divisional budget. If any consultant wishes a handset for their family members, they would by the handset in their own.

The handsets would be issued by the third party through agreement. GP will pay bill up to certain limit.

· For BR employee:

Respective division will handle new issue, loss and theft cases of BR employees according to their divisional budget/policies.

o Tariff Rate:

Employee mobile phone tariff rate under GP account will be as under (Except BR employee):

o International Roaming:

The following terms and conditions will apply in case of availing international roaming facility:

o Mobile usage limit:

Company will bear phone bill up to certain limit for different level of employees. The limits are:

Respective division will decide mobile usages limit for contract employees/consultants in line with the above usages limit policy. Consultant’s mobile bill due for personal calls

will be paid by themselves. In case, an employee’s usage amount exceeds the defined limit in any month, finance will deduct exceeded amount from the following month’s salary.

4.2.6 Children Education Allowance:

Children education assistance is an incentive to share employees’ children’s educational expenses. All confirmed employees will be eligible to avail children educational benefit according to the following entitlement structure –

To avail the children education assistance, an employee must declare and record his/her child’s information and submit an attested/ certified copy of the birth certificate of the child to HR. the amount will be paid out with the monthly salary of the employee. An employee can avail this benefit for all of his/her school going children below 18 years of age. For both the parents working in GrameenPhone, only one claim will be allowed. The children education benefit was effective from March 2006.

4.3 Employee Development Programmes:

4.3.1 Training and Employee Development:

As a pert of individual development plan, the training policy provides a guideline to facilitate job specific functional improvement, development of managerial competencies, understanding of the cross-cultural processes and activities and/or other general areas that need to be improved (please see appendix: 1).

· Training Category:

There are 4 categories:

  1. Functional Training: Functional training is aimed to increase the job related technical/functional know how of an individual such as GSM training for technical division, selling and salesmanship training for sales department etc (please see appendix: 5).
  1. Management Development Training:

· Responsibility:

Training is a shared responsibility of the employee and the company. The responsibilities for training are divided as follow:

HR development, Human Resource Division is responsible for facilitating local and foreign training for GP employees according to Performance Management Process (PMP). In addition, HR development is responsible for designing in-house management training programs. HR development must be informed of and be involved (if necessary) in any training program organized within divisions.

4.3.2 Education Grant:

An employee can avail educational grant for pursuing higher studies in a discipline related to current responsibilities or in an area where he has future career aspirations. This will enable him/her to have personal development and better contribute to the business.

· Eligibility:

Employees at any level having two year or more service length with Grameen Phone will be eligible for the educational grant.

· Details of the grant:

Grameen Phone will bear up to 75% of the total course fee, not exceeding Tk. 350,000. The total numbers of grants will not exceeding 40 per year. An employee willing to avail the grant must fill up a prescribed from available at I:/HR Forms & Format and submit to HR along with the relevant course details and fees structure. Applications for the grant must be submitted to HR at least 2 months prior to the date of commencement of the course. Applications for the grant will be scrutinized by a 4 member committee comprising of 1 person from HR and 3 senior managers from other functions. The grant will be disbursed as reimbursement of the course fee per period/semester.

4.3.3 Smooth Promotion Policy:

Promotion will mean a move to a higher grade with a larger scope of job. After successful completion of individual training, Grameen Phone promote to their employees to a higher position with greater responsibilities based on their performances and future potentiality.

Situations for promotion:

Respective functions will initiate a proposal and submit it to HR justifying creation of new position. The proposals will be forwarded to HR on a quarterly basis, if any. A cross-functional committee will review the proposals for approving the new positions up to manager level. Incase of positions above manger level, the proposal will be sent to MT for approval.

The cross-functional committee is consisted of 4 persons. Configuration of the committee is given below:

· 1 from HR

· 2 from line function, and

· 2 from other functions.

Once the positions are approved, HR will circulate job posting internally and usual selection procedures will be followed. In case of non availability of the right resource, external recruitment effort will commence. The person whose scope of job has significantly increased and lead to creation of the new position should also apply against the job posting.

4.4 Other Benefits:

4.4.1 Working Environment:

Grameen Phone ensures a well decorated, secured and friendly environment for their employees to work with the help of modern furniture, interior design and up to date logistic in their offices. The employees feel very interested by using these users friendly systems of the organization and these modern logistics helps to increase their productivity. Grameen Phone always put more emphasis on maintaining the working environment of the organization.

4.4.2 Inflation Adjustment:

Since employee’s cost of living standard is changing over time, therefore, management urges that there is a need for adjusting average cost of living. To do this GP has devised a mechanism to adjust employees’ salary with country’s inflation rate. It is expected that such policy of periodic salary adjustment will keep money value of salaries roughly constant in terms of their ability to purchase goods and services.

The inflation rate will be calculated by collecting data from different organizations. The most recent available data of previous fiscal year will be considered. HR department will observe and collect information from similar organizations and analyze financial implications due to such adjustment. The proposal will be initiated by Director, HR and submitted to management committee for approval. Every year in December, HR will initiate the process and the adjustment of inflation with the respective employee’s basic will effect from January 1 of the next year.

4.4.3 Long Service Award:

An employee on completion of 5 years as on March 26 of each year will be acknowledged for his/her contribution to the company. The employee will receive a gift within an amount of Tk. 30,000 for completing 5 years at the long service award giving ceremony organized by HR. Those completing the 5 year tenure after March in any particular year will be entitled for the award in the subsequent year.

4.4.4 Recreation Programmes:

Grameen Phone is very much aware about the refreshment and entertainment facilities of their employees. They arrange different sort of entertainment programmes like local and foreign trip, lunch or dinner party, music and cultural programmes etc for their employees considering their position and contribution towards the organization. In fact they have a separate department to handle with these issues and they are responsible for arranging the entertainment functions.

4.4.5 Accident

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REPORT ON MINERAL DRINKING WATER

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 1.0 Introduction

Background of the Study
Modern, business is very much complex because of even changing customer choice, preference, taste etc, and for the technological and high competition. As globalization is on the competition is spread an over the world. Therefore, every organization should be international standard. Every company or firm wants to make his or her loyal customer group. Each firm would like to gain maximum profit through consumer’s satisfaction. Today, each company has to face so much competition. To perform all marketing tasks marketer are to faces. Two types of environment, one is macro or external, and another is micro or internal environment. We know that Mineral Drinking Water is an existing consumes goods. It is classified as shopping goods. People usually drink water for removing thirsty the refreshment and to reduce tiredness. In all seasons, mineral water is widely consumed by the customers. Nevertheless, the demand becomes high in the summer. There is a wide demand and high prospects for the Mineral Drinking Water. SPA Mineral Drinking Water is one of the items to meet this demand and building new demand and features in the consumers’ mind by eliminating thirsty. This study tries to focus on marketing strategy of SPA Mineral Drinking Water. It has become one of the popular brands in Bangladesh and trying to capture major market share.It is manufactured and marketed by “AKIJ FOOD AND BEVERAGE LIMITED” from AKIJ GROUP of INDUSTRY. SPA Mineral Drinking Water is selling mainly local market all over Bangladesh. In spite of few problems, there is increasing demand for SPA Mineral Drinking Water all over the country. Therefore, we can say that SPA Mineral Drinking Water has a bright prospect in the country. Therefore, company should take correction action for the fulfillment of the target of drinking mineral water products of AFBL.

1.2 Importance: We know SPA Mineral Drinking Water is a well-known brand in Mineral Drinking Water industry within Bangladesh. The demand as well as the sales volume of SPA Mineral Drinking Water is increasing rapidly day by day.

Marketing is the key point of the business activities that direct the flow of goods and services from producer to customer or user in order to satisfy customer and accomplish the company’s objectives. In order to achieve the customer satisfaction, product must be available in the right form, at the right time, in the right place.

The importance of this study is to analyze the marketing strategy of SPA Mineral Drinking Water as well as identify the real problems and what method should be used in order to overcome those problems. There is much higher demand for locally produced SPA Mineral Drinking Water in the country than present domestic supply. Bangladesh is not self sufficient in SPA Mineral Drinking Water product production. We see that there is frequent shortage of Mineral Drinking Water product is our local market. As a result, the customers of SPA Mineral Drinking Water are facing a lot of trouble. There are some problems in the distribution of SPA Mineral Drinking Water. The demand of SPA Mineral Drinking Water is not stable in Bangladesh. There is only one way of SPA Mineral Drinking Water supply in Bangladesh, which is Domestic production. But they are trying to export it.

The prime objective behind the creation of SPA Mineral Drinking Water industry was to ensure the steady supply SPA Mineral Drinking Water and to make it easily available to the customers when they need at the lower possible price.

Although Bangladesh has a favorable condition for the growth of SPA Mineral Drinking Water, yet it is not rich in production due to absence of modem machineries. The distribution system is not developed with respect to the market demand. The market forces determine the price of SPA Mineral Drinking Water. In case of distribution, many irregularities come out due to lack of marketing management concept. Weak marketing system is responsible for this kind of error.

However, very few research works have been accomplished in the area of SPA Mineral Drinking Water particularly on Mineral Drinking Water marketing. Although this work is not providing a specific guideline to overcome the current problems of SPA, but we think this report will be helpful for the marketers, the customers and the policy makers who are directly involved in the formulation of the marketing strategy of SPA Mineral Drinking Water. Finally a contemporary marketing strategy is proposed to overcome the current and prospective marketing problems of SPA Mineral Drinking Water and to develop a marketing plan.

Water for Life
The importance of water in human health cannot be overemphasized. There is not a more important element needed by the body, which must constantly be replaced throughout each day. Not providing your body with adequate amounts of water can be devastating to your health. A rule of thumb for water is that the body needs a minimum of half your weight in ounces everyday. (Example: If you weigh 150 lb., you need 75 ounces of water per day.) The need for water is summed up best by the following: “Chronic cellular dehydration painfully and prematurely kills.

Ionized water (or alkaline water) is one of the greatest preventative health advances and technological marvels of the 20th century, yet it has gone almost entirely unnoticed. Ionized water is a powerful Antioxidant providing the body with tremendous amounts of oxygen and therefore lots of energy. It is very alkaline and helps neutralize and flush acid waste from the body, which can encourage disease. It is a superior hydrator and detoxifier because Ionized Water molecule clusters have been “reduced” in size (from 10 to 5) and therefore is “lighter”. Ionized Water’s smaller size allows it to hydrate your body more effectively, pushing out toxins as it easily passes through your body’s tissue.
Natural Mineral Water VS Spring Water:Spring Water is bottled water which does not conform to the Natural Mineral Water Regulations, but which must meet the ‘Tap Waters Regulations’ at the time of sale. Under EEC Regulations Spring Water must conform to the same criteria as Natural Mineral Water with one important exception, Spring waters do not have to prove a consistent mineral content. However, under current UK law, spring waters may also be treated.

1.3 Background of AFBL

Akij Food and Beverage Ltd.
“Brings Quality in Life.”

History of Akij Group stretches back to later part of the forties. In its infancy, the Group started in humble way with jute trading which was known as the golden fiber of the country, earning highest amount of foreign exchange.

1.3  Background of the Company:
Akij Group’s ceaseless efforts with dynamic management and support from our numerous clients have led our Group in diversifying its business activities. In the second phase, the Group went into manufacturing handmade cigarettes popularly known as bides. This sector gave a real boost to the revenue earning of the Group as well as making a substantial contribution to government exchequer. With the passage of time, the Group undertook new ventures and presently there are 15 units of industries under its umbrella like cigarettes, handmade cigarettes, printing & packaging, textiles, hand board, pharmaceutical, leather processing and real-estate business are in operation, catering jobs for more that 32,000 people in various categories.
The Group has plans for setting up more projects. The projects are already in pipeline. Foreign investors have shown keen interest in joining with us for joint ventures. The matter is under our active consideration and will hopefully soon mature. This will also help the nation’s economy growth and will create job opportunities to various professionals.

Akij Group is also involved in socio-cultural activities. The Group has been operating a sizeable orphanage free of charge in district town. The Group has also acquired a modern mother & children hospital previously owned by Save the Children (UK). Ad-Din Welfare Trust is operating the hospital as a non-profitable concern.

Akij Corporation Limited
A sister concern of Akij Group, Akij Corporation Limited is the most organized distribution company in the country. Akij Group is country’s one of the leading business conglomerates. Initially Akij Corporation Limited was known as Amin Enterprise and started its operation in 1992. In June 1997 Amin Enterprise was renamed as Aminuddin Enterprise Limited and in 2001 Aminuddin Enterprise Limited was again renamed as Akij Corporation Limited. Akij Corporation Limited is responsible for the marketing and distribution of three industries of Akij Group namely Dhaka Tobacco Industries, Akij Match Factory Limited and Akij Zarda (chewing tobacco) Factory.

Akij Jute Mills Ltd.
AKIJ JUTE MILLS LTD. a unit of Akij Group is a 100% export oriented Jute yarn Industry catering to the need to carpet manufacturers and other end users of jute yarn all over the world. Apart from being a member of a leading industrial group of Bangladesh, the mill is run by a team of qualified and highly experienced professionals whose principle objective is customer satisfaction. In respect of production, the mill is one of the largest in Bangladesh producing about 20,000 Metric Tons of Jute yarn annually. The mill is creating jobs to over 3,000 people most of them are destitute females of the locality.

Akij Match Factory Ltd.
Akij Match Factory Ltd. has been established in the year 1992 at a beautiful site near Muktarpur Ghat on the bank of river Sitalakshaya. It is a fully automatic match factory, which produces 100% Carborized high quality safety matches.

Dolphin is the brand name of the matches produced from this factory. Immediately after the introduction of the brand it became very popular among its consumer because of the high quality and intensive distribution in every nook and corner of the country.

.The river Shityalakhkha flows next to the factory and facilitates transportation greatly. Some of the wood used to make matchsticks comes from Pakistan.

A cutter with a circular saw cuts the logs into 15” portions. The bark is taken off the portions and these are then put through the peeling machine, which peel layers of wood off the log. These layers are chopped into the rough shape and size of matchsticks. As these sticks are usually quite moist, they are dried. Carborization and treatment with other chemicals such as Boric acid occurs at this point. This is to ensure that the matchsticks don’t break when ignited and that their quality is preserved even in highly humid conditions. The chemically treated sticks are polished in two stages to give them uniform proportions.

At every stage, non-standard products (wood layers or sticks) are rejected. However, these are not wasted. The sticks, wood layers and any other scrap wood goes to be recycled in AKIJ Particle and Hardboard Mills. The faults in the rejected matches are dealt with and these are packed manually. Rotary packers pack the bulk of the matches and these go directly to the market.

Akij Food & Beverage Ltd.
Akij Food & Beverage Ltd. has been established at a beautiful site Krishnapura, Dhamrai of Dhaka. It has come with the best food & beverage in Bangladesh.

There are various types of drink. Mojo is the brand name of cola, Lemu is the brand name of Lemon, and Speed is the brand name of energy drink. Immediately after the introduction of the brand, it became very popular among its consumer because of the high quality and intensive distribution in every nook and corner of the country.

Cheeky Monkey is the brand name of banana chips produced from this factory. It also is becoming popular chips in Bangladesh.

Most of our Raw materials come from various foreign countries. The quality is very strictly controlled. At every stage, non-standard products are rejected.

Dhaka Tobacco Industries
Dhaka Tobacco Industries came to the fold of Akij Group in late seventies when Government has decided to disinvest and hand over the Factory to private sector from the nationalised sector.

The Factory is located at Morkun near Tongi and lot of investment into MEN & Machineries has turned the Factory in to a Modern cigarette-producing unit. It employs about 1,200 people who work in a congenial atmosphere to deliver right quality to satisfy the million of Smokers’ taste and needs.

Currently, Dhaka Tobacco industries produces eight brands of cigarettes. These are Navy, Legend White, Five Star, Red & White, K2, Surma and Diamond. Approximately one billion cigarettes are produced per month by the company’s factory in Tongi, Gazipur.One hundred million of the Navy brand are exported quality and are sold in Dubai.

In storage, the tobacco is kept in air-conditioned and moisture controlled rooms where its perfection can be maintained for up to two years.The bales of processed tobacco are sliced in uniform sizes and ground. This is stored in the blending silos in specific ratios. The tobacco (lamina) is moistened, cut, and dried.

Some of the excess stem produced in National Leaf is also used. It is fed into a conditioner using auto feed. Then, it is cooled and stored in silos to be processed further when necessary. A stem roller is used to flatten the stem so that it is ready to be cut first by the cutter and then by a millicutter. It is moistened using steam in low pressure and dried to attain the desired level of humidity. At this point the lamina and stem come together in the mixing cylinder where chemicals are added. There are different silos for each blend and the cut tobacco is stored in these. Four Rotary feeders are involved in transporting this to the secondary manufacturing department.

A Molin’s Plug making machine makes filters. The filter making machine is capable of making plugs of different length and dia. There are cigarette making machines of various brands and speeds. Recently, the company has invested in Molmac Mark 9 machines. They are equipped with a system to remove ferrous material and stems from the tobacco supplied to the machine. In addition, there is an automatic system of weight and density control to maintain uniformity.

Focke Hinge Lid Packers are used for packing cigarettes. Quality Test Module is used to test the circumference of cigarettes and filters using a laser mike head, the total ventilation with closed ventilation zone and the pressure drop in cigarettes is a completely encapsulated condition. The percentage of moisture, nicotine, and sugar in various blends is found using the Infralab TM Gauge. A Tobacco Oven determines the total oven volatile content of tobacco and stems. There are varieties of other installations to measure both physical and chemical properties, with the most impressive being a latest smoking machine.

The machines run around the clock except on Friday when most of the maintenance work is done. The well-disciplined environment and efficiency of this factory has caused man multinational companies to offer us deal to manufacture their product in order to supply the subcontinent.

Akij Textile Mills Ltd.
Akij Textile Mills Limited (ATML) is a sister concern of Akij Group. Since 1998, Akij Textile has been operating its business by supplying excellent quality Yarn primarily in the export market. The yarns produced by ATML are sold to the export oriented knit & woven garments industry. ATML’s production capacity is around 50 tons per day – 25 tons combed & carded from Ring Spinning, 20 tons from Schlafhorst Autocoro & 5 tons from BD Rotors. The mill can produce all yarn counts from Ne 6/1 to Ne 100/1. The counts mostly being produced are Ne 20/1 to Ne 40/1 combed & carded 100% cotton yarn from Ring Spinning, Ne 6/1 to Ne 26/1 from Schlafhorst Autocoro machine and Ne 7/1 to Ne 16/1 from BD Rotors. The blow rooms are equipped with Vision Shields – foreign fiber (contamination) detectors. From the process of bale breaking to the packaging of yarn, everything is done with automation & state -of – the -art- technology.Quality is of utmost significance and is therefore very carefully controlled.

Beside other routine equipment to measure various properties of the cotton, sliver, and yarn, the lab is equipped with a H.V.1 spectrum. It is used to check the suitability of the cotton from each bale and according to the results; the bale would either be accepted or rejected. The software in the machine is able to select the bales, which do not meet the set standards and compile a list of them automatically. The Uster T4 is used to test sliver, roving, and yarn. It measures thickness variation per kilometer. Frequent samples are taken and tested meticulously. The level of computerization of the machines on the factory floor also mean that their performance can be monitored from the lab.

Akij Particle Board Mills Ltd.
Akij Particle & Hard Board Mills Ltd. has come with the best particleboard in Bangladesh. It started business in the year 2001 & already she has created a place in the market for improved quality.

The factory is situated at Torraghat in Manikgonj District on the bank of the river Kaliganga. Akij Particle Board is a Timber substitute three-layer board made of wood chips. The objective is to produce and supply international standard Particleboard to meet the demand of Architect, Interior Designers & Furniture Manufacturers in the country. With the guidance of Honorable M.D. Sheikh Akij Uddin, Akij Particle & Hard Board Mills Ltd. will maintain quality and better service to satisfy her valued customers and users.

Due to the high levels of humidity in Bangladesh, wood is not a long lasting building material unless it is of the best quality and is excellently treated. However, good quality wood is very expensive and often acquired through the illegal eradication of forests, which has led to many species becoming scarce. The rate at which objects made of wood need to be replaced is greater than the rate at which most trees grow. Particleboards are longer lasting, less expensive, and greener alternative of wood. A lot of the scrap wood produced by various factories in the group is recycled to be particleboards.

Akij Printing & Packaging Ltd.
APPL is one of the biggest printing & packages in Bangladesh. The most modern and sophisticated technology of APPL have ensured our high quality printing and packaging including the best quality wide format digital printing system in Bangladesh. Situated in Tongi and Navaran, two factories provide almost all the packaging required by the group. Besides this, they also provide packaging for other companies.

The paper needs to be slit and trimmed before printing. Goebel Optima 2000 are multiple slitters; they are able to work with paper, board, and film.

There are various types of printing machines. The Heidelberg Speed master CD102 does four-colour offset printing. It is capable of printing 45,000 impressions per shift. There is
a Gravure 7 color-printing machine capable of printing 150 m per minute. Some of the ‘stations’ may be shut off to enable images of smaller numbers of color to be printed with this machine.

The printed media are then cut to the appropriate sizes by easily programmable machines. These then go through the folding and gluing process. There are wet and dry laminating machines for waterproof packaging. These factories are engaged in advertising and not only printing posters. A state of the art new printing machine is able to print front-lit, back-lit and other types of signs on a variety of media.

Akij Zarda (Chewing Tobacco) Factory Limited:
Akij Zarda Factory Ltd. is producing 4 different types of Zarda to full fill the needs of different consumers in diversified taste. Different types of Zarda produced by AZFL are as follows: 1) Special Patti (99): Pack Size – a) 50gm b) 25gm c) 12.5gm, 2) Golden Patti (Surovi) (55): Pack Size – a) 50gm b) 25gm c) 12.5gm, 3) Akiz Zorda (Beli) (44): Pack Size – a) 50gm b) 25gm c) 12.5gm and 4) Vhiza Patti (33): Pack Size – a) 25gm b) 10gm.

Export:
For outstanding performance in export, the company achieved “The National Export Trophy-2001 (Gold)” for Navy Special Filter Cigarette export and “The National Export Trophy (Silver)” for hand made cigarette (popularly known as bidi) export as well as a pioneer employment provider with employment strength of 60,000 staff and officer in different categories.

Marketing:
Government ban on tobacco and anti tobacco campaign has induced our marketing team to become innovative in their marketing strategies. Marketing operations at Akij Corporation Ltd. includes a range of activities like Brand Management, Trade Marketing and Distribution and Marketing Research.

Human Resource:
The Human Resource department is responsible for developing and sustaining a workforce for Akij Corporation Ltd. There is separate HRD wing for ACL for running day-to-day administrative work of Marketing Department.

Product of AFBL

The recent launching of the Akij Groups beverage line has been gaining popularity among all carbonated water lovers. It gained popularity particularly among teenage people and children. Presently the company able to introduce new types of product, which increase the depth of the category of AFBL. Akij food &Beverage limited started there journey officially on July 2006 with three products but now the company gives the products, which are offering, below:

Product
Category		 Brand Name Size
Cola MOJO 150ml can, 250ml pet and can,
500ml pet, 1-liter pet, 2-liter pet.
Cloudy Lemon Lemu 150ml can, 250ml pet and can,
500ml pet, 1-liter pet, 2-liter pet.
Clear Lemon Clemon 250ml pet and can 500ml pet, 1-liter pet, and 2-liter pet.
Energy Drink Speed 250ml pet and can
Mineral Water Spa 500ml pet, 1 liter pet, 2 liter pet
Juice Frutika  (Mango, Red grape, Red orange) 250ml pet, 1 liter.
Milk Farm Fresh UHT milk ½ – liter tetra pack.
Malt Beverage Wild Brew 250ml can.
Snacks Cheeky Monkey 15 and 30 gm Foil pack.
Cheese Puffs 15 and 30 gm Foil pack.
O’ Potato
(vegetable masala, Magic masala)		 15 and 30 gm Foil pack.

 Business Philosophy

Akij Group diversified their business in Food & Beverage industry because in Bangladesh we have 14 corers people. It is large market size to serve and food is required continually for the population. Akij food & beverage want to serve quality food for their target market.
In soft drink industry, there are many local & foreign companies. Akij want to be local unique soft drinks producer with the same quality of foreign company. For this purpose AFBL produces CSD for young target group who like to live stylist life. Main slogan of AFBL is “Brings Quality in Life”.

AFBL has its own marketing & sales department in Akij chamber. The functions of this department are very wide and dynamic. Main functions performed by this department are:
Product development

Raw material sourcing

Find out or create market for its product

Price set up

Packaging development

Developing communication  strategy

Preparing sales forecast

Maintain sales management in the field

Keeping record of sales and stock

Collection & analysis of competitors information

Beside these, it performs a number of activities to conduct their day-to-day business. Under marketing & sales department, a Brand team performs the key:

1.4 Human Resource and Organization Structure

Employees

In AFBL Marketing and sales department, a number of employees work under Sr. G.M (Marketing & sales). Numbers of employees are working in different positions in the 4th floor of Akij chamber. Here I found:
Senior General Manager
General Manager
National Sales Manager
Brand Manager
Purchase executive
Research executive
Brand executives
Brand officers
Event management officers.

Beside these employees, AFBL has a Sales team working all over the country. Four Regional sales managers control these sales forces. An area sales manager & an area sales officer is engaged to conduct regular sales management for each sales area. They work at the retail outlet with the authorized distributors.

The actual marketing activities of AFBL are performed by the Brand office under Marketing and sales department.

ORGANIZATIONAL ADMINISTRATIVE FLOW MODEL (AFBL)

Literature Review

Perception:

Perception is defined as the process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world. It can be described as “how we see the world around us.”

Elements of Perception

Sensation

Sensation is the immediate and direct response of the sensory organs to stimuli. A stimulus is any unit of input to any of the senses. Examples of stimuli include products, packages, brand names, advertisements, and commercials.
The Absolute threshold

The lowest level at which and individual can experience a sensation is called the absolute threshold. The point at which a person can detect a difference between something and nothing is that person’s absolute threshold for that stimulus.

The Differential Threshold

The minimal difference that can be detected between two similar stimuli is called the differential threshold or the just noticeable difference. Manufacturers and marketers endeavor to determine the relevant J.N.D for their products for two different reasons:
So that negative Changes (reduction in product size or quality, increase in product price).
So that product improvements (such as improved or updated packaging, larger size, or lower price)

Research Process

Research process consists of series of actions or steps necessary to effectively carry out research and the desired sequencing of these steps, are given below:

Formulate the research problem
Extensive literature survey
Developing the hypothesis
Preparing the research design
Determining the sample design
Collecting the data
Execution of the project
Analysis of data
Hypothesis testing
Generalizations and interpretation
Preparation of the report or presentation of the results
Managers have to analyze competitive forces in an industry’s environment in order to identify the opportunities and threats that confronting a company. Michael E. Porter of Harvard School of Business Administration has developed a framework that helps managers in this analysis. Porter’s framework, known as the five forces model. This model focuses on five forces that shape competition within industry:
The risk of new entry by potential competitors.
The degree of rivalry among established companies within an industry.
The bargaining power of buyers.
The bargaining power of suppliers.
The threat of substitute products.

Akij Food & Bevarage Limited (AFBL) at a glance:
Name of the Company: Akij Food & Bevarage Ltd. (An enterprise of Akij Group)
Year of establishment: 1985
Head office: Akij Chember, 73 Dilkusha, Motijheel, Dhaka.
First commercial production: July, 1993
Human Resources of Akij Group (Till December 2006):

No Name of Unit No. of Employees
01 Corporate Office 284
02 Dhaka Tobacco Industries 2670
03 Akij Printing and Packaging 448
04 Akij Particel Board Mills Ltd. 622
05 Akij Textile Mills Limited 1654
06 Dhaka Tobacco Industries – LPF 818
07 Akij Food and Beverage Ltd. 539
08 Akij Cement Company Ltd. 148
09 Akij Poly Fiber Ind. Ltd 19
10 Akij Match Factory Ltd. (Unit-1) 2912
11 Akij Match Factory Ltd. (Unit-2) 72
12 Akij Zarda Factory Ltd. 86
13 Akij Zarda Factory Ltd. (Marketing) 18
14 Akij Juit Mills Ltd. 306
15 Dhaka Tobacco Industries – CLA 74
16 Dhaka Tobacco Industries – KLA 141
17 Dhaka Tobacco Industries – MLA 12
18 Dhaka Tobacco Industries – RLA 26
19 Akij Transport Agency 59
20 Akij Corporation Ltd. 904
21 Akij Cement Company Ltd. (Marketing) 40
22 Grand Total 11,855

3.0 Marketing Strategy

3.1 Industry Analysis based on Porter’s five Forces:

A Model for Industry Analysis

The model of pure competition implies that risk-adjusted rates of return should be constant across firms and industries. However, numerous economic studies have affirmed that different industries can sustain different level of profitability; part of this difference is explained by industry structure.

Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates.

Threat of new entry or potential competitors:

Potential competitors are companies that are not currently competing in an industry but have the capability to do so if they choose. Incumbent companies try to discourage potential competitors from entering the industry, the more companies enter, the more difficult it becomes for established companies to hold their share of the market and generate profits. A high risk of entry by potential competitors represents a threat to the profitability of established companies. On the other hand the risk of new entry are low, incumbent companies can take advantage of this opportunity to raise prices and earn greater returns. Barriers to entry→ it means to those factor that make costly for companies to enter in an industry. Now some barriers to entry are given below:

Brand Loyalty:
Brand loyalty is buyer’s preferences for the products of incumbent companies. A company can create brand loyalty through continuous advertising of brand & company names, patent protection of products, product innovation achieved through its research and development programs, an emphasis on high product quality and good after sales service. Now some other techniques of brand loyalty are given below:

Provide quality product and services.
Warranties & Guaranties.
Value adds service.
Continuous advertisement.
Strong customer relationship.
Absolute Cost Advantages:
Absolute cost advantages can arise from three main sources; such as:
Superior production operations due to experience, patents or secret process.
Control of particular inputs required for production such as labor, materials, equipment or management skills.

Economies of scale:
Economic of scale are the cost advantages associated with large company size. It implies that it will increase productivity or decrease the average cost of production. It also includes:
Mass production of standardizes output.
Discount on bulk purchase of raw materials.
If these cost advantages are significant, a new entrant faces the dilemma of either entering on small scale and suffering a significant cost disadvantage or entering on large scale and bearing the large risk of significant capital costs.

Government Regulation:
Historically, GOVT. regulation has constituted a major entry barrier many industries. For example: Until recently in the United States, government regulation prohibited provides of long distance telephone service, such as AT&T, MCI and sprint, from competing for local telephone service with the Regional Bell Operating Companies such as US West and Bell Atlantic.

Barriers to Entry and Competition:
If established companies have built brand loyalty for their products, have an absolute cost advantage with respect to potential competitors, have significant economies of scale, or enjoy regulatory protection, then the risk of entry by potential competitors is greatly diminished. When the risk is low, established companies can charge higher prices and earn greater profits than would be possible otherwise.

Rivalry among Established Companies:
The second of Porter’s five competitive forces is the extent of rivalry among established companies within an industry. If this rivalry is weak, companies have an opportunity to raise prices and earn greater profits. If rivalry is strong, significant price competition, including price wars, may result. The extent of rivalry among established companies within an industry is largely a function of three factors:
The industry’s competitive structure.
Demand condition.
The height of exit barriers in the industry.

Competitive Structure:
Competitive structure refers to the number and size distribution of companies in an industry: Structure varies from fragmented to consolidate and have different implications for rivalry. A fragmented industry contains a large number of small or medium-sized companies, none of which is in a position to dominate the industry. A consolidated industry may be dominated by a small number of large companies (in which case it is referred to as an oligopoly) or, in extreme cases, by just one company (a monopoly). Fragmented industries range from agriculture, video rental and health clubs to real estate brokers and sun tanning parlors. Consolidated industries include aerospace, automobiles and pharmaceuticals, etc.

Demand Conditions:

Growing demand from either new customers or additional purchasers by existing customers tends to moderate competition by providing greater room for expansion. Growing demand tends to reduce rivalry because all companies can sell more without taking market share away from other companies, and high profits are often the result. Conversely declining demand results in more rivalry as companies fight to maintain revenues and market share. Demand declines when consumers leave the marketplace or when each consumer buys less. Under these conditions a company can grow only by taking market share away from other companies.

Exit Barriers:
Exit barriers are economic, strategic and emotional factors that keep companies in an industry even when return are low. If exit barriers are high, companies can become locked into an unprofitable industry in which overall demand is static or declining.

Investments in plant and equipment that have no alternative uses and cannot be sold off. If the company wishes to leave the industry, it has to write off the book value of this assets.High fixed costs of exit, such as severance pay to workers who are being made redundant.
Emotional attachments to an industry, as when a company is unwilling to exit from its original industry for sentimental reasons. Economic dependence on the industry as when a company is not diversified and so relies on the industry for its income.

Buyer is Power:
The power of buyers is the impact that customers have on a producing industry. In general, hen buyer power is strong; the relationship to the producing industry is near to what an economist terms a monopoly- a market in which there are many suppliers and one buyer. Under such market condition, the buyer sets the price. In reality, few pure monopolies exist, but frequently there is some asymmetry between a producing industry and buyers.

The third of porter’s five competitive forces is the bargaining power of buyers. A company’s buyers may be the customers who ultimately consume its products (its end users) but they may also be the companies that distribute its products to end users, such as retailers and wholesalers. According to porter, buyers are most powerful in the following circumstances: When the supply industry is composed of many small companies and the buyers are few in number and large. These circumstances allow the buyers to dominate supply companies. When the buyers purchase in large quantities, in such circumstances, buyers can use their purchasing power as leverage to bargain for price reductions.

When the supply industry depends on the buyers for a large percentage of its total orders. When the buyers can switch orders between supply companies at a low cost, thereby playing off companies against each other to force down prices.

When it is economically feasible for the buyers to purchase the input from several companies at once.When the buyers can use the threat to supply their own needs through vertical integration as a device for forcing down prices.

Supplier Power:
The fourth of Porter’s competitive forces is the bargaining power of suppliers. Suppliers can be viewed as a threat when they are able to force up the price that a company must pay for its inputs or reduce the quality of the inputs they supply, thereby depressing the company’s profitability. According to Porter, suppliers are most powerful:

* When the product that they sell has few substitutes and is important to the company.When the company’s industry is not an important customer of theirs. In which instances, the supplier’s health does not depend on the company’s industry, and suppliers have little incentive to reduce prices or improve quality.

When their respective products are differentiated to such an extent that it is costly for a company to switch from one supplier to another. In such cases, the company depends on its suppliers and cannot play them off against each other.

When, to raise prices, they can use the threat of vertically integrating forward into industry and competing directly with the company. When buying companies cannot use the threat of vertically integrating backward and supplying their own needs as a means to reduce input prices.

Threat of Substitute Products:
In Porter’s mode, substitute products refer to products in other industries. To the economist, a thereat of substitutes exists when a product’s demand is affected by the price change of a substitute product. Substitute products affect a product’s price elasticity – as more substitutes become available, the demand becomes more elastic since customers have a more alternatives. A close substitute product constrains the ability of the firms in and industry to raise prices.

The final force in porter’s model is the threat of substitute producers. Substitute products are those of industries that serve consumers needs in a way that is similar to those being served by the industry being analyzed. The existence of close substitutes presents a strong competitive threat, limiting the price a company can charge and thus its profitability. However, if a company’s products have few close substitutes (that is, if substitutes are a weak competitive forces) then, other things being equal, the company has the opportunity to raise prices and earn additional profits.
Marketing Mix
Every marketer has heard of the four P’s – product, price, place, and promotion. They are the foundation of many marketing educations and the cornerstones of many marketers’ practices.
Recently, however, a new marketing mix has begun to emerge, no longer based on the four P’s. This New Marketing Mix is based on the Four C’s – create, connect, correct and cancel.
Create.

This is the basis of The New Marketing Mix. Gone are the days where a marketer can just create a product and then spend all his money convincing people to care about it. In today’s marketplace, where information flows fast and free, it is vital to put all your effort into creating something that people truly believe is worthwhile. If he/she can get them to care about it, then he/she has really accomplished something.

Connect
As in make it possible for his/her to connect with his/her customers and for his/her customers to connect with each other. This kind of connection is vital to the growth and success of any person/product/company/service. Find out what people like and what they don’t like. All this connection creates a community, where the whole is always more than the sum of its parts.

Change
As in, if it is not working change it. Test and measure repeatedly. The solution is never to plow more money into it and wait for people to “catch on.” Why waste time and money on something that is not doing what it is supposed to? Use analytics to test the success of your ad campaigns or landing pages. Measure the results, tweak it, and measure again… and then tweak it again, etc. In New Marketing, not only is there constant room for improvement, there is a need for it. Just because the ad is up or the copy done, does not mean it is set in stone.

Cancel
As in get rid of it, If you’ve tried to fix something, but it’s still not working – then stop doing it. Do not be afraid to give an underperforming ad/product/service/page the axe. With so many other, positive things, you could find to spend your time .The 4 P’s of Marketing

The major marketing management decisions can be classified in one to the following:

Product
Price
Place (distribution
Promotion

These variables are known as the marketing mix or 4 P’s of marketing mix. They are the variables that marketing managers can control in order to best satisfy customers in the target market. The marketing mix is portrayed in the following diagram:

Product Price Place Promotion
Functionality
Appearance
Quality
Packaging
Brand
Warranty
Service/Support		 List Price
Demounts
Allowances
Financing
Leasing		 Channel Members
Channel Motivation
Market Coverage
Location
Logistics
Service Level		 Advertising
Personal Selling
Public Relation
Message
Media
Budget

Product:
The product is the physical product or service offered to the customer. In the case of physical products, it also refers to any services or conveniences that are part of the offering.
Product decisions include aspects such as function, appearance, packaging, service, warranty, etc.

Price:
Pricing decisions should take in to account profit margins and the probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing.

Place:
Place or placement decisions are those associated with channels of distribution that serve as the means for getting the product to the target customers. The distribution system performs transactional, logistical, and facilitating functions.
Distribution decisions include market coverage, channel member selection, logistics, and levels of service.

Promotion:
Promotion decisions are those related to communicating and selling to potential consumers. Since these costs can be large in promotion to the product price, a break-even analysis should be performance when making promotion decisions. Promotion decision involves advertising, public relation, medical types, etc.

Summary Table of the Marketing Mix based on Spa drinking water:

AFBL have done these four marketing mix very well for Spa drinking water.

Appearance of Spa drinking water is good but is should be changed the bottle of deign, because these types of bottle is very common in Bangladesh. So to capture the customers attention, shape of the bottle needs to change, something new.

Packaging of the Spa drinking water is very good in the context of Bangladesh market and compared with it’s competitors. AFBL ensures the quality of Spa drinking water is very good.

Price of the Spa drinking water is reasonable comparing with it’s competitors.

AFBL has already taken many steps for motivating channel members such as distributors, employees, customers etc. and by market coverage, they also prove their best try for service.

To build up a strong bran “Spa”, AFBL gives sufficient advertisement in TV, Radio, Newspapers etc and build up a good public relationship by participating in many social work, fair, and events.

3.3 Pricing Policy and Strategy

Price is the sum of all the value that consumers exchange for the benefits of having or using the product on serves. Historically, price has operated as the major determination of buyer’s choice.

a) Pricing policy:
As the company has an objective to stay in the market as long as possible with this business. It has adopted the penetration price policy some both domestic and international market.

Another viewpoint is that they company has adopted a fixed pricing strategy. The cause behind this strategy is that the target consumers generally do not like bargaining. As because the AFBL products users perceive high status

b) Pricing Strategy:
Considering consumer satisfaction, market demand etc. The company follows the prices of juice pack is “Cost-pricing” strategy. The pricing strategy is very specific and straight according to present market situation. Pricing decision is made through the discussion among the Managing Directors.

There are three stages at which the prices are fixed to the market in Bangladesh.
Firstly, the price, which the factory fixed, is called factory prices. Secondly, the wholesalers collect PRAN juice product from the factory then they fix a price for juice pack and then sell to the retailers on sub dealers. This type of pricing is called wholesale pricing. The wholesalers pricing system are given below:

Wholesaler Price = Issue price + transportation cost + storage cost +   packing cost + physical losses + other costs + profit margin.

Thirdly, the retailers then collect PRAN juice pack from the wholesalers, after keeping a certain profit margin they fix a price this type of pricing is called retail pricing

Akij Food and Beverage Ltd. is producing three types SQ of Spa drinking water. Spa drinking water of AFBL is dominating the drinking water market of Bangladesh. The three types of juice pack (Including price rate) which are given below:

No. Products name SQ Price (Tk.)
1. Spa Drinking Water 500 ml 10
2. Spa Drinking Water 1000 ml 15
3. Spa Drinking Water 2000 ml 20
Source: Official index book3.4 Distribution Policies and Strategy

Distribution Channel:
A set of interdependent organizations involved in the process of making a product or services available for use on consumption by the consumer or business user.Channel characteristics of Spa drinking water is the food industry of Bangladesh generally maintain a four-tier distribution channel. The Akij Food and Beverage Ltd. does not more retail sale directly from the production canter, Spa drinking water moves form factory to dealer’s agents or distributors, agents to wholesalers, wholesalers to retailers and finally retailers to consumers. The industrial buyers mainly sell Spa drinking water to the wholesalers. They also sell Spa drinking water to retailers besides the wholesalers. ‘The wholesalers mainly sell it to the customers besides the retailers. They also sell it to the customers beside the retailers. The customer mainly collects it from retailers.Wholesalers of the company are trained and contractual. The company divides sales territories among the wholesales. It provides commission and other financial facilities to the wholesalers to motivate the. The company does exclusive distribution. It has power of controlling wholesalers.

Distribution System:
The company has two types of distribution system for Spa drinking water. One is domestic regarding distribution system and other is international regarding distribution system.

Domestic:
Domestic distribution structure of PRAN juice pack in Bangladesh is given below:
Domestic Distribution Structure

 

 International:


3.5 Promotional Policy and Strategy

Promotional Mix consists of four major modem of communication these are: Advertising, personal selling, sales promotion, and publicity.

Spa drinking water, a product of AFBL, Company uses all above promotional strategy to enhance its sales:

1) Advertising:
Advertising is one of the most common tools that the company uses to direct persuasive communications to longer target buyers, consumer, and public. It is aware of the consumer about its quality, price, and consumption pattern.

Advertising can be done in various ways such as:

a) Television: TV is the biggest media in Bangladesh to reach the consumer. The firm realized it and started to spend for TV advertising of Spa Drinking Water. The advertisement of Spa mineral water has shown on the TV channels:
BTV
NTV
ATN
Channel i

b) Radio: Most of the people of Bangladesh live in village. Radio is now available everywhere and known as FM Radio. Radio can build up good appeals. So, the company emphasizes advertisement on radio.

Newspaper: Newspaper is an important media .A company can easily reach to the target customer through newspaper. Almost all the daily newspapers have been used for the advertising of Spa Drinking Water marketing in Bangladesh. Such as,
–      Prothom Alo
Ittefaque
Jugantor
Daily Star
d) Cinema: Some people especially middle lower class enjoy cinema. So to increase sales volume the company has to arrange advertisement through cinema.
e) Magazine: Various kinds of Magazine are published in Bangladesh and a specific target group of (Spa Drinking Water) is reading these magazines. So to create attention of Spa Drinking Water, the company has spent a large number of amounts for advertising in the magazine.
2) Personal selling:
Personal selling is one of the most important to the firm. Personal selling creates a good relationship to the dealers, distributors, wholesales, retailers, with customer or others of AFBL. So, the company’s sales people also play a vital role there.

3) Sales promotion:
Sales promotion is another essential ingredient in marketing campaigns. Such promotion consists of diverse collection of incentive tools, mostly short term, designed to stimulate quicker and for greater purchase of particular products or services by customer, where advertising offers a reason to buy Spa Drinking Water others trade promotion and Consumer promotion such as discount, incentives, coupon gift etc.

4) Publicity:
Spa Drinking Water in Bangladesh uses some publicity, the company frequently provides the material for publicity in the form of news releases, press conference and photograph.

5) Out Door Advertising:
Neon signs, bell signs, billboards, walling art etc are used to aware the people.
Hoarding Board Installation
Bus, Rail & Lunch Station Branding

6) Special Sales Drive:
Pharmacy Outlet
Bus Station
Lunch Ghat
Rail Station

Advertisement of Spa
TV Advertisement

Print Media Advertisement

4.0 Problems

4.1 Problem Faced by wholesaler
(1) Buying problem: Buying is one of the important activities of the wholesalers. The main buying problems of the wholesalers are financial problem. The wholesalers of Spa drinking Water may not have available current cash for doing current buying activities. So, the wholesalers may fall into a lot of troubles in operating these buying functions.

(2) Selling problems: The main selling problems of the wholesalers are sales on credit, sales forecasting:
Sales on credit: The distribution mainly depends upon the retailers for selling Spa drinking Water. So, the wholesaler has to face some of the demand of the retailers. Most of the retailers want to buy Spa drinking Water on credit. Retailer does not want to take risk. So, most of the retailers buy the Spa drinking Water on credit.

Sales forecasting: We know that now the business arena is much competitiveness. Most of the firm would like to gain challenge this competition. So, here sales forecasting is the main problems in the case of selling. The wholesaler does not use any method for determining sales forecasting most of the wholesaler sales forecast on the basis of last year sales.

Retailer’s pressure: The retailer’s pressure is a great problem of the wholesalers in the case of selling. The wholesalers cannot supply the Spa drinking Water to the retailers regularly. At this time, the retailers give a lot of pressure to the wholesalers.

Territory: Determining sales territory in an important matter for the wholesalers. No sales territory has been fixed for the wholesalers. The wholesalers buy and sell Spa drinking Water in their own responsibility.

Sales motivation: There is no sales motivational program in the Spa drinking Water marketing in Bangladesh. On the other hand, the wholesalers see that in the other business motivational program has become popular. So most of the wholesalers are frustrated and they do not know what will be happened.

(3) Transportation: It is one of the most important problems faced by wholesalers. They have not available vehicle. So the cannot supply Spa drinking Water to retailers in due time.

(4) Storage: The wholesaler of Spa drinking Water has no warehouse. So they do not stock a large amount of Spa drinking Water at a time.

High distribution cost: It is one of the most important problem faced by wholesaler. There are involved many policy and procedure. So wholesalers have to pay big amount that makes great trouble of wholesalers high distribution cost involves handling cost, physical losses, tax and financial cost.

(5) Government Policy: Sometime government imposes various policies in business. In addition, businesspersons are to abide by those policies carefully. For this reasons, the wholesalers are directly being affected with there policies. It creates a great trouble for wholesalers.

(6) Communication system: The communication system of Spa drinking Water wholesalers is very traditional. Now they do not follow modernize system.Order placed and orders maintained are operated without any modern communication system.

4.2 Problem Faced by retailer

  1. Buying problem: Retailers have faced various buying problem. It involves various problems such as sources, prices, finance, buying cost, quality and others.
  1. Sourcing problem: The retailers have not available source, so they could not get available marketing and product related information. Sometimes they do not know what have to be done.
  1. Financial problem: Most of retailer is not strong financially. But the retailers need a lot of many for Spa drinking Water business. The retailers cannot collect required capital from any reliable sources.
  1. Timely supply problem: The retailers have to face various problems. Supply of Spa drinking Water is a long term and time-consuming process. Sometimes the retailers do not supply the Spa drinking Water according to the demand of the customers.
  1. Selling problem: The retailers have to face various selling problems. The main selling problems of the retailers are to sale forecasting. They are not actual measurement of target sale. Most of the retailers of Spa drinking Water depend on wholesalers.
  1. Pricing problem: Price determination is a different task for the retailers. The retailers collect PRAN juice pack from the wholesaler and they are depending on the price that is determined by wholesalers. There are no scopes to determine the price of juice pack by retailers.
  1. Storage problem: The 35% retailers face many storage problems with their Spa drinking Water. Most of the wholesalers do not allow the retailers to use their shops. So due to the lack of modern facilities their Spa drinking Water cannot maintain properly.

4.3 Problem Faced by Customer

We have defined few problems of the customer of Spa drinking Water after survey of sample customer groups. The main problems of the customers are sources, quality, and time, pricing system, weight, packing and leveling, poor services, and irregular supply.

Sources: The customer cannot get available information related Spa drinking Water. They have no permanent sources. Few information collections from local retail stores.

Quality: At present, the customers are more careful about product quality. They want to buy quality product. So the customers are in a big problem with the quality of Spa drinking Water. These imitated Spa drinking Water are coming to the customers in many ways. Identification of Spa drinking Water pack and AFBL are great problems for the customer. In this, causes Spa drinking Water cannot provide quality ensure of their Spa drinking Water.

Packaging labeling and weight of Spa drinking Water: At least 30% customer complained packaging and labeling of Spa drinking Water as well as the 25% customer complained weight Spa drinking Water would like to change their existing packaging system. When company packed drinking Water then them cannot properly maintenance weight that is written with the labeling of Spa drinking Water.

Poor services and irregular supply: The Company does not provide actual services that are expected by target customer and retailers. Company supply juice pack wholesaler but wholesalers does not maintenance regularity to supply sometimes it is seen that there are available Spa drinking Water stock in the market and sometimes crisis seen in the market. The customer and the retailers in Bangladesh fully depend on the wholesalers.

5.0 Market-Product Focus

5.1 Opinion of the Percipients involving operating

Marketing Function


5.0 Market Product Focus

5.1 Opinion of the Percipients involving operating Marketing Function

The objective in this study was to analysis the opinion of the participants involving operating marketing function of Spa drinking water. To fulfill this objective some selected issues that are influencing the existing marketing system have been discussed. These issues are product, price, place, government policy, and the performance of the participants. In this purpose, I have made three types of survey questionnaire regarding to Distributor & wholesalers, retailers, and customers to know the participant attitudes.

(1) Opinions of the sample participant about the existing Spa drinking water:

Their opinions have been presented in table.
Table-1

Questions Sample Wholesalers Sample Retailers
Yes No Yes No
Do you need loan? 6
(60%)		 4
(40%)		 6
(60%)		 4
(40%)
Do you have buying problem? 5
(50%)		 5
(50%)		 6
(60%)		 4
(40%)
Do you have selling
problem?		 4
(40%)		 6
(60%)		 5
(50%)		 5
(50%)
Do you think the
product is being
imitated in Bangladesh?		 10
(100%)		 0
(0%)		 7
(70%)		 3
(30%)

Source: Survey data.

Different participants have commended differently. Maximum participants opinion is that they have financial capability is not strong. 60% wholesalers, 60% retailers opinion is that they have need loan from another financial source. 40% wholesalers and 40% retailers expressed their opinion they have not need loan. At least 50% wholesalers, 60% retailers complained that they have buying problem. They thing that for dieinking water, TK. 10 is too much to buy 250ml water comparing with other soft drinks.

About selling problem 40% wholesalers and 50% retailers opinion is they have selling problem and 60% wholesalers and 50% retailers expressed their opinion they have no se
lling problem.

(2) Opinion of the sample participants about distribution appropriateness:
Their opinions have been presented in table.

Table-2

Opinions Wholesalers Retailers
Appropriate 6 (60%) 6(60%)
Not appropriate 4 (40%) 4 (40%)
Total 10 (100%) 10 (100%)
Source: Survey data.
40% Wholesalers, 40% Retailer, think that the existing distribution system of Spa drinking water to be not appropriate for the present situation. In their opinions, the present distribution system in not customer oriented. 60% Wholesaler, 60% retailer thinks that the existing distribution system is reasonable.(3) Opinion of the sample participants about different distribution related questions:
From the evaluation of the participants we see that 80% wholesalers and 90% retailers does not carry Spa drinking water to their store. According to 90% of wholesalers and 75% of retailers’ opinion, that has no major problem in the case of product transportation. 90% wholesalers and 60% retailers have no storing problem. There is no conflict seen between the others distribution participants. 50% wholesalers, 50% retailers expressed their opinion that they are not depended one others participants.

Table-3

Questions Wholesalers Retailers
Yes No Yes No
Do you carry product to your store? 2
(1O%		 8
(80%)		 1
(1O%)		 9
(90%)
Do you face any problem in the case of transportation? 4
(4O%j		 6
(60%)		 2
(20%)		 8
(80%)
Do you face any problem in the case of storage? 3
(3O%j		 7
(70%)		 4
(40%)		 6
(60%)
Do you have any conflicts with the other participants? 0
(0%j		 10
(100%)		 0
(0%)		 10
(100%)
How much are you depended on the participants? 5
(5O%j		 5
(50%)		 5
(50%)		 5
(50%)

Source: Survey data

(4) Opinions of the sample participants about the price appropriateness:

Table-4

Opinions Wholesalers Retailers
Appropriate 10 (100%) 7 (70%)
Not appropriate 0 (0%) 3 (30%)
Total 10 (100%) 10 (100%)

Source: Survey data

Only 30% retailers do not think the existing pricing to be appropriate for the present situation. So there are few pricing problem has exist in present situation and it has made the marketing system complex.

(5) Opinion of the sample participants about the various price related issues:
Their opinions are given below:
Table-5

Questions Sample Wholesalers Sample Retailers
Yes No Yes No
Are you increasing the price any time? 0
(0%)		 10
(100%)		 0
(0%)		 10
(100%)
Do you prefer fixed price? 9
(90%)		 1
(10%)		 10
(100%)		 0
(0%)

Source: Survey data.

Here, mention, 90% wholesaler, 100% Retailers like fixed price the participant are facing various kind of trouble with market price. So we think that the price of Spa drinking water should be fixed 100% wholesalers and 100% retailer are not increasing their drinking water price any time.

(6) Opinions of the sample participant about the wholesaler:
Table-6

Question Special General Local Regional
What kind of Wholesaler are you? 0 4
(40%)		 5
(50%)		 1
(10%)
Source: Survey data
Here mention, we have collected from 10% wholesaler’s participants. According their opinion is that 40% wholesalers are general, 50% wholesalers be are local are 10% wholesalers are regional.(7) Opinion of the sample participants about relations:

Table-7

Question Large Medium Small
What kind of Retailer are you? 1
(10%)		 4
(40%)		 5
(50%)

Source: Survey data

Here, we have collected from 20 relaters’ opinion. 10% retailers are large, 40% retailers are medium, and 50% retailers are small.

(8) Opinion of the sample participants about the marketing problem:

Their opinions are given below:

Table-8

Question Wholesalers Retailers
Yes No Yes No
Do you have any other marketing problem? 4
(40%)		 6
(60%)		 4
(40%)		 6
(60%)

Source: Survey data

The participants are questioned whether they have faced any other marketing problems, 60% wholesaler, 60% retailers opinion is that they have no marketing problem.

(9) Opinion of the sample participants about existing packaging and labeling system of Spa drinking Water:

Table-9

Questions Sample Wholesalers Sample Retailers
Yes No Yes No
Do you think has a major defect of the existing packaging and labeling? 1
(10%)		 9
(90%)		 1
(10%)		 9
(90%)
Do you think need to increase quality of Spa drinking water? 1
(10%)		 9
(90%)		 4
(40%)		 6
(60%)

Source: Survey data.

Here mention 90% wholesalers, 90% retailers have expressed their opinion that the existing packaging and labeling of Spa drinking water is not major defects. 10% wholesalers, 10% retailers complained that existing packaging and labeling system. They have claimed, the existing packaging and labeling is more improved.

10% wholesalers’, 40% retailers’ opinion is that need to increase quality of Spa drinking water as well as same percent participant’s opinion is that need not to increase quality it. But some participants agree that drinking water without any flover is very good. But in Spa, there is a flavor of green coconut.

(10) Opinion of the sample participants about government policy:
Table-10

Questions Sample Wholesalers Sample Retailers
Yes No Yes No
Is the role of the Govt. policy in favor of your business? 7
(70%)		 3
(30%)		 8
(80%)		 2
(20%)
Have you complain about your problem to the authority any time? 3
(30%)		 7
(70%)		 2
(20%)		 8
(80%)

Source: Survey data.

Here, 70% wholesalers and 80% retailers think that the role of government policy is favor of their business. The participant’s opinion is that the government has no control over this policy. While taking interview of the participants they are asked whether they have complained to any authority about their problems 30% wholesaler 20% retailer have complained to they have asked help from the authority, but they have not got any positive result how ever, 80% wholesaler has said that our business should free from political instability 20%. Retailers have said our government should increase business loan to solve business problem.

Customer Opinion:
Total Respondent: 20
01. Customers Awareness about Spa Drinking water:

Yes No
18 2

02. Quality test of Spa Drinking water:

Best Good Below the Average Poor
12 5 3 0

 

03. Opinion about the price of Spa Drinking water:

Reasonable High
15 5

 

04. Do you like the packaging of Spa Drinking Water?

Yes No
13 7

 

05. Availability in the market:

Yes No
18 2

06. Sufficiency of present promotion and advertisement of Spa drinking water:

Yes No
8 12

 

6.0 Analysis

 

6.1 SWOT Analysis

The SWOT analysis is having identified the company’s external opportunities and threats as well as internal strength and weakness. In other word the over all evaluation of a company’s strength, weakness, opportunities, and threats is called SWOT analysis. It can be develop new function business or corporate strategies to accomplish this change. A SWOT analysis for Spa Drinking Water of AFBL is as follows:

First, I have defined strengths of Spa drinking water, which are given in below:
Strengths
Strong and dedicated sales force.
Good quality product.
Good production capacity.
Management competence.
Good marketing skills.
Competence of information system.
Brand name reputation.
Differentiation advantages.
Appropriate management style.

Secondly, we defined weaknesses of Spa drinking water which are given in below:
Weaknesses:

Thirdly, we have defined opportunities of Spa drinking water which are given in below:
Opportunities:
Finally, we have defined threats of Spa drinking water, which are given below:
Threats:
6.2 Prospects of SpaAfter analysis SWOT of Spa drinking water, we find out few prospect of it, which are discussing sequentially.

1) Geographical diversification:
I think that the Spa drinking water has also high demand in all over the market of Bangladesh. The customer for whom the products are producing, they have scattered everywhere in the country and they have the same liking for this product. Beside it has goodwill in the whole country. So I think that there is a great opportunity of geographical diversification in domestics and foreign markets.

2) Opportunity to increase sales through advertising:
The firm as well as their competitor’s do not effective advertises their products in various media. I think most of the consumer of Spa drinking water watch TV as well as TV is a popular media in Bangladesh. So, if the advertisement is given in television most effectively its demand will be increased day by day.

3) Increasing purchasing power:
The economic condition of the country and purchasing power of the customers are increasing. Consumer purchasing power is increasing day by day. As a result the financial condition will be improved in future as well as the demand and consumption of PRAN juice pack will be increased.

4) Opportunity of product differentiation:
Most of the competition positions of the markets are alike. In addition, they produce some quality juice pack, some differentiation, and approximately some price of products. So there is a much opportunity to increase market share through the differentiation of products. Its may be related, or conglomerate differentiation.

5) Competitive advantages:
Fully competition is not started in the market of Spa drinking water. MUM, Jibon, Fresh, Pran & ACMI is the existing competitor of Spa drinking water. Especially, company has to face two styles of competitions: i) Price and, ii) foreign image. So, there is an opportunity to take competitive advantages and increase market share.

6) Market extension:
Most of the people of Bangladesh are lower middle classes and some are upper class. The lower middle classes are highly price sensitive to high price. They usually want various qualities and design of juice pack at a lower price. There is a great chance of increasing the market share, if a great produce attractive qualities and designs but in lover price.
Therefore, this will indicate the firm has a bright future and prospect. Above these viewpoints, the company can expand its markets.

7.0 Recommendation & Conclusion

7.1 Suggestion & Recommendation

We think the following suggestion and recommendation are seen feasible for the improvement of the existing Spa drinking water marketing in Bangladesh. These are given in below:

Suggestion and recommendation related to product:

a) Quality ensures:
The firm should ensure quality of AFBL product according to the consumer’s need and expectations. Quality of a product is of attributes that the consumer expects in a particular product. So quality should be selected from consumer viewpoint.

b) Target market:
New segments will be added with the existing market. New segment will be for middle lower and old people.

c) Product positioning:
The Company will make position of drinking water as ‘economic, quality product for large market share.

d) Product differentiation:
Taste of the drinking water should be natural. Any flyover in drinking water fails to fulfill the thirsty of human.

e) Packaging and labeling:
The Company may charge the packing design a little bit and the instruction of safetyness, contents of vitamin on the level will be introduced very soon open grade labeling will be introduced. The existing packaging is very much common for Bangladesh market. To attract the customer attention, it should be changed. we will provide a picture of foreign brand, which will very much attractive.

Suggestion and recommendation related to pricing:

Pricing policy:
The Company will follow the penetration pricing policy as they do. To keep the firm running it must set a low price. Because the consumer in domestic market is high, price sensitive to high price.

Production cost will be reducing:
Consumer usually wants to better quality and varied designed products at a lower price production cost one of the major components of price. To minimize the production cost, it is recommended that the expert and skilled workers should be appointed which will reduce the rate wastage and volume of defective production.

Establishing the fixed price:
The same price should be fixed all through the county. As a result, the participants should not have to fall into trouble about price control. Besides, 100% participants expect establishing the fixed price.

To add  high commission system:
Dealers, agents, wholesalers and retailers should be given high commission. According to the participants, they want high commission from the authority. The commission system will reduce the business task of the participants.

Competitive price:
Finally, the company will offer competitive price. The company will fixed a reduced price that will be lower than other competitors will.
Suggestion and recommendation related to distribution:
The company will look for intensive distribution the company wants the entire retail shop store Spa drinking water. The firm should develop a clear-cut combination between channel members to distribution of properly Spa drinking water. For the cordial co-operation of channel and sellers and wholesalers in distributing and selling Spa drinking water successfully. It is recommended that the firm would like to get more benefit to profit share and profit margin might be increased.

The distribution pattern needs to be changed the company have to added few pickup vans for proper timely distribution. A drinking water is a very necessary product for the customer; demand oriented distribution should be introduced. Firstly, it is necessary to estimate the number of customer in a certain area, then to estimate their annual demand. Then it is necessary to appoint a dealer distributor for a certain area.

Suggestion and recommendation related to promotion:
The Akij Food & Beverage Company has to create creative advertisements that will create more attention to target customer. The company can participate in trade fair in different places where consumers are concentrated. These activities will help to create image and consumer awareness in flavor of its drinking water. Besides, the firm can advertise through the print media and electronic media.

The company will be taken sales promotion program. Cash discount quality discount and gift will be given to the sales forces. Sales promotional budget will be increased as for as possible.
Current adverting theme will be change a little bit the company is eager to make brand advertising on the front page of daily national newspaper.

Suggestion and recommendation related to research and development:

Research and development (R&D) is very essential for every business world. Information is very necessary for designing effective marketing program. The firm may collect information regarding consumer’s needs, choices, attitude, and exceptions through the R&D.

Other suggestions and recommendations:
We see that the participants in the business have very little knowledge about marketing field. The participants should be properly trained. The intra-communication system will be developed if the distributors /wholesalers are trained well. Sometimes workshop and seminars should be arranged for the participants.

Customer and services are being completely ignored in the existing system. There are no extra facilities given to the customers. The complains of the customers are considered. Customer oriented marketing should be established.

However, the existing product life cycle, Spa drinking water position is rapid group stage. So there are some additional suggestion has been given to keep this position. During this stage, the firm uses several strategies to sustain rapid market growth as long as possible.

It adds new models and flanker products (i.e. products of different sizes, flavors, and so forth that protect the main product).
It enters new market segments.
It increases its distribution coverage and enters new distribution channels.
It shifts from product awareness advertising to product preference advertising.
It lowers prices to attract the next layer of price sensitive buyers.

 7.2 CONCLUSION
Spa drinking water is one of the most popular brands in Bangladesh as well as in international market recently. In all reasons drinking water is widely consumed by the customers the demand becomes high to the customers. There is a wide demand and high prospects for the drinking water. Spa drinking water is one of the items to meet this demand.

Now the firm is facing various types of marketing problems. In this paper, some suggestions and recommendations have been given so that the firm can overcome those problems.We believe that the management of AFBL is more experience as well as they are also thinking about those problems.We think management should be took care this problem. If the firm produces Spa drinking water as for the customer’s choice and demand oriented, the consumers will be highly motivated to purchase the mineral drinking water of the firms.
So, through the observation of the activities and information collected from the interview of participant such as wholesalers, retailers, customers it can be said that this firm is being profitable conduct becomes the firm is not to strong on counter remarkable competition, workers dissatisfaction, and for sufficient demand in comparison with the manufactured goods. But the firm is not being able to perform its marketing activities with efficiency. In this condition continues the firm will be endangered and undergo less in the long run. But it is possible to expand this firm to a greater extent, if it can make use of its present opportunities and facilities properly and it will be possible for it to earn more profit than it is earning now. Therefore, the firm will have to give importance to perform the marketing activities efficiently.

Akij Food & Beverage Ltd. is no doubt one of the basic companies in Bangladesh. So we glad to know the locally produced mineral water in now in a position to fulfill the total of Spa drinking water in the country. The Spa drinking water has that success of business depends on the strength of its existing marketing policy is appropriate for the present situation. The major problems arising in the Spa drinking water in Bangladesh are as follows. The distribution system is being changed complex government policy. Through the company wants most of the retail shop to store juice pack. So the company will have to make intensive distribution. The effective marketing system can be solving present problems.

 7.3 Bibliography
Books:
1.  Kotler Philip, Principles of Marketing, 10th Edition
2.  Kotler, Philip, Marketing Management, Millennium Edition, Prentice Hall of India Private Limited, 1999.
3.  Stantion. J. Willam, Fundamental of Marketing, 9th edition, 1998.
4.  Yoram. J. Wind, Product Policy, Concept, Method and strategy,
5.  Potter. Michael, Edeco, Competitive advantage and strategy, The Free Press.
Report:
6.  Annual Report of MUM: 2004-05.
Website:
7.  www.akijgroup.com
8.  www.afbl.com
9.  www.google.com
10. www.buxton.com
11. www.himalayan.com
12. www.partexbeverage.com
13.  www.akij food & beverages.com

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Analysis the Promotional Tools On the Basis of Marketing Mix for MONAS (Montelukast) Marketing, and Doctors Prescription towards ACME Laboratories Limited

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“Analysis the Promotional Tools On the Basis of Marketing Mix for MONAS (Montelukast) Marketing, and Doctors Prescription towards ACME Laboratories Limited”

Chapter- 1

INTRODUCTION

OF

THE ORGANIZATION

1.1 COMPANY HISTORY

1954 was a milestone year in the history of the pharmaceutical industry. The history of dates back to 1954 when a proprietorship firm was conceived to manufacture ethical drugs. It started with the modest introduction of a few oral liquid products. Late Hamidur Rahman Sinha was the founder of the firm and had been the main visionary of the organization since its inception until his sad demise in February, 1994.

After its initial years of trials and tribulations, the firm was converted into a private Limited Company in the year 1976 and the Balancing Modernization, Replacement and Expansion (BMR&E) work on the small old unit started in 1976 at a large new premise at Dhamrai, Dhaka. Commercial Operation at the new modernized plant equipped with sophisticated and advanced facilities began toward the end of 1983. Many challenges were faced and overcome successfully to transform the company from a very small unit to what it is today a giant in its field.

ACME continuously seeks to expand its production facilities, add employees, and increase it sales and marketing efforts. According to the latest statistics, out of 250 to 300 pharmaceutical companies in the country, ACME is one of the top two.

ACME has also endeavored to strengthen its network of international marketing operations to export its products abroad. We are optimistic about our perpetual growth and success.

Over the years, the efforts made by the competent staff coupled with customer confidence has fuelled our growth, prompting ACME to overcome hindrances and progress towards its ultimate goal i.e., attaining success which indeed is what literally ACME stands for.

1.2 Founder and Management of the Company

Establishment of ACME was a great entrepreneurial effort of Late Hamidur Rahman Sinha way back in 1954 and is a vivid example of a great mind’s vision and its materialization. Post colonial Bengal was a place of great uncertainty and hardship. Industrialization facilities were meager and inadequate. One man came forward with his vision, amidst the political turmoil and utter lethargy of the then-new Government. It’s not an easy task to set up a highly sophisticated industry, and moreover do it without bank loans and governmental assistance. So it demanded immense effort, strong determination along with vision and dreams.

Nasir-ur Rahman Sinha (Chairman)

Mr Nasir-ur Rahman Sinha, Chairman of the The ACME Laboratories Ltd., obtained M.A. in political science from Dhaka University in 1965 and is a pioneer manufacturing industrialist having vast entrepreneurial foresightedness of business. He is also the Chairman of “Sinha Printers Ltd” engaged as a pharmaceutical packers and printers unit. He is connected with Dhaka Stock Exchange Ltd. since 1969 and is also a member of D.S.E. He is the Managing Director of National Equities and Financial Promoters Ltd. (Securities and Investment Advisor). He is also the Director of “Sinha Fabrics Ltd”, “Sinha Wool Wears Ltd”, ACME IT Ltd” and “The ACME Agrovet and Beverage Ltd”

Besides, he sponsored the first Internet Service Provider of the country ‘Information Services Network Ltd.’ (Bangla Net) as it’s Director. He is also a sponsor director of “Holiday Publication Ltd.” engaged in publishing ‘Weekly Holiday’ and ‘Daily New Age’. He is widely connected with many socio-cultural and philanthropic organizations.

Mizanur Rahman Sinha (Managing Director)

Mr. Mizanur Rahman Sinha obtained his graduation degree in Commerce in 1962. He started his career as a banker in Habib Bank Ltd. of then Pakistan. After eleven years of service in different senior positions, he left to join ACME as its Marketing Director in 1975.

He is also the founder Chairman of J. K. Fashions Ltd., Sinha Knitting Ltd. and Sinha Fabrics Ltd. All companies are export-oriented in scope.

Afzalur Rahman Sinha (Deputy Managing Director)

Mr. Afzalur Rahman Sinha graduated from the University of Dhaka with a degree in Science in 1973. He then proceeded to the United States to further his studies in Business Administration in 1980. During his studies he worked as an Analytical Chemist at the University of Missouri in the United States. He then returned to Bangladesh in 1982 to join ACME as its Deputy Managing Director. He is also the Managing Director of Sinha Wool Wears Ltd., a Director of Sinha Fabrics Ltd. and J. K. Fashions Ltd.

Jabilur Rahman Sinha, Ph.D. (Deputy Managing Director)

Dr. Jabil R. Sinha has a B.S. in Chemistry from University of Dhaka, Dhaka, Bangladesh, a M.S. in Pharmaceutical Chemistry from North Dakota State University, Fargo, North Dakota and a Ph.D. in Organic Medicinal Chemistry from University of Georgia, Athens, Georgia.

1.3 The Mission of

The ACME Laboratories Ltd have holistic approach is to ensure Health, Vigor and Happiness for all by manufacturing of ethical drugs and medicine of the highest quality at affordable price and reaching out even to the remotest areas by proper distribution network. We view ourselves as partners with doctors, our customers, our employees, and our environment.

1.4 Vision of

The vision of The ACME Laboratories is to reach out even to the remotest areas of Bangladesh and improve lives with quality products at an affordable price.

Since its inception in 1954, The ACME Laboratories has been working relentlessly with a vision to ensure Health, Vigor and Happiness for all and is on a perpetual quest for excellence.

1.5 Objectives

The main objective of the company is to achieve the maximum market share along the whole country within very short time by utilizing good reputations and providing better quality products.

1.6 The Quality policy of

· Absolute commitment to the highest obtainable standard of quality product and service through excellence and concerted efforts of both employer and employee.

· The Company shall improve its market share and productivity to enhance profitability through monitoring of its performance on a regular basis and identify opportunity for continual improvement.

· The Company has adopted the ISO-9001 and WHO cGMP (Current Good Manufacturing Practice) standards. All employees must adhere to the documented procedures and SOPs (Standard Operating Procedure).

· The Quality Management System shall be adequately resourced with competent personnel, suitable premises, up-to-date technology and requisite facilities.

1.7 The Culture of the Organization:

Total Quality Assurance (TQA) is ACME’s avowed people oriented commitment for ensuring the highest obtainable quality and total customer satisfaction. Under the umbrella of Quality Assurance, manufacturing process in ACME is carried out stringently in accordance with the provisions of ISO-9001 and WTO, CGMP standard. Accordingly all employee and functions adhere to the well documented Standard Operating Procedure for achieving the prime objective of ensuring high quality.

The quality department of ACME has outstanding facilities equipped with most modern instrument and staffed with trained and highly qualified personnel. All procedure for testing, sampling and inspecting are clearly written, approved, implemented and recorded.

Manpower training being the essence of good performance the Total Quality Management system is given due to importance at ACME. Through in-house and external training program the company ensures that the key personnel remain abreast of the latest of QA & GMP.

The management of ACME decided to embrace the 9000 series of standard developer by International Organization for Standardization (ISO) in order to provide assurance that the company operates a specified Quality Management System (QMS). After a couple of years of hard work lead to certification after formal Validation by Orion Register, Inc. USA. Finally ACME becomes an ISO certified company in June 08, 1999.

1.8 The Philosophy of the Organization:

The success of ACME in the domestic market prompted it to explore the international market as well. In 1995, it started its first journey to international operation by exporting medicines to Bhutan. Since then it has been expanding worldwide. The volume of sales increased substantially with an average growth rate of 50% almost every year.

At present, ACME is exporting medicines to several countries in neighboring South-East Asia, Africa, Middle East and the EU, maintaining a philosophy to ensure ‘Health, Vigor and Happiness’ for the whole mankind within its means and resources. Sales wise Afghanistan is the top among the 11 countries ACME is exporting to with a growth rate of 55%.

Among the medicines exported, Antibiotic, Antihypertensive, Antiulcerant and Vitamin are remarkable.

The international marketing section is active in exploring the joint venture production possibilities, establishment of pharmacies, agents or distributors in the Central Asia, the Middle East, Africa, CIS countries and other parts of the world.

ACME has started its operation in Pakistan and early reports of success are encouraging for us. ACME has also planning to set up a manufacturing plant there within a few years.

1.9 Sister Concerns of ACME

· The ACME Laboratories Ltd.

· ACME IT Ltd.

· ACME Aggravate & Beverage Ltd.

· ACME distribution Ltd.

· ACME Overseas Ltd

· Sinha Fabrics Ltd & Sinha Wool Wears Ltd

· MARS Aviation Ltd.

· MARS Universal Ltd

· MARS Air Ltd

· Sinha Printers Ltd

· AMBE Clearing Ltd

1.10 Growth, Development & Future:

In the backdrop of a large population base and wider awareness of Medicare among the rank & file, the pharmaceutical industry and increase in awareness of Medicare among every strata of society. Bangladesh has strong growth prospects. Since 1990 the company has achieved an average growth rate of 25% compared to 13% registered by the pharmaceutical sector of the country. The catalyst for the growth rests with the people who work for ACME.

Today’s research is the basis for future success. This applies in particular to the innovative files of pharmacy. Novel ideas and development of the highest quality manufacturing facilities will continue to form the basis for newer products. The company’s commitment will continue to generate new products to meet the demands of consumers at home and abroad.

Our aspiration in attaining the acme (apex), the efforts of our r & d, the confidence in our capabilities to produce, the alertness of our quality assurance, the commitment of our team to excel. And above all, the trust of our doctors’ community and customers is our inspiration

1.11 Address of the company

Corporate Office:

Court De La ACME

¼, Kallayanpur,

Dhaka -1207

Plant:

The ACME Laboratories Ltd.

Dhamrai, Dhaka, Bangladesh

Phone: 88-02-9352901-02;

06222-88035, 88042, 88047;

Fax: 88-02-0340146

Email: acmeexpo@bangla.net

acmepd@gononet.com

Chapter- 2

INTRODUCEOF

MARKETING DEPARTMENT

2.1 Marketing Division of the ACME Laboratories Ltd:

In this organization have different types of division. Marketing division is one of them. Their marketing division divided into six departments. That’s are- Sales Department, Product Management Department (PMD), Medical Service Department, International Marketing, Marketing Service Department and Marketing Information System Department.

2.1.1 Fundamental Task of Marketing Department:

Marketing plan:

· To prepare the marketing plan of the assigned products emphasizing on positioning, target group analysis, promotional plan (promotional material allocation, sales target fixation etc.)

Sales analysis

· To monitor the sales data and analyze them as feed back of the marketing plan and to take the corrective measures when required.

Identification of new product:

· Being a product officer, incumbent is also a member of Technical Sub Committee (TSC), hence will identify new products and conduct feasibility study of those particular products, and will place an official proposal to TSC for commercially viable products.

Developmental work:

· To prepare Marketing brief, DML Inclusion paper

· To forecast the sales and to set a price proposal of the product.

· To select the brand name of the product.

· To design the strip/blister/tube bottle label/others.

· To design the commercial carton, catch cover, box label.

Promotion materials (for both old and new product)

· To prepare the literature, pad, doctors letter, sticker, poster, multimedia, gift item selection, etc.

· To prepare the action plan for Field personnel.

· To prepare the training manual.

Users Feed back:

· To maintain the users feedback report for product validation.

Training:

· To conduct the training of trainee MR’s

· To conduct the short course training on new products at different sales centers.

Scientific Seminar:

· To provide scientific papers and other supports to arrange scientific seminar.

Doctor’s Query:

· To help the medical services department providing information on products

Routine work:

· Library work for development of promotional materials

· Correspondence with different departments of the company

· Browsing the Internet for recent information.

Additional task:

· To conduct the MR/SR Recruitment test

2.1.2 Strategies of Marketing Division:

Sl. No Objectives Responsible Department Evaluation System
01 Prescription share Sales Prescription shear will be evaluated on the basis of the prescription collected from the chemist shops from different corner of the country.
02 Increasing in overall market share (Growth) Sales Yearly sales (Growth) compared to last year.
03 Increase in doctors’ call Sales Five Field Persons (Whose work stations previous year) of every sales center will be taken as sample to count doctor’s call.
04 To identify new products/molecules for launching. Product Management Department Current year report of identified new products
05 New product launch Product Management Department Report on launching new products
06 No. of specific seminar arranged to increase customers satisfaction. Medical Service Department Total no. of scientific seminar arranged over the year.
07 No. of specific publication Medical Service Department Total no. of specific publication over the year.
08 On time delivery for better customer satisfaction Distribution Department No. of the orders returns due to late delivery all over the year.
09 Increase in annual sales in international market International Marketing Yearly sales (growth) compared to last year.
10 Number of newly registered products in international market. International Marketing Current year report on product registration.

2.1.3 Flow Chart of Marketing Department

Marketing Information System Department (MISD)

2.1.4 Marketing Division Order Line:

2.1.5 Sales Department:

Sales department is a part of the marketing department. The main objective of this department is to increase the sales. The marketing manager is responsible for this. He has to maintain a responsibility on –

The sales department is divided in to two parts.

· Human Products

· Veterinary Products

The job descriptions under sales department for Human & Veterinary products are:

· To achieve the sales target in a particular market.

· To maintain regular contact with doctors & chemists to keep up to date products information.

· To implement company’s policy, plan and objectives and generate prescription of ACMEs products and selling for their products.

· To cover all the areas of each territory and also transform potential customers into customers.

· To keep in touch with market and competitors’ activity, monthly report, special report, sample statement in due time to reach timely to destination and also doctors’ profile property.

The National and Export Sales report for the last five years:

Year

Month

 2007 2008 2009 2010 2011
February 160453669 182741099 195226848 243310028 253488887
March 167837902 214326939 214621727 275965490 297867903
April 199351761 218981281 213878912 259536542 354511578
May 221850817 240173549 224232998 256337606 331079862
June 215512994 251142018 252149916 260561470 368352983
July 223157039 227995750 28757639 323251445 383639412
August 192680337 209151594 231882282 271038922 311570584
September 192606025 210729761 215139081 281534700 308830165
October 211885992 231076505 299028498 278230886 341017743
November 228431965 237136083 298344595 303671172 348173155
December 198493736 217298656 276634236 308553190 327124322
January 195522379 230453451 270966684 262353342 346827875
Export Sales 22817852 29231394 31801222 43542594 48045401
Yearly collect 2430602468 2700438080 3007664638 3367887387 4020529870
Yearly Target 28744925876 3404285356 4007131848 4794249053 4538673058
Yearly Achievement % 85 79 75 70 89
Growth Rate % 16 11 11 12 19

2.1.6 Product Management Department:

The ACME’s Product Management Department is of prime significance for round-the-year operation of a pharmaceutical company and is indispensable for its steady growth. Since inception, ACME faced the challenges of introducing new and effective drugs to compete with other competitors in the business.

ACME recognizes the need for progressive approach in order to lead the ever competitive trends in the health care market. Our ACME’s Product Management Department is painstakingly involved in research, which goes on unceasingly for medically innovative therapies.

The ACME’s Product Management Department equipped with latest instruments to support various stages optimizations and technology transfer to the plant. Personnel are trained and highly qualified pharmacists and chemists, engaged constantly in improving upon the formulation so as to make the drugs safer and more effective. Our process is well established and has properly documented quality management systems as per CGMP guidelines.

In short form, this department does pricing, designing and targeting all types of product developing jobs like planning.

The following functions performed by this department:

o To prepare the literature

o Generates sales information

o Arranges conferences

o Prepare product leaflets

o Conducting research in fields

o Collect information about competitors

o Perform sales trend analysis

o To control and look after the sales representative teams.

Major Functions of PMD deals are as follows:

· Formulation of New Products

· Reformulation (Where required)

· Reprocessing (If Required)

· Problems solving related to formulation and manufacturing. (Where required) or Trouble Shooting.

· Preparation of tentative master formula for a new product/revision of existing master formula.

· Development of new product.

Þ Formulation of a new product:

PPD is responsible for the establishment of formulation and for the preparation of the recipe of the drugs.

Steps involved in a new product development:

· Product information from marketing department along with necessary attributes.

· Preparation of recipe by the help of relevant references.

· Requisition for purchase department for new materials.

· To perform laboratory trail (Pre-formulation study)

· Finalization of formulations.

· Analysis of the sample by QC and approval.

· Accelerated stability testing.

· Drug administration formalities.

· Selection of primary packaging materials.

· Forecast from marketing department.

· Preparation of provisional product data sheet.

· Provisional data sheet sent to production planning department for new materials.

· Preparation of tentative master formula comparing with product data sheet.

· Pilot batch production (Successive three batches)

· QC analysis and approval.

· Preparation of final master formula with necessary amendments.

· Final master formula to product planning department

Þ Reformulation:

Reformulation is necessary for the following three reasons:

Ø For further improvement of product quality.

Ø For increase productivity

Ø For more cost effective formulation maintaining quality.

Þ Reprocessing:

If the chemical assay by QA for a particular batch don’t comply the standard, then PPD wilt check the batch and take necessary action following approved SOP and discussion with QA.

Þ Trouble Shooting:

During production PDD, QA, Product department investigate the case of formulation defects and take necessary steps accordingly.

Þ Preparation of Master Formula:

Among many important functions, preparation of master formula is very important duty of PD department. This document contains all the record regarding raw materials, production procedure, packaging and quality assurance profile of product.

Þ Development of Existing Products:

PPD also deals with the development of the existing product formulations. The objectives are:

· Improve the quality of a product.

· Prevention of any type of problem existing in the product.

· To minimize process time and cost maintaining quality.

New product Development Strategy:

· Market Study & Sample Collection.

· Proposal

· Approval of proposal by Management.

· Marketing Brief/ Data Sheet

· Trade Name Selection.

· Letter to PD for Recipe.

· Sale Forecast to Costing.

· DML Inclusion Paper.

· Competitors Prices to Costing.

· Development of Packing Materials:

· Inner Leaflet

· Blister/Strip/Label Design

· Commercial Carton Design

· Catch Cover Design

· Box Label

· Development of Promotional Materials

· Literature

· Gift Items

· Doctors Letter

· Others

· Promotional Materials Allocation.

· Multimedia.

· Training Material/ Action Plan.

· Product Launched.

· Sales evaluation.

· User feedback.

2.1.7 Marketing Service Department (MSD)

The job descriptions of Marketing Service Department are:

· To ensure tender submitting (Govt. & Non Govt.).

· To check different sorts of official letter.

· To draft circular.

· To ensure different sorts of Deport related works such as Dispatch, Collection etc.

· To check Transfer/Posting.

· To assist Marketing Director, Marketing Manager, Sales Manager, Distribution Manager, Asst. Sales Managers, RSMs & ZMs.

2.1.8 International Marketing Department

This department deals with all sorts of marketing activities in the overseas market. They ensure smooth and regular export of ACME medicines in foreign countries. It has overseas offices in Pakistan, Singapore, and Myanmar etc countries. It exports ACME’s medicines in 18 countries.The job descriptions of International marketing department are Marketing Concept: International Marketing department will explore Promotion Bureau, Bangladesh Pharmaceutical Association, Chambers of Commerce in foreign countries or all possible sources to approach the overseas pharmaceutical importers/companies.

· To developing International Business Plan.

· To ensure the International Legal & regulatory consideration.

· To determine Method or channels of export.

· Making Pricing, Quotations & Method of Payment.

· Take necessary steps for Product Adaptation, Registration, Marketing, and Promotion & Redesign.

Globalization:

ACME’s success in the domestic market prompted it to explore the international market. With the philosophy of ensuring health, vigor and happiness for the whole mankind, ACME started its international operations in 1995 by exporting medicines to Bhutan. Since then, ACME made a strong presence in the international market and export is increasing every year. Now ACME is successfully exporting to Nepal, Bhutan, Myanmar, Afghanistan, Pakistan, Sri Lanka, Philippines, Vietnam, Hong Kong, East Timor, Gambia, Papua New Guinea and CIS.

Now ACME is trying to expand its international operations by stepping into untapped market and strengthening its presence in existing markets. International marketing is trying to develop new markets in Ethiopia, Kenya, Sudan, Ghana, Yemen and other countries of Africa and Asia.

The future promises greater prospects for the international marketing of ACME. Bangladesh being an LDC will enjoy waiver from patent protection until 2016 according to WTO TRIPS agreement, while developing countries have to implement TRIPS compliant patent rules from 2005. This has created immense opportunities for Bangladeshi companies to export pharmaceuticals especially to LDCs. ACME being aware of these opportunities is relentlessly trying to bolster its international presence by capacity building, quality products and superior services.

Export:

Export is our top corporate priority now. Their achievements so far:

· Established ACME’s overseas office in Pakistan with a view to set up a manufacturing plant within a few years.

· MOU signed for mutual business interest with the Himalaya Drug Company of India.

ACME’s Export Markets:

Regular Export Market Irregular Export Market

· Myanmar i) East Timor

· Sri Lanka ii) Uzbekistan

· Afghanistan iii) Yemen

· Hong Kong iv) Malta

· Nepal v) Cambodia

· Pakistan vi) Gambia

· Philippines vii) Bhutan

· Vietnam

· Market Development

· Ethiopia

· Myanmar

· Cambodia

· Nigeria (Vet)

· Taiwan

· Yemen

· Kenya

· KSA

Export Sales report for the last two years

Country 2009 2010 Market Increase Rate
Afghanistan 52,786.00 34,670.00
Sri Lanka 191,091.50 278,219.00
Nepal 115,602.85 129,518.75
Hong Kong 21,542.40 49,075.60
Pakistan 16,995.00 8,202.00
Vietnam 18,600.00 23,700.00
Myanmar 41,.85.96 44,608.89
Philippines 110,264.00 106,371.50
Kenya 11,375.00 14,245.00
Bhutan 6,904.69
East Timor 6,439.73
PNG 7,192.50
Grand Total 599,879.63 688,610.94

2.1.9 Medical Services Department:

The main work of this department is to communicate with the doctors and to collect feedback from them. When a new product is launched, the medical services department arranges seminars with the help of product department and invites the doctors to attend. This department also arranges many clinical meetings. In these meetings, they are shown video presentations, which helps increasing the company image. It is also supplied to the foreign countries.

Job Summary of Medical Service Department:

· To present the pharmaceutical products and conduct the scientific seminars.

· To prepare presentation and other necessary works for arranging scientific seminars

· To prepare papers and audio visual aids for doctors as per their needs for specific seminars and other purpose.

· To develop and publish quarterly Medical Newsletter.

· To develop booklets, information cards, brochures, leaflet, posters and other promotional items on different types of diseases, which are relevant to ACME’s pharmaceuticals products.

· To handle the queries from doctors and prepare answers related to their queries.

· To conduct training classes for the Trainee MRs.

· To visit different stalls and collect doctor’s opinion.

· To help in providing ideas and selection of gift items for the attending doctors of scientific seminar.

· To arrange seminars on pharmaceutical products with PCs (village doctors).

2.2 Quality Assurance Department:

Acme’s stated belief that, “No compromise on quality can be made in a business that involves human lives,” is the cornerstone of the company’s Quality Assurance program.

Total Quality Assurance (TQA) is ACME’s avowed people oriented commitment for ensuring the highest quality products and customer satisfaction.

The Company has adopted ISO-9001 and WHO CGMP (Current Good Manufacturing Process) Standards and has been accredited with ISO-9001 certification in 1999. The entire manufacturing procedure, starting with the incoming raw materials, through stringent intermediate manufacturing process and packaging of products, to the dispatching of finished goods, requires that analysts, pharmacists and instructors monitor and control each step. Even after the release of finished goods, the quality control lab tracks post-distribution spot checks of all batches.

The Quality Assurance Department of ACME has outstanding facilities, equipped with latest instruments such as HPLC, GLC, AAS, UV-VIS, FTIR, particle size analyzer polarimeter, potentiometric titrator with KF, Liquid particle counter Laminar Air Flow, microscopes etc. Personnel are trained and highly qualified. All procedures for testing, sampling and inspecting are clearly written, approved, implemented and recorded and all process, equipments or systems are validated that reduce the cost of product with ensuring quality requirements, systems and procedures to meet CGMP.

Manpower training being the essence of good performance, the Total Quality Management System is given due importance at ACME. Through in-house and external training programs, we ensure that our key personnel remain abreast of the latest concepts of CGMP needs.

The Management of ACME decided to embrace the 9000 series of standards developed by the International Organization for Standardization (ISO) in order to provide assurance that the company operates a specified Quality Management System (QMS). After a couple of years of hard work, led to Certification after formal Validation by Orion Registrar Inc., USA. Finally, ACME became an ISO certified company in June 08, 1999.

Acme’s Quality Assurance Department is equipped with the most modern instruments and is staffed with well trained and qualified personnel. All procedures for testing, sampling and inspecting are clearly approved, implemented and documented. All instruments are regularly calibrated and processes, machinery and premises validated. Through training programs (in-house and abroad), the key personnel of the company remain abreast of the latest concepts of Quality Assurance.

Quality Assurance Department monitors each step of manufacturing operation and adopted “Good Laboratory practice (GLP)” to ensure reliability and accuracy of the pharmaceutical product. The department is subdivided into different section so as to ease and facilitate documentation and proper operations. The sections are:

· Raw materials section

· Oral liquid section

· Tablet section

· MDI and DPI &HPLC section

· IR section

· Capsules, Ointment, Cream section

· Microbiology section

· Packaging section

Activities of Quality (QA) Department:

· QA laboratory has to perform the following major responsibilities.

· Sampling adequate for testing purpose (physical, chemical, biological).

· Issuing release, reject or quarantined advice for each batch of raw materials,

· Packaging materials and finished products.

· Assessment of intermediate products for further processing.

· Storing retained samples from each batch produced.

· Maintaining batch wise fully quality control test records and signature of the person(s) who performed the test.

· Batch documentation.

· Ensuring precision and accuracy for all testing methods.

· Performing environmental monitoring tests.

· Calibration and standardization of laboratory equipments.

· Control of lab, reagents.

· Testing of any retained goods.

· Stability test for finished products.

2.3 Research and Development Department:

The ACME Pharmaceutical Limited employs a significant portion of its resources in its R&D. It wants to retain its position as a major player in the Bangladesh pharmaceutical market through introduction of new products with the aid of their R&D team. The team comprises of academically sound and professionally competent diversified professionals who has the commitment towards new product development. R&D team of ACME pharmaceutical Ltd is consistently striving towards-

· Developing new formulations

· Simplifying manufacturing processes

· Minimizing product costs

· Doing pilot trial of new drug formulation.

2.4 Human Resource Department:

One of the fundamental aspects of our Corporate Objective is that our people are our prime asset. It is not the machine or the technology alone, but the invaluable mix of man-machine interface that makes technology work. We believe that whereas the capacity of machine is limited, human potential is unlimited. As such, ACME has been placing utmost importance on the continuous development of its human resources. We train people not only to do their jobs well, but also give them an environment which fosters personal and professional development. Being one of the most dynamic pharmaceutical companies in Bangladesh, we are adequately staffed with highly qualified, experienced and innovative personnel. Over 3200 young, energetic and highly motivated employees from diverse disciplines are working untiringly with ACME at home and abroad. ACME’s objective in this respect is to develop its human resources by way of imparting training both in-house and external institutions.

With a field force of over 1300 highly professional marketing personnel, ACME is represented in every part of Bangladesh to ensure promotion and distribution of its products at every level of consumer. With the sustained efforts of our aggressive marketing team a good number of our products have become the brand leaders in their respective therapeutic segments. Team work is the secret of ACME’s success which has become part of ACME culture.

2.5 Raw Materials Department:

This section deals with the potency of each and every raw material that is imported by the ACME Laboratories Ltd. The raw materials range from active ingredients, acceptances to packaging material. This section deals not only the potency but also determine the percentage of impurities in the material, which provides the basis of cross-examination. According to the observation made by this section a material is either rejected or accepted for use.

Various test involved in raw materials analysis:

· Identification

· Solubility

· Appearance of the solution

· PH

· Melting point limit

· Loss on drying

· Bulk density

· Mesh size

· IR spectroscopy

· UV spectroscopy

· HPLC

· Operational rotation

· Water content

· Potency determination

· Microbiological Test

2.6 Packaging & Packing Section

This section deals with the checking of procured packaging and packing materials as well as monitors the proper packing of finished products for their correct label, batch number, manufactured and expiry date. The tests that are exercised by this section for packing materials are:

Product Test
PVC and PVDC Color, width, thickness, weight par unit area etc
Cotton Appearance, weight, moisture content sulfated
Shipping Carton Weight, dimensions and thickness
Inner cartoon Height & level, description (text, color, general appearance) weight etc
Plastic Cap Appearance, weight, length, diameter, volume capacity
Dropper Appearance, weight, length, capacity, adaptability, with bottle cartoon & plastic cover
Mask type Appearance, width, adhesiveness
Bottle, ampoules vials Height, neck diameter, weight, volume capacity, light transmission test etc

Chapter- 3

PHARMACEUTICAL MARKETING

3.1 History of Pharmaceutical Marketing:

The marketing of medication has a long history. The selling of miracle cures, many with little real potency, has always been common. Marketing of legitimate non-prescription medications, such as pain reliever or allergy medicine, has also long been practiced. Mass marketing of prescription medications was rare until recently, however. It was long believed that since doctors make the selection of drugs, mass marketing was waste the resources, when specific ads targeting the medical profession would be cheaper and jus as effective. This would involve ads in professional journal, and visits by sales staff to doctor’s office and hospital.

3.2 Concept of Pharmaceutical Marketing

Pharmaceutical marketing is a subspecialty of marketing. It can define as process by which market for pharmaceutical care is actualized.

The emphasis pharmaceutical marketing is on pharmaceutical care, and not just on drugs. The marketing of many is as such a part of pharmaceutical marketing as is the marketing of drug products.

So, pharmaceutical marketing is not synonymous with significantly broader than, the marketing of pharmaceutical.

Parties involve with Pharmaceutical marketing:

Parties who are involved with pharmaceutical marketing are given below;

· Hospital pharmacies

· Community pharmacies

· Third party insurance company

· Consulting pharmacies

· Pharmaceutical manufacturers

· Drug wholesaler

· Drug retailer

Levels of Pharmaceutical marketing system:

Marketing of Pharmaceuticals

Pharmaceutical organizational system

Pharmaceutical marketing system

Health care marketing system

General marketing system

Exchange flow and Relocated Pharmaceutical Marketing Functions

Product Product

Information Information

Payment Payment

Dispensing Dispensing

Right Right

External System

* Control System

* Health Care System

* Economic System

* Sociopolitical System

3.3 Direct and indirect marketing to health care providers:

Physicians are perhaps the most important players in pharmaceuticals sales. They write the prescriptions that determine which drug will be used by the patient. Influencing the physicians is key to pharmaceutical sales. Historically, this was done by the large pharmaceutical sales forces. A medium size pharmaceutical company might have sales forces of 1000 representatives. The largest companies have tens of thousand of representatives. Sales representatives’ calls upon physicians regularly providing information and free drug sample to the physicians. This still the approach today, however economic pressures on the industry are causing pharmaceutical companies to rethink the traditional sales process to physicians.

Pharmaceutical companies are developing process to influence the people who influence the physicians. There are several channels by which a physician may be influenced, including self-influence through research, peer influence, direct interaction with pharmaceuticals companies, and patient.

3.3.1 Physician Targeting:

Identify the universe of physicians most likely to prescribe a given drug. Historically this is done by measuring the number of total prescriptions (TRx) and new prescriptions (NRx) per week that each physician writes. This information is collected by the commercial vendors. The physicians are then “deciled” in to ten groups based on their writing pattern. Higher deciles are targeted. Some pharmaceutical companies use additional information to deciles physicians such as-

· Profitability of a prescription (script).

· Accessibility of the physician.

· Tendency of the physicians to use the pharmaceuticals company’s drug.

· Effect of managed care formularies on the ability of the physician to prescribe a drug.

· The adoption sequence of the physicians.

3.3.2 Sales force size and structure:

Decide on the appropriate size of a sales force needed to sale a particular portfolio of a drug to the target universe. Design the optimal reach (how many physicians to see) and frequency (how often to see them) for each individual physician. Decide how many sales representatives to devote to office and group practice and how many to devote to hospital accounts.

3.3.3 Sales force optimization:

Design sales territories in a manner that evenly spreads the work load across territories, districts, and regions. Minimize the amount of time a sales representative spends driving and maximize the time the representative has to meet with physicians.

Call planning: Designing the optimal timing for each individual physician’s sales call. Forecast each physician’s prescribing response to a sale call over the next few weeks. Minimize the “annoyance factor.”

3.3.4 Sales force effectiveness:

Monitor the performance of the sales force in the target universe of physicians. Adjust market message, reach, frequency, timing, territories or other actions in order to increase sales.

3.4 SWOT analysis of Bangladesh Pharmaceutical Industry is as bellow:

Strength:

· Large protection of domestic industry by Drug Policy, 1982.

· A good growth of market, around 15%-20% increase par year.

· Availability of raw materials from nearest source location.

· Least presence of multinational giants.

Weakness:

· High price sensitive target group.

· Need broad distribution network.

· Need continuous monitoring for prescription generations.

· Strong promotion of chemist group.

· Bureaucratic drug approval procedure.

Opportunity:

· Acceptability of new molecules to the doctor is high.

· New market for meeting existing demands can be created.

Threat:

· Identification of Indian Drug which is cheaper.

· Trend of copying of highly prescribed drugs.

· Price variation among different companies.

3.5 Facts of Pharmaceutical Sector in Bangladesh:

¨ The pharmaceutical market size in Bangladesh in terms of manufacture (manufactured in Bangladesh by both locally owned companies and multi nationals) selling price without the deduction of VAT, in 1981 was Tk.1730 million.

¨ In 1996 it rose to Tk. 10200 million.

¨ The average yearly growth of the sector in these 15 years therefore is tk. 688 million.

¨The average growth percentage over the same period is 12.81, the highest yearly growth being in 1984 (25.22% over the previous year) and the lowest in 1996 (1.5% over the previous year).

¨At present there are about 250 – 300 pharmaceutical companies operat

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System Engineering Ltd

Background:

An inverter is an electrical device that converts direct current (DC) to alternating current (AC); the converted AC can be at any required voltage and frequency with the use of appropriate transformers, switching, and control circuits. An inverter is essentially the opposite of a rectifier.

Static inverters have no moving parts and are used in a wide range of applications, from small switching power supplies in computers, to large electric utility high-voltage direct current applications that transport bulk power. Inverters are commonly used to supply AC power from DC sources such as solar panels or batteries.

The electrical inverter is a high-power electronic oscillator. It is so named because early mechanical AC to DC converters was made to work in reverse, and thus was “inverted”, to convert DC to AC.

Application:

1.1 DC power source utilization
1.2 Uninterruptible power supplies
1.3 Induction heating
1.4 HVDC power transmission
1.5 Variable-frequency drives
1.6 Electric vehicle drives
1.7 Air conditioning
1.8 The general case
1.9 Warnings

In this report contains only the variable frequency inverter or drive. A variable-frequency drive controls the operating speed of an AC motor by controlling the frequency and voltage of the power supplied to the motor. An inverter provides the controlled power. In most cases, the variable-frequency drive includes a rectifier so that DC power for the inverter can be provided from main AC power. Since an inverter is the key component, variable-frequency drives are sometimes called inverter drives or just inverters.

A PLC (Programmable Logic Controller) is a device that was invented to replace the necessary sequential relay circuits for machine control. The PLC works by looking at its inputs and depending upon their state, turning on/off its outputs. The user enters a program, usually via software, that gives the desired results. A programmable logic controller is currently defined by National Electrical Manufacturers Association of America as a digital electronic device that uses a programmable memory to store instruction to implement specific functions such as logic, sequence, timing, counting and arithmetic to control machines and processes. At beginning of its invention and application (during 1980’s) it was the replacement of conventional sequence system such as electromechanical relays, timers, counters and so on. But now a day it is using for automation of equipment as well as for automation of industrial plant as a whole, monitoring and control of all process variables, data acquisition and analysis, production monitoring and forecasting, trouble shooting of equipment and so on.

Broad Objective:

The broad objectives of this report are mainly understood the servicing and maintenance of Variable frequency inverter and PLC.

Specific Objectives:

1. Study on Variable frequency inverter and PLC.
2. Identifying different types of Variable frequency inverter and PLC.
3. Suggest probable solution of the identified problem.

Methodology:

• Both primary and secondary data are being collected for the purpose of this report. The report is concentrated of the technical support service and maintenance of variable frequency inverter and PLC.
• Primary Data are collected from the maintenance Chart, the User Manual handbooks and Text books.
• Secondary data are being collected from the printed Journals, brochures and websites.

1.1 Background:

System Engineering Ltd is one of the most reputed organizations in Bangladesh kind of for different Industrial Automation works, Electro-Mechanical & Electrical Engineering works, Plant Election & maintenance, Man-Machine Customization etc. Its objective is to help to make maximum return from the system. It has self-supported expertise technical teams with modern tools & technology.

System Engineering Ltd is authorized sole-agent of some world-class manufacturers in Bangladesh. SEL has selected these companies for their high quality products with justified price for Bangladesh. SEL thinks, high quality products & services are the most important factors to our industrial sector for developing our country.

Our outlook is totally different. We were born differently. We are growing with a different view. We are stuffed with courteous, responsive, dependable professionals, who are able to provide a variety of services.

The company enjoys good reputation due to its quality product sales and after sales services, innovation, productivity and customer support. The company is looking forward to providing with efficient customer service, support and better technology to the local market.

1.2 List of Services:

• Plant Erection & Maintenance
• Trouble Shooting & Up gradation of Industrial Machinery
• Man-Machine Customization
• Electrical LT Panel, MCC Panel, PFI Panel Fabrication
• Pipe-Line and Cable Work
• Duct Fabrication

List of products:

PLC LS Korea ABB Finland
Touch Screen & XGT Panel LS– Korea ABB–Finland
Electric Motor ABB – India
Name of Organization System Engineering Ltd Hyundai – Korea
Year of Establishment 2000
Earlier/Old Name System Automation (Till 2007)
Type of Business Plant Erection on turnkey basic
Selling of Automation Products
Selling of Low & Medium Voltage Products
Partnerships Distributor of LS, Korea (Old name of LG) for automation products
Channel Partner of ABB, Finland for Inverter, PLC, Electric Motor and Instruments
Sole-Agent of Autonics, Korea for Sensor and Controllers
Exclusive distributor of Hyundai, Korea for low and medium volt electric products
Employees 63 employees
Address House # 53, Road # 03, Sector # 3, Uttara, Dhaka – 1230
House # 15, Road # 18, Sector # 3, Uttara, Dhaka – 1230
E-mail sel@selbn.com; jafar@selbn.com

1.4 History

Year Activities
2000 Three dynamic engineers formed a company named System Automation for Plant Erection, Maintenance & Trouble Shooting.
2001 Joined with LG as Local Distributor in Bangladesh at Sep’2001 for their industrial automation products.
2003 Successfully completed our first plant erection project on Battery Manufacturing Plant of Rahimafrooz, Zirani Bazar, Savar, Dhaka which they started at 2001 and capacity was 1,50,000 battery/month.
2004 Joined with Autonics Corporation as their Sole-Agent in Bangladesh.
2006 Successfully completed plant erection of Global Dyeing & Spinning Mills Ltd at Rupgonj, Narayangonj.
2007 Became a Limited company and changed its name to “System Engineering Ltd”.
2007 Joined with Hyundai as their Exclusive Distributor in Bangladesh for their LV & MV products.
2008 Joined with ABB as their Channel Partner in Bangladesh for their Inverter, PLC, Electric Motor and Instruments.
2008 Started Battery Manufacturing Plant erection project of Rahimafrooz (10,00,000 battery/month) at Iswordi EPZ (running).
2008 Started erection project of Battery Accumulator Plant of Rahimafrooz at Saver (running).

1.6 Vision

The vision of system Engineering Ltd is to become the country leader for industrial solutions and establish ourselves as the largest and most lucrative service provides in our country.

1.7 Mission

System Engineering Ltd. has acknowledged the responsibility to eradicate the deficit in country’s industrial automation equipment service and to improve the quality of the lives of their employees and the communities they serve. The company aims to achieve this mission not only through best quality products but also through excellence in service.

1.7 Theme

System Engineering Ltd. Always said as their theme “Best service way of progress”. They also use this theme beside their logo.

1.8 Quality Commitment
System Engineering Ltd .has acknowledged the responsibility to eradicate the deficit in country’s Industrial automation equipment Industrial automation equipment and to improve the quality of the lives of their employees and the communities they serve. The company aims to achieve this mission not only through best quality products but also through excellence in its service.
The goal of System Engineering Ltd. is to become best electro-mechanical firm in Asia by achieving excellence in all facets of its activities. System Engineering Ltd. believe that with strong dedication, their continued research on quality control and their commitment to ‘Just in Time’ delivery and quality after sales support will certainly lead them to our goal.
Their various quality policies involve employing fully qualified experienced engineers some are foreign trained, carrying on regular inspection of their equipments by both local and foreign renowned experts, providing full time training to their newly recruited employees and sharing their ideas. System Engineering Ltd. emphasize greatly on after sales care. With a 12-member team of experienced teams and graduate engineers in charge of support and service department are available even during non working hours, System Engineering Ltd. believe that they serve the customers with the best quality commitment System Engineering Ltd. is proud to declare that their quality management system is better then others company.

1.9 Uncompromising Integrity

Reputation of System Engineering Ltd. is based upon their ability to fulfill promises to shareholders, customers and employees. They do so by being honest in their dealings, taking responsibility and being accountable for their actions. System Engineering treats everyone the way they would like to be treated. They are proactive in identifying issues and coming up with solutions. They ensure that the highest ethical standards guide in making decisions. System Engineering is true to our word.

1.10 Respect & Care for Others

By working as one team with shared goals System Engineering Ltd. achieve great things. They value ideas and contributions from everyone. System Engineering recognize, respect and value diversity in the team. They develop strong bonds by communicating and sharing knowledge. They encourage open discussion and commit to an agreed position.

System Engineering Ltd. has implemented a Quality Management System that is continuously maintained for effectiveness and process improvements in accordance with the requirements of clients.

2.1 The Process Approach

In accordance with the requirements of the standard, EEL has adopted a process approach in design of quality management system.

The processes as applicable and relevant to EEL has been identified and defined. Output of every process is input to one or more processes. In case the output is not flowing to any internal of the processes, it flows to customers and other interested parties. Thus input to every process is outcome of one or more processes. In case input is not being derived from any internal process, the same flows from customers and other interested parties or from external sources.
Methods have been defined to ensure that operation and control of these processes are effective and efficient. Resource requirements for each of the processes are assessed by management to ensure that operation and monitoring of the process can be done as planned.

Strong monitoring, measurement and analysis of the process has been defined as a support process to ensure process performance and is measured and communicated at regular intervals within the organization. Based on the results, action plans are developed for implementing actions necessary for improvement of the processes.

2.2 Product Realization Processes:

1. Order Bagging (Institutional)
2. Forecasting
3. Planning
4. Product Development
5. Procurement
6. Manufacturing
7. Dispatch & Installation
8. Maintenance
9. Customer Complaint Handling

2.3 Measurement, Analysis and Improvement Processes:

• Measurement and Monitoring
• Customer Satisfaction Measurement

2.4 Top Management Process:

Management Review

Figure: Organization overview

2.5 Sequence and Interaction Process

Product Realization Processes:

Past Years Performance Results From other External Sources

Chapter One

1.2 Block diagram of PLC :

Reference LG Manual book.

Fig-2: Bolck diagram of PLC

Fig-3: Input and Output of PLC

Fig-4: Structure of PLC

Fig-5: PLC Processor

Fig-6: PLC I/O Port

1.3 PLC I/O Configuration

1.4 PLC I/O Configuration

Figure of PLC module

1.5 Programming Device

1.6 Advantage of a PLC Control System

Fig-7: Ladder diagram

Fig-9: Electro magnetic relay

Fig-9: PLC Communication system

Fig-10: PLC machine control system

1.7 Difference from a pc

Fig-11: PLC

1.8 PLC Programming

1.9 Symbol of ladder logic

1.10 Process of programming

1.11 Control panel with a PLC controller

With invention of programmable controllers, much has changed in how an process control system is designed. Many advantages appeared. Typical example of control panel with a PLC controller is given in the following picture.

Fig-12: PLC Control System Panel Board.

1.12 Advantages of control panel that is based on a PLC controller can be presented in few basic points:

Compared to a conventional process control system, number of wires needed for connections is reduced by 80%
Consumption is greatly reduced because a PLC consumes less than a bunch of relays
Diagnostic functions of a PLC controller allow for fast and easy error detection.

Change in operating sequence or application of a PLC controller to a different operating process can easily be accomplished by replacing a program through a console or using a PC software (not requiring changes in wiring, unless addition of some input or output device is required).

Needs fewer spare parts
It is much cheaper compared to a conventional system, especially in cases where a large number of I/O instruments are needed and when operational functions are complex.
Reliability of a PLC is greater than that of an electro-mechanical relay or a timer.

PLC Communication

A: It depends on the two devices being connected, whether they are DTE or DCE devices, how they are connected together before adding a RS-232/RS-422 Converter, how many signal lines are required. This information is for devices requiring only Receive (Rx) and Transmit (Tx) signal only, other devices require more connection pairs.

A1: CASE #1: The Device connects directly to the serial port on the Computer. The computer serial port is configured as a DTE port, the device cabling is configured as DCE to connect directly. With this connection, the first RS-422 converter connects with a Standard serial cable wired pin #1 to #1, #2 to #2, etc. The second converter requires a null modem connection between it and the device, since our converter is configured as DCE on the RS-232 side, and the device cabling is also DCE. See the connection diagram for CASE #1.

Fig-13: PLC Communication
A2: CASE #2: The Device connects through a Null Modem (Crossover) Cable to the serial port on the Computer. This original connection requires a Null Modem cable because both Computer and Device are configured as DTE. In this case, the first RS-422 Converter connects to the Computer with a Standard serial cable wired pin #1 to #1, #2 to #2, etc. The original Null Modem Cable is set aside, not used. A new Standard serial Cable is connected to the device and the second converter. See the connection diagram for CASE #2.

A3: CASE #3: In the third case, we want to extend a set of RS-232 connections between two devices, but we don’t know how either port is configured. Both devices use DB9F (female) connectors. We have a voltmeter. We know the converters are DCE devices. When powered, the RS-232 output will have a negative DC voltage compared to GND. So, we connect a Standard cable to the device, power it up, measure between Pin #5 of the cable to Pin #3. If it has a minus voltage (usually between -3VDC to -11VDC), connect it to the DB9 connector of the converter. This connection should be okay. If almost no voltage on Pin #3, check Pin #2. If it has the minus voltage, use a Null Modem Connection between the device and converter to swap the pin connections. If neither has a voltage, you need pinouts for the connector/cable. Make a similar test for the RS-232 connections at the other end. The voltage should be on the cable pin connecting to Pin #3. No Connection diagram for CASE #3, it will either match CASE #1 or CASE #2, but could instead require connections with Null Modem Connections on both converters if the original cable is not used.
The pin numbers for the RS-422 connections are not shown, they may vary according to the model, but the signal name will be shown on the data sheet.
In the case of DB25 RS-232 connections, Pin #2 is TD, Pin #3 is RD, and Pin #7 is GND.

Note: These connection figures do not show power supplies or handshaking lines needed to power “port powered” converters. The port powered devices usually need the RTS line and DTR line high (signal level +11 VDC), a power supply may be required for both ends if the RS-422 transmitter voltage is less than 4.4 volts TD(B) to TD(A). For pin outs of RS-232, refer to the FAQ on RS-232 Connections that WORK!
RS-232 Facts
RS-232 is a point-to-point serial communications standard that defines the electrical and mechanical details of the interface between Data Terminal Equipment (DTE) and Data Communications Equipment (DCE). Compared with newer standards RS-232 is limited in terms of data rate, maximum distance and noise immunity. The standard defines 25 electrical connections including data lines, control (hardware handshake) lines, timing lines and special secondary function lines. In typical applications many of these lines are not used.
Cables: When connecting a DTE to a DCE all connections are straight through. When connecting a DTE to a DTE a special ‘null modem’ or crossover cable is required.
Connectors: The original RS-232 connector was a DB-25, which supported all RS-232 lines. Often, DB-9 connectors are used, which support the most common data and hardware handshake lines.
Speed/Distance: The standard suggests RS-232 can operate at about 20 kbps over distances of 50 feet, a conservative estimate depending on grounding and noise considerations. Over short distances RS-232 is sometimes operated at rates as high as 115.2 kbps. Several hundred feet is possible at data rates of 9600 bps or lower.
Tech Tip: For longer distances, higher speeds and more noise immunity, convert to RS-422 for point-to-point, or RS-485 for multi-drop applications.

PORT POWERED

SERIAL RS232 TO RS485

DB9-Female To DB9-Male or Terminal

PORT POWERED – OPTO-ISOLATED

3-WIRE RS232 REPEATER

DB9-Female to DB9-Male or Terminal
RS232 serial cable layout

Almost nothing in computer interfacing is more confusing than selecting the right RS232 serial cable. These pages are intended to provide information about the most common serial RS232 cables in normal computer use, or in more common language “How do I connect devices and computers using RS232?”
RS232 serial connector pin assignment

The RS232 connector was originally developed to use 25 pins. In this DB25 connector pin out provisions were made for a secondary serial RS232 communication channel. In practice, only one serial communication channel with accompanying handshaking is present. Only very few computers have been manufactured where both serial RS232 channels are implemented. Examples of this are the Sun SPARCstation 10 and 20 models and the Dec Alpha Multia. Also on a number of Telebit modem models the secondary channel is present. It can be used to query the modem status while the modem is on-line and busy communicating. On personal computers, the smaller DB9 version is more commonly used today. The diagrams show the signals common to both connector types in black.

The defined pins only present on the larger connector are shown in red. Note, that the protective ground is assigned to a pin at the large connector where the connector outside is used for that purpose with the DB9 connector version.
The pin out is also shown for the DEC modified modular jack. This type of connector has been used on systems built by Digital Equipment Corporation; in the early day’s one of the leaders in the mainframe world. Although this serial interface is differential (the receive and transmit have their own floating ground level which is not the case with regular RS232) it is possible to connect RS232 compatible devices with this interface because the voltage levels of the bit streams are in the same range. Where the definition of RS232 focused on the connection of DTE, data terminal equipment (computers, printers, etc.) with DCE, data communication equipment (modems), MMJ was primarily defined for the connection of two DTE’s directly.

RS232 DB9 pinout

DEC MMJ pinout

RS232 DB25 pinout

RS232 DB25 to DB9 converter

The original pinout for RS232 was developed for a 25 pins sub D connector. Since the introduction of the smaller serial port on the IBM-AT, 9 pins RS232 connectors are commonly used. In mixed applications, a 9 to 25 pins converter can be used to connect connectors of different sizes. As most of the computers are equipped with the DB9 serial port version, all wiring examples on this website will use that connector as a default. If you want to use the example with a DB25, simply replace the pin numbers of the connector according to the conversion table below.

RS232 DB9 to DB25 converter

DB9 – DB25 conversion
DB9 DB25 Function
1 8 Data carrier detect
2 3 Receive data
3 2 Transmit data
4 20 Data terminal ready
5 7 Signal ground
6 6 Data set ready
7 4 Request to send
8 5 Clear to send
9 22 Ring indicator

RS232 serial loopback test plugs

The following RS232 connectors can be used to test a serial port on your computer. The data and handshake lines have been linked. In this way all data will be sent back immediately. The PC controls its own handshaking. The first test plug can be used to check the function of the RS232 serial port with standard terminal software. The second version can be used to test the full functionality of the RS232 serial port with Norton Diagnostics or Check It.

DB9 DB25 Function

1 + 4 + 6 6 + 8 + 20 DTR
CD + DSR
2 + 3 2 + 3 Tx
Rx
7 + 8 4 + 5 RTS
CTS

Testing occurs in a few steps. Data is sent on the Tx line and the received information on the Rx input is then compared with the original data. The signal level on the DTR and RTS lines is also controlled by the test software and the attached inputs are read back in the software to see if these signal levels are properly returned. The second RS232 test plug has the advantage that the ring-indicator RI input line can also be tested. This input is used by modems to signal an incoming call to the attached computer.

RS232 null modem cables

The easiest way to connect two PC’s is using an RS232 null modem cable. The only problem is the large variety of RS232 null modem cables available. For simple connections, a three line RS232 cable connecting the signal ground and receive and transmit lines is sufficient. Depending of the software used, some sort of handshaking may however be necessary. Use the RS232 null modem selection table to find the right null modem cable for each purpose. For a Windows 95/98/ME Direct Cable Connection, the RS232 null modem cable with loop back handshaking is a good choice.
RS232 null modem cables with handshaking can be defined in numerous ways, with loopback handshaking to each PC, or complete handshaking between the two systems. The most common null modem cable types are shown here.
Simple RS232 null modem without handshaking (Null modem explanation)

Connector 1 Connector 2 Function
2 3 Rx
Tx
3 2 Tx
Rx
5 5 Signal ground

RS232 null modem with loop back handshaking (Null modem explanation)

Connector 1 Connector 2 Function
2 3 Rx
Tx
3 2 Tx
Rx
5 5 Signal ground
1 + 4 + 6 – DTR
CD + DSR
– 1 + 4 + 6 DTR
CD + DSR
7 + 8 – RTS
CTS
– 7 + 8 RTS
CTS

RS232 null modem with partial handshaking (Null modem explanation)

Connector 1 Connector 2 Function
1 7 + 8 RTS2
CTS2 + CD1
2 3 Rx
Tx
3 2 Tx
Rx
4 6 DTR
DSR
5 5 Signal ground
6 4 DSR
DTR
7 + 8 1 RTS1
CTS1 + CD2

RS232 null modem with full handshaking (Null modem explanation)

Connector 1 Connector 2 Function
2 3 Rx
Tx
3 2 Tx
Rx
4 6 DTR
DSR
5 5 Signal ground
6 4 DSR
DTR
7 8 RTS
CTS
8 7 CTS
RTS

1.12 PC to RS485 Interface

Fig-14: PC RS485 INTERFACE

Figure 1: Circuit Diagram of Isolated RS485 Interface

Figure 1 shows the circuit diagram of RS485 interface. Connector K1 is linked to the serial port of the PC, power to the PC side of the circuit is derived from the signal lines DTR and RTS. Positive supply is derived from RTS and negative supply from the DTR line. The RTS line is also used to control the data direction of RS485 driver IC U4.

Optical isolation is achieved by optocouplers U1, U2 and U3. Opto U1 is used to control the data direction of U4 opto U2 provide RXD line isolation while opto U3 provide TXD line isolation.
The other side of the isolator carries TTL levels. This side is powered by an unregulated dc supply between 9V and 18V dc. IC U5 provide 5V regulated output and IC U4 provide the RS485 bus interface. The TXD and RXD lines status are provided by data indicating LEDs. The interface has been tested at the baud rate of 19.2k baud.
For Data Reception RTS = 1 (at +ve level)
For Data Transmition RTS = 0 (at -ve level)
DTR line is always set to 0 (at -ve level)

Figure 2 & 3 shows the component layout of the isolator pcb and the track patterns respectively.

Fig-15: Component layout of the Isolator PCB

Figure 16: Track patterns of the Isolator PCB

Component details of the project.
1 4 C1,C2,C3,C6 100nF

2 1 C4 10uF 16V

3 1 C5 470uF 25V

4 3 D1,D2,D3 1N4148

5 2 D4,D5 LED RED 3mm

6 2 D7,D6 TRANSIL 6.8V

7 1 D8 1N4003

8 1 K1 DB9 R/A PCB PLUG

9 1 K2 PCB TERMINAL BLOCK 4 WAY

10 3 R1,R2,R3 1K8

11 2 R7,R4 4K7

12 2 R5,R8 1K

13 3 R9,R12 150R

14 1 R6 680R

15 2 R11,R10 10R

16 1 R13 120R

17 2 U3,U1 H11L1 OPTO-ISOLATOR

18 1 U2 CNY17-3 OPTO-ISOLATOR

19 1 U4 MAX487, SN75176B

20 1 U5 LM7805

PLC programming cables for several brands

Most PLC’s can be programmed from a PC via a serial cable. Unfortunately, many of these cables have a non standard layout. De cables shown here can be bought from the regular sales channels, but it is often much cheaper to solder them yourself.

Mitsubishi PLC cable layouts

Melsec PLC’s from Mitsubishi can be connected to PC’s running Medoc programming software using various cables. Each different I/O module uses a different pin assignment.

Not all Mitsubishi PLCs can be connected directly to a programming PC. The signal levels of the A series CPU units are not RS232 compatible and must be converted with a SC-02N or SC-05 converter. The serial cable layout to connect this converter to a PC is shown in this diagram.

PC to Mitsubishi SC-02N/SC-05 adapter cable

If more than one serial port is necessary on an A series melsec PLC, the AJ71C24 or AJ71C21 serial communication modules can be plugged into the system. These modules provide RS232 compatible serial ports, so no signal conversion is necessary to connect these modules with a PC. Both modules are equipped with a DB25 connector. The cable layout for these two modules is shown below.

PC to Mitsubishi AJ71C24 serial programming cable

PC to Mitsubishi AJ71C21 serial programming cable

The A1SJ71C24-R2 can also be used to connect computers and devices to a melsec series A PLC. This plug-in module contains two serial ports, each with a DB9 connector. The wiring layout is in fact identical to the

PC to Mitsubishi A1SJ71C24-R2 serial programming cable

Omron PLC cable layouts

The PLC’s from Omron can be connected to various peripheral equipment. Each device requires its own cable layout. Only the more common cables are shown here.

DB9 RS232 programming cable

DB25 RS232 programming cable

CV500-CIF01 tool bus programming cable

Siemens PLC’s

Most programming of Siemens S5 PLC’s is done using a special RS232 to TTY converter. The S7 series are programmed using a RS232 to MPI bus converter. The easiest thing to do is buy these special cables from your local Siemens supplier. The operator terminals however can be programmed using a normal serial cable. The following cable can be used to program the OP series of operator displays.

Programming cable for OPxx display series

Systematic approach to designing a process control system

first, we need to select an instrument or a system that you wish to control. Automated system can be a machine or a process and can also be called a process control system. Function of a process control system is constantly watched by input devices (sensors) that give signals to a PLC controller. In response to this, PLC controller sends a signal to external output devices (operative instruments) that actually control how system functions in an assigned manner (for simplification it is recommended that we draw a block diagram of operations’ flow).

Secondly, we need to specify all input and output instruments that will be connected to a PLC controller. Input devices are various switches, sensors and such. Output devices can be solenoids, electromagnetic valves, motors, relays, magnetic starters as well as instruments for sound and light signalization.

Following an identification of all input and output instruments, corresponding designations are assigned to input and output lines of a PLC controller. Allotment of these designations is in fact an allocation of inputs and outputs on a PLC controller which correspond to inputs and outputs of a system being designed.

Thirdly, should make a ladder diagram for a program by following the sequence of operations that was determined in the first step.

Finally, program is entered into the PLC controller memory. When finished with programming, checkup is done for any existing errors in a program code (using functions for diagnostics) and, if possible, an entire operation is simulated. Before this system is started, we need to check once again whether all input and output instruments are connected to correct inputs or outputs.

Maintenance Part

Fig-17: Font view of plc

Fig-18: Power Circuit of PLC

Fig-19: Control circuit of PLC
Problem:
Power Failure

Solution:
Power section of PLC fault occurred.
Replace capacitor

Economical Benefit Using a PLC Control Panel Board

Increased production
Improved quality
Greater product uniformity
Saving in raw materials
Saving in energy
Saving in manpower
Increase safety

Chapter Two

2.1 Introduction

An inverter is an electrical device that converts direct current (DC) to alternating current (AC); the converted AC can be at any required voltage and frequency with the use of appropriate transformers, switching, and control circuits. An inverter is essentially the opposite of a rectifier.
Static inverters have no moving parts and are used in a wide range of applications, from small switching power supplies in computers, to large electric utility high-voltage direct current applications that transport bulk power. Inverters are commonly used to supply AC power from DC sources such as solar panels or batteries.

Inverter designed to provide 115 VAC from the 12 VDC source provided in an automobile. The unit shown provides up to 1.2 amperes of alternating current, or just enough to power two sixty watt light bulbs.
An inverter converts the DC electricity from sources such as batteries, solar panels, or fuel cells to AC electricity. The electricity can be at any required voltage; in particular it can operate AC equipment designed for mains operation, or rectified to produce DC at any desired voltage.

Grid tie inverters can feed energy back into the distribution network because they produce alternating current with the same wave shape and frequency as supplied by the distribution system. They can also switch off automatically in the event of a blackout.
Micro-inverters convert direct current from individual solar panels into alternating current for the electric grid

A variable-frequency drive controls the operating speed of an AC motor by controlling the frequency and voltage of the power supplied to the motor. An inverter provides the controlled power. In most cases, the variable-frequency drive includes a rectifier so that DC power for the inverter can be provided from main AC power. Since an inverter is the key component, variable-frequency drives are sometimes called inverter drives or just inverters.

2.2 Main part of inverter
Input Section
Control Section
Power Section
Output Section

Input section
There are many parts of input section
Rectifier
Breaking resistor
Health relay

Control Section
There are three types of control
Key pad
Terminal
Communication

Power Section
Main parts of power Section
SMPS card
IGBT

Output Section
DC Converter
Chopper transformer

Operation mode
Frequency reference mode
Keypad mode
Terminal mode
Communication mode
Input function
Analog
Digital

Analog input
Variable pot, Terminal RS232
ACC-Accelerations time
DEC-De acceleration time
Base frequency
Maximum frequency

Digital input
FWD-Forward
REV-Reverse
RST-Reset
Multifunction 1
Multifunction 2
Multifunction 3

2.3 Inverter Specification
IG-5A
kW/Voltage Ratings:

o 0.75 ~ 55kW, 3 phase, 200 ~ 230VAC

o 0.75 ~ 75kW, 3 phase, 380 ~ 480VAC

– Selectable V/f, Sensor less vector, Sensor vector control (Optional)

– Built-in process PID control

– Optimum acceleration & deceleration for a maximum torque

– APP parameter group for special operations;

Traverse, Multi Motor Control, DRAW

– Multi-function I/O terminal:

Input: 27 functions / Output: 21 functions

– Multi Motor Control (Up to 4 motors: Optional)

– Motor parameter Auto-tuning

– Parameter Read/Write function using a detachable LCD Keypad

Fig-20: Inverter iG5A-4

– Power terminal configuration

Symbols Functions

R AC Line input (3 Phase 200-230 VAC or 380-460 VAC)

S

T

G Earth Ground

U 3 Phase power output terminal to motor (3 Phase 200-230 VAC or 380-460 VAC)

V

W

G Earth Ground

P1 Positive DC bus terminal
External DC Reactor connection terminal and DB Unit connection terminal

LS Starvert iG5A is very competitive in its price and its functional strength compared to iG5. User-friendly interface, extended inverter ranges up to 7.5kW, superb torque competence and small size of iG5A provides an optimized user environment.
Selectable V/f, sensor less vector control

– Motor parameter Auto-tuning

– Powerful torque at overall speed range

– 0.1 ~ 400Hz frequency output

– -15% ~ +10% input voltage margin

– Fault history: Last 5 faults

– 0~10Vdc / -10 ~ +10Vdc analog input

– IP20 enclosure, UL Type 1 (Option)

– Selectable manual/automatic torque boost

– Selectable PNP/NPN input signal

– 2nd motor control and parameter setting

– Built-in Dynamic braking transistor as standard

– Enhanced process PID control

– Built-in RS485 (LS Bus / Modbus RTU) communication

– Cooling fan On/Off control & Easy change

– Remote control using external keypad * RJ45 cable (Optional)

– Upgraded functions: Sleep & Wake-up (Energy savings)

KEBKinetic Energy Buffering) protection

Low l (eakage PWM algorism

– Monitoring & commissioning PC based software tool
IP5A

Starvert iP5A series adopt various functions as standard for operation of Fan and Pump. iP5A’s optimum performance for Fan & Pump, you can optimize system stability in user-environment and reduce system construction cost.

– Dual PID

When additional PID control or Cascade PID control is required, Dual PID provides users various uses of the system with only iP5A.

– Multi Motor Control

The built-in algebra control function enables an inverter to control many motors without a controller so that user can take advantage of energy-saving and cost-down.

– Sleep and Wake-Up

The built-in energy saving function makes inverter stop automatically when the capacity is very low.

– Pre Heater

The pre heater function is built-in to prevent motor damage and inverter break-down caused from humidity.

– Flying Start

When the inverter drives many ventilators or when the fan in a big load system turns due to a natural convection, iP5A operates the motor by searching the motor speed automatically.

– Auto energy saving

iP5A provides the auto energy saving function by the optimal flux control which minimizes an energy loss caused by a change of the load.

– Improved Management from Instant Power-off and Power Dip Generation

During the power Dip or instant power-off, which is generated by lightening, ground fault and power-failure, loads still keep the mechanical energy and this energy flows back to inverter by regeneration. The power-failure guarantee time is extended by using this electrical character of inverter.

– Constant and Stable Performance (24 hours 365 days)

Regardless of outside alteration such as input voltage variation by load change or weather effect, iP5A can handle moter and load with best performance.

– Safety Stop

When unexpected power-failure blocks power supply, inverter stops motor by using inertia energy of load that prevents unexpected second accident (Parameter setting is required).
Specification

– 200V Class
SV ¡ iP5A – 2 055 075 110 150 185 220 300

Motor Rating1) [HP] 7.5 10 15 20 25 30 40

[kW] 5.5 7.5 11 15 18.5 22 30

Output ratings Capacity[kVA]2) 9.1 12.2 17.5 22.9 28.2 33.5 43.8

Rated current[A] 24 32 46 60 74 88 115

Output frequency 0.01 ~ 120 [Hz]

Output voltage(V) 200 ~ 230V

Input
ratings Voltage[V] 3 Phase 200~230 V (-15% ~ +10%)

Frequency 50 ~ 60 [Hz] (± 5%)

Weight (kg) 4.9 6 6 13 13.5 20 20

– 400V Class

SV iP5A – 4 055 075 110 150 185 220 300

Motor
Rating1) [HP] 7.5 10 15 20 25 30 40

[kW] 5.5 7.5 11 15 18.5 22 30

Output
ratings Capacity
[kVA]2) 9.6 12.7 19.1 23.9 31.1 35.9 48.6

Rated
current[A] 12 16 24 30 39 45 61

Output frequency 0.01 ~ 120 [Hz]

Output voltage(V) 380 ~ 480V3)

Input
ratings Voltage[V] 3 Phase 380~480 V (-15% ~ +10%)

Frequency 50 ~ 60 [Hz] (± 5%)

Weight (kg) 4.9 6 6 12.5 13 20 20

SV iP5A – 4 370 450 550 750 900 1100 1320

Motor
Rating1) [HP] 50 60 75 100 125 150 175

[kW] 37 45 55 75 90 110 132

Output
ratings Capacity
[kVA]2) 59.8 72.5 87.6 121.1 145.8 178 210

Rated
current[A] 75 91 110 152 183 223 264

Output frequency 0.01 ~ 120 [Hz]

Output voltage(V) 3 Phase 380~480V3)

Input
ratings Voltage[V] 3 Phase 380~480 V (-15% ~ +10%)

Frequency 50 ~ 60 [Hz] (± 5%)

Weight (kg) 27 27 29 42 43 101 101

SV iP5A – 4 1600 2200 2800 3150 3750 4500

Motor
Rating1) [HP] 215 300 350 400 500 600

[kW] 160 220 280 315 375 450

Output
ratings Capacity
[kVA]2) 259 344 436 488 582 699

Rated
current[A] 325 432 547 613 731 877

Output frequency 0.01 ~ 120 [Hz]

Output voltage(V) 3 Phase 380~480V3)

Input
ratings Voltage[V] 3 Phase 380~480 V (-15% ~ +10%)

Frequency 50 ~ 60 [Hz] (± 5%)

Weight (kg) 114 200 200 243 280 380

1) Indicates the maximum applicable capacity when using a 4-Pole LG motor.
2) Rated capacity (v 3×V×I) is based on 220V for 200V class and 460V for 400V
class.
3) Maximum output voltage will not exceed the input voltage. An output voltage less
than the input voltage may be programmed if necessary.

Common
specifications Dynamic braking torque Max. braking torque 20% continuous4)

ED Option (braking UNIT, braking resistor) 4)

Cooling method Forced air cooling

Protection degree IP20, UL Enclosed Type 1(provided with conduit box) for all ratings, UL Open type from 15 to 90 kW (Optional conduit plate)

Control Control method V/F, Sensor less Vector, Slip Compensation, Easy Start Selectable

Frequency setting resolution Digital reference: 0.01Hz(Below 100Hz), 0.1Hz(Over 100Hz), Analog reference: 0.01Hz/60Hz

Frequency accuracy Digital: 0.01% of max. output freq
Analog: 0.1% of max. output freq

V/F ratio Linear, Square pattern, User V/F

Overload capacity 110% per 1min, 120% per 1min5)

Torque boost Manual torque boost(0 to 15% adjustable), auto torque boost

Operation Operation method Keypad/Terminal/Communication selectable

Frequency setting resolution Analog:0~12V/-12V~12V/4~20mA/0~20mA/Pulse/Ext-PID, Digital: Keypad

Input signal Start signal Forward, Reverse

Multi-Step Up to 18 Speeds can be set including Jog (Use Programmable Digital Input Terminal)

Multi-Step Accel/Decel time 0.1~ 6,000 sec, Max 4 types can be set via Multi- Function Terminal.
Accel/Decel Pattern: Linear, U-Curve, S-Curve Selectable

Emergency stop Interrupts the Output of Inverter

Jog Jog operation

Fault reset Reset the fault when the protective function is active.

Output signal Operating status Frequency Detection Level, Overload Alarm, Stalling, Over Voltage, Low Voltage, Inverter Overheating/ Running/ Stopping/ Constant running, Inverter By-Pass, Speed Searching

Fault output Contact Output (3A, 3C, 3B) – AC 250V 1A, DC 30V 1A

Indicator Choose 2 from Output Frequency, Output Current, Output Voltage, DC Link
Voltage (Output Voltage: 0 ~ 10V)

Operation function DC Braking, Frequency Limit, Frequency Jump, 2nd Function, Slip Compensation, Reverse Rotation Prevention, Auto Restart, Inverter By-Pass, Auto-Tuning, PID Control, Flying Start, Safety Stop, Flux Braking, Low leakage, Pre-PID, Dual-PID, MMC, Easy Start, Pre-heater

Protection function Inverter trip Over Voltage, Low Voltage, Over Current, Ground Fault , Inverter Overheat, Motor Overheat, Output Phase Open, Overload Protection, External Fault 1, 2, Communication Error, Loss of Speed Command, Hardware Fault, Option Fault, etc

Inverter alarm Stall Prevention, Overload Alarm, Thermal Sensor Fault

Momentary power loss Below 1 sec: Continuous operation, Above 1 sec: Auto restart active when Safety Stop is set to “Yes” with a fan connected.

Keypad Operation information Output Frequency, Output Current, Output Voltage, Frequency Set Value, Operating Speed, DC Voltage, Integrating Wattmeter, Fan ON time, Run-time, Last Trip Time.

Trip information Trips Indication when the Protection Function activates. Max. 5 Faults are saved. Last Trip Time.

Environment Ambient temperature -10¡É~40¡É (use loads less than 80% at 50¡É)

Storage temperature -20¡É~65¡É

Ambient humidity Less than 90% RH Max. (No condensing)

Altitude, Vibration Below 1,000m• Below 5.9m/sec² (=0.6g)

Application site Pollution degree 2, No Corrosive Gas, Combustible Gas, Oil Mist, or Dust

IV5

Fig: 21-Inverter IV5

S Starvert iV5 series realizes the high precision vector control in entire operational area and its highly precise speed control guarantees superb control stability in the elevator controls.
Auto tuning
In the application which requires a high torque at low speed, the electrical parameters of motor should be properly set for an optimal operation. Auto tuning function of iV5 make users to set the motor variable accurately.

– various communication interface

iV5 provides various communication interface such as RS 485, Device NET, Profibus-DP and Modbus-RTU.

– Extended function card (ENC_DIV,DIAO and ELIO)

Option card for the encoder pulse division (ENC_DIV) supports the encoder with open collector output and can divide the encoder pulse up to 1/128. Digital input and Analog signal output card (DIAO) can receive the binary speed command from PLC or other upper level controller and has 4 channels of analog signal output. ELIO card enables the lift application software to be available for an optimized lift operation.

Terminal configuration

Power terminal configuration

Symbol Name Description

R,S,T AC Input 3Phase AC input connection
1) 200V: 200~230V, 50/60Hz
2) 400V: 300~460V, 50/60Hz

U,V,W Output Cable connection of 3 phase induction motor

G Earth ground Inverter frame earth terminal

B1,B2 Braking resistor Braking resistor connection

P1,P2 DC reactor and Braking unit DC reactor, braking unit and DC link common connection terminal

P DC Link(+-) terminal DC Link common connection terminal

N DC Link(-) terminal Braking unit and DC link common terminal

Control terminal configuration

Item Display Name Description

Digital input FX Forward run command ‘ON’ when tied to CM terminal

RX Reverse run command Stops when FX, RX are ON / OFF simultaneously

BX Emergency stop ON when closed to CM, FREERUN Stop and Deceleration stop. It does not trigger fault alarm signal.

RST Fault reset Clears the fault condition when the fault state is removed.

P1 Multi-function input terminal Selectable among the following 27 functions:
(Multi step speed selection 1/2/3, JOG run, MOP up/down/Save/Clear, Analog hold, Main drive, Second function, Speed Acc/Dec time selection, 3-wire operation, External default signal B contact point, Forward rotation prevention, Process PI disable, Timer input, Soft start cancellation, ASR PI Gain selection, ASR P.PI selection, Flux reference selection, Pre-excitation, Speed/Torque control selection, Torque limit use, Torque bias

P2

P3

P4

P5

P6

P7

CM COMMON “ON” in case of connection between CM and digital

Analog input VREF Power supply for Analog setting Reference voltage by variable resistor ( + 10V ) : 10k§Ù

AI1 Voltage/ Current Signal Input – Voltage signal input (-10 ~ 10V), current signal input (4 ~ 20mA), Motor NTC selectable via Multi-function Analog input.
– Selectable among following 8 different functions;
Speed/Torque/Flux command, Torque bias, Torque limit,
Process PI controller command, Process PI controller feedback value, Draw command, Motor NTC input)
– Jumper setting in Voltage Input: Closed (Jumper connected as Default)
– AI1, AI2: Open (Jumper disconnected), AI3: Switch set on left side
– Jumper setting in Current Input
– AI1, AI2: Short
– Motor NTC (When using LG-OTIS Motor Only)
– AI3: switch set on right side.

AI2

AI3 Voltage/ Motor NTC input

5G COMMON – COMMON terminal for analog input

P5 Power supply for open collector – +5V

5G – 0V

Encored input A+ Encoder A-phase signal – A, B signal for Line Drive Type Encoder.
– Short P5 pin of JP2 on I/O PCB and set JP1 switch to LD for the use of Line Drive.

A-

B+ Encoder B-phase signal

B-

P15 Power supply for open collector + 15 V

5G 0 V

PA Encoder signal output : A-Phase – A, B signal for Complementary or Open Collector Type Encoder.
– Short P15 pin of JP2 on I/O PCB and set JP1 switch to “OC”.

PB Encoder signal output: B-Phase

Analog output AO1 Analog output 1 Output range: -10V ~ +10V
Selectable among 31 (Motor speed, speed ref. 1~2, Torque command 1~2, torque current, flux ref., flux current, Inverter output current/voltage, Motor Temp, DC link voltage¡¦ )

AO2 Analog output 2

AO3 Analog output 3

5G COMMON COMMON terminal for analog output

Open collector output OC1 Open collector output Selectable among the following 14 functions;
Zero speed detect, Speed detect (Bi-directional), Speed detect (Uni-directional), Speed reach, Speed deviation, Torque detect, On Torque limit, Motor overheat, Inverter overheat, on low voltage, Inverter running, Inverter regenerating, Inverter ready,Timer output

OC2

OC3

EG

Digital output 1A Multi-function input 1 (A Contact)

1B

2A Multi-function input 2 (A Contact)

2B

30A Fault alarm A contact Outputs when fault occurs.
Deactivated in BX condition.

30B Fault alarm B contact

30C COMMON COMMON for 30A, 30B

KEY PAD

Keypad features

2.4 Connection Diagram of inverter

2.5 Types of Fault
Over current
Over current 2
Ground Fault
Inverter Overload

Overload Trip
Inverter Overheat
Output Phase loss
Over Voltage
Low Voltage
Electronic Thermal
Input Phase loss
Self diagnostic multifunction
Parameter save error
Inve3rter hardware Fault
Communication Error
Key pad Error
Cooling fan Error
Instant cut off
External Fault A contact input
Brake contra Error
Over current Fault
Over Current 2
Ground fault current

Model:
SV008iG5-A-4
Fault:
Inverter has no power
Solution:
SMPS Circuit Problem
Replace SMPS Circuit

Model:
SV005iS5-4
Fault:
No Power
Solution:
Cooling Fan Fault
Circuit Servicing
Replace Cooling Fan
Model:
SV022iS5A-4
Fault:
No Power
Solution:
Power Card Fault
IGBT Fault
SMPS Card Fault
Damage Braking Resistor
Replace IGBT
Replace SMPS Card
Replace Braking Resistor(200 Ohm)

Model:
SV022iS5A-4
Fault:
Key pad LED Direct flashing
Solution:
Polar Capacitor Fault
Replace it, new polar capacitor solder there.

Model:
SV008iG5-A-4
Fault:
Output Error

Solution:
Replace IR2133J Rectifier.
Model:
HV008iG-1
Fault:
Key pad light (Run,Set,Rev,Fw) flashing at a time.
Solution:
IGBT Fault
Replace IGBT
Model:
SV044iG5-2
Fault:
Low voltage fault
Solution:
Replace Power circuit resistor

Model:
IG5440-4
Fault:
Does not show display.
Solution:
SMPS Card fault
Replace capacitor of SMPS card

Model:
SV022iS5A-4
Fault:
No Power
Solution:
Power Card Fault
IGBT Fault
SMPS Card Fault
Damage Braking Resistor
Replace IGBT
Replace SMPS Card
Replace Braking Resistor (200 Ohm)

Fig-22: Inverter synchronization

Fig-23: Sub Power PCB of inverter

Fig-24: Main Power PCB

Fig-24: Main Power PCB

Fig-25: Control card of Inverter

Fig-:26 Burnt IGBT

Fig-:27 IGBT Test

Fig-:28: Rectifier

Conclusion:

PLC (Programmable Logic Controller) and Inverter is a latest intelligent instrument that is used widely in different industrial plants to operate automatically with decreasing the plants breakdown times as well as its maintenance costs and increasing both of quality and quantity of productions. Considering of its high reliability and low cost most of the organizations are now trying to replace their old control system with new PLC control system. So as an Electrical Engineer sufficient knowledge about PLC and Inverter should know.

Accuracy: The closeness of an indication or reading of a measurement device to the actual value of the qu

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ARTICLE ON ONLINE MARKETING MARKETING MANAGEMENT

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ARTICLE ON

ONLINE MARKETING

MARKETING MANAGEMENT

Abstract Summary

Online marketing also known as Internet Marketing or E –Marketing or Online advertising has become popular for couple of reasons .It is the Marketing using internet in online methods. The Marketing Websites Re being used in marketing products or services through internet. These websites with you in identifying the product, advertising, or branding concepts consistent with your marketing strategy and market opportunity. .They combine qualitative and quantitative methods to obtain the best read on marketplace reactions and perceptions. To accomplish this, you may already be utilizing channels such as banner ads, email blasts, pop-ups and pop-under. These are all “push” techniques, whose purpose is to create demand where it may not yet exist. However, in order to have a fully realized online marketing strategy Perhaps your product or service isn’t easily sold directly from your website. Maybe your business model requires a salesperson to have direct contact a prospect. Or perhaps you sell your products through dealers or distributors. Regardless of whether your online marketing goals include persuading a visitor on your site to request product information, download a demo, contact the dealer nearest him, or ask to speak to a salesperson, search engine marketing generates powerful results. Over one third of surveyed Internet users believe the companies topping a search results list to be a leading brand in the business category they are searching. And when your site repeatedly appears prominently in the search results, you’re creating multiple brand impressions. In Bangladesh,BUZINESS BANGLADESH.COM has launched the biggest marketing website where products and services are sold through online .

Background

Develop an Online-marketing plan

Online Marketing or E-marketing means using digital technologies to help sell your goods or services. These technologies are a valuable complement to traditional marketing methods whatever the size of your company or your business model.

The basics of marketing remain the same – creating a strategy to deliver the right messages to the right people. What has changed is the number of options you have. Though businesses will continue to make use of traditional marketing methods, such as advertising, direct mail and PR, e-marketing adds a whole new element to the marketing mix. Many businesses are producing great results with Online Marketing or e-marketing and its flexible and cost-effective nature makes it particularly suitable for small businesses.

This guide describes how to develop an Online Marketing or e-marketing plan and provides guidance on implementing that plan and monitoring its effectiveness.

E-commerce plays an increasingly important role in the way in which products and services are purchased.

E-commerce systems such as your website can be used to market and sell to customers, and to provide after-sales support. E-commerce can also be an important part of strengthening relationships and improving the efficiency of your dealings with suppliers and other key trading partners.

This guide looks at the key issues to consider when planning for the introduction of e-commerce. It provides advice on how best to identify the opportunities for e-commerce within your business and the solutions available. It also emphasises the need to plan for the ongoing development and maintenance of any e-commerce system at the outset.

Distance selling and online trading

Introduction

All businesses that supply goods or services must comply with a wide range of regulations on their quality and suitability as well as rules on the information they must provide.

But there are a number of extra rules if you sell at a distance or online. This includes selling by mail order including catalogues, phone, fax, internet and digital TV.

Understanding and complying with the distance selling regulations puts you on a firm footing when dealing with consumers, and can help you to avoid disputes.

This guide gives an overview of the rules on distance selling and online trading and tells you where you can find out more.

To is not optimized around your products and services. The search engines aren’t all-knowing – they need help from you to tell them what to rank for. That means that each page of your website should have code elements and content that revolves around different keywords for your products or services. When the search engine crawls your site that tells them exactly what terms you should rank for.

Of course, that’s just one part of it. You also have to build links to your site using the keywords you wish to rank for as your anchor text. The more outside sites linking to yours with the right anchor text, the higher you’ll see your rankings climb.

That’s the easy answer – of course it gets a bit more complex than that. Don’t hesitate to fill out our form to get a free website analysis and recommendations on how your site can rank for chosen keywords.

Introduction

‘Business info Bangladesh’

‘Business info Bangladesh’ is the biggest business portal & a platform for online business promotion for all Bangladeshi companies. Our mission is to use Internet to bridge Bangladesh with other foreign countries to promote trade, establish and increase connections and communications on business affairs. We’ve also opened the doors for foreign businesses to introduce themselves to Bangladesh.

Bizbangladesh.com is the Top Web Development & Online Promotion Company in Bangladesh.. Specializing in Business Web Solution, Web Design, Web Marketing, E-commerce, Search Engine Promotion and Web Programming Solutions for Businesses and Organizations.

They also provide World Class Web Services including Domain Registration, WebSite Hosting etc.

Bizbangladesh.com is owned & operated by Annex World, a Leading Web & E-commerce Development Company that offers complete online / web solutions for businesses & individuals.

Why use Bizbangladesh.com

Bizbangladesh.com is the most informed & planned business portal of Bangladesh. Our memberships offer unparalleled value. Our robust site features combined with own web zone for our member makes ‘Business info Bangladesh’ a unique site that generates traffic from serious buyers focused specifically on their business.

Bizbangladesh.com thus became a window, the gateway to global market place. A few mouse-clicks at bizbangladesh.com, you’ll discover a world of unmatched business

How Bizbangladesh.com Can Help You

Our online marketing & search engine optimization services increases traffic to your website and improve your rankings in the search engines. online marketing and Search engine optimization services include;

* Website analysis and strategy development

* Optimization implementation services, and

* Rankings maintenance services.

Website analysis and strategy development services:

Key competitor analysis in search engine rankings on same keywords and keyword phrases

Design/Layout/Content analysis & Optimization of web pages.

Identification of other strategic opportunities designed to generate site traffic.

creating search crawler friendly pages with effective keyword and meta tags.

Log files analysis for spider activity and keyword generation.

Optimization implementation services:

Search engine analysis and Submission readiness check (Content, Design, Keywords, Descriptions, and Titles etc.) creating a optimization & Promotion Tactics & execute it step by step.

Submitting and ensuring web site listing

Keywords and phrases research to help your customers to find you.

Continual optimization to maintain and upgrade rank position

Rankings maintenance services like:

continuing Target Market & key competitors analysis

Rolling Promotional strategies

Monitoring of rankings (rankings report)

Re-submission of any pages that have been dropped. Monitoring of search engine/directory activity (activity, that will affect the optimization strategy)

Problem Identification

Three Biggest Problems for Online Marketing

1. Converting leads to sales.

2. Managing an online marketing an online marketing system.

3. Prioritizing time, energy and money for best results.

Online marketing or Web site promotion is more than just adding your web address to your business cards. You should perfectly use the power of the Internet to get in front of more potential customers than ever before. Our online marketing & search engine optimization services help companies reach their active buyers online and profit from their online investment.

Online Marketing & Search Engine Optimization is a time consuming, complex and continual process. Some web designers may submit your website to a couple of search engines, but they often forget is that what is appealing to the human eye is rarely appealing to a search engine spider. This is a separate task all together and requires significant technical expertise to get a company professionally indexed.

Whether you are a small business looking for a presence on the Internet or a successful Internet business

By analyzing above terms probems of online marketing can be identified and resolved.

Objective OF Bizbangladesh.com

Vision:

We envision ‘Business info Bangladesh’ as a leading provider of cost-effective solutions that will enable businesses to obtain a greater online presence with useful and creative advertising mediums in a growing B2B e-commerce environment.

Why use Bizbangladesh.com

Bizbangladesh.com is the most informed & planned business portal of Bangladesh. Our memberships offer unparalleled value. Our robust site features combined with own web zone for our member makes ‘Business info Bangladesh’ a unique site that generates traffic from serious buyers focused specifically on their business.

Bizbangladesh.com is divided into Six main sections.

* Business Directory – Features… Exporters Directory, Importers Directory, Service Providers Directory, Overseas Directory.

* B2B Trade Zone – Features… B2B Sell Offers, B2B Buy Offer, B2B Business Opportunity.

* Company Profile – Features… Details information about the company.

* Product Catalogue – Features… Products information with complete description and photographs.

* Other information – Features… Trade & Investment information, Important Numbers, Business News, Travel information etc.

* Web Services – Features… Domain Registration, Web Hosting, Web Designing, Web Site Promotions etc.Bizbangladesh.com thus became a window, the gateway to global market place. A few mouse-clicks at bizbangladesh.com, you’ll discover a world of unmatched business opportunities. Opportunities, backed by efficient and reliable mix of online and offline value services that enable you to materialize your business dreams, irrespective of the size or type of your business.

Strategic Alliances:

Discoverybangladesh.com – The Bangladesh Travel Guide & First travel & tourism portal of Bangladesh, provide complete travel related information & services under one roof.

Bizbangladesh.com is owned & operated by Annex World, a Leading Web & E-commerce Development Company that offers complete online / web solutions for businesses & individuals.

Available Information in Online of Bizbangladesh.com

www.bizbangladesh.com believes in Result-Oriented Marketing Solutions.

Search Engine Friendly Web Hosting Solution ~

Search Engine Friendly hosting 30 day Money Back Guarantee
USA based fastest servers 100% Uptime Guarantee
Free SSL Secure Server Instant Account Setup

At bizinfo-bangladesh, we offer search engine friendly Web hosting services for our clients. Our state-of-the-art network and data center guarantees faster and more reliable service. And our commitment to adopting the best technologies available means that we’ll continue to provide unbeatable speed and reliability.

Hosting packages are ideal for the growing online business. With plenty of storage, bandwidth and e-mail accounts, you’ll have everything you need to keep your e-commerce site up and running smoothly!

High Bandwidth Connectivity and Redundant Connections allow us to guarantee 100% uptime on all sites. Our 30-day money back guarantee ensures you will be happy & Risk Free with your web hosting service.

We offers a full range of web hosting services Even if you registered your domain through another company, your site can still be hosted by us. Check our premium hosting packages with special rates

Agro / Agritural / Food Products Arts / Craft / Gift & Jewellery Automotive & Automobile Products
Chemicals & Raw Materials Building Construction Products Electronics & Electrical
Energy & Power Beauty and Personal Care Medical & Pharma
Home Appliance & Supplies Computer & Telecom Products Leather & Textile Products
Office & Industrial Spplies Others / Miscellaneous Products Apparel & Fashion Products
Latest Members From Bangladesh
Company Name Biz Type Biz Catagory
Zarif Fashion & Crafts Exporter Sarees
Best Computers Importer Computer Hardware & Accessories
K2 Corporation Exporter Handicrafts & Handmade
Bashundhara Group Importer Fine Chemicals
Adasdsa Asdsa Exporter Auto Parts & Accessories
Dory Nangladesh Enterprises Exporter Menswear
General Properties Ltd. Exporter Other Products
Foodex International Importer Canned Food
A. d. export & Import Importer Electronic Instrument
Taurus Elevaors Ltd. Importer Escalators & Lifting Equipment
B. trade International Exporter Frozen / Dried / Processed Food
Nipun (pte) Ltd. Exporter Jeans
Life Family Co. Ltd Exporter Leather & Textiles Accessories
Fashion Exclusive Ltd. Exporter Readymade Garments
Quality Automobiles Importer Automobile & Commercial Vehicles
Latest Members From Overseas
Company Name Country Biz Catagory
Taiwan Benefit Company (tbc) Taiwan Agro / Agritural / Food Products
Abe Hoang Manufacturer Email: Abehoang@asia.com Others Agro / Agritural / Food Products
Dhanwant Metal Corporation India Chemicals & Raw Materials
Waste Oil Solution Plant Co. ltd. Chile Energy & Power
Computer Wholesale Centre Limited United Kingdom Computer & Telecom Products
Hebeikeshun Chemical Import & export Co. ltd. China Chemicals & Raw Materials
Hongyuan Hengye Machinery Co. Ltd. China Electronics & Electrical
Matetrade China Apparel & Fashion Products
Infiniti Buying Services Pakistan Leather & Textile Products
Shanghai Construction Machinery Group Co. ltd. China Building Construction Products
Branch Office Of Dalian Linyuan Machinery & Equipment Co. Ltd. China Automotive & Automobile Products
Shraddha Associates (guj) Pvt. Ltd. India Chemicals & Raw Materials

Domain Name Registration ~

For as little as $11.50 (Tk. 750.00) per year registration fees, you can secure your own domain name (www.yourname.com) We offer most of the top level domains and country code domains like .com .net .biz .org .bd .uk etc.

A domain name is your web address. A short, easy to remember domain name or names can be invaluable to the success of your website. If you need ideas about good domain names, need help or have questions, call Bizbangladesh.com at 0192-4714040 or 9664421.

Register your domain name now before someone else does. We offer reliable and secured domain name registration services with instant hosting setup.

At bizbangladesh.com, they provide quality hosting and are so confident in our service that we offer a 30-day money back guarantee. If you are not satisfied with any portion of our service, no questions asked!

** please remember that Business info Bangladesh will happily work with you to create your own hosting package with options that are not specifically listed at our Website Hosting Packages.

Objective Of Providing Information

Search engine analysis and Submission readiness check (Content, Design, Keywords, Descriptions, and Titles etc.)

creating a optimization & Promotion Tactics & execute it step by step.

Submitting and ensuring web site listing

Keywords and phrases research to help your customers to find you.

Continual optimization to maintain and upgrade rank position

Rankings maintenance services like:

continuing Target Market & key competitors analysis

Rolling Promotional strategies

Monitoring of rankings (rankings report)

Re-submission of any pages that have been dropped

Monitoring of search engine/directory activity (activity, that will affect the optimization strategy)

www.bizbangladesh.com belive in Result-Oriented Marketing Solutions.

Available Information

Which type of data required: We offers a full range of web hosting services Even if you registered your domain through another company, your site can still be hosted by us. Check our premium hosting packages with special rates.

Starter Business Business Plus
100 MB Space 250 MB Space 500 MB Space
5000 MB Bandwidth 12000 MB Bandwidth 20000 MB Bandwidth
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Tk. 1500 / yr Only Tk. 2800 / yr Only Tk. 4200 / yr Only
List Your Business at one of the Biggest & Faster Growing Business Directory and become a part of the global marketplace – its’ FREE
:: Manufactures/Exporters Pages

:: Importers Pages of Bangladesh

:: Service Provider Pages

:: Pages for Overseas Businesses
>> List Your Business
>> Update Company Profile
Company Name Biz Type Biz Catagory
Zarif Fashion & Crafts Exporter Sarees
Best Computers Importer Computer Hardware & Accessories
K2 Corporation Exporter Handicrafts & Handmade
Bashundhara Group Importer Fine Chemicals
Adasdsa Asdsa Exporter Auto Parts & Accessories
Dory Nangladesh Enterprises Exporter Menswear
General Properties Ltd. Exporter Other Products
Foodex International Importer Canned Food
A. d. export & Import Importer Electronic Instrument
Taurus Elevaors Ltd. Importer Escalators & Lifting Equipment
B. trade International Exporter Frozen / Dried / Processed Food
Nipun (pte) Ltd. Exporter Jeans
Life Family Co. Ltd Exporter Leather & Textiles Accessories
Fashion Exclusive Ltd. Exporter Readymade Garments
Quality Automobiles Importer Automobile & Commercial Vehicles
Latest Members From Overseas
Company Name Country Biz Catagory
Taiwan Benefit Company (tbc) Taiwan Agro / Agritural / Food Products
Abe Hoang Manufacturer Email: Abehoang@asia.com Others Agro / Agritural / Food Products
Dhanwant Metal Corporation India Chemicals & Raw Materials
Waste Oil Solution Plant Co. ltd. Chile Energy & Power
Computer Wholesale Centre Limited United Kingdom Computer & Telecom Products
Hebeikeshun Chemical Import & export Co. ltd. China Chemicals & Raw Materials
Hongyuan Hengye Machinery Co. Ltd. China Electronics & Electrical
Matetrade China Apparel & Fashion Products
Infiniti Buying Services Pakistan Leather & Textile Products
Shanghai Construction Machinery Group Co. ltd. China Building Construction Products
Branch Office Of Dalian Linyuan Machinery & Equipment Co. Ltd. China Automotive & Automobile Products
Shraddha Associates (guj) Pvt. Ltd. India Chemicals & Raw Materials
Agro / Agritural / Food Products Arts / Craft / Gift & Jewellery Automotive & Automobile Products
Chemicals & Raw Materials Building Construction Products Electronics & Electrical
Energy & Power Beauty and Personal Care Medical & Pharma
Home Appliance & Supplies Computer & Telecom Products Leather & Textile Products
Office & Industrial Supplies Others / Miscellaneous Products Apparel & Fashion Products

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Featured categories:

Phone system ,credit card and processing credit, telemarketing ,web design, postage meters , payroll services , POS system ,steel building , Residential Steel Building ,Merchant Services ,Inbound call centers, VOIP etc.

Methodology: It is-

1. Set of system or methods , principles , and rules for regulating a given discipline

2. Philosophy

3. The branch of logic that deals with the general principles of formation of knowledge.

4. Usage roblem means technique or procedure, method.

In recent years methodologies been increasingly used as a pretentious substitute for method in scientific and technical methods. The website BISINESS BANGLADESH.COM is using some specific techniques

Internet Marketing Methodology

Bruce Clay, Inc. is a professional internet marketing services and consulting firm that has developed many specific methods and processes to maintain a constant and clear track towards increasing website traffic. Since 1996 we have offered a variety of free information and advice on Search Engine Optimization and will continue to do so in the future. You will be able to find free advice on most topics having to do with search engine marketing, but if by chance you find an area we have yet to cover, let us know and we’ll add that to the site in the near future.Our internet marketing strategy and methodologies are designed to cover a wide range of problems. Because our approach is synergistic, true advantages will come from applying many of our search engine marketing methodologies at once.

Pay Per Click (PPC) Methodology

PPC Methodology takes you from keyword selection to account set up and management, to tracking result and adjusting ads for improved click-thru to measuring ROI. Google, Yahoo! and MSN are the main focus of our Pay Per Click process. Like search engine optimization, each pay per click marketing campaign will be different from the next but the methodology allows for general guidelines to be followed with room for adjustments along the way.

For improving your own PPC campaign, our PPC Methodology page will give you a wealth of information on pay per click advertising. If you are currently running or are interested in starting a PPC campaign but know you don’t have time to do this yourself, please visit our PPC Services page to see if our pay per click management services fit your needs. Need to know what types of tools you may need to manage your own campaign? Visit our PPC Tools pages. If you need training or more education on what PPC is, please visit our PPC Training page. If our search engine marketing services seem like the right fit, your next step would be checking out our PPC Rates. Web Analytics Methodology

Web Analytics Methodology

Having data to analyze your Web site traffic, conversions, etc. is very important for any site owner interested in making their site a success. With web analytics, you can understand your visitors, traffic patterns, search engine marketing campaigns, conversion dynamics and more. This tool can make it easy to fine tune your website and campaign performance to enhance your internet marketing strategy which will allow you to maximize your return on investment (ROI).

Learn more about our Web Analytics Methodology, Web Analytics Services, and specific Web Analytics Rates.

SEO Web Design Methodology

Designing a website that will appeal to both the search engines and users is no easy task; however, our SEO Design Methodology section can it make it easier. We will help you plan your site, using Web personas to help you identify the needs and goals of your target audience. We’ll also take a look at your competition and analyze how they are meeting their goals to find ways to improve on their search engine marketing strategy. Learn how to lay the groundwork for your site’s design, focusing on its architecture, navigation options, content decisions and coding. Our goal is to give you all the search engine optimization information you need so your site can stay on top of the search engine rankings.

Learn more about SEO Web Design Methodology, Web Design Services, Web Design Tools and specific Web Design Rates.

Online marketing studies and surveys are a well-established market research methodology. Online marketing research is deployed after carefully considering research design factors. Clients include B2B and consumer marketers, advertising agencies, and venture capital firms.

Three Biggest Problems for Online Marketing

1. Converting leads to sales

2. Managing an online marketing an online marketing system

3. Prioritizing time, energy and money for best results

The difference between a successful and unsuccessful website is in many cases a question about how it’s marketed and promoted.

Online marketing or Web site promotion is more than just adding your web address to your business cards. You should perfectly use the power of the Internet to get in front of more potential customers than ever before. Our online marketing & search engine optimization services help companies reach their active buyers online and profit from their online investment.

Online Marketing & Search Engine Optimization is a time consuming, complex and continual process. Some web designers may submit your website to a couple of search engines, but they often forget is that what is appealing to the human eye is rarely appealing to a search engine spider. This is a separate task all together and requires significant technical expertise to get a company professionally indexed.

Whether you are a small business looking for a presence on the Internet or a successful Internet business looking for a well planned promotion campaign, you’ve come to the right place.

Prospect

Now- a -days Online Marketing has become very popular because of low cost, as it is on the internet, IT is very fast , & you can reach a global audience as well as it has some disadvantages too-as hard to tell if people are ling because you cant see their face & you can be overloaded with information .The Internet is made up of electrons , so there is not really anything physically to grab hold of like in a brick or mortar business .this considerably reduces cost and we don’t really need many materials or buildings. Just a computer with World Wide Web capabilities. The Business Bangladesh.com is well established website company having wonderful marketing strategy on prospects to provide the people at the necessary goods and services.

Findings

About Business info Bangladesh –

[ www.bizbangladesh.com ]

www.discoverybangladesh.com

info@bizbangladesh.com

www.webhostingbd.com

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Ayojon: Event Management

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Ayojon

The venture, an event management firm will be known as Ayojon. Ayojon is a Bangla word which means making arrangements or organizing.

The company will be a sole proprietorship and be registered under the Bangladesh Company Act, 1994. If required the form of ownership will be changed in time.

Ayojon will be a service oriented company that is the firm will provide intangible goods or perform useful labor on behalf of another person.

The company will start its operation in early 2006, if everything goes as planned by the proprietor.

For the purpose of registration the entrepreneur must acquire the following licenses.

1. Trade License – From Dhaka City Corporation

2. Article of Incorporation – From Registrar of Joint Stock Company

3. Tax Certificate – From National Board of Revenue.

The location of the office for Ayojon will be decided when the firm will go into operation in 2006. The location for the office will be decided based on the convenience of the prospective customers of the company. The probable locations are Dhanmondi or Gulshan. Uttara is also in the list of probable location, if that is convenient for the customers.

Mission of Ayojon will be to provide its customer services to their utmost satisfaction.

Ayojon pledges its dedication to serve the community with quality services and set an example of professionalism and ethical business practices in the industry.

The vision of Ayojon is centered towards becoming the market leader in event management within 5 years of inception through hard work and commitment, maintaining the leadership and carrying the flag of uncompromising quality into the unforeseen future with constant value addition and a strong line of innovation.

Scope of Operation:

Ayojon will start its operation in a small scale, targeting a segment of the market that has not been

targeted by the existing firms before. It will focus its attention to the needs of the small and medium sized organization – both profit and not-for-profit.

Historically ours has been a culture that nourishes strong roots of occasions. We as a nation like to celebrate a lot of events, and our program calendar hardly sees a week when anything significant does not take place. In congruence with that ongoing heritage of celebration that is instilled in us, the concept of event management is as old in our culture as the concept of celebrating that event. What has been lacking until recently is the ability to see the big picture – which is the ability to see the opportunities and the problems associated with such big scale events. And this is precisely where event management fits in.

The event management industry in Bangladesh is not yet fully developed. There are few established event management firms in the country. The three established solely event management firms are Jetset PR, Antar Showbiz and Wizard. These firms are dedicated exclusively to the show business events.

But, the corporate market for event management has largely been unexplored. Although there is a demand for professional event management organizations, there is few such firms that cater exclusively to this demand. The advertising firms made the most of this situation, as they took up event management as a very lucrative side business. The initiative of managing their client’s events was started by Asiatic ad agency and soon followed by most of the advertising agencies. In fact Asiatic was so much interested to see the profit in this sector, that they have opened a separate subsidiary called Asiatic EML, for the sole purpose of managing their clients’ events. But other than that, no significant movements were taken to create a service firm for the purpose of managing the client’s events professionally.

A market survey conducted by a group of MBA students of IBA made an effort to find out the customer satisfaction level with the existing firms that provide event management services. The surveyors asked the clients of these companies to assign different numbers to the following seven dimensions of a company’s event management capability. The average is presented below.

Here 5 = Highest satisfaction with the service

1 = Lowest satisfaction with the service

CEMS Asiatic EML Uni-trend Media

comm

 Bitopy Grey Andes Ad

comm
Consistency of

Services &

Professionalism

 3 3 4 3 2 3 4 2
Fulfilling Commitments 1 3 5 3 2 3 4 2
Timely service 4 1 2 1 3 4 4 3
Creativity 2 5 3 1 1 2 4 2
Proactive 3 3 4 3 2 3 1 2
Low Charges 1 4 3 3 3 2 3 2
Quick reaction

to complaints

 1 3 4 3 3 2 4 3
Total 15 22 25 17 16 19 24 16

From the survey, Unitrend, Andes, and Asiatic EML can be identified as major players in the industry of event management. They have a high profile client base like –

· Lever Brothers

· British American Tobacco Bangladesh

· ACI

· Social Marketing Company (SMC)

· GQ Ball Pen

· BRAC

· Pran

· Saudia Airlines

· GMG Airlines

· Siemens

Unitrend and Andes are basically advertisement agencies, which provide event management as additional service. As mentioned before, Asiatic EML is a subsidiary of advertising agency Asiatic.

Other than Asiatic EML, CEMS (Conference and Exhibition Management System) is currently the only firm delivering event management services.

Demand Analysis

Windmill is an advertising firm, which also manages their clients’ events as a side business. According to Reazuddin Mosharaf, the CEO of Windmill, the demand for professional event management firms has been strong and the number of events as well as the number of customers getting interested to look for professional help in arranging their events is increasing. The demand is growing at the rate of 16% every year. (Page 21, A Performance Analysis of the Advertising Companies in Bangladesh, Farshed Alam, Institute of Business Administration). But, the supply is nowhere near to match the demand. This large gap between supply and demand presents an opportunity for the entrepreneurs in this sector.

In most cases, managers from different departments are brought together to form a committee to manage corporate events. This arrangement put extra pressure on the managers and sometimes results in lack of professionalism as managing an event professionally and cost efficiently require a good liaison with a number of suppliers. A manager responsible for other corporate activities usually cannot maintain this liaison. But, it is not financially feasible for organizations to recruit a manager solely for the purpose of managing the corporate events, which is not more than a few per year in numbers. Hence more and more organizations are looking for professional help in managing their events.

Non-corporate sector also presents opportunities for the potential event management firms. Even a decade ago family programs used to be organized by the family members. For example during any wedding, family members from all around the country used to come together to arrange the ceremony. But, with everyone spending more time in the workplaces, arrangements of family events like weddings or akikahs by the family members are becoming increasingly difficult. Again people are looking for professional help in arranging family programs.

The survey mentioned in the earlier section revealed that there is a high demand for professional event managers. The result of the survey is shown below:

Target Customers Questions Asked YES NO
Corporate Customers Do you feel the necessity of a professional Event Management company who can organize your events? 66% 34%
Do you feel that a professional Event Management company will add significant value to the way your events are organized? 82% 18%
If any firm offers exclusively event management services, would you be willing to use them? 80% 20%
Non corporate Customers Do you feel the necessity of a professional Event Management company who can organize your events? 59% 41%
Do you feel that a professional Event Management company will add significant value to the way your events are organized? 63% 37%
If any firm offers exclusively event management services, would you be willing to use them? 72% 28%

To be successful, a firm must do a better job than its competitors in satisfying target customers. That is why marketing plan must be geared to the needs of customers and also to the strategies of the competitors. An organization should constantly compare the value and customer satisfaction delivered by its products or services, prices, channels and promotion with those of its close competitors. In this way they can discern areas of advantage and disadvantage.

Customers

Y Market Segmentation

In Bangladesh, the prospect for event management firms is very good. The vast market out there has not been explored yet. This market can be divided into three major segments.

· The corporate clients

· The non-corporate clients

· The Bangladesh Government

The Corporate Clients

This segment includes various multinational companies, local public and private limited companies, financial and non-financial institutions, joint ventures and franchises, small businesses, NGOs, research institutions, private and public educational institutions, showbiz companies, social marketing companies, theater groups, cultural forums etc.The corporate clients are located in Gulshan, Dhanmondi and Motijheel – which will be the main area of focus while conducting the marketing activities.

MNCs that are situated in Gulshan are the biggest market for event management companies.

Customer Segment Main Concentrated Marketing Zone No. of

Events done in a Calendar Year

 Main Events Done

Frequently
1 Multinational companies are frequently engaged in big events. i) Gulshan

ii)Dhanmondi

 15-20 i) Promotional campaigns

ii) Launching of new products
2. Local service

companies are the

least interested in

conducting big

events.

 i) Dhanmondi

ii)Uttara

 0-5 Only interested in events regarding opening new branches. But even then they prefer to do it by themselves as the events are relatively done in a manner which can save cost.

MNCs are willing to add professionalism in event management and looking for innovative and improved ways to manage their corporate events. The survey mentioned in section 02 found out, most of the companies would like to be associated with an event management company, rather than conducting their events in-house.

Target Customers Value professionalism in Managing Events Willing to pay a premium value for good event management Prefer to outsource the management of their events to an event management company Looking for ideas of innovative events to be associated with
MNC ü ü ü ü
Local Manufacturing Companies ü ü ü
Local Service Companies ü
Private and public educational institutions ü ü ü
financial and non-financial institutions ü ü ü ü
small businesses ü ü

The Non-Corporate Clients

Due to changes in our socio-cultural and economic condition, people are spending more time at work. As a result, they have less time to spend on social affairs – get together or a may be a birthday party for the children. These people make up the non-corporate client segment of the event management market.

This segment can be subdivided on the basis of age, income and religion.

Age based sub-segment

Aged below 26

Ayojon hopes to tap the early college graduates who have begun their professional careers but have not yet started their families. These events will focus mainly on themes with moderate to high energy appeal, such as, dance parties, concerts, fund raisers etc. The majority of weddings will fall into this segment.

Ages 27-55

The persons that fall into this age group are employed, middle to upper-middle class families. The reason they choose event planners is they are too busy to do it themselves, such as picnics. The majority of special occasion planning will occur in this market segment.

Ages 56 and Above

Persons over the age of 55 have reached the turning point of life. Many are retiring; others are celebrating anniversaries of significant years, and still others are seeing that their children’s special events are taken care of. Most holiday parties, birthday parties and other special occasions, such as wedding receptions and reunions, will occur in this market segment.

Religion based sub-segment

The major religious group in our country is the Muslims. The minority religious groups include the Hindus, the Christians and the Buddhists. Although these religious groups live in harmony, they have some distinct rituals, weddings for example. So, these groups have to be offered with different packages based on their different religious practice.

Income based sub-segment

Ø Personal Income– Over 15,000

Ø Personal Income– Over 20,000

Ø Personal Income– Over 35,000

On the whole, this segment represents upper middle to high income families. This segment has strong family bonding and they are willing to pay professional event management firms to arrange their family programs.

The Bangladesh Government

Another major segment in this market is the Bangladesh Government. Each year the Bangladesh Government hosts a variety of programs. Which firm will be in charge of these programs are decided by tenders.

Target market determination

As has been mentioned before, the market for event management has been unexplored. But, at the same time, this market is too vast to be targeted by a small firm like Ayojon. To be successful Ayojon will have to focus its attention to segments or niches that the big players have overlooked or ignored. This way, Ayojon will be able to avoid confrontation with the major players in the market by specializing along market, customer, service and marketing mix lines. Through smart targeting, Ayojon will be able to earn as much profit as the market leaders.

A study reveals that the corporate customers are moderately satisfied with the way their events are managed.

Target Customers Very satisfied Moderately satisfied Neutral Moderately dissatisfied Very Dissatisfied
MNC 12% 42% 22% 16% 8%
Local Manufacturing Companies 11% 34% 12% 26% 17%
Local Service Companies 3% 24% 56% 9% 8%
Private and public educational institutions 15% 23% 19% 10% 33%
financial and non-financial institutions 22% 46% 13% 3% 16%
small businesses 2% 28% 22% 36% 12%

The corporate clients, especially the MNCs are very much willing to engage in long-term contracts with professional event management firms. But most of them already have contracts with various advertisement firms for their event management. They are not willing to terminate their contract immediately and would like to engage both an event management firm as well as advertising firms on a short term basis to see just how much value professionalism adds to the process of event management. But, the number of events that these corporate clients are going to initiate is likely to increase by more than 10% in the coming year. Most significant increase will take place for the manufacturing companies and MNCs. This will present Ayojon with the opportunity to have contracts with established MNCs.

Ayojonwill also target the local manufacturing companies, local service companies, private and public educational institutions, financial and non-financial institutions, and small businesses. As it is very unlikely that the number of events the corporate customers initiate would decrease in coming future, the firm is looking at a very positive market indicator.

Ayojon will also target the Government programs and bid for them. This will give Ayojon a boost in image, which will help the firm to capture the attention of the whole market.

A study revealed that the personal customers are very much interested in event management services.

Ø 66% of the consumers said that they are willing to appoint an event management company to organize their events if the price is affordable.

Ø 59% of the customers claimed that they do not possess the necessary expertise to conduct a big personal event successfully without outside help.

Ø 68% of the customers claimed that they would appoint an event management company to save time. 22% will do it because it will make their life hassle free.

These customers will form Ayojon’s non-corporate target group. The firm will focus on the residential areas of Gulshan, Dhanmondi, Baridhara, Uttara, Banani – as these locations represent the affluent income groups among the general population who can afford Ayojon’s services.

So, for Ayojon, there are four distinct niches that the firm can serve effectively.

Niche Identification and Characteristics Events
Niche 1 Growth obsessive MNCs with plenty of brands. These companies are looking to either reposition or redeem the brand image of some of its brands. Designing promotional campaigns and events associating various brands with various special days celebrated, like Family Day.
Niche 2 MNCs, and other big and small local companies which want professionalism and “one-stop” service in managing their events. These companies are moderately satisfied with the current event management situation, and see room for improvement. Product launching, Annual general meetings (AGM), Suppliers meeting, fashion shows etc.
Niche 3 People who are well aware of the huge amount of time and hassle it takes to arrange an event personally and also well aware of the usefulness of the professional help in arranging their personal event. Wedding ceremony, birthday and graduation ceremonies, high school reunions etc.
Niche 4 The Bangladesh Government who sponsors a number of events every year. National Tree Plantation Week, National Science Week, LDC Ministers’ Conference etc.

Services to be provided

Ayojon is mainly service oriented, where we will be offering the following services initially. We have divided these services into four groups, where each group has its individual name, individual target market, individual positioning strategy and individual growth pattern. These four groups are –

Customized Corporate Events

These are the events that are generally conducted by various advertisement companies and event management companies with direct orders and specified guidelines from different corporate clients. Ayojon is also planning to do them, but its offer will be different in this sense that the firm is going to add professionalism to the service, by providing “one-stop” service for the customers. Ayojon is going to cut down the hassle required in arranging the events, and also through superior supplier relationship the firm will reduce the total time required to arrange these events.

Creative Corporate Events

These are the events that are currently not performed by any of the companies but present an opportunity through which they can enhance their corporate and brand image. Ayojon will come up with ideas of new events and the firm’s sales people will pay an occasional trip to the companies, present the idea before them and point out the benefits that they can have by conducting that event through the firm’s guidance. For example – there is a current trend in our country of associating different brands with different occasions, such as, Anchor with Mother’s Day and Ponds with Women’s day. Ayojon will come up with ideas that will associate different brands of different companies with different occasions like that, come up with ideas of events (such as, Talk Shows) that will strengthen the bond between that concept and the brand and present them in front of the companies.

Customized Personal Events

These are the events that are currently done by individuals through their own initiative – but often require too much time or effort for his or her liking. That is why Ayojon is presenting the concept of event planning for individual events like high school reunions, graduation ceremonies, wedding ceremonies etc for the first time.

Government Events

These are the events that Bangladesh Government sponsors for various purposes, like the national week for science and technology, national tree plantation week, etc. The Government also hosts programs like LDC Ministers’ Conferences. These programs present enormous opportunity for Ayojon.

Using Computer Technology Effectively

In order to provide better services to its customers than the competitors, Ayojon will maintain a number of databases –

Customer database

There will be separate databases for corporate clients, non-corporate clients, and the Government programs. This database will provide the firm with a tool to create loyal customers and provide them the best value. Ayojon maintains that creating new customers is much harder than retaining them.

Supplier database

This database will include name of the suppliers, their office location, name of their products and/or services and price tags.

Venue database

This database will include name, location, and rent of different venues in the country.

Using Internet Effectively

Keeping in mind the effectiveness of a net solution, Ayojon has decided to add online services for its customers. This website will allow the customers to log on 24 hours a day and order for their events, and also view what are the resources that are available to him or her for arranging desired event. The website will help a customer to express his or her opinions or launch a complaint, so that the firm can quickly get back to the particular customer in the least possible time. Ayojon plans to hire an IT specialist who will maintain the website. Data from the website will directly go to the customer relations department. The website will be updated daily for the convenience of the customers.

Ayojon will launch its website at the very beginning of its operation in early 2006.

Products or Services to be introduced in the Future

After Ayojon starts its operation, it will introduce new products or services to add value to its existing services.

Step-by-Step event Planning Guides

These booklets include a calendar to map out the event, a step-by-step guide on what is needed for and how to put together a successful, worry-free event, resource information, popular refreshments with recipes, games, and tips to put their event in the record books. The events available include meetings, retreats, parties, vacations, and special occasion celebrations such as graduations, holidays, showers, weddings, and receptions.

Resources Manual

This valuable guide acts as a review for all the resources located in the surrounding area. A ranking is given to the various services, such as caterers, decorators, disc jockeys, bands, and facilities. This manual gives the client the freedom of making a choice based on experience.

Core Competencies and Uniqueness of the Services

Ayojon’s core competency is based on two value additions that the firm will be providing. These value additions will position the firm totally apart and always ahead of any existing and potential competitors. These two value adding dimensions are stated below.

Professionalism

Various event management and advertising companies are already arranging most of the corporate events – but they are done very informally, with most of the things being done at the last moment. As a result the only available supplier is being contracted, the only available venue is booked and temporary employees and volunteers are hired in a very informal way from their known people to work during the event. But Ayojon is planning to do it in a thorough and professional way – where the firm’s main emphasis would be saving time of the clients, making an assortment of supplier available for the client through strong networking with suppliers, getting the booking list of the venue available to the customers and frequently updating them, allowing the customers to know what is available 24 hours a day through logging on to the website and hiring temporary workers in a very professional way from credible sources.

Innovation

Ayojon’s distinct and most fundamental capability is that the firm will always be adding innovative ways to serve the customers. At the beginning, the firm will be allowing the customers to get updated information of what is available regarding their events, from the firm’s website. Other than this, Ayojon is also planning to introduce step by step guides and resource manual in future – each of these products being the first of its kind in the country.

Pricing of the Service

Price is the most sensitive element of marketing mix. Once set at a level, it is hard for any firm to change it. As a new comer in the market, Ayojon has to be careful in pricing its services. After considering a number of factors, Ayojon has decided to offer its customers a number of packages – all based on mark up pricing.

10% Mark Up Package

This package is for the corporate clients and to be used in bids for Government programs. Currently, all other companies are charging 15% mark-up on existing cost as agency charge. Ayojon is charging only 10% – to send a message that the firm is not only providing superior services, but actually providing them with much lower cost. This is a strategy that Ayojon will use to lure clients from the competitors.

It will also attract small corporations, who at present are unwilling to hire event management services due to high costs associated with it.

Mark Up Package

This package is also for the corporate clients – those who are interested in sponsoring charity programs. For example, a company wants to sponsor a concert to raise funds for children suffering from cancer. If they hire Ayojon to organize the concert, the firm will charge them 8% mark up on cost instead of usual 10% mark up on cost.

15% Mark Up Package

This package is for non-corporate clients. In this case the firm is charging higher with 15% mark up over prices. The purpose is sending a message that Ayojon is not interested in small events and also to communicate to the market that the firm is providing quality services at a premium price. Ayojon is claiming that the firm is looking for prestige and professionalism – and someone looking to cut cost in a birthday party is not the person the firm is looking for.

Sometimes customers may want to reduce the price. However in most of the cases Ayojon will try to ignore these requests as they will hamper the firm’s business in long run and it will be able to assure the customers that the cost is a result of quality the firm is providing.

Distribution of Services

Ayojon is looking to distribute its services in two ways.

· Traditional distribution network.

· Non-conventional Distribution network

Traditional Distribution Network

In this process the customers will call Ayojon or come to its office in search of help to organize events.

Non-conventional Distribution Network

Positioning of the Firm

Most of the services of Ayojon are positioned to take advantage of future market opportunities and openings. For that the firm has tracked the current market trends, forecasted the future market openings and positioned the services and service upgrades accordingly.

Trend 1

In a not so distant future, people will be so hard pressed for time that they will try to save time as much as possible from possible sources.

To keep in pace with this trend, Ayojon has prepared a website where people can get access 24 hour a day to make advance bookings for events, to see which venue is open for booking at which date without making several phone calls, to get access to the firm’s assortment of services without coming to the office etc. – all of which will help people to save a substantial amount of time.

Trend 2

An inevitable impact of western culture which is currently prevalent in our society would mean that people would look for new ways to express their identification with the west – which will enforce a more party going, free-spirited behavior.

For that, Ayojon is planning to introduce a few events initially which is very much prevalent in the west but not yet introduced in our culture. Some of these events are Drive-In movies; Mask party, etc. If maximum security and professionalism is adopted, people will be very much willing to adopt this new time-passes.

Trend 3

With the advent of technology, people will look for more and more customized product and service.

Ayojon’s focus will be to customize the services as much as possible to cater to the customers’ need better.

Promotion

Ayojon is a new organization and certainly needs exposure to the market before it moves into business. So the firm has divided its promotional campaign in a number of dimensions

v Pre-Launching Promotion

v Advertisements

v Relationship management

v After sale service

The firm must also consider the following aspects for promoting

v Public awareness building

v Service attributes promoting

v Success promoting

Y Pre-startup promotion

The pre-startup promotion period will determine our initial market share and reputation in the industry. As we are forming a new organization and moving into the industry for the first time, we need to create organization image and familiarity among our customer base. To do this we plan to perform the following promotional activities:

Press Conference

After forming the organization, Ayojon will arrange a press conference to announce the date of starting operation of its business and other related information about other service. This will be the firm’s first formal approach to the target market. In event management business, media plays a very important role as they can enhance the image of the firm’s services if properly used. The following is a summary of the pre-launching press conference:

The conference will be held 15 days before inaugurating.

It will be held at a reputed venue, preferably a reputed hotel.

About 100 selected media people including journalists, and selected business people will be invited.

Full-time employees of Ayojon will be introduced to the invitees so that future relationship becomes easier.

Cost of the press conference will depend on the venue of the press conference. If the press conference is held at a hotel in Dhaka, it cost will be near tk.50,000.

News Coverage

In the press conference, Ayojon will have to make sure that the firm is covered well by the media. The right exposure to the market through media should be achieved. The firm should also make sure that the event and the organization – Ayojon – make story in Naksha (weekly supplement of Daily Prothom-alo) and Lifestyle (weekly supplement of Daily Star) and other supplements like those.

Advertisements

After the successful completion of the press conference, Ayojon will emphasize on the 14 days that the firm will have before inaugurating. At this point the promotional campaign will be intense and very critical for the success of the organization. To do this the firm will take the following steps:

Newspaper Advertisement

Ayojon will start advertising on newspapers seven days before the inauguration. The firm may select two Bangla and one English daily (preferably Daily Prothom Alo, Daily Jugantor and Daily Star). The Ad on first four days will try to create public awareness about the event management organization. On the 7th day which would be the inauguration day, the firm will give a full-page prospectus on those papers about Ayojon’s organizational activities, services and other related topics.

Number of Advertisement 11 Advertisements
Number of Full-page Advertisement 1
Number of Half-page Advertisement 10
Cost of Full-page Advertisements (in taka) 80,000
Cost of Half-page Advertisements (in taka) 200,000
Total Cost 280,000

Moving into the first month of the business, the firm must consider new promotional tools to reach the target market. For that purpose, Ayojon will continue with newspaper advertisement in the first month of business. However the firm will move the advertisements in the third page of the newspaper instead of the first page. Ayojon will select one Bangla and one

English newspaper (preferably Daily Prothom Alo and The Daily Star). The ads will come to each paper once every week (in different days for the selected papers).

Number of Banners 20
Location Firmgate, Mahakhali, Mirpur, Dhanmondi, Gulshan, Motijhil etc
Size 10 ft X 4ft
Cost (Taka 2000 X 20) Taka 40,000
Number of exposure 8
Size 3 column 4 inch
Color Two color
Total Cost (in taka) 48,000

After first month the frequency of newspaper advertisements will be reduced and will be shown once in two weeks and in the process only 4 times per month.

Banners

Banners will be put on prime points on Dhaka city for the launching and long-term promotional campaign. The locations chosen for the banners are Firmgate, Mahakhali, Mirpur, Dhanmondi, Gulshan, Motijhil etc.

Formal Inauguration and Cultural Show

Ayojon will arrange an inauguration ceremony in reputed venue. The program will include the following parts:

In this ceremony, the firm will invite representatives of its potential corporate customers, media people, media stars and some of the top business person. Approximately 200 guests will be invited in this ceremony. The program will be covered by print media. Special gift items will be given to the guests. The cultural program will be performed by local artists.

Number of Guest 200
Number of additional person 50
Total Guest 250
Cost of gift items( 200×150) Taka 30,000
Cost of the Dinner (250×400) Taka 100,000
Cultural Program Taka 50,000
Other costs Taka 20,000
Total Cost Taka 200,000

Personal contact

The most effective way to negotiate with corporate buyers is using personal contact. By using personal contacts, the firm can influence the decision making process of the corporate buyers and also can attract them. For private users word-of-mouth can be an effective way. Successful arranging of private ceremonies like wedding ceremonies, picnics will enhance the company image as well as developing loyal customer base.

To get in touch with potential corporate customers, membership in different clubs of the city like Dhaka Club, International Club may be helpful.

Open Air Concert

To get attention of the non-corporate customers, Ayojon will arrange an open-air concert. The firm will bring both the traditional and modern singers as well as the top bands of the city to perform on stage. The concert will be held in Army stadium. For that, sponsorship of Transcom Beverage (Pepsi) will be sought.

The cost of the concert will be recovered by selling tickets. The target will be to achieve break-even in this concert so that the firm will not have to incur any extra cost arranging the concert. On the other hand this will also work as a promotional tool for the firm.

Relationship Management

In the modern era, one of the most critical factors of success is to maintain relationship with different interest groups. To decrease the time required to arrange an event, cut cost and preserve quality Ayojon will maintain relationship with the following groups:

Designer

During different corporate events, different souvenirs will be published. The task of designing these souvenirs will be sub-contracted to Chitrolekha Graphics Design.

Printer

The task of publishing different souvenirs will be sub-contracted to a definite printing press. This press will print all the required papers and souvenirs required by Ayojon.

Chef

During wedding ceremonies or picnics, a chef will be needed to cook foods. Ayojon will have a contract with preferably Fakruddin Baburchee to cook in the events organized by the firm, if necessary.

Flower shops

Flowers will be required for decoration purpose. Ayojon will sub-contract the supply of flowers to a reputed flower shop of the city.

Decorators

Ayojon will also maintain relationship with a decorator, in case their service is required for any event organized by the firm.

After Sale Service

The customer relations department will call the customers after the completion of every event, to know whether the customer is satisfied with the service they have got. They may also congratulate the customer on the successful completion of an event. All these will boost the good image that the company will promote regarding their service – since the customer will think that Ayojon really care about the customers.

The customer will get the chance to express his/her complaints at any time in the website. The IT department will pass that complaint to the customer relationship department, who will reach the customers to solve his/her dissatisfaction at the least possible time which will give the firm a superior service image in the eye of the customers.

The main element of Ayojon’s service mix, created for the sole purpose of making a commercially viable service offer, will have to be the firm’s skilled human resource. Ayojon is not a primarily technology based company – and with such reliance on the human element of the enterprise, the firm has the unique opportunity to introduce high-class professionalism with a hint of personal touch. The dedicated and versatile employees recruited by the firm must be keen to serve the industries’ best and their diverse natures and skills should allow the firm to cope with any pressing situations in the near future.

Organizational Structure

Ayojon will have four departments. These departments as well as their functions are stated below

Departments Sections Functions
Marketing This department will have

three sections.

 Sales Section The sales department will perform the duties of selling the events that the firm is going to create and find sponsors for them. They will keep liaisons with the specific corporations.
Customer Relations Section The duties of this section would be to keep good relationship the clients.
Media Relations Section The duties of this section would be to keep good relationship with the media.
Event Management The basic duty of this department is to conduct the events in an organized fashion. The employees of this department will co-ordinate the various activities such as renting the facility, arranging decorations, providing refreshments, and the other specific activities.
IT This department will be responsible for maintaining databases, and the firm’s website. The employees of this department will also inform the customer relations department of any grievances sent by the customers through the website.
Finance The finance department will carry out the functions regarding financial decision-making, cash flow management and financing options.

Number and Designation of the Key Personnel

There will be five key positions in the firm. Their designations are given below:

· Chief Executive Officer

· Head of Marketing

· Event in Charge

· Head of IT

· Chief Financial Officer

For each key position, one person will be employed. It total, there will be five key personnel.

Number and Designation of Other Employees

Other than the five key personnel, there will be eight other employees. Their designations are given below:

Department Designation No. of Employees
Marketing Sales Section Sales representative 02
Customer Relations Section Customer relations executive 01
Media Relations Section Media relations executive 01
Event Management Executive, Event 02
IT Executive, IT 01
Finance Executive, Finance 01

A cleaner will also be employed for cleaning services and. People who can cook will be given preferences in this position.

Job Description

Each employee of Ayojon will have a specific responsibility. The following table provides job description of the Ayojon employees.

Name of the Position Job Description
Chief Executive Officer Should oversee the whole decision making process, and make the final decision

Should chair the meetings and be the center of all activities.
Head of Marketing Keeping good relations with the clients

Monitoring sales

Ability to rectify customers complaints

Persuading customers to try out the innovative services of the company

Maintain good relationship with the media and stakeholders
Event in Charge Designing the event schedule

Coordinating the different functions to perform an event

Controlling the events

Taking corrective actions if anything goes wrong

Maintaining good supplier relationship

Recruit temporary help if required

Coordinating all the activities related to an event
Head of IT Design the website

Design the database

Maintain the website and the database

Inform the customer relations department of any customer complaints.
Chief Financial Officer Financial decision making

Signing authority

Budget forecasting

Allocating financial resources

Payroll and accounting activities
Sales representative Sell Ayojon’s services to different corporate clients.

Find out whether potential customers have demands different than that perceived by the firm
Customer relations executive Handle customer grievances

Keep in touch with the customers and inform them of our different services
Media relations executive Keep in touch with different media people

Make sure that the firm’s news are well covered by the media
Executive, Event Designing the event schedule

Coordinating the different functions to perform an event

Controlling the events

Taking corrective actions if anything goes wrong

Maintaining good supplier relationship
Executive, IT Assist the Head of IT in his work

Design the website

Design the database

Maintain the website and the database

Inform the customer relations department of any customer complaints.
Executive, Finance Assist the CFO in his/her work

Book keeping

Employment Requirements

The employees of Ayojon must have certain for the firm to ensure professionalism in its services.

Name of the Position Job Requirements
Chief Executive Officer Should be a good strategic decision-maker

Should have exceptional leadership skills
Employees in Marketing Department Experience in related field

Proper academic background with a major in Marketing

Good communication skills
Employees in the Event Management Department Experience in related field (not mandatory, but will be preferred)

Innovative

Ability to create and design effective events to the satisfaction of the customer

Ability to generate good ideas for growth opportunities

Ability to work under pressure
Employees in the IT Department Experience in related field

Proper academic background

Innovation (required for the design of the website)
Employees in Finance Department Experience in related field

Good analytical skills

Proper academic background with a major in Finance

Ability to analyze investment opportunity

Organizational Diagram

For an organization to perform effectively, it must have a chain of command. For Ayojon, it will be as follows:

Compensation Structure

To get the best service from its employees, Ayojon must plan for an attractive compensation structure for them. The following table shows monthly expenditure on employee salaries.

Designation of the Employees No of Employees Monthly Salary (in Tk) Total Salaries Paid
Chief Executive Officer 01 40,000 40,000
Head of Marketing 01 18,000 18,000
Sales Representatives 02 6,000 12,000
Customer Relations Executive 01 12,000 12,000
Media Relations Executive 01 12,000 12,000
Event in Charge 01 18,000 18,000
Executive, Event 02 12,000 24,000
Head of IT 01 18,000 18,000
Executive, IT 01 12,000 12,000
Chief Financial Officer 01 18,000 18,000
Executive, Finance 01 12,000 12,000
Cook / Cleaner 01 1,000 1,000
Total 197,000

These are the beginning salaries of the employees. The sales representatives will receive the cost of transportation to the

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BANGLADESH BANK

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BANGLADESH Bank (BB) has adopted advanced ICT to be digitised in all spheres of its functions including monetary policy, banking supervision and internal management. BB has already introduced e-commerce, e-banking, automated clearing house etc.; a historic move towards achieving higher productivity across all economic sectors including agriculture and SME through use of ICTs. Engineers could be pioneers innovating new applications of ICT, and reaching them to the doorstep of the common people.

The universal role of Information and Communication Technology (ICT) is vital for socio-economic development of a developing country like Bangladesh. Availability of information helps increase productivity, ensures fair and competitive market and empowers marginal people. Digital technology makes doing things easily from any place — using mobile phone as a medium of money transfer and payment of utility bills, for example.

Digital society means knowledge based society. Therefore, the government has placed the vision of 2021 — the year of Golden Jubilee of our independence. The vision envisages a digital Bangladesh with excellence in information and communication technology and high-performing inclusive economic growth.

If Bangladesh goes digital it will be an e-state combined with e-governance, e-banking, e-commerce, e-learning, e-agriculture, e-health and so on. However, the vision encompasses much more. There is a strong correlation between economic and social development of a country and its proficiency in science and technology, so we need a knowledge-based society, efficient management and skilled human resources as well.

We need to extend ICT facility to every village in Bangladesh, so that even farmers can get access to internet connectivity; acquire related information regarding his/her crop or product development, pricing etc. In this connection, the government has already taken initiatives to connect Bangladesh with the second Submarine Cable Network to have secured connectivity with the information superhighway. Realising the potential of ICT for national development, the government has approved the National ICT Policy, 2009 on priority basis.

It is expected that by 2021, Bangladesh will have a countrywide ICT network and high-speed information flow between centre and periphery. Instructions will be transmitted electronically, which will accelerate the national decision-making process and monitor the performance of all agencies.

High level of internet penetration is a must for the development of ICT. The latest statistics (ITU 2007) revealed that internet penetration is only 0.3% in Bangladesh, whereas the rate is 7.3 and 5.3% respectively in India and Pakistan. However, we too are getting ready to experience higher level of internet penetration, particularly with high density of wireless infrastructure. BB, which is indeed the nerve centre of the financial world, cannot remain behind in this race of digitisation.

Bangladesh Bank, being the monetary authority of the country, is at the forefront of the government’s firm drive to digitise. We have already formulated a 5-year strategic plan for the financial sector based on advanced technological applications to deliver services with utmost efficiency. The ultimate goal is to make BB a world-class central bank with high applications of technologies. It should, in fact, transform itself into a paperless organisation within this plan period.

BB has achieved a historic milestone in the trade and business arena, departing from conventional banking with the introduction of e-commerce recently; a giant stride towards digital Bangladesh. Banks have been allowed to make online money transactions, payment of utility bills through internet, transfer of funds (account to account), payments for trading goods and services, and facilitate online credit card payments in local currency.

Indeed, electronic payments will be considered as cash transactions, which will be regulated under the Anti-Money laundering Act as well as other relevant rules and regulations. It is expected that a national payment gateway, connecting all banks for inter-bank transactions (e-banking), will be established soon. Electronic fund transfer will also be possible in near future. Necessary preparations have already been taken in this direction.

Installation of Bangladesh Automated Clearing House (BACH) is another remarkable event in the history of the financial sector in Bangladesh. It will simplify the remittance channel and payment system and, therefore, bring dynamism in business activities.

The system was started in early November 2009 on experimental basis, participated by some well-prepared banks, and will be inaugurated formally soon. Applying sophisticated methods, the system needs only images and corresponding information of the submitted cheque leaves instead of a physical one, and will send them to the Bangladesh Automated Cheque Processing System (BACPS) using a secured communication link.

New cheques/clearing instruments (standardised) will contain Magnetic Ink Character Recognition (MICR) line that encompasses information regarding the amount, transaction code, clients account details, routing number (numeric code assigned to bank branches for easy identification of origin and destination of the instrument), cheque leaf’s serial number and so on. The system will support both intra-regional and inter-regional clearings based on a centralised processing centre in Dhaka and designated clearing regions, and will conform to the international best practices and cost-effective solutions for cheque processing.

Therefore, after getting customers’ cheques for collection in the bank-branch, collecting banks will check the prima facie information of the submitted cheques, capture images and information, and send them to BACPS electronically. BACPS will then process and send the images and information to the paying banks for validation.

Paying banks will examine the pertinent images and information, and send back to the BACPS for payment (further examination if any inconsistency like fund insufficiency or mismatch of signature etc.) Then BACPS will accumulate all the information, work out a single net amount for each bank, and send it back to the collecting banks. As such, the cheque clearing time is expected to be reduced to one day for countrywide payment. In other cases, this will be a matter of couple of hours only.

Mobile banking, using cell phone as a tool, extends banking services to the doors of the people. An account holder can check account history/statement, status on cheques, and payment order, or stop payment, and so forth.

However, initially, three commercial banks have been allowed mobile banking to accelerate inward remittance transfer with the help of the outlets of mobile companies. Recently, BB has strengthened its monitoring and supervision activities on agricultural and SME loans with the help of the existing countrywide mobile network, keeping records of cell phone numbers of farmers and small entrepreneurs.

Online Credit Information Bureau (CIB) report, a pivotal component of risk management measures, is expected to be launched by 2010. Banks and financial institutions will be able to access the CIB data base online, and get the credit report of the concerned borrower. The database will consist of detailed information of individual borrowers, owners and guarantors.

Meantime, a project, On-line Credit Bureau has been started using advanced technology to establish online connectivity between CIB of B B and head offices of all banks and financial institutions. It is crucial to upgrade the capacity of CIB to the policy priority accorded to financial inclusion, expand SME and agricultural lending, and increase overall growth of trade and business.

Online CIB will minimise the extent of default loan by facilitating the banks and financial institutions with credit reports of the loan applicants very quickly, and therefore, lending institutions would not encounter any credit risk while extending lending or rescheduling facility.

A central bank reform program initiated ICT packages include networking, banking application, enterprise resources planning solution, enterprise data warehouse etc., with a view to ensuring efficient management of assets including human resources.

Under the networking program, all the departments of Bangladesh Bank Head Office and its nine branch offices have already been brought under a computer network (LAN/WAN), connecting almost 3,100 PCs. Therefore, any official sitting anywhere (head office or branches) has access to the same kind of resources, and can share knowledge and information and ensure knowledge based management.

Enterprise Resources Planning (ERP) solution covers digitisation of procurement (e-procurement), cash management, access control etc. Meanwhile, recruitment process under B B has been digitised (online application, sorting, validation etc.).

Banking application includes automation of all the accounts with B B (banks, financial institutions and government), foreign exchange management, currency management, treasury and securities systems/module, public debt management module, and also establishment of a central depository system (CDS) to build a platform for secondary trading of treasury bills and bonds.

Enterprise Data Warehouse (EDW) creates an electronic data bank, which will provide all information and statistics of monetary, trade and fiscal areas of the national economy, where all the concerned people of BB will have access to use it for further policy analyses. B B is going to commence web based e-tendering system, which covers announcement of tender, distribution of schedules, bidding etc., to ensure simplicity and transparency of tendering process.

These are only a few examples of how fast the B B is progressing in the process of digitisation of its activities. In addition, it is also taking other banks and government agencies on board to ensure speedy, credible, user-friendly financial services to all.

Moreover, B B has been encouraging green engineering by installing solar panels on its own premise and providing re-financing windows to support speedy development of solar energy, biogas and effluent treatment plants all around the country. And in all these activities the role of green engineers will be vital.

Challenges
The major challenges for Bangladesh are poverty reduction and sustainable development, but neither of these is possible without a strong science and technology base underpinned by excellence in education at all levels and a well-trained work force in ICT. There needs to be infrastructural development and technology transfer throughout the country to disseminate knowledge to even remote areas of the country.

However, the government has taken initiatives to promote ICT among all spheres of people, including the hard-to-reach areas; tax and duty cut on computers, promoting ISP services etc.

A broadband infrastructure is needed with access for all Bangladeshis from their homes, work places, schools and tele-centres with Wimax and 3G network. We also need a digitally literate population and workforce, digital business development, and a legal framework that assures freedom of expression while protecting the rights of creators and innovators towards building an indigenous knowledge and technological base.

At the beginning, we must concentrate on the development of infrastructure in terms of hardware, software and manpower. Skilled manpower from local market must be available to keep the system running without depending on foreign “experts.” Sustainability of digital Bangladesh depends on our enhanced ability to maintain, repair and expand once the system is installed.

In order to manage a sustainable digitised Bangladesh, we need a long-term plan to produce adequate number of scientists, computer and communication engineers, software engineers; technology management experts etc., for further development of our ICT sector and keeping pace with the technological advancement in the developed world.

Otherwise, digital Bangladesh would be highly vulnerable and dependent on foreign manufacturers and experts. Simultaneously, we must encourage our young engineers to move towards utilisation of less or no fossil fuels. This green engineering will have to be one of the strategic components of digital Bangladesh.

Certainly, we will opt for a technology-based economy. But that economy must also be socially responsive to the needs of the disadvantaged. In other words, we pledge to build a more inclusive digital Bangladesh where engineers too will play the desired strategic role.

The vision is to see B B paperless within the shortest possible time — all correspondence (both internal and external) will be online — and achieve higher productivity across all economic sectors including agriculture and SME through use of ICTs. Steps have been taken already to bring overall functions and activities of B B under automation. Its supervisory functions have been further strengthened applying advanced banking techniques with innovative technology.

It can be noted that technology-driven business models followed by the banks and financial intuitions ensure better and faster services to the clients. A recent study of B B revealed that banks that adopt technology are more profitable and reduce risks as they gain maturity in offering such services.

B B has already engaged banks in major programs of upgrading their IT platforms, with ample processing powers and online connectivity, to enable efficient data management, processing and analyses in banks for their own risk management purposes and for reporting to BB.

A holistic approach needs to be taken by all the stakeholders to reach the ICT facilities to the doorstep of the common people. Engineers could be pioneers in this regard, innovating new applications of ICT, and thus move the nation towards digital Bangladesh.

Simultaneously, they should also be responsive to the challenges of climate change, and hence move towards green engineering. B B is well aware of its responsibility in promoting green finance for greener Bangladesh. I am sure engineers too will play their desired role in this fight for a greener energy based digital Bangladesh.

THE BANGLADESH BANK ORDER, 1972

[Whereas, it is necessary to establish a central bank in Bangladesh to manage the monetary and credit system of Bangladesh with a view to stabilising d omestic monetary value and maintaining a competitive external par value of the Bangladesh Taka towards fostering growth and development of country’s productive resources in the best national interest;]1
Now, THEREFORE, in pursuance of the proclamation of independence of Bangladesh, read with the Provisional Constitution of Bangladesh Order, 1972, and in exercise of all powers enabling him in that behalf, the President is pleased to make the following Order:

CHAPTER I

PRELIMINAR

(1) This Order may be called the Bangladesh Bank Order, 1972
(2) It extends to the whole of Bangladesh.
(3) It shall come into force at once and shall be deemed to have taken effect on the 16th day of December, 1971.
2. In this Order, unless there is anything repugnant in the subject or context, –
(a) “appointed day” means the 16th day of December, 1971;
(b) “approved foreign exchange” means currencies declared as such by any notification under Article 18;
(c) “Bank” means the Bangladesh Bank;

[(cc)“banking company” means Óe¨vsK †Kv¤úvbxÓ defined in `dv (Y) of aviv 5 e¨vsK †Kv¤úvbx AvBb, 1991 (1991 m‡bi 14bs AvBb);]2
1Substituted by the Bangladesh Bank (Amendment) Act, 20032Added by the Bangladesh Bank (Amendment) Act, 2003
(d) “Bank Notes” means notes made and issued by the Bank in accordance with Article 23;
[(dd) “bank rate” means the standard rate made public by the Bangladesh Bank under Article 21;]1
.(e) “Board” means the Board of Directors of the Bank;
.(f) “Co-operative Bank” means any co-operative society or co-operative bank including the apex co-operative bank registered under [mgevq mwgwZ AvBb, 2001 (2001 m‡bi 47bs AvBb)]2, or any other law for the time being in force relating to co¬operative societies, one of objectives of which is to provide financial accommodation to its members;
.(g) “Director” means a Director of the Bank;

[(gg) “financial institution” means ÒAvw_©K cÖwZôvbÓ defined in `dv (L) of aviv 2 of Avw_©K cÖwZôvb AvBb, 1993 (1993 m‡bi 27bs AvBb);]3
.(h) “Governor” and “Deputy Governor” means respectively the Governor and Deputy Governor of the Bank;
.(i) “Government” means the Government of the People’s Republic of Bangladesh;
.(j) “Scheduled Bank” means a bank for the time being included in the list of banks maintained under sub-clause (a) of clause (2) of Article 37;
.(k) “State Bank” means the State Bank of Pakistan constituted under the State Bank of Pakistan Act, 1956; and
.(l) “Taka coin” means one Taka coin and one Taka note and two Taka coin and two Taka note which are legal tender in Bangladesh.

CHAPTER II

ESTABLISHMENT, INCORPORATION, CAPITAL AND MANAGEMENT

 

3. (1) There shall be a bank to be called the Bangladesh Bank for the purposes of carrying on the business of central banking and it shall be deemed to have been established on the appointed day.
(2) The Bank shall be a body corporate by the name of the Bangladesh Bank, having perpetual succession and a common seal, and shall by the said name sue and be sued.
4. (1) The capital of the Bank shall be Taka three crores.
.(2) The entire capital of the Bank shall stand vested in and allotted to, the Government.
.(3) The capital of the Bank may, subject to the approval of the Government, be increased by a resolution of the Board, and any capital so increased shall be subscribed for by the Government in such form and manner as may be determined by the Government.
.(4) On the appointed day all the shares of the State Bank held in Bangladesh which have not already vested in the Government by or under any other law for the time being in force, shall by virtue of this Order, be deemed to have been vested in, and allotted to, the Government free from any trust, mortgage, charge, lien, interest, or other encumbrance whatsoever.

1Added by t he Bangladesh Bank (Amendment) Act, 2003 2Substituted by the Bangladesh Bank (Amendment) Act, 2003 3Added by the Bangladesh Bank (Amendment) Act, 2003
(5) The Government shall pay such compensation in respect of the shares vested in the Government under clause (4) as may be determined by it and such compensation shall be distributed among the shareholders of the State Bank in Bangladesh in the manner as may be determined by the Government: Provided that the total compensation payable under this clause shall not exceed the total paid up value of the shares held by the shareholders, among whom such compensation is to be distributed.
5. (1) On the appointed day the entire undertaking of the State Bank in and in relation to Bangladesh shall be deemed to have been transferred to, and vested in, the Bank.
(2) The undertaking of the State Bank so transferred and vested shall be deemed to include all assets, rights, powers, authorities and privileges and all property, movable and immovable, including all lands, buildings, cash balances, reserve funds, investments, and debts or actionable claims, any security or negotiable instrument, and all other rights and interests in, or arising out of, such property as were immediately before the appointed day in the ownership, possession, power or control of the State Bank in relation to, or for the purpose of, the undertaking of the State Bank in or in relation to Bangladesh whether such property is situated within or without Bangladesh, and all books of account, registers, records and all other documents of whatever nature relating thereto and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind of the State Bank in relation to the undertaking within the territory of Bangladesh.
(3) Subject to the provisions of this Order all contracts, deeds, bonds, agreements, powers of attorney, grants of legal representation and other instruments of whatever nature subsisting or having effect immediately before the appointed day and to wh ich the State Bank is a party or which are in favour of the State Bank shall—
.(a) if they are exclusively for the purposes or for the business of the undertaking of the State Bank in Bangladesh; or
.(b) if they are partly for the purposes in sub-clause (a) and partly for any other purpose to the extent and subject to such conditions and limitation, as the Government may determine, be of as full force and effect against or in favour of the Bank and may be enforced or acted upon as fully and effectively as if in place of the State Bank, the Bank has been a party thereto or as if they had been issued in favour of the Bank.

6. (1) All suits, appeals, or other legal proceedings of whatever nature pending on the appointed day by or against the State Bank in relation to its undertaking which has vested in the Bank under Article 5, shall be deemed to be suits, appeals and other legal proceedings pending by or against the Bank and may be continued and enforced by or against the Bank.
(2) Notwithstanding anything contained in any other law for the time being in force, where any proceeding for the winding up of a banking company under the Banking Companies Ordinance, 1962, is pending before the High Court of Bangladesh immediately before the appointed day in wh ich the State Bank was appointed as Official Liquidator, the Bank shall be substituted in place of the State Bank as the Official Liquidator and shall be deemed always to have been so substituted.
2. 7. Subject to the provisions of this order and any other law for the time being in force, any person being a citizen of Bangladesh who, immediately before the appointed day, was an employee of the State Bank shall, as from that day, continue to be an employee of the Bank on the same terms and conditions as were applicable to him immediately before that day.

[7A.The main functions of the Bank shall be :
(a) to formulate and implement monetary policy;
(b) to formulate and implement intervention policies in the foreign exchange market;
(c) to give advice to the Government on the interaction of monetary policy with fiscal and exchange rate policy, on the impact of various policy measures on the economy and to propose legislative measures it considers necessary or appropriate to attain its objectives and perform its functions;
(d) to hold and manage the official foreign reserves of Bangladesh;
(e) to promote, regulate and ensure a secure and efficient payment system, including the issue of bank notes;
(f) to regulate and supervise banking companies and financial institutions. ]1

8. (1) The Head Office of the Bank shall be at Dhaka.
[(2) The Bank shall have Offices at Dhaka, Chittagong, Khulna, Bogra, Rajshahi, Sylhet, Barisal and Rangpur and may establish other offices, branches, and agencies in Bangladesh or in consultation with the Government anywhere outside Bangladesh.]2
9. [(1) …………………………………………………]3
(2) [The general superintendence] 4 and direction of the affairs and business of the Bank shall be entrusted to a Board of Directors which may exercise all the powers and do all acts and things that may be exercised or done by the Bank; Provided that until the first Board is constituted the Governor may exercise all powers and do all acts and things as are required to be exercised or done by the Board.
(3) The Board shall consist of—
(a) the Governor;
(b) a Deputy Governor to be nominated by the Government;
(c) [four Directors who will not be Government officials]5 to be nominated by the Government, from amongst persons who, in the opinion of the Government, have had experience and shown capacity in the field of banking, trade, commerce, industry, or agriculture;
(d) three Government officials to be nominated by the Government.

1Added by the Bangladesh Bank (Amendment) Act, 2003
2Substituted by the Bangladesh Bank (Amendment) Act, 2003
3Omitted by the Bangladesh Bank (Amendment) Act, 2003
4Substituted by the Bangladesh Bank (Amendment) Act, 2003
5Substituted by the Bangladesh Bank (Amendment) Act, 2003
[9A.(1) There shall be a Council for the co-ordination of fiscal, monetary and exchange rate policies, hereinafter called the Co-ordination Council, consisting of—
(i) Minister for Finance………….. Chairman
(ii) Minister for Commerce…….. Member

(iii) Governor, Bangladesh Bank ….. Member
(iv) Secretary, Finance Division …… Member
(v) Secretary, Internal Resources Division.. Member
(vi) Member (Programming), Planning Commission Member

(2) The Co-ordination Council shall—
(a) co-ordinate the macro-economic framework including fiscal, monetary and exchange rate strategies and policies;
(b) ensure consistency among macro-economic targets of growth, inflation and fiscal, monetary and external accounts;
(c) meet for the purposes of clauses (a) and (b) before the finalization of the budget to determine the extent of public sector borrowing taking into account credit
requirements of the private sector, monetary expansion based on projected growth, price inflation, and net foreign assets of the banking system;
(d) meet at least on a quarterly basis to review the consistency of macro-economic policies and to revise limits and targets set at the time of the formulation of the budget, keeping in view the latest developments in the economy;
(e) consider limits of the government borrowing as revised from time to time in the meetings to be held before and after passage of the annual budget.
(3) The Banglades h Bank shall ensure that the macro -economic framework as co¬ordinated by the Co -ordination Council is reflected in the policies of the Bangladesh Bank.
(4) The Bangladesh Bank shall place before the Co -ordination council—
(a) relevant data relating to monetary expansion and Government borrowing from the banking system, and
(b) the assessment of the Bangladesh Bank regarding the impact of economic policies of the government on monetary aggregates and balance of payments.
(5) The Ministry of Finance shall, from time to time, bring to the notice of the Co¬ordination Council the impact of tax, budget and debt management policies on overall macro-economic situation.
.(6) The Ministry of Commerce shall, from time to time, bring to the notice of the Co¬ordination Council the impact of trade and tariff policies on overall macro¬economic situation.]1

1Added by the Bangladesh Bank (Amendment) Act, 2003
10. (1) The Governor of the Bank shall be the Chief Executive Officer and shall, on behalf of the Board, direct and control the whole affairs of the Bank.
.(2) In the matters not specifically required by this Order or by regulations made thereunder, to be done by the Board, the Governor shall have powers of general superintendence and direction of the affairs and business of the Bank and may exercise all powers and do all acts and things which may be exercised or done by the Bank.
(3) The Governor shall be appointed by the Government on such salary and terms and conditions as may be determined by the Government except that neither the salary of the Governor nor his other terms and conditions of service shall be varied to his disadvantage after his appointment.
(4) One or more Deputy Governors shall be appointed by the Government on such salary and on such terms and conditions as the Government may determine except that neither the salary of a Deputy Governor nor his o ther terms and conditions shall be varied to his disadvantage after his appointment.
(5) [The Governor shall hold office for a period of four years and shall be eligible for re-appointment :
Provided that the Governor shall not hold office if he a ttains the age of sixty five years;]1
(6) The Governor and a Deputy Governor shall devote their wholetime to the affairs of the Bank.
(7) [The Government may require a Deputy Governor to hold an office other than in the Bank, in which event the Deputy Governor shall vacate his office, and the period during which he holds the other office shall not count towards his tenure of office as Deputy Governor.] 2
(8) The Governor, or a Deputy Governor, as the case may be, may, in addition to his duties as t he Governor or a Deputy Governor, be entrusted by an order of the Government with such duties for such period as may be specified in the order.
(9) No person shall hold office as [Governor or Deputy Governor] 3 :
(a) [Who is a member of the Legislature or a Local Government]4;
(b) who is employed in any capacity in the public service of Bangladesh or holds any office or position for which any salary or other remuneration is payable out of public funds;
(c) who is a Director, officer or employee of any other [banking company or financial institution]5 or of any other business concern:

1Substituted by the Bangladesh Bank (Amendment) Act, 2003 2Substituted by the Bangladesh Bank (Amendment) Act, 20033Substituted by the Bangladesh Bank (Amendment) Act, 2003 4Substituted by the Bangladesh Bank (Amendment) Act, 2003 5Substituted by the Bangladesh Bank (Amendment) Act, 2003
Provided that nothing in this sub-clause shall apply where the [Governor or
Deputy Governor]1 is entrusted with additional duties under clause (8);
(d) [who has defaulted in payment of dues of the government or of any banking company or any financial institution;]2
[(e) who is, or at any time has been, adjudicated an insolvent or had suspended payment or has compounded with his creditors;
(f) who is found lunatic or becomes of unsound mind;
(g) who has been convicted of an offence involving moral turpitude or has been sentenced by a court for a term of imprisonment exceeding one year.]3

(10) The Government may grant leave to the Governor and Deputy Governor for such period and on such terms and conditions as may be specified by the Government;
(11) Where the Governor during his term of office is incapacitated or is absent on deputation, leave or otherwise, the Government may appoint any person qualified under clause
(9) but who may not be qualified under sub-clause (b) of that clause to act for the time being as the Governor in his place.
11. (1) Meetings of the Board shall be convened by the Governor at least six times in each year and at least once in each quarter.
(2) Any three Directors may require the Governor to convene a meeting of the Board at any time and the Governor shall forthwith convene a meeting accordingly.
(3) The Governor or, if for any reason he is unable to attend, the Deputy Governor nominated under sub-clause (b) of clause (3) of Article 9, shall preside at meetings of the Board and in the event of any equality of votes, shall have a second or casting vote. In case the Deputy Governor is also unable to attend for any reason, any other Director, authorised by the Governor, shall preside over the meeting of the Board and shall have a second or casting vote.
(4) No act or proceedings of the Board shall be questioned on the ground merely of the existence of any vacancy in, or any defect in the constitution of, the Board.
12. (1) There shall be an Executive Committee consisting of—
(a) the Governor;
(b) the Director nominated under sub-clause (b) of clause (3) of Article 9;
(c) one Director elected by the Board from amongst the Directors nominated under sub-clause (c) of clause (3) of Article 9; and
(d) one Director appointed by the Government from amongst the Directors nominated under sub-clause (d) of clause (3) of Article 9.

(2) Except when the Board is in session, the Executive Committee shall deal with and decide any matter within the competence of the Board and shall keep minutes of its proceedings, which shall be submitted to the Board for information at its next meeting.
1Substituted by the Bangladesh Bank (Amendment) Act, 20032Substituted by the Bangladesh Bank (Amendment) Act, 2003 3Added by the Bangladesh Bank (Amendment) Act, 2003
13. (1) No person shall be or shall continue to be a Director—
(a) [Who is a Member of the Legislature or a Local Government; or]1;
b) [who has defaulted in payment of dues of the Government or of any banking company or any financial institution; or]2;
(c) who is, or at any time has been, adjudicated an insolvent or had suspended payment or has compounded with his creditors; or
(d) who is found lunatic or becomes of unsound mind; or
(e) who is an officer or employee of any [banking company]3 or any financial institution; or
(f) who is a Director of [any banking company or financial institution]4, but he shall not be disqualified or cease to be a Director if he is a Director of a bank which is a society registered under the [mgevq mwgwZ AvBb, 2001 (2001 m‡bi 47 bs AvBb)] 5 or any other law for the time being in force relating to co-operative societies; or
(g) who absents himself from three consecutive meetings of the Board, without leave from the Board; [or
(h) who has been convicted of an offence involving moral turpitude or has been sentenced by a court for a term of imprisonment exceeding one year.] 6
(2) Nothing in sub-clause (b) of clause (1) of this Article shall apply to the Government Official nominated as Director under sub-clause (d) of clause (3) of Article 9.
14. (1) The Directors nominated under sub-clause (c) of clause (3) of Article 9 shall hold office for three years.
(2) A Director nominated under sub-clause (d) of clause (3) of Article 9 shall hold office at the pleasure of the Government.
(3) Directors shall on the expiry of their term of office be eligible for re-nomination.
15. (1) The Government may remove from office—
(a) the Governor or a Deputy Governor if he becomes permanently incapable of performing his duties or subject to any of the disqualifications specified in clause (9) of Article 10 or has done any act which is a breach of the trust reposed in him, or if his continuance in office is regarded as manifestly opposed to the interests of the Bank; and
(b) any Director.

(2) (a) The Governor, a Deputy Governor or a Director may resign his office by statement to that effect in writing signed by him and addressed to the Government;
1Substituted by the Bangladesh Bank (Amendment) Act, 2003 2Substituted by the Bangladesh Bank (Amendment) Act, 2003 3Substituted by the Bangladesh Bank (Amendment) Act, 2003 4Substituted by the Bangladesh Bank (Amendment) Act, 2003 5Substituted by the Bangladesh Bank (Amendment) Act, 2003 6Added by the Bangladesh Bank (Amendment) Act, 2003
(b) A statement of resignation by a Deputy Governor or a Director shall be addressed as above through the Governor;
(c) On the acceptance of such a resignation by the Government, the office shall become vacant;
(3) Any Director vacating office under this Article shall not be eligible to become a Director until the expiry of the term of office for which he was nominated; and

(4) In the event of a vacancy occurring, the Government shall fill the vacancy by nominating another Director.

CHAPTER III BUSINESS AND FUNCTIONS OF THE BANK

16. The Bank is authorised to carry on and transact the several kinds of business hereinafter specified, namely : –
(1) [ the accepting of money on deposit from and the collection of money for the Government, foreign Governments, domestic and foreign banks, domestic and foreign financial institutions and local authorities with or without interest;]1
[(1A) …………………………………………………]2
(2) (a) the purchase, sale and rediscount of bills of exchange and promissory notes drawn on and payable in Bangladesh and arising out of bona fide commercial or trade transactions bearing two or more good signatures one of which shall be that of a scheduled bank, and maturing within one hundred eighty days from the date of such purchase or rediscount, exclusive of days of grace;
(b) the purchase, sale and rediscount of bills of exchange and promissory notes, drawn on and payable in Bangladesh and bearing two or more good signatures one of which shall be that of a scheduled bank or the apex co-operative bank and drawn or issued for the purpose of financing seasonal agricultural operations or the marketing of crops, and maturing within fifteen months from the date of such purchase or rediscount exclusive of days of grace; Explanation—For the purpose of this sub-clause—
(i) [the expression “agricultural operations” include cultivation of crops, plantation, agricultural machineries and implements, fertilizers and pesticides, fishing, pisciculture, animal husbandry, forestry, horticulture and allied activities;]3
(ii) “crops” include products of agricultural operations;

(iii) the expression “marketing of crops” includes the processing of crops prior to marketing by agricultural producers or any organisation of such producers;
1Substituted by the Bangladesh Bank (Amendment) Act, 2003 2Omitted by the Bangladesh Bank (Amendment) Act, 2003 3Substituted by the Bangladesh Bank (Amendment) Act, 2003
(c) the purchase, sale and rediscount of bills of exchange and promissory notes drawn on and payable in Bangladesh and bearing two or more good signatures, one of which shall be that of the apex co-operative bank or a financial corporation and drawn or issued for the purpose of financing the production or marketing activities
of cottage and small scale industries approved by the Bank and maturing within eighteen months from the date of such purchase or rediscount, exclusive of days of grace : Provided that the payment of the principal and interest of such bills of exchange or promissory notes is guaranteed by the Government to the satisfaction of the Bank.
(d) The making to a corporation declared eligible by the Government in consultation with the Bank of loans and advances —
(i) repayable on demand or on the expiry of fixed periods not exceeding ninety days from the date of such loan or advance, against securities of the Government; or
(ii) repayable on the expiry of fixed periods not exceeding eighteen months from the date of such loan or advance, against securities of the Government of any maturity, or against bonds and debentures issued by the Corporation to which the loan or advance is made, and guaranteed by the Government and maturing within a period not exceeding eighteen months from the date of such loan or advance;
(e) the purchase, sale and rediscount of bills of exchange and promissory notes drawn on and payable in Bangladesh and bearing the signature of a scheduled bank, and issued or drawn for the purpose of holding or trading in securities of the Government and maturing within ninety days from the date of such purchase or rediscount, exclusive of days of grace;
(f) the purchase, sale and rediscount of bills of exchange and promissory notes drawn on and payable in Bangladesh and bearing two or more good signatures one of which shall be that of a scheduled bank or the apex co-operative bank or any corporation approved by the Government and having as one of its objects the making of loans and advances in cash or kind, drawn and issued for financing the developme nt of agriculture, or of agricultural or animal produce or the needs of industry, having maturities not exceeding ten years from the date of such purchase or rediscount : Provided that the Bank may from time to time issue to a corporation which may have dealings with the Bank under this sub-clause any directions which can be issued to a banking company under the [e¨vsK †Kv¤úvbx AvBb, 1991 (1991 m‡bi 14 bs AvBb)] 1, and in the event of anybody, while carrying out any direction hereunder, either wilfully making a false statement or wilfully omitting to make material statement shall be punishable under [sub-section (2) of section 109 of the said Act of 1991]2, and in the event of any contravention or default in compliance with any direction, any Director or Officer who is knowingly a party to the contravention or default shall be punishable under [sub-section (7) of the said section]3, and the provisions of [Section 111 of the said Act]4 shall apply to such proceedings as if such corporation were a banking company;

1Substituted by the Bangladesh Bank (Amendment) Act, 2003 2Substituted by the Bangladesh Bank (Amendment) A ct, 2003 3Substituted by the Bangladesh Bank (Amendment) Act, 2003 4Substituted by the Bangladesh Bank (Amendment) Act, 2003
(g) the purchase, sale and rediscount of such Government guaranteed debentures issued by a public company or corporation establis hed by or under any law for the time being in force as the Bank may from time to time approve in this behalf;
.(h) to guarantee, to the extent the Bank deems fit, issue of loans and debentures by the scheduled banks or financial institutions to rural cre dit institutions;
(i) to guarantee funds of scheduled bank in agricultural credit operations to the extent the Bank deems fit.
(3) (a) the purchase and sale of approved foreign exchange;
(b) the purchase, sale and rediscount of bills of exchange including treasury bills drawn in or on any place in countries whose currency has been declared as approved foreign exchange and maturing within one hundred and eighty days from the date of purchase  Provided that no such purchase, sale or rediscount shall be made in Bangladesh except with a scheduled bank;
(c) the keeping of balances with banks in countries whose currency has been declared as approved foreign exchange;

[(d) subject to the approval of the Board the placing of balances abroad with asset management companies of global standing and reputation for investment in countries whose currencies have been declared as approved foreign exchange: Provided that the placement under this clause shall not exceed 25 percent of the balance kept abroad.]1.
(4) The making to Local Authorities, scheduled banks or co-operative banks of advances and loans repayable on demand or on the expiry of fixed periods not exceeding ninety days against the security of—
.(a) stocks, funds and securities, o ther than immovable property, in which a trustee is authorised to invest trust money by any law for the time being in force in Bangladesh;
(b) gold or silver or documents of title to the same;
(c) such bills of exchange and promissory notes as are eligible for purchase or rediscount by the bank; and
(d) promissory notes of any scheduled bank supported by documents of title relating to goods, such documents having been transferred, assigned or pledged to any such bank as security, for a cash credit or overdraft granted for bona fide commercial or trade transactions or for the purpose of financing seasonal agricultural operations or the marketing of crops;
(5) the making of loans and advances out of the Rural Credit Fund established under Article 60 for the purposes specified therein;
(6) the making of loans and advances out of the Agricultural Credit Stabilisation Fund established under Article 61 for the purposes specified therein;
1Added by the Bangladesh Bank (Amendment) Act, 2003
(7) the making of loans and advances out of the Industrial Credit Fund established under Article 62 for the purposes specified therein;
(8) the making of loans and advances out of the Export Credit Fund established under Article 63 for the purposes specified therein;
(9) the making to the Government of advances repayable in each case not later than three months from the date of the making of the advance;
(10) the making to institutions or banks, specially established for the purpose of promoting agricultural or industrial development in the country or co-operative banks of advances and loans for such amounts and on such terms and conditions as the Board may decide from time to time;
(11) the purchase holding and sale of shares and debentures of any company or corporation or institution as may be decided in consultation with the Government;
(12) the issue and purchase o f telegraphic transfers, demand drafts and other kinds of remittances make payable at its own branches, offices or agencies;
(13) the drawing accepting, making and issue, on its own account or account of the Government, as the case may be of any bill of exchange, hundi, promissory note or engagement for the payment within or without Bangladesh, of Bangladesh or foreign currency payable to bearer or to a banker on demand; but no such business shall be carried on or transacted without the previous approval of the Government;
[(13A) the issue of its own negotiable securities on such rate of interest as the Bank may decide;]1
(14) (a) subject to sub-clause (b) the purchase and sale of securities of countries whose currency has been declared as approved fo reign exchange with an unexpired currency of not more than ten years;
(b) the restrictions relating to maturity shall not apply to securities held by the Bank on the date on which this Order comes into force or any securities that may be received as as sets including those transferred to and vested in the Bank under Article 5;
(15) (a) the purchase and sale of securities of the Government, or of such securities of a Local Authority as may be specified in this behalf by the Government by notification in the Official Gazette on the recommendation of the Board;
(b) securities, debentures and shares fully guaranteed as to principal and interest by the Government shall be deemed for the purpose of this clause to be securities of the Government;
(c) the amount of such securities held at any time in the Banking Department shall be so regulated that the total value of such securities shall not exceed the aggregate amount of the capital of the Bank, the Reserve Fund and four-fifths of the Liabilities of the Banking Department in respect of deposits;
(16) the custody of monies, securities and other articles of value and the collection of the proceeds whether principal, interest or dividends of any such securities;
1Added vide Act No. 17 of 1990.
(17) the sale and realisation of all property, whether movable or immovable which may in any way come into the possessio n of the Bank in satisfaction, or part satisfaction of any of its claims;
(18) the acting as agent to the Government, or any Local Authority in the transaction of any of the following kinds of business, namely :-
(a) the purchase and sale of gold or silver or approved foreign exchange;
(b) the purchase, sale, transfer and custody of bills of exchange, securities or shares in any company;
(c) the collection of the proceeds, whether principal, interest or dividends, or any securities or shares;
(d) the remittance of such proceeds, at the risk of the principal, by bills of exchange payable either in Bangladesh or elsewhere;
(e) and the management of public debt;
(19) the purchase and sale of gold coin and gold or silver bullion;
(20) the opening of an account with or the making of any agency arrangement with, and the acting as agent or correspondent of a bank incorporated in any country outside Bangladesh or the principal currency authority of any country under the
.law for the time being in force in that country or any international or regional bank formed by such principal currency authorities, and the investing of the funds of the Bank in the shares and securities of any such international or regional bank;
(21) (a) subject of sub-clauses (b) and (c), the borrowing of money for purposes of the business of the bank and the giving of security for money so borrowed;
(b) no money shall be borrowed under this clause from any person in Bangladesh other than a scheduled bank for a period exceeding three months and an amount not at any time exceeding the amount of the capital of the Bank;
(c) no money shall be borrowed under this clause from any foreign national in or outside Bangladesh other than foreign and international banks, companies, institutions or concerns;
(22) the making and issue of bank notes subject to the provisions of this Order;
(23) the performance of the functions of the Bank under the International Financial Organisations Order, 1972;
(24) establish credits a nd give guarantees;
(25) the exercise of powers and functions and the performance of duties entrusted to the Bank under this Order or under any other law for the time being in force; and
(26) generally, the doing of all such matters and things as may be necessary, incidental to or consequential upon the exercise of its powers or the discharge of its duties or functions under this Order.

17. (1) Where, in the opinion of the Board or of the Governor, circumstances so warrant, the Bank may, notwithstanding any limitation contained in sub-clauses (a) and (b) of clause (2) or sub-clauses (a) and (b) of clause (3) or clause (4) of Article 16—
(a) purchase, sell or discount any of the bills of exchange or promissory notes specified in sub-clause (a) or s ub-clause (b) of clause (2) or sub-clause (b) of clause (3) of Article 16 though such bill or promissory note does not bear the signature of a scheduled bank; or
(b) make advances or loans repayable on demand or on the expiry of fixed periods not exceeding ninety days against the various forms of security specified in clause (4) of Article 16 or against the security of goods or when the advance or loan is made to a banking company against such other form of security as the Bank may consider sufficient.
(2) Notwithstanding anything to the contrary contained in any other law for the time being in force where a banking company, to which an advance or loan has been made under the provisions of sub-clause (b) of clause(1) is wound up, any sum due to the Ba nk in respect of such advance or loan shall, subject only to the claims, if any, of any other banking company in respect of any prior claim or advance made by such banking company against any security, be a first charge on the assets of the banking company.
2. 18. [The Bank shall by notification in the official Gazette, declare the currency of any country to be approved foreign exchange for all or any of the purposes of this order.]1
19. The Bank shall not, except as authorised under this Order—
(1) engage in trade or otherwise have a direct interest in any Commercial, industrial or other undertaking except such interest as it may in any way acquire in the course of the satisfaction of any of its claims, but all such interest shall be disposed of at the e arliest possible moment;
[(2) …………………………………………….]2
(3) advance money on the mortgage, or otherwise on the security, of immovable property or documents of title relating thereto, except where such advance is
made to any of its employees for building o r purchasing a house for his personal use against the security of the house;
(4) become the owner of any immovable property except where ownership is necessary for the use of such property by the Bank, or for the residence, recreation or welfare of its employees;
(5) make unsecured advances and loans; and
(6) draw or accept bills payable otherwise than on demand.

20. (1) The Bank shall undertake to accept monies for account of the Government, and to make payments up to the amount standing to the credit of their accounts and to carry out its exchange, remittance and other banking operations, including the management of the public debt.
(2) (a) The Government shall entrust the Bank, on such conditions as may be agreed upon between the Government and the Bank, with all their money, remittance, and banking transactions in Bangladesh, and, in particular, shall deposit free of interest all its cash balances with the Bank.
(b) Nothing in this clause shall be deemed to prevent the Government from carrying on money transactions, at places where the Bank has no office, branch or agency or from holding at such places such balances as it may require.
1Substituted by the Bangladesh Bank (Amendment) Act, 2003
2Omitted by the Bangladesh Bank (Amendment) Act, 2003

(c) The Government shall entrust the Bank, on such conditions as may be agreed upon between the Government and the Bank, with the management of the public debt and with the issue of any new loans.
(3) In the event of any failure to reach agreement on the conditions referred to in this Article, the Government shall decide the conditions and its decision shall be final.
(4) Any agreement made under this Article shall be laid, as soon as may be after it is made, before the Legislature.

1. 21. The Bank shall make public from time to time the standard rate at which it is prepared to buy or rediscount bills of exchange or other commercial p aper eligible for purchase under this Order.
2. 22. [The Bank shall sell to or buy from any authorised dealer in Bangladesh approved foreign exchange at such rates of exchange and on such conditions as it may determine Pursuant to its monetary and exchange rate policy.]1 Explanation—In this Article “authorised dealer” means a person for the time being authorised under section 3 of the Foreign Exchange Regulation Act, 1947, to deal in foreign exchange.
23. (1) The Bank shall have the sole right to issue Bank Notes made payable to bearer on demand in Bangladesh in accordance with the provisions hereinafter made.
(2) Any person contravening this authority or committing any other offence specified in Article 35 shall be liable to the penalties mentioned therein.
24. (1) Subject to the provisions of clause (2) all Bank Notes, Coins and Currency Notes and those which were in circulation in Bangladesh on the appointed day shall continue to be legal tender at any place in Bangladesh for the amount expressed therein and shall be guaranteed by the Government.
(2) On the recommendation of the Board, the Government, may, by notification in the official Gazette, declare that with effect from such date as may be specified in the notification, any series of Bank Notes of any denomination shall cease to be legal tender save at such offices, branches and agencies, if any, of the Bank as may be specified in the notification.
3. 25. Notwithstanding anything contained in Article 24 no Pakistan Bank note of the denominatio nal value of five hundred rupees and one hundred rupees issued before 8th day of June, 1971 shall be legal tender in payment or an account of amount expressed therein.
4. 26. (1) The issue of Bank Notes shall be conducted by the Bank in an Issue Department which shall be separated and kept wholly distinct from the Banking Department and the assets of the Issue Department shall not be subject to any liability other than the liabilities of the Issue Department as defined in Article 32.

(2) The Issue Department shall not issue Bank Notes to the Banking Department or to any person except in exchange for other Bank Notes or for such coin, bullion, approved foreign exchange or securities as are permitted under this Order to form part of the assets of the Issue Department.
1Substituted by the Bangladesh Bank (Amendment) Act, 2003
1. 27. The Bank Notes made and issued by the Ba nk shall be in such denominations and of such design, form and material as may be approved by the Government on the recommendations of the Board.
2. 28. The Bank shall not reissue Bank Notes which are torn, defaced or excessively soiled.
3. 29. Notwithstanding anything contained in any enactment or rule or law to the contrary, no person shall as of right be entitled to recover from the Government or the Bank the value of any lost, stolen, mutilated or imperfect Bank Note.
30. (1) The assets of the Issue Depart ment shall not be less than the total of its liabilities and shall be maintained as follows: –
(a) of the total amount of the assets, assets of such value as the Government in consultation with the Bank, may, by notification in the official Gazette, specify shall be held in gold coins, gold bullion, silver bullion, Special Drawing Rights, Asian Monetary Units, Islamic Dinars or approved foreign exchange, and
(b) the remainder of the assets shall be held in —
(i) Taka coins;
(ii) Taka securities of any maturity;
(iii) such bills of exchange and promissory notes payable in Bangladesh as are eligible for purchase by the Bank under sub-clauses (a), (b) and(f) of clause (2) of Article 16;
(iv) Promissory notes obtained by the Bank in respect of advances and loans made under clause (4) of Article 16 against such securities as are mentioned in sub-clauses (a) and (b) of that clause; and
(v) Promissory notes obtained by the Bank in respect of advances and loans made under clause (10) of Article 16.
(2) For the purposes of this Article —
(a) gold coin, gold bullion and silver bullion shall be valued at the market value of the fine gold or silver content thereof, as the case may be;
(b) Taka coin shall be valued at its face value; and
(c) Taka securities and securities specified in clause (4) shall be valued at the market value for the time being obtaining or face value whichever is less.
(3) Of the gold coin and gold or silver bullion held as assets not less than seventeen-twentieths shall be held in the custody of the Bank including its branches, offices of agencies, and the gold or silver belonging to the Bank which is in any other bank or in any mint or treasury or in transit may be reckoned as part of the assets.
(4) For the purposes of this Article that approved foreign exchange which may be held as part of the assets shall be in any of the following forms, namely —
(a) balances standing to the credit of the Bank with the principal currency authority of a country whose currency is an approved foreign exchange, or at any bank in such country;
(b) bills of exchange bearing two or more good signatures having a maturity not exceeding one hundred and eighty days and drawn on and payable at any place in a country whose currency is a n approved foreign exchange; and
(c) securities of a Government with an unexpired currency of not more than five years and payable in a currency which is an approved foreign exchange.
(5) Restrictions relating to maturity shall not apply to securities mentioned in clause
(4) held by the Bank on the appointed day or any securities transferred to and vested in the Bank under article 5.
4. 31. Notwithstanding anything contained in the foregoing provisions, the Bank may, with the previous sanction of the Government, for periods not exceeding six months in the first instance, which may with the like sanction be extended from time to time by periods not exceeding three months at a time, hold as assets gold coin, gold or silver bullion, Special Drawing Rights, A sian Monetary Units, Islamic Dinars or approved foreign exchange of less aggregate amount than that required by sub-clause (a) of clause (1) of Article 30.
5. 32. (1) The liabilities of the Issue Department shall be an amount equal to the total of the amount of the Bank Notes for the time being in circulation.

(2) for the purposes of this Article any Bank Note which has not been presented for payment within forty years from the first day of July following the date of its issue shall be deemed not to be in circulation and the value thereof shall notwithstanding anything contained in clause (2) of Article 26 be paid by the Issue Department to the Banking Department; but any such Bank Note if subsequently presented for payment, shall be paid by the Banking Department.
33.(1) The Bank shall issue Taka coin on demand in exchange for Bank Notes and Bank Notes on demand in exchange for coin which is legal tender in Bangladesh.
(2) The Bank shall in exchange for Bank Notes of ten taka or upwards supply Bank Notes of lower value or coins which are legal tender in Bangladesh under the Bangladesh Coinage Order, 1972, in such quantities as may in the opinion of the Bank be required for circulation. The Government shall supply such coins to the Bank on demand and if it fails to do so at any time the Bank shall be released during the period of such failure from obligation to supply them to the public.
(3) The Government shall take over from the Bank at such times and in such quantities as the Bank may, with the previous approval of the Government, determine Taka coins which are not required for purposes of circulation against payment.

1. 34. The Government shall not reissue any Taka coins taken over under clause (3) of Article 33 nor put into circulation any Taka coin except through the Bank and the Bank shall not dispose of Taka coin otherwise than for purposes of circulation or by delivery to the Government under the preceding Article.
2. 35. (1) No person in Bangladesh other than the Bank or as expressly authorised by this Order, the Government shall draw, accept, make or issue any Bill of Exchange, Hundi, Promissory Note or engagement for the payment of money payable to bearer on demand, or borrow, owe or take up any sum or sums of money on the Bills, Hundis or Notes payable to bearer on demand of any such persons, but such Cheques, or Drafts, including Hundi, payable to bearer on demand or otherwise may be drawn on a person’s account with a banker.

(2) Notwithstanding anything contained in the Negotiable Instrument Act, 1881, no person in Bangladesh other than the Bank, or as expressly authorised by this Order, the Government shall make or issue any Promissory Note expressed to be payable to the bearer of the instrument.
(3) Any person contravening the provision of this Article shall be punishable upon conviction with fine which may extend to double the amount of the Bill, Hundi, Promissory Note or engagement in respect whereof the offence is committed.

(4) No prosecution under this Article shall be instituted e xcept on complaint made in writing on behalf of the Bank.
36. [(1) Every scheduled bank shall maintain with the Bank a balance the amount of which shall not be less than such portion of its total demand and time liabilities as may be prescribed by the Ba nk pursuant to the monetary policy objectives of the Bank, by notification in the official Gazette. Explanation—For the purposes of this Article liabilities shall not include the paid-up capital or the reserves, or any credit balance in the profit and loss account of such bank or the amount of any loan taken from the Bank.]1
[(2) Based on the monetary policy objectives pursued by the Bank, it shall prescribe from time to time the terms and conditions of admissibility of interest, and the rate of interest, on the required minimum balances and/or on amounts in excess of the required minimum balances.]2
[(2A) ………………………………………………..]3
[(2B) .………………………………………………..]4

(3) Every scheduled bank shall send to the Bank returns signed by two responsible officers of such bank containing such information as may be deemed necessary for carrying out the purposes and objects of this Order at such periods of time as the Bank may from time to time direct.
.(4) [If at the close of business on any day before the day fixed for the next return under the preceding clause, the balance held at the Bank by any scheduled bank is below the minimum fixed by clause (1) such scheduled bank may be ordered by the Bank to pay the Bank in respect of such day penal interest at such rate above the Bank rate as may be determined by the Bank from time to time on the amount by which the balance with the Bank falls short of the fixed minimum, and if, on the day on which the next return is due, such balance is still below the fixed minimum as disclosed by this return, Bangladesh Bank may impose a higher rate of penal interest above the Bank rate in respect of that day and each subsequent day on which the balance held at the Bank at the close of business on the day is below the fixed minimum.]5
(5) When under the provisions of clause (4) penal interest [……………..]6 has become payable by a scheduled bank, if thereafter on the day fixed for the next return under clause (3) the balance held at the Bank is still below the fixed minimum as disclosed by this return—

1 Substituted by the Bangladesh Bank (Amendment) Act, 2003
2Substituted by the Bangladesh Bank (Amendment) Act, 2003
3Omitted by the Bangladesh Bank (Amendment) Act, 2003
4Omitted by the Bangladesh Bank (Amendment) Act, 2003
5Substituted by the Bangladesh Bank (Amendment) Act, 2003
6Omitted by the Bangladesh Bank (Amendment) Act, 2003

(a) every director and officer of the scheduled bank, who is knowingly and wilfully a party to the default, shall by order of the Bank be punishable with fine which may extend to [Taka one lakh]1 and with a further fine which may extend to [Taka one lakh]2 for each subsequent day on which the default continues; and
(b) the Bank may prohibit the scheduled bank from receiving after the said day any fresh deposit, and if default is made by the scheduled bank in complying with such prohibition, every director and officer of the scheduled bank who is knowingly and wilfully a party to such default or who through negligence or otherwise contributes to such default shall by order of the Bank be punishable in respect of each default with fine which may extend to [Taka one lakh]3 for each day after the first on which a deposit received in contravention of such prohibition is retained by the scheduled bank.

[………………………………………..]4
(6) Any scheduled bank failing to comply with the provisions of clause (3) shall by order of the Bank be liable to pay to the Bank a penalty of [Taka twenty five thousand]5 for each day during which the failure continues.
(7) Whoever in any return under this Article wilfully or recklessly makes a statement false in any material particular or wilfully or recklessly omits to state a material particular shall by order of the Bank be punishable with fine which may extend to [Taka ten lakh]6 in respect of each such return.
(8) The penalties imposed by clauses (4), (5), (6) and (7) shall be payable on demand made by the Bank and in the event of refusal by the defaulting bank, director or officer to pay on such demand, may be levied by a direction of the Civil Court having jurisdiction in the area where an office of the defaulting bank is situated, such direction being made only upon application made in this behalf to the court by the Bank, with the previous sanction of the Government.

37. (1) The Bank shall maintain at all its offices and branches an up-to-date list of banks declared by it to be scheduled banks under sub-clause(a) of clause (2).
(2) The Bank shall, by notification, in the Official Gazette—
(a) declare any bank to be scheduled bank which is carrying on the business of banking in Bangladesh and which—
(i) is a banking company [………………….]7 or a co-operative bank, or a corporation or a company incorporated by or established under any law in force in any place in or outside Bangladesh;
1Substituted by the Bangladesh Bank (Amendment) Act, 2003
2Substituted by the Bangladesh Bank (Amendment) Act, 2003
3Substituted by the Bangladesh Bank (Amendment) Act, 2003
4Omitted by the Bangladesh Bank (Amendment) Act, 2003
5Substituted by the Bangladesh Bank (Amendment) Act, 2003
6Substituted by the Bangladesh Bank (Amendment) Act, 2003
7Omitted by the Bangladesh Bank (Amendment) Act, 2003

(ii) has a paid -up capital and reserves of an aggregate value of [an amount n ot less than that required to be maintained under iJrJ 13 of mqJÄT ßTJŒJjL IJAj, 1991 (1991 xPjr 14jÄ IJAj) ]1 : Provided that in the case of a co-operative bank, an exception may be made by the Bank;
(iii) satisfies the Bank that its affairs are not being conducted in a manner detrimental to the interests of its depositors;
(b) [Direct the de-scheduling of any scheduled bank which—
(i) ceases to fulfil the requirements mentioned in sub-clause (a) or goes into liquidation or otherwise wholly or partly ceases to carry on banking business; or
(ii) in the opinion of the bank, is conducting its business in a manner detrimental to the interests of its depositors : Provided that the Bank may, on application of the scheduled bank concerned and subject to such conditions, if any, as it may impose, defer the making of a direction under sub-clause (b) for such period as the Bank considers reasonable to give the scheduled bank an opportunity of fulfilling the requirements mentioned in paragraphs (ii) and (iii) of sub- clause (a); ]2
(c) alter the description in the list of scheduled banks whenever any scheduled bank changes its name. Explanation—In clause (2) the expression “Value” means the real or exchangeable and not the nominal value of the capital and reserves and the valuation made by the Bank shall be final.

38. The Bank may require any Corporation with which it has any transactions under Article 16 to furnish returns referred to in clause (3) of Article 36 and if it does so require, the provisions of clauses (6), (7) and (8) of Article 36 shall apply, so far as may be, to such Corporation as if it were a scheduled bank.
[38A. The Governor shall at least once a year or at any other instance, if so summoned appear before the Parliamentary Committee on Finance to report on the monetary policy and of other activities of the Bank and to answer questions.]3
2. 39. [The Bank shall compile and publish in such manner and at such times as the Board may consider appropriate a consolidated statement from such information as may be received under this Order]4.
3. 40. (1) The Bank shall prepare and transmit to the Government a weekly account of the Issue Department and of the Banking Department in such form as the Government may, by notification in the Official Gazette direct. The Government shall cause these accounts to be published weekly in the Official Gazette.

1Substituted by the Bangladesh Bank (Amendment) Act, 2003
2Substituted by the Bangladesh Bank (Amendment) Act, 2003
3Added by the Bangladesh Bank (Amendment) Act, 2003
4Substituted by the Bangladesh Bank (Amendment) Act, 2003

(2) The Bank shall also, within two months from the date on which the annual accounts of the Bank are closed, transmit to the Government a copy of the annual accounts signed by the Governor, the Deputy Governor, if any, and the Chief Accounting Officer of the Bank, and certified by the Auditors together with a report by the Board on the working of the Bank throughout the year, and the Government shall cause such accounts and report to be published in the Official Gazette.
41. (1) No suit or other legal proceedings shall lie against the Bank or any of its officers for anything which is in good faith done or intended to be done in pursuance of Article 36 or Article 37 or Article 38 or Article 39 or Article 40 or in pursuance of the provisions of Chapter IV.
(2) No suit or other legal proceedings shall lie against the Bank or any of its officers for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of Article 36 or Article 37 or Article 38 or Article 39 or Article 40, or in pursuance of the provisions of Chapter IV.
CHAPTER IV COLLECTION AND FURNISHING OF CREDIT INFORMATION
42. In this Chapter, unless the context otherwise requires,—
(a) “banking company” means the banking company as defined in [clause (cc) of article 2 of this Order]1 and includes the apex co-operative bank or any other banking or financial institution notified by the Government in this behalf;
(b) “borrower” means any person to whom any credit limit has been sanctioned by any banking company, whether availed of or not, and includes —
(i) in the case of a company or corporation, its subsidiaries;
(ii) in the case of a Hindu undivided family, any member thereof or any firm in which such member is a partner;
(iii) in the case of a firm, any partner thereof or any other firm in which such partner is a partner; and
(iv) in the case of an individual, any firm in which such individual is a partner;
(c) “credit information” means any information relating to—

(i) the amounts and the nature of loans or advances and other credit facilities granted by a banking company to any borrower or class of borrowers;
1Substituted by the Bangladesh Bank (Amendment) Act, 2003
(ii) the nature of security taken from any borrower for credit facilities granted to him; and
(iii) the guarantee furnished by a banking company for any of its customers.
43. The Bank may—
(a) collect, in such manner as it may think fit, credit information from every banking company; and
(b) furnish such information to any banking company in accordance with the provisions of Article 45.
44. (1) For the purpose of enabling the Bank to discharge its functions under this Chapter, it may at any time direct any banking company to submit to it such statements relating to such credit information and in such form and within such time as may be specified by the Bank from time to time.
(2) A banking company shall, notwithstanding anything to the contrary contained in any other law for the time being in force or in any instrument regulating the “ constitution thereof or in any agreement executed by it relating to the secrecy of its dealing with its constituents, be bound to comply with any direction issued under clause (1).”
45. (1) A banking company may, in connection with any financial arrangement entered into or proposed to be entered into by it with any person, make an application to the Bank in such form as the Bank may specify requesting it to furnish the applicant with such credit information as may be specified in the application.
(2) On receipt of an application under clause (1), the Bank may, as soon as may be, furnish the applicant with such credit information relating to the matters specified in the application, as may be in its possession : Provided that the information so furnished shall not disclose the names of the banking companies which have submitted such informatio n to the Bank.
(3) The Bank may in respect of each application levy such fees, as it may deem fit, for furnishing credit information.
2. 46. (1) Any credit information contained in any statement submitted by a banking company under Article 44 or furnis hed by the Bank to any banking company under Article 45 shall be treated as confidential and shall not, except for the purposes of this Chapter, be published or otherwise disclosed.

(2) Nothing in this Article shall apply to—
(a) the disclosure by any banking company, with the previous permission of the Bank, of any information furnished to the Bank under article 44;
(b) the publication by the Bank, if it considers necessary in the public interest so to do, of any information collected by it under Article 44, in such consolidated form as it may deem fit without disclosing the name of any banking company or its borrowers.
(3) Notwithstanding anything contained in any law for the time being in force, no court, tribunal or [other authority except Parliament]1 shall compel the Bank or any banking company to produce or to give inspection of any statement submitted by that banking company under Article 44 or to disclose any credit information furnished by the Bank to that banking company under Article 45.

1. 47. No person shall have any right, whether in contract or otherwise, to any compensation for any loss incurred by reason of the operation of any of the provisions of this Chapter.
2. 48. (1) If any banking company—

(a) fails to submit any statement required under Article 44 or submits under the Article a statement which is false in any material particular; or
(b )fails to comply with any condition imposed under this Chapter, every director or other officer of the company and every other person who is knowingly a party to the breach shall be punishable with fine which may extend to [Taka five lakh]2.
(2) If any person discloses any credit information, the disclosure of which is prohibited under Article 46, he shall be punishable with imprisonment which may extend to six months or with fine which may extend to [Taka one lakh]3 or with both.

CHAPTER V

CHAPTER VI GENERAL

1. 59. Securities of the value of Taka three crores may be allocated for the purpose by the Government and shall be held by the Bank as the Reserve Fund.
2. 60. (1) The Bank may establish and maintain a Fund to be called the Rural Credit Fund to which shall be credited—

1 Substituted by the Bangladesh Bank (Amendment) Act, 20032 Substituted by the Bangladesh Bank (Amendment) Act, 2003 3 Substituted by the Bangladesh Bank (Amendment) Act, 2003 4 Chapter V, Articles 49, 50, 51, 52, 53, 54, 55,56, 57 and 58 omitted with effect from
the 16th August, 1993 by Act 27 of 1993.
(a) an initial sum of Taka 50 lakhs to be subscribed by the Government; and
(b) appropriations of such amount from the surplus profits of the Bank as may be determined by the Bank in consultation with the Government.

(2) The Rural Credit Fund may be applied by the Bank to the following objects, namely:-
(a) the making of medium-term loans and advances to co-operative banks, repayable on the exp iry of a fixed period, not exceeding five years from the date of the making thereof, against such security as the Bank may, from time to time, specify in this behalf;
(b) the making of medium-term and long-term loans and advances to rural credit agencies created or established by or under any law for the time being in force including scheduled banks on such terms and conditions as the Bank may, from time to time, specify in this behalf;
(c) where the Bank is satisfied that any co-operative bank or any scheduled bank to which a loan or advance as is referred to in clause (4) of Article 16 has been made is unable to repay the same in time, the converting of such loan or advance, into a medium-term loan or advance, as the case may be, in accordance with the provisions of sub-clause (a);
(d) the making of short-term and medium-term loans and advances to scheduled banks as refinance against their loans and advances to co-operative societies or farmers or dealers supplying seed, machinery, fertilizer and other requisites of agriculture to farmers on credit:
Provided that such credit is granted on such terms and conditions as to security and otherwise; as may be laid down by the Bank; and
(e) The financing of a system of guarantees in accordance with rules to be made by the Bank to cover a portion of the bona fide loss that a scheduled bank is proved to the satisfaction of the Bank to have incurred in any transaction of loan or advance made under sub-clause (d).

61. The Bank may establish and maintain a fu nd to be called “Agricultural Credit Stabilisation Fund” to which shall be credited :-
(a) an initial sum of Taka 25 lakhs to be subscribed by the Government; and
(b) appropriation of such amount from the surplus profits of the Bank as may be determined by the Bank in consultation with the Government;
(c) the amount in the said Fund shall be applied by the Bank only to the making of loans and advances to apex co-operative bank repayable on the expiry of a fixed period of not less than fifteen months and not exceeding five years from the date of making such loan or advance and on such terms and conditions as may be specified in this behalf by the Bank: Provided that no such loans or advances shall be made—
(i) except for the purpose of enabling the apex co-operative bank to pay any dues in respect of bills of exchange and promissory notes, purchased or rediscounted by the Bank under sub-clause (f) of clause
(2) of Article 16 or loans and advances made to it by the Bank under clause (6) of Article 16 and unless, in the opinion of the Bank the apex co-operative bank is unable to pay such dues in time due to drought, famine or natural calamities; and
(ii) unless such loans and advances are fully guaranteed as to the repayment of the principal and payment of interest by the Government.

62. (1) The Bank may establish and maintain a Fund to be called the Industrial Credit Fund to which shall be credited—
(a) an initial sum of Taka one crore to be subscribed by the Government, and
(b) appropriations of such amount from the surplus profits of the Bank as may be determined by the Bank in consultation with the Government.
(2) The Industrial Credit Fund shall be applied by the Bank to the following objects, namely:-
(a) the making of medium-term and long-term loans and advances to co¬operative banks and such institutions as the Bank may deem fit repayable on the expiry of a fixed period, not exceeding five years from the date of the making thereof, against such security as the Bank may, from time to time, prescribe in this behalf;
(b) the making of medium-term and long-term loans and advances to industrial credit agencies created or established by or under any law for the time being in force on such terms and conditions as the Bank may, from time to time, prescribe in this behalf;
(c) where the Bank is satisfied that any institution to which a loan or advance as referred to in clause (4) of Article 16 has been made is unable to repay the same in time, the converting of such loan and advance into a medium-term loan or advance, as the case may be, in accordance with the provisions of sub-clause (a); and
(d) the financing of a system of guarantees in accordance with rules to be made by the Bank to cover a portion of any bona fide loss that a scheduled bank is proved to the satisfaction of the Bank to have incurred in any transaction of medium-term and long-term loan to a party seeking to establish an industrial project of small or medium size.
63. (1) The Bank may establish and maintain a Fund to be called the Export Credit Fund to which shall be credited—
(a) an initial sum of Taka one crore to be subscribed by the Government, and
(b) appropriations of such amount from the surplus profits of the Bank as may be determined by the Bank in consultation with the Government.
(2) The Export Credit Fund shall be applied by the Bank to the following objects, namely:-
(a) the making of medium-term and long-term loans and advances to scheduled banks and other credit institutions created or established by or under any law for the time being in force, as refinance against their medium-term and long-term loans and advances given for financing exports from Bangladesh, on such terms and conditions as to security and otherwise as the Bank may, from time to time, lay down in this behalf;
(b) the making of loans and advances, directly or through scheduled banks or other credit institutions created or established by or under any law for the time being in force, to private or Government sponsored institutions in foreign countries, for the purpose of enabling them to import goods from Bangladesh, on such term and conditions as the Bank may, from time to time, lay down in this behalf.
2. 64. After making provision for bad and doubtful debts, depreciation in assets, contributions to staff superannuation fund and for all other matter for which provision is to be made by or under the Order or which are usually provided for by bankers, the balance of the profits shall be paid to the Government.
65. (1) Not less than two Auditors shall be appointed and their remuneration fixed by the Government.
(2) The Auditors shall hold office for such term not exceeding one year as the Government may fix while appointing them, and shall be eligible for re¬appointme nt.
3. 66. Without prejudice to anything contained in Article 65 the Government may at any time appoint the Comptroller and Auditor-General or such Auditors as it deems fit to examine and report upon the accounts of the Bank.
4. 67. (1) Every Auditor shall be supplied with a copy of the annual balance sheet and it shall be his duty to examine the same together with the accounts and vouchers relating thereto; and every auditor shall have a list delivered to him of all books kept by the Bank, and shall at all re asonable time have access to books, accounts and other documents of the Bank, and may, at the expense of the Bank, if appointed under Article 65 or at the expense of the Government if appointed under Article 66, employ Accountants or other persons to assist him in investigating such accounts and may, in relation to such accounts, examine any Director or Officer of the Bank.

(2) The Auditors shall make a report to the Government upon the annual balance sheet and accounts, and in every such report t hey shall state whether in their opinion the balance sheet is a full and fair balance sheet containing all necessary particulars and properly drawn up so as to exhibit a true and correct view of the state of affairs of the Bank, and, in case they have called for any explanation or information from the Board, whether it has been given and whether it is satisfactory.
[68. ..…………………………..]1
1. 69. The Research Department and the Statistics Department of the Bank shall have the power, subject to right and provisions guaranteed under other laws, to request from any natural or juridical person, as well as the Government, any data or information necessary for the proper execution of its duties.
2. 70. [The Bank may subject to approval of the Government appoint any locally owned scheduled bank as its agent in a place where there is a branch of the said scheduled bank.]2
71. (1) For the purposes of section 124 of the Evidence Act, 1872, the provisions of Part IV of the Code of Civil Procedure, 1908, and the provisions of rule 27 of Order V, and rule 52 of Order XXI of the said Code, the Bank and any Officer of the Bank acting in his capacity as such shall be deemed to be a public officer.
(2) The provisions of Section 123 of the Evidence Act shall apply to the unpublished records relating to the affairs of the Bank and the Governor shall be deemed to be the officer or head of the department concerned.
(3) Every Officer of the Bank shall be deemed to be a public servant within the meaning of section 21 of the Penal Code (Act XLV of 1860).

1Omitted by the Bangladesh Bank (Amendment) Act, 2003
2Substituted by the Bangladesh Bank (Amendment) Act, 2003

1. 72. Notwithstanding anything contained in any law for the time being in force Provident Fund or pension granted by the Bank to its employees shall not be liable to seizure, attachment or sequestration by process of any Court in Bangladesh at the instance of a creditor, for any demand against the pensioner or in satisfaction of a decree or order of any such Court.
2. 73. The Bank shall not be liable to the payment of any Stamp Duty under the Stamp Act, 1899.
3. 74. The Bank shall not be liable to the payment of Customs Duty on gold, silver, coins, currency notes, security papers, and any other goods that may be specified by the Government.
4. 75. Notwithstanding anything contained in the Income -tax Act, 1922, or the Business Profits Tax Act, 1947, or any other law for the time being in force relating to income-tax, super-tax or business profits-tax, the Bank shall not be liable to pay any income-tax, super- tax or business profits -tax on any of its income, profits or gains.
5. 76. The Bank shall not be placed in liquidation save by order of the Government and in such manner and on such terms and conditions as it may direct.
77. (1) If in the opinion of the Government, the Bank fails to carry out any of the obligations imposed on it by or under this Order the Government may by notification in the Official Gazette declare the Board to be superseded, and thereafter the general superintendence and direction of the affairs of the Bank shall be entrusted to such agency as the Government may determine and such agency may exercise the power and do all acts and things which may be exercised or done by the Board under this Order.
(2) When action is taken under clause (1) the Government shall cause a full report of the circumstances leading to such action and of the action taken to be laid before the Legislature at the earliest possible opportunity and in any case within three weeks of the re-assembly thereof after the issue of the notification superseding the Board.
78. (1) Except in the performance of his duties under this Order every employee of the Bank shall preserve and aid in preserving secrecy with regard to all matters relating to the affairs of the Bank not published by it, and with regard to all matters relating to the financial or monetary affairs of any institution, person, body of persons, any Government or authority whether in Bangladesh or outside that may come to his knowledge in the performance of his duties.
(2) Every such employee who communicates any such matter, except when required by law to do so in the discharge of his duty as such shall be guilty of an offence and shall on conviction by a court of competent jurisdiction be punished with imprisonment of either description for a term which may extend to six months or with fine which may extend to [Taka five lakh]1 or with both.
1Substituted by the Bangladesh Bank (Amendment) Act, 2003
(3) No court shall take cognizance of any offence punishable under this Article except upon complaint in writing by a person authorised in this behalf by the Governor.

79. (1) The Governor may, by general or special order, delegate to a Deputy Governor, subject to such conditions and limitations, if any, as may be specified in the Order, such of the powers and functions exercisable by him under this Order or under any other law for the time being in force as he may deem necessary for the efficient administration of the functions of the Bank.
(2) The fact that a Deputy Governor exercises any power or does any act or thing in pursuance of this Order shall be conclusive proof of his authority to do so.
80. (1) The Bank may, notwithstanding anything contained in any law for the time being in force or any contract, depute any member of its staff for such period as it may deem fit to the Government or any institution and thereupon the person so deputed shall, during the period of his deputation, render such service to the Government or institution as it may require.
(2) Nothing contained in this Article shall empower the Bank to depute any member of its staff to the Government or any institution on any salary, emoluments or other terms and conditions which is or are less favourable to him than that or those to which he is entitled immediately before such deputation.
81. Whenever the Bank anticipates economic disturbances that are likely to threaten domestic monetary stability in Bangladesh or whenever abnormal movements in the money supply or in the price level are endangering such stability, it shall be the duty of the Bank—
(a) to adopt such policies, and to cause such remedial measures to be taken, as are appropriate in the circumstances and authorised b y the Order; and
(b) to submit to the Government a detailed report which shall include as a minimum, an analysis of—
(i) the cause of the anticipated economic disturbances or, of the actual abnormal movements of the money supply or the price level;
(ii) the probable effects of such disturbances or movements on the level of production, employment, and real income in Bangladesh; and
(iii) the measures which the Bank has already taken, and the further monetary, fiscal, or administrative measures which it proposes to take or recommends for adoption by the Government.
2. 82. (1) [The Board]1 may make regulations consistent with this Order to provide for all matters for which provision is necessary or convenient for the purpose of giving effect to the provisions of this Order: Provided that in the event of non-existence of the Board, the Governor may with the approval of the Government make regulations for the purpose of giving effect to the provisions of this Order and generally for carrying out the purposes of this Order.

1Substituted by the Bangladesh Bank (Amendment) Act, 2003
(2) In particular and without prejudice to the generality of the foregoing provision, such regulations may provide for all or any of the following matters, namely:-
(a) the manner in which meetings of the Board shall be transacted and the procedure to be followed at meetings thereof;
(b) the conduct of the business of the Executive Committee;
(c) the delegation of powers and functions of the Board, the Governor, Deputy Governor, Directors, or Officers of the Bank;
(d) the formation of committees of the Board, their supervis ion by the Board and the conduct of business in such committees;
(e) Recruitment of employees of the Bank including the terms and conditions of their service, constitution of superannuation, beneficial and other funds, with or without Bank’s contribution, for the employees of the Bank, their welfare, providing amenities, medical facilities, grant of loans and advances, their betterment and uplift;
(f) the manner and form in which contracts binding on the Bank may be executed;
(g) the provision of an official seal of the Bank and the manner and effects of its use;
(h) the manner and forms in which the balance sheet of the Bank shall be drawn up, and in which the accounts shall be maintained;
(i) the remuneration of Directors;
(j) the relations of the scheduled banks with the Bank and the returns to be submitted by the scheduled banks to the Bank;
(k) the regulations of clearing houses for the scheduled banks;
(l) the circumstances in which, and the conditions and limitations subject to which, the value of any lost, stolen, mutilated or imperfect Bank Note may be refunded as of grace;
(m) the denomination, form, issue, negotiability, encashment and repatriation of the instruments mentioned in clause (8) of Article 16;
(n) generally, for making any provision necessary or convenient for the efficient conduct of the business, discharge of functions and for purposes of management of the Bank.

[(2A) Notwithstanding anything contained in this Article, no regulation under sub¬clause (h), (i), and (m) of clause (2) shall be made without the prior approval of the Government.
Provided that regulations falling under sub-clause (e) on salary and compensation packages of employees would be subject to the approval of the government, based on due consideration of skill and competence needed for central banking.]1
1Added by the Bangladesh Bank (Amendment) Act, 2003
(3) Copies of all regulations made under this Article shall be available to the public on payment.
1. 83. In all laws mentioned in this Order and in all other existing laws including the Banking Companies Ordinance, 1962, the Negotiable Instruments Act, 1881, the Trust Act, 1882, the Companies Act, 1913, the Foreign Exchange Regulation Act, 1947, the Banker’s Books Evidence Act, 1891, and all rules, regulations, bye-laws, notifications, Orders and instruments, references to State Bank of Pakistan shall unless the context otherwise requires, be construed as reference to “Bangladesh Bank”.
2. 84. (1) The State Bank Act, 1956 (Act XXXIII of 1956) and the Bangladesh Bank (Temporary) Order, 1971 (A.P.O. No.2 of 1971) are hereby repealed.

(2) Any rules or regulations made, order passed, notification issued, thing done, action taken or proceedings commenced under any of the provisions of the State Bank Act, 1956 (Act XXXIII of 1956), the Bangladesh Bank (Temporary) Order, 1971 (A.P.O. No.2 of 1971) or deemed to have been so made, passed, issued, done, taken or commenced, shall continue in force and be deemed to have been made, or as the case may be, passed, issued, done, taken or commenced under the corresponding provision of this Order.
DACCA, ABU SAYEED CHOWDHURY The 31st October, 1972. President, People’s Republic of Bangladesh.
NASIMUDDIN AHMAD Joint Secretary.

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Bangladesh Budget 2010-2011 & Its Impact on Capital Market

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Introduction

   Budget is a numerical expression of a plan. It is essential to every financial or nonfinancial institution. A govt. can not run without its budget. The govt. publishes its budget for every financial year. This budget directly or indirectly affects the capital market of that country. In this report We  have analyzed the budget 2010-11 with a view to finding out the impact of budget on capital market.

 Description

Budget-Definition   A budget is generally a list of all planned expenses and revenues. It is a plan for saving and spending. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods. In other terms, a budget is an organizational plan stated in monetary terms. It has to take account the institutional setting, national aspiration, economic environment within which it operate to attain the cherished objectives.

In summary, the purpose of budgeting is to:

  1. Provide a forecast of revenues and expenditures i.e. construct a model of how our business might perform financially speaking if certain strategies, events and plans are carried out.
  2. Enable the actual financial operation of the business to be measured against the forecast.

Government Budge

A government budget is a legal document that is often passed by the legislature, and approved by the chief executive-or president. For example, only certain types of revenue may be imposed and collected. Property tax is frequently the basis for municipal and county revenues, while sales tax and/or income tax are the basis for state revenues, and income tax and corporate tax are the basis for national revenues.

The two basic elements of any budget are the revenues and expenses. In the case of the government, revenues are derived primarily from taxes. Government expenses include spending on current goods and services, which economists call government consumption; government investment expenditures such as infrastructure investment or research expenditure; and transfer payments like unemployment or retirement benefits.

Budgets have an economic, political and technical basis. Unlike a pure economic budget, they are not entirely designed to allocate scarce resources for the best economic use. They also have a political basis wherein different interests push and pull in an attempt to obtain benefits and avoid burdens. The technical element is the forecast of the likely levels of revenues and expenses.

Therefore govt. budget should involve:

· A plan, setting out proposal and decisions of running out the finances of the govt.

· An authorization to raise the revenue and to incur expenditure.

· A forecast of the results expected on which to base future policy.

· An efficiency yardstick of what expenditure or revenue ought to attain successfully.

Bangladesh Govt. budgeting procedure

The annual budget is prepared by the Ministry of Finance and presented to Parliament for approval each year, except during periods of martial law, when the budget has been announced by the martial law administration.

The Constitution of Bangladesh, however, does not use the term budget. Instead, it uses an equivalent term ‘Annual Financial Statement’, which is to show the estimated receipts and expenditures of the government for a particular financial year.

Government budget in the country has two parts:

· Revenue and

· Development.

The tax on premium value would discourage the companies, which are planning to be listed on the exchanges.

The government could easily reduce its budget deficit to three per cent – instead of five per cent forecast in the budget by off-loading shares of state-owned enterprises. This will reduce the public deficit to a great extent, replenish the bourses with quality shares and stabilize the market. In 2008, the government raised more than Tk 20 billion from the capital market by off-loading SoEs’ shares.

Govt. must be appreciated for not making mentioning TIN mandatory while opening BO accounts and for not imposing tax on individuals’ capitals gain.

Recommendations

With regard to budget FY11, the apprehension is that realization of revenue targets and resource mobilization may be more within reach than the full implementation of the expenditure plan, in terms of quantity and quality However, some of the reform measures articulated earlier such as strengthening of regulatory reforms, BBBF, public expenditure reform, and civil service reform should receive due attention. These are critical to raising efficacy of public service delivery. Implementation of the budget proposals will hinge on significant improvement in the delivery capacity of the entire government machinery including various implementing ministries, institutions and agencies

Some recommendations related to capital market reforms:

Appendix Table 1.1

References

Ø  The Monthly Economic Trend, June, 2010, Bangladesh bank.

Ø  The Budget for FY-2010-11, Ministry of Finance.

The Economic Review of Bangladesh, Ministry of Finance, Bangladesh.

The Daily Financial Express, The daily star – English newspaper;

Prothom Alo- Bangla newspaper;

State of the Bangladesh Economy and Budget Responses 2010-11, CPD;

Finance Minister’s Budget speech- (2010);

Ministry of Finance, Bangladesh;

www.banglapedia.com

www.cpd.bd.com

www.dse.com

www.stockbangladesh.com

www.bdstockprice.info

www.biasl.net

www.bd.stock.com

Bibliography

Bodie, Z; Kane, A; Marcus, J. Alan; Investments, (Tata McGraw-Hill)

Dragota, V. Minority shareholders’ protection in Romanian capital markets: evidence on dividends, Euro-Mediterranean Economics and Finance Review,

Khan, M. Y; Jain, P. K; Financial Management, (Tata McGraw-Hill)

Reily, K. Frank; Brown, C. Keith; Investment Analysis and Portfolio Management. 

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Bangladesh at a Glance

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Bangladesh at a Glance

Bangladesh, officially the People’s Republic of Bangladesh, is a country in South Asia. It is surrounded by India on all sides except for a small border with Myanmar to the far southeast and the Bay of Bengal to the south. Together with the Indian state of West Bengal, it makes up the ethno-linguistic region of Bengal. The name Bangladesh means “Country of Bengal the borders of Bangladesh were set by the Partition of India in 1947, when it became the eastern wing of Pakistan (East Pakistan), separated from the western wing by 1,600 km (1,000 miles).

Despite their common religion of Islam, the ethnic and linguistic gulf between the two wings, compounded by an apathetic government based in West Pakistan, resulted in the independence of Bangladesh under the leadership of Sheikh Mujibur Rahman in 1971 after the bloody Bangladesh Liberation War, in which it was supported by India. The years following independence have been marked by political turmoil, with thirteen different heads of government, and at least four military coups. The population of Bangladesh ranks seventh in the world, but its area of approximately 144,000 km² is ranked ninety-fourth, making it one of the most densely populated countries in the world. It is the third largest Muslim-majority nation, but has a slightly smaller Muslim population than the Muslim minority in India.

People’s Republic of Bangladesh

Gônoprojatontri Bangladesh
Anthem: Amar Shonar Bangla

My Golden Bengal
Capital

(and largest city)

 Dhaka

23°42?N 90°21?E / 23.7°N 90.35°E
Official languages Bengali
Demonym Bangladeshi
Government Parliamentary republic
President Zillur Rahman
Prime Minister Sheikh Hasina
Speaker Abdul Hamid
Independence March 26, 1971
Declared Victory Day December 16, 1971
Area
– Total 147,570 km2 (94th)

55,599 sq mi
– Water (%) 7.0
Population
– 2009 estimate 162,221,000(7th)
– Density 1,099.3/km2 (5th)

2,917.6/sq mi
GDP (PPP) 2008 estimate
– Total $226.205 billion (48th)
– Per capita $1,398 (153rd)
GDP (nominal) 2008 estimate
– Total $84.196 billion (58th)
– Per capita $520 (157th)
Gini (2000) 33.4 (medium)
HDI (2007) ? 0.543[ (medium) (146th)
Currency Taka (BDT)
Time zone BST (UTC+6)
– Summer (DST) BDST (UTC+7)
Drives on the Left
Internet TLD .bd
Calling code 880
1 Adjusted population, p.4,
Contents

Ø <href=”#History”> History

Ø Culture

Ø People

Ø River

Ø Climate

Ø <href=”#Government_and_politics”>Government and politics

Ø <href=”#Foreign_policy_and_military”>Foreign policy and military

Ø <href=”#Divisions.2C_districts.2C_and_upazilas”>Divisions, districts, and upazilas

Ø <href=”#Geography_and_climate”>Geography and climate

Ø <href=”#Flora_and_fauna”>Flora and fauna

Ø <href=”#Economy”>Agriculture & Economy

Ø <href=”#Demographics”>Demographics

Ø <href=”#Culture”>Culture

Ø Sports

History

Somapura Mahavihara in Paharpur, Bangladesh is the greatest Buddhist Vihara in the Indian Subcontinent built by Dharmapala of Bengal.

Sixty Dome Mosque in Mosque city of Bagerhat was built in the 15th century and is the largest historical mosque in Bangladesh, as well as a World Heritage site.

The Shaheed Minar, which commemorates, is a well known land the Bengali Language Movementmark in Bangladesh.

Sheikh Mujibur Rahman (3rd person from right), founder of Bangladesh and Maulana Bhashani (4th person from right) in 1953.

Remnants of civilization in the greater Bengal region date back four thousand years, when the region was settled by Dravidian, Tibeto-Burman, and Austro-Asiatic peoples. The exact origin of the word “Bangla” or “Bengal” is unknown, though it is believed to be derived from Bang, the Dravidian-speaking tribe that settled in the area around the year 1000 BC.

The kingdom of Gangaridai was formed from at least the seventh century BC, which later united with Bihar under the Magadha, Nanda, Mauryan and Sunga Empires. Bengal was later part of the Gupta Empire and Harsha Empire from the third to the sixth centuries CE. Following its collapse, a dynamic Bengali named Shashanka founded an impressive yet short-lived kingdom. Shashanka is considered the first independent king in the history of Bangladesh. After a period of anarchy, the Buddhist Pala dynasty ruled the region for four hundred years, followed by a shorter reign of the Hindu Sena dynasty. Islam was introduced to Bengal in the twelfth century by Arab Muslim merchants and Sufi missionaries, and subsequent Muslim conquests helped spread Islam throughout the region. Bakhtiar Khilji, a Turkic general, defeated Lakshman Sen of the Sena dynasty and conquered large parts of Bengal in the year 1204. The region was ruled by dynasties of Sultans and land lords Bhuiyan for the next few hundred years. By the 16th century, the Mughal Empire controlled Bengal, and Dhaka became an important provincial centre of Mughal administration.

European traders arrived late in the 15th century, and their influence grew until the British East India Company gained control of Bengal following the Battle of Plassey in 1757. The bloody rebellion of 1857, known as the Sepoy Mutiny, resulted in transfer of authority to the crown, with a British viceroy running the administration.During colonial rule, famine racked the Indian subcontinent many times, including the Great Bengal famine of 1943 that claimed 3 million lives.

Between 1905 and 1911, an abortive attempt was made to divide the province of Bengal into two zones, with Dhaka being the capital of the eastern zone. When India was partitioned in 1947, Bengal was partitioned along religious lines (for the majority Muslims), with the western part going to India and the eastern part joining Pakistan as a province called East Bengal (later renamed East Pakistan), with its capital at Dhaka. In 1950, land reform was accomplished in East Bengal with the abolishment of the feudal zamindari system. However, despite the economic and demographic weight of the east, Pakistan’s government and military were largely dominated by the upper classes from the west. The Bengali Language Movement of 1952 was the first sign of friction between the two wings of Pakistan. Dissatisfaction with the central government over economic and cultural issues continued to rise through the next decade, during which the Awami League emerged as the political voice of the Bengali-speaking population. It agitated for autonomy in the 1960s, and in 1966, its president Sheikh Mujibur Rahman was jailed; he was released in 1969 after an unprecedented popular uprising.

In 1970, a massive cyclone devastated the coast of East Pakistan, killing up to half a million people,and the central government responded poorly. The Bengali population’s anger was compounded when Sheikh Mujibur Rahman, whose Awami League won a majority in Parliament in the 1970 elections,was blocked from taking office. After staging compromise talks with Mujib, President Yahya Khan arrested him on the early hours of March 26, 1971, and launched Operation Searchlight, a sustained military assault on East Pakistan. Yahya’s methods were extremely bloody, and the violence of the war resulted in many civilian deaths Chief targets included intellectuals and Hindus, and about ten million refugees fled to neighbouring India.Estimates of those massacred throughout the war range from three hundred thousand to 3 million.

Before his arrest by the Pakistan Army, Sk. Mujibur Rahman formally declared the independence of Bangladesh and directed everyone to fight till the last soldier of the Pakistan army was evicted from East Pakistan. Awami League leaders set up a government-in-exile in Calcutta, India. The exile government formally took oath at Mujib Nagar in Kustia district of East Pakistan on April 14, 1971 with Tajuddin Ahmad as the first Prime Minister. The Bangladesh Liberation War lasted for nine months. The Bangladesh Forces formed within 11 sectors led by General M.A.G. Osmani consisting of Bengali Regulars and Mukti Bahini conducted a massive guerilla war against the Pakistan Forces with all out support from the Indian Armed Forces. Jointly the Mitro Bahini achieved a decisive victory over Pakistan on December 16, 1971, with Indian Armed Forces taking over 90,000 prisoners of war.

Jatiyo Smriti Soudho, a tribute to the martyrs of the Bangladesh Liberation War.

After its independence, Bangladesh became a parliamentary democracy, with Mujib as the Prime Minister. In the 1973 parliamentary elections, the Awami League gained an absolute majority. A nationwide famine occurred during 1973 and 1974,and in early 1975, Mujib initiated a one-party socialist rule with his newly formed BAKSAL. On August 15, 1975, Mujib with most of his family members were assassinated by mid-level military officers.

A series of bloody coups and counter-coups in the following three months culminated in the ascent to power of General Ziaur Rahman, who reinstated multi-party politics & founded the Bangladesh Nationalist Party (BNP). Zia’s rule ended when he was assassinated in 1981 by elements of the military.Bangladesh’s next major ruler was General Hossain Mohammad Ershad, who gained power in a bloodless coup in 1982 and ruled until 1990, when he was forced to resign under massive revolt of all major political and the public, nevertheless western donor pressure in a major shift in international policy after the end of communism. Since then, Bangladesh has reverted to a parliamentary democracy. Zia’s widow, Khaleda Zia, led the Bangladesh Nationalist Party to parliamentary victory at the general election in 1991 and became the first female Prime Minister in Bangladesh’s history. However, the Awami League, headed by Sheikh Hasina, one of Mujib’s surviving daughters, clinched power at the next election in 1996 but lost to the Bangladesh Nationalist Party again in 2001.

In January 11, 2007, following widespread political unrest, a caretaker government was appointed to administer the next general election. The country had suffered from extensive corruption,disorder and political violence. The new caretaker government has made it a priority to root out corruption from all levels of government. To this end, many notable politicians and officials, along with large numbers of lesser officials and party members, have been arrested on corruption charges. The caretaker government held a fair and free election on December 29, 2008.Awami League’s Sheikh Hasina won the elections with a landslide victory and took oath of Prime Minister on 6 Jan 2009.

Population

The Population of Bangladesh is over 140.34 million, growth rate now being 1.30% . Bangladesh is one of the most densely populated countries (834 per sq. km) 80% of the population live in the rural areas. Of the total population 47% are in the civiliar labour force, male 29.14% and female 17.86% .
River
Bangladesh is a deltaic plain of the three major river systems of South Asia – the Ganges, the Brahmaputra and the Meghna. Country is formed with the alluvial soil of these rivers. Green paddy fields and vegetation are found all around. There are some hills on the North Eastern and South Eastern Parts of the country which are the extension of the Himalayan ranges in the South-East. The most significant Characteristic of the landscape of Bangladesh is its extensive networks of rivers which contribute a great deal to shape the socioeconomic life of the country.

Climate

The land ofthe Bangladesh falls in the sub-tropical region of the globe. Of the three major seasons, winter is the shortest. Summer and Rainy seasons are Longer. In Winter- November to February temperature varies froin 29° to 1 1° Celsius. Summei- March to June- is the hottest period when temperature varies from 21° to 32° celsius. Rainy season- July to October- is the wettest period of the ycar, when most rainfall occurs and rivers are f1111, and temperature varies from 30″ to 25° Celsius. Humidity varies from 99% (July) to 36`% (December)

Government and politics

Jatiyo Sangshad Bhaban houses the Parliament of Bangladesh.

National symbols of Bangladesh
Anthem Amar Shonar Bangla
Animal Royal Bengal Tiger
Bird Oriental Magpie Robin
Fish Hilsa
Flower White Water Lily
Fruit Jackfruit
Sport Hadudu
Calendar Bengali calendar

Bangladesh is a parliamentary democracy.Direct elections in which all citizens, aged 18 or over, can vote are held every five years for the unicameral parliament known as Jatiya Sangsad. The parliamentary building is known as the Jatiyo Sangshad Bhaban and was designed by architect Louis Kahn. Currently the parliament has 345 members including 45 reserved seats for women, elected from single-member constituencies. The Prime Minister, as the head of government, forms the cabinet and runs the day-to-day affairs of state. While the Prime Minister is formally appointed by the President, he or she must be an MP who commands the confidence of the majority of parliament. The President is the head of state but mainly a ceremonial post elected by the parliament.

However the President’s powers are substantially expanded during the tenure of a caretaker government, which is responsible for the conduct of elections and transfer of power. The officers of the caretaker government must be non-partisan and are given three months to complete their task. This transitional arrangement is an innovation that was pioneered by Bangladesh in its 1991 election and then institutionalized in 1996 through its 13th constitutional amendment.

The Constitution of Bangladesh was drafted in 1972 and has undergone fourteen amendments.<href=”#cite_note-amendments-28″>[29] The highest judicial body is the Supreme Court. Justices are appointed by the President. The judicial and law enforcement institutions are weak.Separation of powers, judicial from executive was finally implemented on the 1st of November, 2007. It is expected that this separation will make the judiciary stronger and impartial. Laws are loosely based on English common law, but family laws such as marriage and inheritance are based on religious scripts, and therefore differ between religious communities.

The two major parties in Bangladesh are the Bangladesh Awami League and the Bangladesh Nationalist Party (BNP). BNP is led by Khaleda Zia and finds its allies among Islamist parties like Jamaat-e-Islami Bangladesh and Islami Oikya Jot, while Sheikh Hasina‘s Awami League aligns with leftist and secularist parties. Hasina and Zia are bitter rivals who have dominated politics for over 15 years; each is related to one of the leaders of the independence movement. Another important player is the Jatiya Party, headed by former military dictator Ershad. The Awami League-BNP rivalry has been bitter and punctuated by protests, violence and murder. Student politics is particularly strong in Bangladesh, a legacy from the liberation movement era. Almost all parties have highly active student wings, and student leaders have been elected to the Parliament.

Two radical terrorist organizations, Jagrata Muslim Janata Bangladesh (JMJB) and Jama’atul Mujahideen Bangladesh (JMB), were banned in February 2005. Several small-scale bomb attacks taking place since 1999 have been blamed on those groups, and dozens of suspected members have been detained in security operations, including the heads of those two parties in 2006. The masterminds were tried and executed. The Bangladesh government won praise from world leaders, including Western leaders, for its strong anti-terrorist stance.

The January 22, 2007 election was postponed indefinitely and emergency law declared in January 11, 2007 as Army backed caretaker government of Fakhruddin Ahmed aimed to prepare a new voter list and crack down on corruption. They also assisted the interim Government of Bangladesh in a drive against corruption, which resulted in Bangladesh’s position in the Transparency International‘s Corruption Index changed from the very bottom, where they had been for 3 year in a row, to 147th in just 1 year.

A large alliance led by the Bangladesh Awami League won the December 29, 2008 poll, in a landslide victory. They got 230 seats among 300 seats in the parliament. On 31 July 2009 Prime Minister Sheikh Hasina expanded the Bangladeshi cabinet to bring the total size to 44.

Foreign policy and military

Bangladesh pursues a moderate foreign policy that places heavy reliance on multinational diplomacy, especially at the United Nations. In 1974 Bangladesh joined both the Commonwealth of Nations and the United Nations and has since been elected to serve two terms on the Security Council in 1978–1979 and 2000–2001. In the 1980s, Bangladesh played a lead role in founding the South Asian Association for Regional Cooperation (SAARC) in order to expand relations with other South Asian states. Since the founding of SAARC 1985, a Bangladeshi has held the post of Secretary General on two occasions.

Bangladesh’s most important and complex foreign relationships are with India. These relationships are informed by historical and cultural ties and form an important part of the domestic political discourse.

Bangladesh’s relationship with India began on a positive note because of India’s assistance in the independence war and reconstruction. Throughout the years, relations between both countries have fluctuated for a number of reasons. A major source of tension between Bangladesh and India is the Farakka Dam. In 1975, India constructed a dam on the Ganges River 11 miles (18 km) from the Bangladeshi border. Bangladesh alleges that the dam diverts much needed water from Bangladesh and adds a man-made disaster to the country already plagued by natural disasters. The dam also has terrible ecological consequences. On the other hand, India has voiced concerns about anti-Indian separatists and Islamic militants allegedly being harboured across their 2,500-mile (4,000 km) border, as well as the flow of illegal migrants, and is building a fence along most of it.But at the 2007 SAARC meeting both nations pledged to work cooperatively on security, economic and border issues.

The current strength of the army is around 200,000 including reservists,the air force 22,000,and navy 14,950.In addition to traditional defense roles, the military has been called on to provide support to civil authorities for disaster relief and internal security during periods of political unrest. Bangladesh is not currently active in any ongoing war, but it did contribute 2,300 troops to the coalition that fought in the 1991 Persian Gulf War and Bangladesh is consistently a top contributor to UN peacekeeping forces around the world. As of May 2007, Bangladesh had major deployments in Democratic Republic of Congo, Liberia, Sudan, Timor-Leste and Côte d’Ivoire.. Presently Bangladesh is the 2nd largest troop contributor country to the UN.[2]

Bangladesh enjoys relatively warm ties with the People’s Republic of China which has, particularly in the past decade, increased economic cooperation with the South Asian nation. Between 2006 and 2007, trade between the two nations rose by 28.5% and there have been agreements to grant various Bangladeshi commodities tariff-free access to the Chinese market. Cooperation between the Military of Bangladesh and the People’s Liberation Army is also increasing, with joint military agreements signed and Bangladesh procuring Chinese arms which range from small arms to large naval surface combatants such as the Chinese Type 053H1 Missile Frigate.

Divisions, districts, and upazilas

Administrative divisions of Bangladesh. This map shows the highest level unit called a Division.

Bangladesh is divided into six administrative divisions,<href=”#cite_note-CIA2007-40″>[41] each named after their respective divisional headquarters: Barisal, Chittagong , Dhaka, Khulna, Rajshahi and Sylhet.

Divisions are subdivided into districts (zila). There are 64 districts in Bangladesh, each further subdivided into upazila (subdistricts) or thana. The area within each police station, except for those in metropolitan areas, is divided into several unions, with each union consisting of multiple villages. In the metropolitan areas, police stations are divided into wards, which are further divided into mahallas. There are no elected officials at the divisional, district or upazila levels, and the administration is composed only of government officials. Direct elections are held for each union (or ward), electing a chairperson and a number of members. In 1997, a parliamentary act was passed to reserve three seats (out of twelve) in every union for female candidates.

Dhaka is the capital and largest city of Bangladesh. Other major cities include Chittagong, Khulna, Rajshahi, Sylhet, Barisal, Bogra, Comilla, Mymensingh and Rangpur. These cities have mayoral elections, while other municipalities elect a chairperson. Mayors and chairpersons are elected for a span of five years.

City City population (2008 estimate) Metro population (2008 estimate)
Dhaka 7,000,940 12,797,394
Chittagong 2,579,107 3,858,093
Khulna 855,650 1,388,425
Rajshahi 472,775 775,495
Sylhet 463,198 –
Barisal 210,374 –

Geography and climate

Dead corals at St. Martin’s Island

Satellite image presenting physical features of Bangladesh.

Panorama of Cox’s Bazar in the early morning: clouds on a blue sky, still water and forest in the distance.

Sun rise in Kuakata

Bangladesh is in the low-lying Ganges–Brahmaputra River Delta or Ganges Delta. This delta is formed by the confluence of the Ganges (local name Padma or Pôdda), Brahmaputra (Jamuna or Jomuna), and Meghna rivers and their respective tributaries. The Ganges unites with the Jamuna (main channel of the Brahmaputra) and later joins the Meghna to eventually empty into the Bay of Bengal. The alluvial soil deposited by these rivers has created some of the most fertile plains in the world. Bangladesh has 58 trans-boundary rivers, making water issues politically complicated to resolve – in most cases as the lower riparian state to India.Most parts of Bangladesh are less than 12 m (39.4 ft) above the sea level, and it is believed that about 50% of the land would be flooded if the sea level were to rise by 1 m (3.28 ft).

In south east Bangladesh experiments have been done since the sixties to ‘build with nature’. By implementing cross dams, the natural accretion of silt has created new land. With Dutch funding, the Bangladeshi government began to help develop this new land in the late 1970s. The effort has since become a multiagency operation building roads, culverts, embankments, cyclone shelters, toilets and ponds, as well as distributing land to settlers. By fall 2010, the program will have allotted some 27,000 acres (10,927 ha) to 21,000 families.

The highest point in Bangladesh is in Mowdok range at 1,052 m (3,450 ft) in the Chittagong Hill Tracts to the southeast of the country.

Straddling the Tropic of Cancer, Bangladeshi climate is tropical with a mild winter from October to March, a hot, humid summer from March to June. A warm and humid monsoon season lasts from June to October and supplies most of the country’s rainfall. Natural calamities, such as floods, tropical cyclones, tornadoes, and tidal bores occur almost every year,combined with the effects of deforestation, soil degradation and erosion. Cox’s Bazar, south of the city of Chittagong, has a beach that stretches uninterrupted over 120 kilometres (75 mi).

In September 1998, Bangladesh saw the most severe flooding in modern world history. As the Brahmaputra, Ganges and Meghna spilt over and swallowed 300,000 houses, 9,700 kilometres (6,027 mi) of road and 2,700 kilometres (1,678 mi) of embankment 1,000 people were killed and 30 million more were made homeless with 135,000 cattle killed, 50 square kilometres (19.3 sq mi) of land destroyed and 11,000 kilometres (6,835 mi) of roads damaged or destroyed. Two-thirds of the country was underwater. There were several reasons for the severity of the flooding. Firstly, there were unusually high monsoon rains. Secondly, the Himalayas shed off an equally unusually high amount of melt water that year. Thirdly, trees that usually would have intercept rain water had been cut down for firewood or to make space for animals.

Bangladesh is now widely recognized to be one of the countries most vulnerable to climate change. Natural hazards that come from increased rainfall, rising sea levels, and tropical cyclones are expected to increase as climate change, each seriously affecting agriculture, water & food security, human health and shelter.

It is believed that in the coming decades the rising sea level alone will create more than 25 million climate refugees.

Flora and fauna

Royal Bengal Tiger.

A major part of the coastline comprises a marshy jungle, the Sundarbans, the largest mangrove forest in the world and home to diverse flora and fauna, including the Royal Bengal Tiger. In 1997, this region was declared endangered.The Magpie Robin is the National Bird of Bangladesh and it is common and known as the Doyel or Doel (Bengali: ??????). It is a widely used symbol in Bangladesh, appearing on currency notes and a landmark in the city of Dhaka is named as the Doyel Chatwar (meaning: Doyel Square).The national flower of the country is water lily and the national fruit is jackfruit.

Bangladesh- Agricultural Country

Bangladesh Agriculture at a Glance
Total family : 17,600,804
Total farm holding : 15,089,000
Total area : 14.845million hectare
Forest : 2.599 million hectare
Cultivable land : 8.44 million hectare
Cultivable waste : 0.268 million hectare
Current fellow : 0.469 million hectare
Cropping intensity : 175.97%
Single cropped area : 2.851 million hectare
Double cropped area : 3.984 million hectare
Triple cropped area : 0.974 million hectare
Net cropped area : 7.809 million hectare
Total cropped area : 13.742 million hectare
Contribution of agriculture sector to GDP : 23.50%
Contribution of crop sector to GDP : 13.44%
Manpower in agriculture : 62%
Total food crop demand : 23.029 million metric ton
Total food crop production : 27.787 million metric ton
Net production : 24.569 million metric ton

Economy

Worker in a paddy field – a common scene throughout Bangladesh. Two thirds of the population works in the agricultural sector.

Despite continuous domestic and international efforts to improve economic and demographic prospects, Bangladesh remains a developing nation.<href=”#cite_note-52″>[53] Its per capita income in 2008 was US$520 compared to the world average of $10,200.<href=”#cite_note-CIA2007-40″>[41]

Jute was once the economic engine of the country. Its share of the world export market peaked in the Second World War and the late 1940s at 80%<href=”#cite_note-jute-53″>[54] and even in the early 1970s accounted for 70% of its export earnings. However, polypropylene products began to substitute for jute products worldwide and the jute industry started to decline. Bangladesh grows very significant quantities of rice (chal), tea (Cha) and mustard. Although two-thirds of Bangladeshis are farmers, more than three quarters of Bangladesh’s export earnings come from the garment industry,<href=”#cite_note-garments-54″>[55] which began attracting foreign investors in the 1980s due to cheap labour and low conversion cost. In 2002, the industry exported US$5 billion worth of products.<href=”#cite_note-rahman-55″>[56] The industry now employs more than 3 million workers, 90% of whom are women.<href=”#cite_note-begum-56″>[57] A large part of foreign currency earnings also comes from the remittances sent by expatriates living in other countries.

Bashundhara City, the largest shopping mall in South Asia

Jamuna Bridge: one of the longest bridges in the world.

Obstacles to growth include frequent cyclones and floods, inefficient state-owned enterprises, mismanaged port facilities, a growth in the labour force that has outpaced jobs, inefficient use of energy resources (such as natural gas), insufficient power supplies, slow implementation of economic reforms, political infighting and corruption. According to the World Bank, “among Bangladesh’s most significant obstacles to growth are poor governance and weak public institutions.”

Despite these hurdles, the country has achieved an average annual growth rate of 5% since 1990, according to the World Bank. Bangladesh has seen expansion of its middle class, and its consumer industry has also grown. In December 2005, four years after its report on the emerging “BRIC” economies (Brazil, Russia, India, and China), Goldman Sachs named Bangladesh one of the “Next Eleven,” along with Egypt, Indonesia, Vietnam and seven other countries. Bangladesh has seen a dramatic increase in foreign direct investment. A number of multinational corporations and local big business houses such as Beximco, Square, Akij Group, Ispahani, Navana Group, Transcom Group, Habib Group, KDS Group and multinationals such as Unocal Corporation and Chevron, have made major investments, with the natural gas sector being a priority. In December 2005, the Central Bank of Bangladesh projected GDP growth around 6.5%.

One significant contributor to the development of the economy has been the widespread propagation of microcredit by Muhammad Yunus (awarded the Nobel peace prize in 2006) through the Grameen Bank. By the late 1990s, Grameen Bank had 2.3 million members, along with 2.5 million members of other similar organisations.

In order to enhance economic growth, the government set up several export processing zones to attract foreign investment. These are managed by the Bangladesh Export Processing Zone Authority.

Demographics

Religion in Bangladesh
Religion Percent
Islam 89.7%
Hinduism 9.2%
Buddhism 0.7%

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Banglalink

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Banglalink

Company at a Glance

Type : Subsidiary

Founded : 1999

Headquarters : Tiger House, House # SW (H)04, Gulshan

Avenu Gulshan Model Town,

Dhaka, Bangladesh

Area served : 61 districts and 446 Thanas

Key people : Rashid Khan, CEO

Industry : Telecommunication

Products : Telephony

Revenue : ? US $ 26.3 million

Parent : Orascom Telecom

Slogan : making a difference

Website : http://www.banglalinkgsm.com/

About The Company

Banglalink (Bengali: ?????????), is the second largest cellular service provider in Bangladesh. As of December, 2007, Banglalink has a subscriber base of 7.08 million. It is a wholly owned subsidiary of Orascom Telecom.

Banglalink had 1.03 million connections until December, 2005. The number of Banglalink users increased by more than 253 % and stood at 3.64 million at the end of 2006. Making it one of the fastest growing operators in the world.

In August, 2006, Banglalink became the first company to provide free incoming calls from BTTB for both postpaid and prepaid connections.

Products Offered

Prepaid Packages

Banglalink currently offers two prepaid plans. All the prepaid plans come in two phases—Standard (T&T incoming and outgoing with NWD and ISD) and M2M.

· desh, with the slogan One country, one rate, is one of the cheapest prepaid plans in the country by tariff. Users of desh can call any mobile operator at 1.75 takas (excluding VAT) around the clock and has three FnF numbers.

· ladies, first!, with the slogan Shomporker Network (means network of relationship), is tailored for women. It has introduced 1 second pulse for the first time in the prepaid market and has four FnF numbers.

Postpaid Packages

Currently there are three postpaid plans from Banglalink. These packages are called enterprise personal. All packages come with T&T local, NWD, ISD and e-ISD connectivity.

· personal package 1

· personal package 2

· personal call and control

Banglalink enterprise

Banglalink enterprise offers a wide range of products and services to suit the needs of the business community. Companies under the enterprise package are provided with a dedicated enterprise relationship manager who provides them with personalized customer care round the clock. Other benefits of enterprise include customized packages with attractive call charges and connection price, enterprise SMS broadcast, enterprise short code, international roaming, missed call alerts, free voice mail retrieval, fax and data service, call conferencing, special offer for family members and many more. The current packages are:

· enterprise corporate; targeted at the corporate segment

· enterprise SME; targeted at the SME segment

· enterprise personal

Banglalink CU

Banglalink CU package is targeted at the shopkeepers, which offers PCO facility to the general public. It comes in two varieties:

· CU

· CU call and control

History

Sheba Telecom (Pvt.) Ltd. was granted license in 1989 to operate in the rural areas of 199 upazilas and later they were also allowed to extend to cellular mobile radio-telephone services.

In July, 2004 it was reported that Orascom Telecom is set to purchase through a hush-hush deal the Malaysian stakes in Sheba Telecom, as it had failed to tap the business potentials in Bangladesh mainly due to a chronic feud between its Malaysian and Bangladeshi partners. An agreement was reached with Orascom worth $25 million was finalized in secret. The pact has been kept secret for legal reasons, considering financial fallout and because of the feud.

The main reason for the undercover dealing was because the existing joint venture agreement the first right to buy that.

Integrated Services Ltd (ISL), the between the Bangladeshi and the Malaysian partners dictates that if any party sells its Sheba shares, the other party will enjoy Bangladeshi partner, was being ‘officially’ shown as purchasing the shares held by Technology Resources Industries (TRI) of Malaysia for $15 million. ISL then paid another $10 million to Standard Chartered Bank to settle Sheba’s liabilities. Sheba had a base 59,000 users, of whom 49,000 were regular when it was sold
In September, 2004 Orascom Telecom Holdings purchased 100% of the shares of Sheba Telecom (Pvt.) Limited (“Sheba”). It was acquired for US$ 60 million and re-branded and launched its services under “Banglalink” in February, 2005. Banglalink’s license is a nationwide 15-year GSM license and will expire in November, 2011.

Special Event

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Bank is an organization, usually a corporation, chartered by a state or central government, but all financial institution is not bank

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Bank is an organization, usually a corporation, chartered by a state or central government, but all financial institution is not bank-Illustrate &explain

Introduction:

A financial institution is basically any organization in the dealing of moving, investing or lending money, trade in financial instruments or providing financial services, includes profitable banks, thrifts, federal and state savings banks, savings and loan associations and credit unions. Refers to any bank, credit unions or other entity are that distribute cash. A financial institution can be a bank or an investment company.

However, bank is an organization, usually a corporation, chartered by a state or central government, which does most or all of the following: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects checks, drafts, and notes; certifies depositor’s checks; and issues drafts and cashier’s checks.

The key difference between banks and other financial institutes is the facility of cash deposits. This unique facility is provided by the banking sector to all its customers through means of saving accounts and current accounts. This is an easy and effective way of handling all the personal as well as business finances. Apart from this, banks also serve as financial intermediaries offering a host of financial services to all customers.

Financial institution:

One has to first understand what financial institutions are, because bank in itself is one of the various financial institutions that exist in an economy. Basically, the term financial institutions encompass several economic setups which provide financial services to its members or clients. This includes various deposit taking institutions such as banks and credit unions, as well as non-banking institutions such as insurance companies, investment funds, brokers, etc. Most of these financial institutions are regulated by the government. The most important function of these financial institutions is to canalize funds between lenders and borrowers indirectly.

Common types of financial institution are:

* Commercial Banks

* Credit Unions

* Stock Brokerage Firms

* Asset Management Firms

* Insurance Companies

* Finance Companies

* Building Societies

* Retailers

Role of Financial Institutions:

* The various financial institutions generally act as an intermediary between the capital market and debt market. But the service provided by a particular institution depends on its type.

* The financial institutions are also responsible to transfer funds from investors to the companies.

* Typically, these are the key entities that control the flow of money in the economy.

Services Offered by Various Financial Institutions:

The services provided by the various types of financial institutions may vary from one institution to another.

For example, the services offered by the commercial banks are –

The services provided by the brokerage firms, on the other hand, are different and they are –

The insurance companies offer –

The credit union is co-operative financial institution, which is usually controlled by the members of the union. The major difference between the credit unions and banks is that the credit unions are owned by the members having accounts in it.

The stock brokerage firms are the other types of financial institutions that help both the corporations and individuals to invest in the stock market.

Another type of financial institution is the asset management firms. The prime functionality of these firms is to manage various securities and assets to meet the financial goals of the investors. The firms also offer fund management advice and decisions to the corporations and individuals.[1]

Function:

Financial institutions provide service as intermediaries of financial markets. They are responsible for transferring funds from investors to companies in need of those funds. Financial institutions facilitate the flow of money through the economy. To do so, savings are brought to provide funds for loans.

Bank:

As we mentioned earlier in this write-up, a bank is a financial institution in itself – a deposit taking financial institution to be precise. As with most of the other institutions listed above, even banks acts as financial intermediaries. Basically, banks allow consumers deposit money in savings accounts and lend the same money in form of various loans. Banks are among the most strictly regulated financial institutions in any economy. While the basic concept of a bank is same in all the countries, the restrictions on these banks may differ from one country to another.

Type of banks:

1. Saving Banks: Saving banks are established to create saving habit among the people. These banks are helpful for salaried people and low income groups. The deposits collected from customers are invested in bonds, securities, etc. At present most of the commercial banks carry the functions of savings banks. Postal department also performs the functions of saving bank.

2. Commercial Banks: Commercial banks are established with an objective to help businessmen. These banks collect money from general public and give short-term loans to businessmen by way of cash credits, overdrafts, etc. Commercial banks provide various services like collecting cheques, bill of exchange, and remittance money from one place to another place.

3. Industrial Banks / Development Banks: Industrial / Development banks collect cash by issuing shares & debentures and providing long-term loans to industries. The main objective of these banks is to provide long-term loans for expansion and modernization of industries.

4. Land Mortgage / Land Development Banks: Land Mortgage or Land Development banks are also known as Agricultural Banks because these are formed to finance agricultural sector. They also help in land development.

5. Indigenous Banks: Indigenous banks mean Money Lenders and Sahukars. They collect deposits from general public and grant loansto the needy persons out of their own funds as well as from deposits. These indigenous banks are popular in villages and small towns. They perform combined functions of trading and banking activities.

6. Central / Federal / National Bank: Every country of the world has a central bank. In India, Reserve Bank of India, in U.S.A, Federal Reserve and in U.K, Bank of England. These central banks are the bankers of the other banks. They provide specialized functions i.e. issue of paper currency, working as bankers of government, supervising and controlling foreign exchange. A central bank is a non-profit making institution. It does not deal with the public but it deals with other banks. The principal responsibility of Central Bank is thorough control on currency of a country.

7. Co-operative Banks: o-operative banks are registered under the Co-operative Societies. They generally give credit facilities to small farmers, salaried employees, small-scale industries, etc. Co-operative Banks are available in rural as well as in urban areas. The functions of these banks are just similar to commercial banks.

9. Consumers Banks: Consumers bank is a new addition to the existing type of banks. Such banks are usually found only in advanced countries like U.S.A. and Germany. The main objective of this bank is to give loans to consumers for purchase of the durables like Motor car, television set, washing machine, furniture, etc. The consumers have to repay the loans in easy installments.

Difference between Bank and Other Financial Institutions:

It is a tough job to compare bank and financial institutions owing to the fact there exist several financial institutions, and each of these differ from banks by a significant extent. Basically, differentiating between banks and financial institutions is similar to comparing a deposit taking financial institution with a non-deposit taking financial institution. (If that criterion is taken into consideration both financial set-ups differ from each other on the basis of depositing facility, which is only provided by banking institutions as opposed to their non-banking counterparts.) That’s true to a certain extent, but it is by no means complete.[2]

Even though banks are deposit taking financial institutions themselves, they can at times differ from other deposit taking financial institutions as well. For instance, credit unions also allow consumers to deposit (or borrow) money, but in order to avail this facility you need to be a member of this credit union and by becoming a member of the credit union you automatically become one of its owner. Yet another noteworthy difference between a bank and a finance company is the fact that former indulges in various business transactions, savings as well as investment, while the latter mainly focuses on investment and stabilization of currency. Though all the components have a common role to play in the country’s economy, there is a significant difference between the banking and non-banking sectors. The banking sectors include commercial banks including private banks, public sector banks, and foreign banks that are mainly responsible for ensuring fiscal stability in the country. On the other hand, the non-banking sector includes all the other components like credit card agencies, investment companies, and insurance companies that are responsible to regulate and monitor lending as well as borrowing of funds.

The basic difference between Banking financial institution (BFI) and Non-Banking Financial System (NBFI):

Conclusion:

In any given economy, there are numerous financial institutions – including banks, insurance companies, credit card companies, investment funds, consumer finance companies, etc. Even though a bank is a financial institution in itself, it differs from other financial institutions mentioned above by a significant extent. The most prominent difference between banks and other financial institutions is the fact that they provide the facility of depositing cash by resorting to savings account – something which most of the non-banking financial institutions are not entitled to do. So as simple we can state that banking institution is a financial institute but every financial institute is not a bank.

Bibliography:

Websites:

1. http://en.wikipedia.org/wiki/Financial_institution

2. http://en.wikipedia.org/wiki/Bank

3. http://kalyan-city.blogspot.com/2011/02/different-types-of-banks-what-are.html

4. http://www.buzzle.com/articles/difference-between-bank-and-financial-institution.html

5. http://bankinfobd.com/blog/banking-and-non-banking-financial-institutions-basic-differences

[1] Benton E. Gup, Banking and Financial Institutions: A Guide for Directors, Investors, and Borrowers

Volume 615 of Wiley Finance, John Wiley & Sons, 2011

[2] See Anjali Kumar, The sale of goods carried by sea (2nd edition), The Regulation of Non-Bank Financial Institutions: The United States, the European Union, and Other Countries, Parts 63-362

[3] see Md. Mahfuzur Rahman,Article banking and non Banking financial Institution’s basic differences, available at http://bankinfobd.com/blog/banking-and-non-banking-financial-institutions-basic-differences

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BANK RESERVES PART 1

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What Are Bank Reserves?

Bank reserves are the cash minimums that must be kept on hand by financial institutions in order to meet central bank requirements. The bank cannot lend the money but must keep it in the vault, on-site or at the central bank, in order to meet any large and unexpected demand for withdrawals.

In the U.S., the Federal Reserve dictates the amount of cash reserves each bank must maintain.

How Bank Reserves Work

Bank reserves are essentially an antidote to panic. The Federal Reserve obliges banks to hold a certain amount of cash in reserve so that they never run short and have to refuse a customer’s withdrawal, possibly triggering a bank run.

KEY TAKEAWAYS

  • Bank reserves are the minimal amounts of cash that banks must keep on hand in case of unexpected demand.
  • Excess reserves are the additional cash that a bank keeps on hand and declines to loan out.
  • These excess reserves tend to rise in bad times and fall in good times.

Bank reserves are divided into the required reserve and the excess reserve. The required reserve is that minimum cash on hand.

The excess reserve is any cash over the required minimum that the bank is holding in the vault rather than putting it to use as loans. Banks usually have little incentive to maintain excess reserves because cash earns no return and can even lose value over time due to inflation. Thus, banks normally minimize their excess reserves and lend out the money to clients rather than holding it in their vaults.

Bank reserves decrease during periods of economic expansion and increase during recessions. That is, in good times businesses and consumers borrow more and spend more. During recessions, they can’t or won’t take on additional debt.

Special Considerations

The required bank reserve follows a formula set by the Federal Reserve Board’s regulations that are based on the amount deposited in net transaction accounts. These include demand deposits, automatic transfer accounts, and share draft accounts. Net transactions are calculated as the total amount in transaction accounts minus funds due from other banks and less cash in the process of collection.

The required reserve ratio may also be used as a tool to implement monetary policies. Through this ratio, a central bank can influence the amount of funds available for borrowing.

Beginning in late 2008, the Federal Reserve began paying interest to the banks for required and excess reserves as a way to infuse more cash into the U.S. economy. That upended the conventional wisdom that banks would rather lend money out than keep it in the vault.

Required bank reserves are determined by the Federal Reserve for each bank based on its net transactions.

Impact of the ’08 Crisis

As noted, banks typically keep their excess reserves at minimal levels. However, the interest rate at which banks could loan money fell sharply after December 2008, when the Federal Reserve attempted to boost the economy by cutting interest rates. Around the same time, the Federal Reserve began paying interest to the banks on their cash reserves.

The banks took the cash injected by the Federal Reserve and kept it as excess reserves rather than lending it out. They were earning a small but essentially risk-free interest rate rather than lending it out for a somewhat higher but riskier return.

For this reason, the number of excess reserves spiked after 2008, despite an unchanged required reserve ratio.

COURTESY: INVESTOPEDIA

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BANK RESERVES PART 2

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Bank reserves are the minimum cash reserves that financial institutions must keep in their vaults at any given time. These are a commercial bank’s cash holdings physically held by the bank, and deposits held in the bank’s account with the central bank. It equals the cash physically available with the bank plus the amount it has deposited with the central bank. These are the cash minimums that must be kept on hand by financial institutions in order to meet central bank requirements. The minimum cash reserve requirements for financial institutions in each country are set by the central bank of that country. These excess reserves tend to rise in bad times and fall in good times.

Under the fractional-reserve banking system used in most countries, central banks typically set minimum reserve requirements that require commercial banks under its purview to hold cash or deposits at the central bank equivalent to at least a prescribed percentage of their liabilities, such as customer deposits. The bank cannot lend the money but must keep it in the vault, on-site or at the central bank, in order to meet any large and unexpected demand for withdrawals. Such sums are usually termed required reserves, and any funds above the required amount are called excess reserves. These reserves are prescribed to ensure that, in the normal events, there is sufficient liquidity in the banking system to provide funds to bank customers wishing to withdraw cash. Even when there are no reserve requirements, banks often as a matter of prudent management hold reserves in case of unexpected events, such as unusually large net withdrawals by customers or bank runs.

In general, banks do not earn any interest on their reserves. Bank reserves are essentially an antidote to panic. The Federal Reserve obliges banks to hold a certain amount of cash in reserve so that they never run short and have to refuse a customer’s withdrawal, possibly triggering a bank run. Funds in banks that are not retained as a reserve are available to be lent, at interest. The amount of bank reserves relative to total deposits is a measure used to assess a bank’s risk. The higher the bank reserves are, the less risk-taking a bank is and vice versa.

Formula

Bank Reserves = Bank’s Deposit at Central Bank + Vault Cash

Bank Reserves = Required Reserves + Excess Reserves

A bank reserve is a portion of a bank’s deposits that are set aside in a liquid account to ensure that the bank has enough cash on hand to fulfill withdrawal requests. In bookkeeping, reserves are ordinarily part of the equity of a company. Bank reserves, on the other hand, are part of the bank’s assets. In a bank’s annual report, bank reserves are referred to as “cash and balances at central banks”. Bank reserves decrease during periods of economic expansion and increase during recessions.

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Based on the “Hurdles in export and import operation “A study at Khaleque Group of Industries

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view with charts and images

“Based on the Hurdles in Export and Import Operation ‘A study on Khaleque Group of Industries’ “

Executive Summary

Khaleque Group of Industries has emerged as a renowned Cosmetics & Toiletries manufacturer of Bangladesh and also as a leading manufacturer and exporter of Knit Garments products with 3 spinning mills as a backward linkage. Mr. Abdul Khaleque Pathan, a very hard working young man started his business carrier as a Brick manufacturer in 1983 under the name and style of Khaleque & Co. with trademark ‘K & Co’. The bricks brought name and fame for unique quality of brick and for pleasant personality and integrity of Mr. Khaleque and to meet the market demand he soon started another brickfield named M/s. Bandu Bricks. Then embarked with production of garments products and cosmetics & toiletries items. Khaleque group of Industries now consists of the following allied concerns:-

Keya Beauty Soap is a renowned Brand in Bangladesh as well as in India and huge exports are being done regularly in India, Bhutan & Middle East. Mr. Abdul Khaleque Pathan with export Trophy for consecutive 3 years 2002-2003, 2003-2004 & 2004-2005. In recognition of exceptional garments exports, Mr. Khaleque was awarded export Trophy in the year 1994 and for export performance of Knit Garments Mr. Khaleque was selected as CIP for year 1997 & 1998.

The present employees/workers of Khaleque Group of Industries are about 12000 of which near 900 male and female workers are “Deaf & Dumb” who have been turned into manpower from downtrodden social burden. Now they are happy efficient workers.

Present Annual Turnover of the Group is about 1000 Crores which is ever increasing, but the recent global recession has caused much damage to the group’s emerging which will take some time for healing.

The largest hurdles faced by Khaleque Group of Industries, in export and import sector, are the inefficient Customs and administrative export trade processes, as well as the inadequacy of the current transport and shipping infrastructure. The duplication of Customs formalities, low operational efficiency at the Port of Chittagong and poor transport infrastructure result in lengthy delays and exorbitant shipment costs that constrain the Bangladesh economy. The shortcomings of the Customs and administrative procedures should be addressed through phased trade facilitation initiatives that are synchronized with upgrading of vital transportation infrastructure. This will enable Bangladesh’s economy to significantly progress and the garment sector will remain one of the most competitive in the world.

Chapter 01

1. Introduction

This report is based on the “Hurdles in export and import operation- ‘A study on Khaleque Group of Industries’ “. Export and import are very common and widely practiced form of international business. Khaleque Group is the top local Cosmetics & Toiletries manufacturer of Bangladesh and also a leading manufacturer and exporter of Knit Garments products with 3 spinning mills as a backward linkage. So have chosen it for our report so that we can have a wider view of our concern topic. Basically what we want to cover is the current export and import situation of the company, the problem that it is facing and solutions they are applying. Besides these have also recommended some suggestions from our end which can be applied for the betterment of their export and import business.

1.1 Origin of the Report:

This report is based on an internship program. Khaleque Group of Industries arranges this internship program to gather practical knowledge about export and import activities. Topic for this internship report is “Hurdles in Export and Import operations of Khaleque Group of Industries” This exposure is very helpful for oneself to know how things move and to find the gap as well as the similarities between theoretical and practical knowledge.

1.2 Objectives of the Study:

I have divided the objectives of this report into two parts. One is general and the other is more specific. These objectives are stated below:

(i) General Objective:

The topic with which I assigned was identifying problems and solutions of a particular company of export-import industry of Bangladesh. While completing this task firstly have chosen Khaleque Group of Industries.

Therefore, my general objective was to understand the current export and import situation of the company and hurdles during its operation.

(ii) Specific Objective:

Main focus of our report was to study the areas as follows:

1.4 Scope of the Study:

As working in Audit Department and for preparing my report had to collect information from the company. During internee period got chances to visit factory, supervise much production process & completed many sample program. For gathering other departmental data, I got little time beside my routine work. But here tried to cover whatever data got from other departments rather than Audit Department. This case study will help to analyze the various concept of marketing, formal hierarchy, standardized export & import policies & rules, organizational network, decision making in stable & unstable situation which will enrich my experience for future career.

1.5 Methodology:

To complete the term paper, tried to collect information from two sources. One is primary sources and other is secondary sources. Then analyzed all the gathered data to meet our general and specific objectives.

(i) Primary Sources:

(ii) Secondary Sources:

1.6 Limitations of the Study:

Some limitations or barriers were faced while conducting the study. The limitations which faced during study are as follow:

Chapter 02

2. Overview of the Company

2.1 History of the Company:

Bangladesh has been a land of splendid arts and artifacts. In ancient word, this was the very centre of sophistication and perfection in weaving and textile. Once, the muslin of Bengal was held as a unique symbol of beauty and aristocracy all over the world. The time has changed, yet we have successfully nourished our extraordinary craft and texture of our textile in zamdani, handloom, silk etc.

Khaleque Group of Industries has emerged as renowned Cosmetics & Toiletries manufacturer of Bangladesh and also as a leading manufacturer and exporter of Knit Garments products with 3 spinning mills as a backward linkage.

Mr. Abdul Khaleque Pathan, a very hard working young man started his business carrier as a Brick manufacturer in 1983 under the name and style of Khaleque & Co. with trademark ‘K & Co’. The bricks brought name and fame for unique quality of brick and for pleasant personality and integrity of Mr. Khaleque and to meet the market demand he soon started another brickfield named M/s. Bandu Bricks. He then embarked with production of garments products and cosmetics & toiletries items.

However, in the age of globalization, another wonder that made Bangladesh distinct is the readymade garments industry and with a vision to enhance this field further Khaleque Group of Industries (KGI) started its journey in 1991.

Khaleque group of Industries now consist of the following allied concerns:-

Keya Spinning Mills Ltd. and Keya Cotton Mills Ltd. are spreaded in a complex of 30 acres. The factory has a state of art technology and it produces 40 tons of yarn everyday. The capacity of both spinning mills is 70 thousand spindles. The capacity of yarn mill is 50 thousand spindles. The factory is equipped with machineries manufactured by world leaders like Rieter, Toyota, Uster etc.Every step of production has to undergo modern and scrupulous quality control process. It also has a hi-tech testing lab to ensure desired quality standard. Both Keya Spinning Mills Ltd. and Keya Cotton Mills Ltd. have proudly achieved ISO 9001 certificate.

The factory not only meets up the demand of Khaleque Knitting and Garments Industries (PVT) Ltd. unit and Keya Knit Composite Ltd. but also gets it exported overseas too.

Keya Beauty Soap is a renowned Brand in Bangladesh as well as in India and huge exports are being done regularly in India, Bhutan & Middle East. In recognition of exceptional export performance of Cosmetics, the Government of Bangladesh has honored Mr. Abdul Khaleque Pathan with export Trophy for consecutive 3 years 2002-2003, 2003-2004 & 2004-2005.

In recognition of exceptional garments exports, Mr. Khaleque was awarded export Trophy in the year 1994 and for export performance of Knit Garments, Mr. Khaleque was selected as CIP for year 1997 & 1998.

The present employees or workers of Khaleque Group of Industries are about 12000 of which near 900 male and female workers are “Deaf & Dumb” who have been turned into manpower from downtrodden social burden. Now they are happy efficient workers.

Present Annual Turnover of the Group is about 1000 Crores which is ever increasing, but the recent global recession has caused much damage to the group’s emerging which will take some time for healing.

Khaleque Group, a leading business conglomerate with firm mission and vision for creating new avenues for employment, improving quality of products with a team of efficient workers and IT based management will contribute significantly in the GDP of the country.

2.2 Mission of KGI:

Thus KGI’s mission is to satisfy the customers and to be the market leader, in providing all sorts of knitted garments from Bangladesh to customers around the globe.

KGI is committed optimizing product quality and ensuring cost effective operations.

2.3 Vision of KGI:

KGI believes quality is not a miracle. It is indeed the result of sharp direction, perfect execution, sincere effort and high aspiration.

2.4 Organizational Goals of KGI:

“No compromise with Quality” is our key objective. We are passionate to serve high quality Garments, Cosmetics & Toiletries products within an affordable price. We are committed to serve our best towards the stakeholders.

2.5 Objectives of KGI:

2.6 Board Of Directors:

2.7 Management Team:

(i) Executive Committee:

(ii) Management Committee:

(iii) Share Management & Corporate Affairs:

(iv) Audit Committee:

2.8 Company Profile:

Corporate Headquarter:

Jarun, Konabari, Gazipur

Liaison Office:

House # 108, Mosque Road Old D.O.H.S. Banani, Dhaka 1206

Factory :

Jarun, Konabari, Gazipur

Year of Establishment: 1991

Business Lines:

 Manufacturing and Marketing of Cosmetics & Toiletries Products, Knit Garments products

Export Outlets:

USA, UK, India, Bhutan, UAE, Nepal, Kuwait, Srilanka, Saudi Arabia &Myanmar

Number of Employees : 12000.

2.9 Social Responsibility:

Apart from contributing largely in the national economy and employment sector of the country, KGI performs social responsibilities as well. It has helped physically challenged people to establish their lives. Out of a total of 12000 employees it has so far employed 600 deaf people in their factories. It further denotes a significant amount of money to different educational institutes. In addition to that KGI provides possible medical treatments free of charge as complimentary to the employees. Thus KGI intends to take part in the development process of the country and keep on prospering.

Chapter 03

3. Products Overview, Production Capacity and Export Import Analysis

3.1 Products Overview:

3.1.1 Knit Garments products

Khaleque Group of Industries has emerged as a renowned Cosmetics & Toiletries manufacturer of Bangladesh and also as a leading manufacturer and exporter of Knit Garments products with 3 spinning mills as a backward linkage.

3.1.2 Cosmetics and Toiletries products:

Keya Cosmetics Ltd., a reputed name in the cosmetics & toiletries products manufacturing & selling sector in the country. Keeping all our efforts concentrated upon product development, quality control and standardization, a philosophy of continuous improvement at all units. All our products are derived through rigorous research and each of them is incorporated with globally recognized quality norms. That’s why, clients from all over the world rely upon us as a brand synonymous to trust, reliability and innovative products. Products overview are presenting below:

Products of Keya Cosmetic:

Keya Pomade

Weight Size: 50 ml

Color: Orange Colour

3.2 Production Capacity :

3.2.1 Garments Production Capability

(i) Knitting Department :

Knitting Capacity: 1950 M.Tons/Month.

Single Jersey, S/Lacoste, Double Lacoste, Rib, Interlock, etc.

Flat Knit Collar Knitting capacity: 210,000 Pcs/Month.

(Machine List is enclosed)

(ii) Dyeing & Finishing Department:

Dyeing & Finishing capacity: 1650 M.Tons/Month.

(Machine List is enclosed)

(iii) Garments Division:

Total Nos. of Lines: 95 (Ninety Five)

Production Capacity: 7 Million Pcs/Month.

(Machine List are enclosed)

3.2.2 Cosmetics and Toiletries Items Production Capability:

3.2.3 List of Machineries:

Knitting Machine Profile:
Type of Fabrics Dia Gauge Qty Sets Production Capacity (Kgs.) Per Machine Total Production Per Day (Kgs.) Brand Origin
1×1, 2×2 With Lycra Rib 18 16 2 120×2 240 Keumyong Korea
1×1, 2×2 With Lycra Rib 30 18/14 2 210×2 420 Fukahama Taiwan
1×1, 2×2 With Lycra Rib 32 18 4 210×4 840 Fukahama Mayer Taiwan Germany
1×1, 2×2 With Lycra Rib 34 18 4 220×4 880 Fukahama Mayer Taiwan Germany
1×1, 2×2 With Lycra Rib 36 18 4 230×4 920 Fukahama Mayer Taiwan Germany
1×1, 2×2 With Lycra Rib 25 18 1 200×1 200 Mayer Germany
17 3500
Flat Knit Normal Design Collar & Cuff 14 10 500×10 5000 Matsuya Japan

 

 

 

 

Sewing Machine Profile:
Machine Details Type Total Country of Origin
Plain Machine 505 Japan & Malaysia
Flat lock Flat Bed(Hem) 86 Japan, Singapur & Malaysia
Flat Lock Flat Bed(Tape Binding) 96 Japan, Singapur & Malaysia
Flat Lock Cylinder Bed 185 Japan, Singapur & Malaysia
Over Lock 4 Thread 715 Japan, Singapur & Malaysia
Flat Lock 2 Niddle Chain Stitch Feet of the Arm 101 Japan, Singapur & Malaysia
Febric Trimmer (Dust Drum) 10 Japan, Singapur & Malaysia
Button Hole 8 Japan & Malaysia
Button Stich 8 Japan & Malaysia
Rib Cutting 32 TSSM (Taiwan)
Cutting Machine 32 USA
Thread Re- Winding 6 China
Vacuming Table 243 Indonesia
Kawakamp 1 Japan
Mini Compact Press 6 Taiwan
Stam Iron 324 Japan
Movable Heat Transfer Machine 6 Bangladesh
Padprinting Machine 10 Japan
Total 2374
Dyeing Section:
Machine Type One Time Loading Capacity in Kgs. Quantity (Sets) Total One Time Loading Capacity in Kgs. Brand/Country Of Origin
Vertical Winch (Computerized) 200 3 600 Fongs (China)
400 3 1,200 Fongs (China)
400 1 400 Fongs (China) High Temp.
600 1 600 Fongs (China) High Temp.
600 3 1,800 Fongs (China)
800 4 3,200 Fongs (China)
1,200 4 4,800 Fongs (China)
1,600 3 4,800 Fongs (China)
2,400 1 2,400 Fongs (China)
23 19,800
Sample Winch (Computerized) 30 1 30 Fongs (China)
60 1 60 Fongs (China)
60 1 60 Fongs (China)
20 1 20 Fongs (China)
30 1 30 Fongs (China)
60 1 60 Fongs (China)
6 260
Vartical Winch (Semi Auto) 300 2 600 Korian
400 2 800 Korian
1,000 3 3,000 Korian
7 4,400
Finishing Section:
Machine Type Production Capacity Per Day (Kgs.) Quantity (Sets) Total Production Capacity Per Day (Kgs.) Brand/Country Of Origin
Squeezer 8,000 6 48,000 Akab (Sweden)
Wet Calender 3,000 1 3,000 Heliot (France)
Dryer 9,000 5 45,000 Fongs (Korea), Askme(Taiwan) L.K (Taiwan),Heliot(France)
Tube- Tex 6,000 8 48,000 USA
Stenter (Slitting) 7,000 2 14,000 Bruckner (Germany)
Boiler 11,000 5 55,000 LC (Taiwan), Loos (Germany)
Water Treatment Plant:
Machine Type Production Capacity Per Hour Quantity (Sets) Brand/Country Of Origin
WTP-01, WTP-02, WTP-03, WTP-04, WTP-05,WTP-06 100 m3/h 6 India
ETP-01 4000m3/day 1 Italy
Lab-Machine Profile:
Machine Type Total Quantity (Pcs.) Machine Details
Lab Machine 5 Ahiba (USA)
Light Box 4 Verivide (England)
PH’ Meter 4 Germany
Crockmaster 2 Crockmaster (James H. Heal & Co. Ltd.) England
Wash fastness 1 Gyrowash (James H. Heal & Co. Ltd.) England
Washing 1 Wascator (James H. Heal & Co. Ltd.) England
Washing 1 Wirlpool (Heavy Duty Series 8 ) U.S.A
Tumbler Dryer 1 Zanussi (England)
Tumbler Dryer 1 Wirlpool U.S.A
Datacolor 4 Spectro Photometer 600 (USA)
Woven 1 Binder Germany
INCUBATURWoven 3 James .H.Heal & co England
True Brust 1 James .H.Heal & co England
Random Tumble Pilling Tester 2 James .H.Heal & co England
Therma plate 1 James .H.Heal & co England
Perspirometer 1 James .H.Heal & co England
Orbitor Pilling & Snagging Tester 1 James .H.Heal & co England
Pilling assesment viewer 1 James .H.Heal & co England

3.2.4 Value Chain of Khaleque Group:

The following value chain of the companies belonged to the Khaleque Group.

Exhibit: Value Chain of Textile Companies belonged to Khaleque Group

3.2.5 Functional Departments for Export and Import Analysis of KGI :

All the functions of Merchandising Inc. are operated under four major departments:

(i) Merchandising Department:

This department of M. Inc. is responsible for the following activities:

(a) Searching buyers:

The task of this department started with the searches of buyers, who want to import garment products from our country, to get the order of the garment product manufacturing.

(b) Introduce letter:

After finding suitable buyers this department issues an introducing letter to the respective buyers which describes M. Inc.’s total years of experience, its parameter of total activities, efficiency and effectiveness and relationship with existing buyers.

(c) Cost of Making:

CM is another important activity that stands for Cost of Making. Here the merchandiser of this dept. determines what things are required to make a unit or dozen of an order. Then he makes calculation of per unit cost on the basis of accessories consumption, fabric consumption, labor cost and other relevant costs.

(d) Price negotiation:

When this department has the clear idea about the cost involved in the desired transaction, they start price negotiation to determine a final price that the buyer agrees to pay.

(e) Select supplier:

Merchandising department recognizes the effectiveness of their commitment to buyers and there by it shoulders the responsibility of finding out efficient buyers. The bases of efficiency include supplier’s adequate administrative setup to prepare all necessary documents for exports, supplier’s financial status and adequate capacities etc.

(ii) Sampling Department:

It starts its activities after receiving the original sample or sketch sample from the buyer with an intention to testify the capability of M. Inc. to meet the desired standard of the products. Two people contribute towards the efficiency of sampling dept. They are sampling man and pattern master of M. Inc.

(iii) Commercial Department:

The commercial department of M. Inc prepares pro-forma invoice for the respective buyer. The invoice includes the quantity of the buyer’s order, its unit price and total price. The commercial department also transfers master L/C on the name of selected supplier. This department also maintains all clerical activities such as maintaining the accounts of daily transaction, maintaining payroll, keeping the accounts of daily expenditure etc.

(iv) Accessory supply department:

For a smooth manufacturing, the assurance of on time delivery of fabric and accessories is must. The responsibility of supplying accessories to the suppliers lands on this department. To assure this supply, Merchandising Inc. utilizes two sources. One is its sister concern FM. Printing and Packaging Company. Another is the outsourcing from its suppliers of long term relationship. As a result the manufacturer doesn’t need to be worried about the availability of accessories.

(v) Production Department:

Although named as production department, this service department rather follows up production, dividing its activities into following sections of Responsibilities, Quality monitor and control. This dept. supervises the manufacturing process to maintain the quality and scheduled progress of the manufacturing on behalf of Merchandising Incorporation.

Final Inspection: For its reputation, buyers usually delegate the responsibility of final inspection on the shoulder of quality Inspector of Merchandising Incorporation. The efficient inspection is the responsibility of the quality Inspector of Merchandising Inc.

(vi) Distribution Department:

As the name mentions the task of shipping department of M. Inc starts with receipt of final goods from the supplier factory after the final inspection and ends with loading of the goods bound for supplier. This department also prepares the supporting documents for export such as bill of exchange, bill of lading, commercial invoice, certificate of origin, packing list etc.

3.5 Export Import Analysis:

3.5.1 Export Analysis:

The year 2008-09 became an economic crisis spanning the world and unparalleled in history. When the year came to a conclusion, there was no end in sight. Economic uncertainty prevails throughout the year. We at Keya have responsibility to grow. Instead of saying that there are only few ways left for surviving but also continuing to live profitably despite this economic uncertainty. We owe our stability to the strategy.

(i) Export Analysis of Cosmetics & Toiletries Items:

Our 100% Halal Beauty Soap of International Standard (TFM 80%) has earned wide fame at home and abroad. We are making substantial export in the country of India, Bhutan, Pakistan, Italy, KSA, UK, Djibouti, Mali, Chad, Senegal and etc. Our products are also in high demand in the Middle East.

Due to relentless efforts standard by the management and marketing professional, the volume of sales increased in export sales.

(ii) Export Sales of Cosmetics & Toiletries Items:

Sales Revenue (Tk.) 2008-09 2007-08 2006-07 2005-06
Export Sale 135,397,055 114,817,326 106,172,510 113,541,230

Fig: Last four years export performance of Cosmetics & Toiletries Item

(iii) Export Analysis of Knit Garments products:

Khaleque Group of Industries is a leading manufacturer and exporter of Knit Garments products with 3 spinning mills as a backward linkage. The above mentioned value chain chart depicts that presently total daily capacity of two knit composite units is 80 MT, whereas the daily capacity of three spinning units is 78.4 MT yarn, which can fulfill 98% of total yarn requirement.

(iv)List of Present Buyers:

(v) Export Sales of Knit Garments products:

Year Export Quantity Export Value($) Export Value(TK)
2009 46,933,640 $41,886,245.80 2,865,019,212.72
2008 73,339,853 $70,030,122.11 4,790,060,352.32
2007 40,742,044 $40,439,546.93 2,766,065,010.01

Fig: Last three years export performance of Knit Garments products.

3.5.2 Import Analysis:

KGI is a 100% export oriented Knit Garments products manufacturing company. They mainly produce Yarn and export it to fabrics manufacturing company and fabrics manufacturing company exports it to garment industry through Back to Back L/C. Garment industry exports this fabrics against master L/C after certain process in this sense. KGI is an exporter of garments products but in the commercial term these kinds of exporters are called deem exporter. As the main job of KGI is manufacturing and exporting of Yarn so they need some raw materials and axillaries to manufacture this product. Main raw materials of KGI are various types of raw cotton. As KGI is a vertical integrated company so they have forward and backward linkage facility. They have fabrics manufacturing company and garments manufacturing company. Keya Knit Composit Ltd. gets 100% L/C from their own Garment Industry and Khaleque Group of Industries  gets 60% L/C from their own company.

(i) Import:

As the main raw material of Keya Yarn Mills Ltd. is raw cotton, so they procure their raw materials under two ways:

(a) Local Import:

As KGI is one of the largest finest yarn manufacturing companies of Bangladesh, they need various types of raw cotton. But we cannot produce high quality of raw cotton in our country. So we are 100% depended on imported cotton, so KGI’s local import is Nil.

(b) Foreign Import:

As we know that to produce high quality of yarn, need high quality of raw cotton. High quality of raw cotton means which cotton exists length fiber is long and fibers are matured. To produce high quality of raw cotton, mainly need favorable weather condition but we do not have that. So ultimately we are fully depended on imported raw cotton for our textile mills. KGI mainly procures central Asia’s cotton. Uzbekistan’s, Turkmenistan’s, Kazakhstan’s and Tajikistan’s raw cotton as per their buyers satisfaction. Though the price of central Asia’s raw cotton are higher than the others cotton. Sonali Textiles also procure raw cotton from Zimbabwe, Syria, USA, India, West Africa, Indonesia, Thailand etc. through cash L/C.

Chapter 04

4. Bottlenecks Retarding Export and Import Operation

This vital and vibrant export oriented industry has been facing some problems from local forces, which may be termed as weaknesses (or the Nation’s weakness) and some problems caused by forces beyond our geographical/political boundary, which may be termed as threats to our industry. The Readymade Garment Industry is already 20 years old but during the last two decades no planned, fruitful policy to build up a backward linkage textile industry to feed the RMG industry has been taken by the authorities. Even the existing textile industries are not capable of producing high standard fabrics to offset the foreign ones from the market. Shortage of capital, necessary to develop local sources for quality raw cotton, is a major weakness.

The reason behind the shortage of capital, however, can be attributed to the socio economic condition of the country; enabling foreign direct investment could however, compensate for this. Furthermore, although the Government has responded to the RMG industry’s request for devaluation of the local currency- the Taka from time to time, it has failed to decrease the current rate of interest. At the same time, our financial policy measures are not sufficient to attract entrepreneurs to invest in the textile industry. Anomalies in the banking sector, problems at the port, vindictive political environment, bureaucratic shackles, electricity crisis and currency adjustment policy pursued by the country and the lack of some policy support from the government to sustain the country’s falling competitiveness against its competitors in the international market are other serious weaknesses. Without ‘miscellaneous’ expenditures, no file is moved, no UC is cashed, no imported raw materials are released. There are many eager hands in the public service agencies that the industries have to fill with ready cash. Without this practice no job can be done timely. The public service agencies work very slowly and ‘speed’ money becomes the only solution to hasten the procedure. This is however done increasing by miscellaneous expenditures.

The raw materials the industry imports, say within 7 days, take an additional 15 days to reach warehouses from the Chittagong port. About 54 formalities (with miscellaneous expenditure) have to be observed to release a shipment of raw materials. These formalities increased the industry’s lead-time against overseas competitors.

The weaknesses, which have been mentioned above, could be classified into the following categories:

4.1 Unstable Political Environment and Law and Order:

4.1.1 Political Instability:

Due to the last non-cooperation movement in 1995-96, the industry suffered a loss of about Tk. 4,500 crore (Tk. 45 billion) and about 300 factories were forced to take loans of over Tk.200 crore (Tk. 2 billion). Due to Hartal (general strike) and other such political programs such as order cancellations and stock-lot gluts arose in the ready-made garment industry. Banks started showing its reluctance to open L/Cs. Ultimately many affected factories were on the verge of winding-up and declaring bankruptcy. The export oriented garment industry bore production losses equivalent to Tk 6-9 crore (Tk. 60-90 million) per hour. During the period of Caretaker Govt, the country went through emergency period. In the interest of 1.5 million workers and owners of over 3000 garment factories, the political differences should be solved politically in the parliament.

4.1.2 Unfavorable Law and Order Situation:

The disrupting law and order situation is another heavy constraint which hinders not only the development of the national economy but also the development of the export-oriented RMG sector. Due to the depreciating law and order situation, the interest of both the employers and the employees are being affected. In this relation it should be mentioned that the Factories’ Act and Labor Laws of the country are old and do not support the development of the export-oriented RMG sector. The changed environment must be reviewed and in this process interested and involved parties should be integrated.

4.2 Infrastructural Bottlenecks:

4.2.1 Port Congestion and Crisis:

Due to unchecked interest by a section of politicized dock laborers, the Chittagong Port has remained closed for about 30 days during the last three years. Go-slow and congestion are chronic problems. Chittagong port being the largest seaport in the country contributes to 80% of import and 75% of export of the total international trade. As the normal activities in export and import are hampered due to the complexity created by various reasons like dock labor unionism, go slow principle, strike etc. usage of the seaport traders has been disturbed and declining. This is definitely influencing the national economy negatively. The Garment Exporters and Garment Input Importers have been facing problems in export and import for years. It is worth mentioning that due to delay in unloading of raw materials for the Garment Industry, it is not possible for the entrepreneurs to produce the garments within the Letter of Credit (L/C) period. Thus the L/C becomes invalid and the exporters face great financial loss. Consequently, buyers are losing interest in trade with Bangladesh. Moreover the entrepreneurs have to take the responsibilities of the loss on their own shoulders. A large number of garment factories are classified as sick as they have been unable to recover from the stock-lot problem, which is also one of the causes for bottlenecks in the port area. Heavy congestion in the Chittagong port has been prevailing for the last four years. This congestion affects the normal activities of the port. Loading and unloading of goods are always delayed and ships remain in the outer anchorage for long periods of time. As a result, port utility has been lessened which is also damaging the reputation and image of the port internationally. The handling equipment at the port is insufficient to cope with the rising volume of the export-import business from the garment industry and other export oriented industries. The country should start setting up new jetties immediately to increase the loading and unloading capacity of the Chittagong Port because an average size jetty takes about 4 years to be set up. The port is taken hostage by a handful of people for their egotistic interest, posing a serious threat to the export-trade of the country. The government should play a stronger role in addressing the port crises. Handing over port activities to private sector enterprises perhaps can ensure a sustainable solution.

4.2.2 Frequent Interruption in Energy Supply:

For the last two years the electricity crisis has been unparalleled. To better describe the situation it would be safe to say that the power grid has been at its peak capacity for the last decade or two. A survey in the RMG sector in May 1997, indicated that in Jan-May 1997, the RMG sector had already suffered losses in excess of Tk.1700 crore (Tk.17 billion). Presently on an average, we are losing production worth about US$ 1.6 million per day (or US$ 46.4 million per month or US$ 561.6 million per year) just owing to the electricity crisis alone. For obvious reasons the chain-effect is more serious. RMG production could be increased by 10-15 % if reliable power supply was available.

4.2.3 Congestion in Road and Railway Communication and Traffic Jam:

A good transport system is a prerequisite for economic development. A lack of it creates road congestion, as a result it may take a longer time to get imported raw materials from the port and transport the finished products to the port from the factory. It also causes additional transport cost. A congestion-free road and rail communication, especially between Dhaka and Chittagong, linking the garment industry is vital for further development of the export-oriented RMG sector.

4.3 Problems and Corruptions of Chittagong Port

Chittagong Port is considered the heart of the economy of Bangladesh. The geographical location of this port creates the opportunity of easy and cost-effective foreign trade to be carried out through this port with all the South Asian countries as well as other Asian countries.

 

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Basic Concepts of Labor Management Relations and Trade Union

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Basic Concepts of Labor Management Relations and Trade Union

Introduction

Labor management relations has become one of the most delicate and complex problems of modern industrial society. Labor management progress is impossible without cooperation of labors and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and employers (management).

The term ‘Labor management Relations’ comprises of two terms: ‘Labor’ and ‘Relations’. “Labor” refers to “any productive activity in which an individual (or a group of individuals) is (are) engaged”. By “relations” we mean “the relationships that exist within the industry between the employer and his workmen.”

The term labor management relations explain the relationship between employees and management which stem directly or indirectly from union-employer relationship.

Labor management relations are the relationships between employees and employers within the organizational settings. The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.

Trade unions take their place within the wider labor movement, which consists of several more or less intimately related organizations. All have the common objectives to improve the material, cultural and social status of their members. Trade unions have a particular function in this, but relationships between the various parts of the labor movement vary from country to country and from period to period.

Trade union movement was created and developed to meet human, economic and political needs and aspirations, varying from region to region, country to country and continent to continent. There was no overall plan. These bodies display no single patter of development, structure, organization or objective. The movement is a living organization in a continuous flux which develops, merges and separates while responding to economic and political pressure. Through the courses of time, it has been possible to trace the interaction between local, national and international changes on structure, objectives and affiliations at all levels of the trade union movement.

Part A

Concepts of Labor Management Relations

Definition of Labor Management Relations

Labor refers to workers as a group. Workers in an industry sell their own labor in exchange for an income they negotiate with the management. While these negotiations may occur on an individual basis, many wage negotiations occur between employees who have organized into a group called a labor union (formed to improve the members’ wages and working conditions) and managers. This group wage- and benefit-negotiating process is called collective bargaining.

The relationship between labor and management can involve substantial conflict. While labor often requests higher wages to improve its standard of living, management may resist because wage increases may cut into industry profits. Managers can use the threat of layoffs (releasing employees) in order to keep wage increases down, while workers can go on strike (withhold their labor) if their demands are not met. Specialists in the field known as labor relations study how workers organize themselves, as well as the subsequent interactions between management and labor.

The nature and scope of labor management relations consists of an analysis of how people work together in a workplace, an evaluation of differences as well as relations arising among them, and how they regulate organizational arrangements for the reconciliation of different interests.

As the time passes, different determinants have come into the fields of industrial relations. These include government machineries for settlement of disputes, workers’ and management’s role into collective bargaining, settlement of grievances by arbitration, conciliation or adjudication workers’ participation at various levels of management etc.

The elements of industrial relations are as numerous as the production functions. These represent a combination of attitudes, personal contacts and relationships, standard procedures, agreements and documents in a variety of benefits and disciplines etc. The essence of the scope is a constant pursuit in which all men in industry should live together for which it must find ways and means of reconciling the differences between them and sometimes identical for two parties, i.e. management and worker. It involves economic, social and political objectives.

Perspective theories of Labor Relations

When studying the theories of labor management relations, there are three major perspectives that contrast in their approach to the nature of workplace relations. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of trade unions and job regulation very differently.

Unitary perspective

In unitarism, the organization is perceived as an integrated and harmonious whole with the ideal of “one happy family”, where management and other members of the staff all share a common purpose, emphasizing mutual cooperation. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees, being predominantly managerial in its emphasis and application.

Consequently, trade unions are deemed as unnecessary since the loyalty between trade unions and organizations are considered mutually exclusive, where there can’t be two sides of industry. Conflict is perceived as disruptive and the pathological result of agitators, interpersonal friction and communication breakdown.

Pluralistic perspective

In pluralism the organization is perceived as being made up of powerful and divergent sub-groups, each with its own legitimate loyalties and with their own set of objectives and leaders. In particular, the two predominant sub-groups of in the pluralistic perspective are the management and trade unions.

Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees, conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and if managed could in fact be channeled towards evolution and positive change.

Marxist Perspective

This view is also known as the conflict theory. This view of labor management relations looks the nature of the capitalist society, where there is a fundamental division of interest between capital and labor, and sees workplace relations against this background. This perspective sees inequalities of power and economic wealth as having their roots in the nature of the capitalist economic system. Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital. Whilst there may be periods of acquiescence, the Marxist view would be that institutions of joint regulation would enhance rather than limit management’s position as they presume the continuation of capitalism rather than challenge it.

Labor Management Relations: Attitudes and Approaches

There are some attitudes and approaches which have been influential in the study of labor management relations.

Systems Approach

A systems approach towards industrial relations has been much contributed by John T. Dunlop. This can be explained by three aspects. The first component relates to major inputs under two groups: i) External culture and environmental comprising values like traditional values of society, attitudes of labor and management to resolve differences, political system, government role, legislation etc. and ii) Internal inputs such as industrial relations-stuff philosophies, corporate views, technology input etc. The second component relating to labor management relations comprising of six sub-systems, such as recruitment, compensation, performance appraisal, labor relations, employee development and employee maintenance. These act as interconnections in developing human resource potential in the organization. The third component of this model is establishing of a mechanism to for monitoring performance of the labor management relations functional agencies and pre-established standards. This feedback mechanism includes both qualitative and quantitative indices of performance. This model provides a good mechanism for viewing the important factors which largely determines the effectiveness of the industrial activity.

This model was attacked by a lot of critics on several aspects. This model was found as heavily constructed on structural determinant of labor management relations, while neglected the functional components. The system was not only ambiguous and static in nature, but also omitted behavioral motivations, perceptions and attitudes. The critics also pointed out that this model leaves out of explanation the way in which key leaders in unions, enterprises, employers’ associations and government agencies are able to influence the events.

Oxford Approach

Developed by Alan Flander, this model views labor management relation as employment relation between management and workers within certain institutionalized regulations. The basic issue of this regulation is to regulate jobs. A system of labor management relations is seen as a system of rules. These rules appear in different ways such as in legislation and in statutory orders; in trade union regulations; in collective agreements and in arbitration awards; in social conventions; in managerial decisions; and in accepted “customs and practices”. The subject deals with certain regulated or institutionalized relationships in industry. In other words, the institution of job regulation is categorized as internal and external job regulations. According to him, collective bargaining is central to the industrial relations system. The rule making process of collective bargaining is regarded as a political institution involving a power relation between management and workers.

This approach was criticized in the sense that it is too narrow to provide a comprehensive framework for analyzing labor management relations problems. It has laid all its stress on collective bargaining as the principal method of rule-making but ignored the roles of “open warfare” as a separate process of determining rules. Institutional and power factors are given higher priority and the variables such as technology, market, status and ideology are not given any importance. This reveals a severe limitation of narrowness of this approach.

The main difference between Systems model and Oxford approach is that Systems model emphasizes the role of wide influences on rule determination and the Oxford approach stresses the process of rule-making through collective bargaining.

Industrial Sociology Approach

Industrial Sociology approach can be viewed as the opposite side of the coin to the systems and Oxford models. The industrial sociology model emphasizes on studying the behavioral aspects of the actors’ interaction in the work-place. The basic assumption of this model seems to be that conflict is an inherent part of industrial society and study industrial relations should focus its attention on identifying the factors that produce conflict as well as the method to resolve it. In order to understand the behavioral needs of the actors it is essential to study the motives and intentions, goals, interests and attitudes of the management and the workers that are likely to produce conflict.

These are two behavioral components in the labor management relations, i.e. managers and the workers. These two are influenced by respective rational objectives. The management’s rational objective is to seek maximum organizational control in order to secure maximum profit at the lowest minimum cost. Whereas the workers’ rational thinking is to seek maximum control of their work in order to obtain monetary reward.

The inconsistency and incompatibility of these two objectives tend to create tension in the labor management relations system. Clark Ferr argues that the conflict between labor and management is inevitable because the desires and aspirations of both the groups are unlimited but the means of satisfaction are limited. The conflict in a labor management relations system tends to arrive because of divergent interests. The relationship tends between diversity, conflict and resolution of the conflict. In a harmonious situation conflict is generated by diversity of interests and resolve through negotiation and compromise.

It is viewed that some of the conflicts lie in the dissatisfaction of the workers with the job itself, and other are with the physical and social environment at the workplace, lack of any meaningful job creates frustration to the worker as a result conflict tends to arise.

C.J.Margerison identified three kinds of conflicts, such as i) distributive, ii) structural and iii) human relations.

It is however realized that the conflict generates at two levels. Firstly, the intra-plant level where situational factors, such as job content, work task and technology and interaction factors produce three types of conflict, viz. distributive, structural and human relations. These conflicts are handled through bi-partite agreements, such as collective bargaining; structural analysis of the socio-technical system and man-management analysis respectively. In case of the second level intra-organization, resolution of conflict may involve some outside factors like governments regulation, policy of the federation or overall situation of the national economy.

It also suggests a method of inquiry which attempts to develop sociological models of conflicts. This model in fact, has concentrated all the attention of studying “people” in a situation, organization or system. The major limitation of this approach is that it takes economic and other variables as constant and emphasizes only on sociological factors. The emphasis on the significance of conflict in industrial relations is not a new one.

The Action Theory Approach

This system also stressed the collective regulations of industrial labor which is a focal point of the systems model. The actors operate within a framework which can at best be described as a coalition relationship. As a matter of fact, the actors agree to co-operation that takes place in the ways of bargaining. The action theory analysis of industrial relations points out collective bargaining as an instrumental took for solving the conflicts. It focuses mainly on bargaining mechanism

Pluralist Approach

The pluralist ideology says that people in an enterprise contains different interests, aims and aspirations. The social environment is an important factor in industrial conflicts. The strike activity will come down when the industrial jobs become pleasant and integrated into the wider society. Again, it is argued that the organization is a plural society, containing many related but separate interests and objectives which must be maintained in some kind of equilibrium. Management and government should not suppress any ideas or opinions and keep the conflict within accepted bounds; as a result it does not destroy the enterprise atmosphere. Ross’ and Harman’s “strike” postulates the declining incidents of strikes because of the institutional framework. They say that the strike activity in the entire world declined in spite of an increase in union membership. The need for collective bargaining mechanism for conflict resolution is stressed. For differentiates the two aspects of relationship between workers and management. Firstly, it is a market relationship which deals with the terms and conditions on which labor is hired. This relationship is necessarily economic in character and based on contracts executed between the parties. The second aspect is managements’ handling of labor, the interaction, negotiations, distribution of power and participation in decision making processes etc.

The important criticism of the pluralistic approach is the Marxists. They argue the exploitation and slavery will continue unabated in the institutional structure of pluralism. The difference in a social structure is that the worker will be deemed to be a better paid wage slave.

Gandhi and Marx on Labor Management Relations

Certain aspects of Gandhi’s social theory come very close to Marx’s teaching. Both accept the existence of social conflict as a fact. Gandhi also saw conflict between labor and capital in industry. Industrialization proceeds, as Gandhi recognized, on the basis of exploitation of labor on one hand and agriculture on the other. Gandhi was greatly perturbed by the ill-effects of industrialization and primarily because it leads to increasing inequality. In this assertion there is striking parallel between his analysis and Marx’s rejection of Adam Smith’s rejection.

Marxian program of action and Gandhian passive resistance program has its basis on the stronger force of human nature, the will of the deprived to fight exploitation. Both start with an awareness of the existence of social conflict, therefore, resisting exploitation of exploited. In both, further, the urge in revolutionary. While Marx envisages a war between workers and capitalists based on power relationships, Gandhi’s process is non-violent and passive resistance, Marxian labor management relations is equated with a power-struggle, unlike co-operation of Gandhian approach.

Nevertheless, the fundamental difference lies in the image of the ultimate society that they have in view. Removing the element of built-in hostility of a necessary clash between the interests of labor and capital, the concept of trusteeship was advocated by Gandhi.

Gandhi put forth the ideas of truth and passive resistance by the exploited against the exploiters. Truth and non-violence became the technique of labor management relations in Gandhian concept. Truth means social justice and non-violence which contains all embracing love, active goodwill, compassion for all humanity, resisting injustice – cooperation in terms of honorable equality. It laid emphasis in peaceful action to settle disputes, failing which recourse should be had to arbitration. Marx allowed violent proletariat action and ultimately state stewardship of industry. Gandhi was against state-ownership, because, although state while apparently doing good by minimizing exploitation, it does the greatest harm to mankind by destroying individuality, which lies at the root of all progress. On the other hand, Gandhi cultivated the idea of “trusteeship” among owners.

Human Relations Approach

In recent years, the management is displaying increasing interest which in the research findings of sociologists and psychologists in an area, what has become to be known as “human relations” in industry. Social scientists have been conducting investigations into such problems, as what makes for effective communications between management and workers, what leads to good and poor morale in a work situation; what causes employees to respond to union organizing drives; which factors lead to conflict and which to co-operation in industrial situations.

Better human relations may be possible through scientific personnel management. Personnel management can be viewed from various aspects. There is the management aspect in which the improved efficiency of the men in industry is the objective; there is the conciliatory aspect in which industrial peace is the primary object; and there is social reform aspect in which the improvement of the physical, moral and emotional environment of labor is predominant. It is ultimately concerned with the human and social implications of the internal organization and methods of working and of human and social change in the society. Thus efficiency, mental health and happiness go hand in hand for the approach of human relations. Human relations in industry simply mean relations at human level between management and man. Human relations approach is of developing man and not merely techniques and skills of labor force in industry. The labor force in industry spends the best part of their lives on their workplace. Their development as conscientious human beings is also responsibility of those who run the industries. Modern day worker is a delicate piece of mechanism which requires careful handling by a person knowing the art of management. Human element in industry is needed to be reorganized from a scientific and practical point of view.

The work of George Elton Mayo, professor of Industrial Research at Harvard University in the ‘30s, which is known as the Hawthorne experiment, discovered that what was forgotten in technological perfection was a human being who was doing the work. Mayo found that factory has two functions. First, to produce goods and second, is social function. But according to Mayo the situation in the factory produces the opposite in its social functions, i.e. human dissatisfaction. Industry must know the technique of handling people. Technical discipline and intellectual knowledge of professional managers are not enough to lead men at work. But the knowledge in which the men are brought to conduct themselves in life and in their profession according to a certain code of honor. Here lies the role of human relations in industry. An approach to human relations does with a man’s sense of his worth or concerning his moral values. Sound human relations in work situation cannot be achieved on the basis of cleverness but must rest on mutual trust and confidence. Somebody has truly said that industry is really a human system performing economic functions. Human relations motivate human beings in industry to serve and sacrifice for things with which they identify.
Labor Management Relations Framework

The term Labor management relations has a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, Labor management relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations. Now its meaning has become more specific and restricted. Accordingly, Labor management relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers.

The relationships which arise at and out of the workplace generally include the relationships between individual workers, the relationships between workers and their employer, the relationships between employers, the relationships employers and workers have with the organizations formed to promote their respective interests, and the relations between those organizations, at all levels. Labor management relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers’ participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises.

An industrial relations system consists of three elements:

1. Environmental Context (Technology, Market Pressure, Legal Environment)

2. Participants (Employees, Unions, Management, Government)

3. “Web of Rules” (Process by which Labor and Management interact)

For this system to work efficiently, the three participants must, to some degree, have a common ideology (acceptance of the economic system and the role of other participants). However, acceptance does not necessarily mean convergence of interests. To the contrary, some degree of worker-management conflict is inevitable as though the interests of the parties overlap, they diverge in key respects (e.g how to divide the profits).

So, an effective relations system does not eliminate conflicts, rather it provides with an initiation that minimizes its effect on management, society and employees.

The next page shows the Labor Management Relations System graphically:

Actors in Labor Management System

A labor management relations system consists of the whole gamut of relationships between employers and employees and employers which are managed by the means of conflict and cooperation.

A sound labor management relations system is one in which relationships between management and employees (and their representatives) on the one hand, and between them and the State on the other, are more harmonious and cooperative than conflictual and creates an environment conducive to economic efficiency and the motivation, productivity and development of the employee and generates employee loyalty and mutual trust.

Three main parties are directly involved in industrial relations:

Employers

Employers possess certain rights vis-à-vis labors. They have the right to hire and fire them. Management can also affect workers’ interests by exercising their right to relocate, close or merge the factory or to introduce technological changes.

Employees

Workers seek to improve the terms and conditions of their employment. They exchange views with management and voice their grievances. They also want to share decision making powers of management. Workers generally unite to form unions against the management and get support from these unions.

Government

The central and state government influences and regulates industrial relations through laws, rules, agreements, awards of court and the like. It also includes third parties and labor and tribunal courts.

Fig: Actors in Labor Management Systems

There are also some secondary actors, who basically evolve from the primary three actors. These actors are: 1. Trade Union

2. Employers’ Association

3. Court and Tribunal

Factors Influencing Labor Relations

There are mainly two types of factors Influencing labor relations:

Internal factors:

History and tradition

Our history of industrial relations is one of oppression from the owner’s/employers’ part. Our industrial relations date back to the 60’s of the 18th century when rail lines were established here for the first time. The workers had to endure colonial suppression and the employers main concern was their own profits-not the workers well being. Laborers were treated as animals. Any sort of objection raised on part of the labors could be faced with death in the hands of the owners. Reflections of this trend are still visible in contemporary Bangladesh.

Nature of Leadership

We have had dedicated leaders in Bangladesh who have led the trade union movement to its present state. But allegations of opportunism also exist among the trade union leadership of Bangladesh. Our trade union leadership can still be observed to be under the control of a certain class of bourgeoisie. They have no real respect for the class struggle of the working class and seek to meet their ends by maintaining liaisons with the employer class in the name of helping the working class. More often than not, basic unions are not much more than picket unions of the management. Our trade union movement has failed to develop to its full form due to the presence of these ailments.

Union Politics

The contemporary union scene is pockmarked with conflicts both within the unions itself and between different unions. Leaders are observed to be prone to break away from the mother union because of internal conflict and form unions of their own. This is leading to an increase in the number of unions without any significant increase in total membership.

Policies

Perhaps the most important determinants of the relationship between the parties are the policies adopted by the unions and management. Or lack of thereof. The policies adopted by the parties may be identical, different, or amenable to compromise. In any event, these policies and the extent to which to which they exist will influence the general relationship of the union and the management and their specific actions within that relationship.

External Factors:

Industry Characteristics

The elasticity of demand for a product produced in an industry and substitution availability are important industry characteristics which can influence collective bargaining. In some industries, such as education, medical care, or construction, there may be no available substitute available from the product.

In industries where labor costs are a significant cost item, costs such as transportation, education and construction shall be monitored closely. In other industries, such as utilities, which are capital intensive and where labor costs are not as important as other costs, management may be less inclined to strongly resist wage demands.

Technology

Some process industries, such as oil refineries, are easy for management personnel to operate during a strike. Others, such as steel mills, are impossible to operate without the regular work force. A strike in the former may mean no loss of production and is not very effective. A strike in the latter may be disastrous.

Socio economic Condition

Economic conditions are a very critical factor in influencing a union’s willingness to settle and also the nature of its respective concerns in bargaining. When economic conditions are good, the management is more prone to avoiding a strike and thus are more receptive to union demands. During economic downturns, unions maybe more concerned with security than money. The recent economic conditions of high unemployment, high inflation and low profits have made bargaining difficult.

All the factors mentioned above have a great effect on our trade union movement. For example, poor financial condition of the garments workers, according to many union leaders, is the main obstacle behind their lagging behind. Otherwise they could make the strongest movement in the country given the largest number of workers in the industry.

Legislation

Legislation is probably the greatest outside force affecting labor relations. The law has created a whole new framework within which unions and management operate. Many of the parties’ actions, from the recognition of the union, to the negotiation and administration of a contract, to conciliation, meditation, and sometimes arbitration is carried out because the law requires that it be done.

Whatever the laws and regulations neither are, the matter of regret is that they neither are nor reflected in real life situations. In the garments sector, the real picture is that the workers don’t even enjoy the right of being able to join a trade union. An attempt to join trader union is still in many cases translates into loss of job for the worker.

Government Administration and the Judiciary

Governments are not only responsible for the creations of labor relations law but also administering the law. Governments may intervene in labor disputes in a number of ways. In Bangladesh, government may by order in writing prohibit a strike or lockout if the strike or lockout continues for more than 30 days. Government may by order in writing prohibit a strike or lockout if it is satisfied that the continuance of such a strike or lockout is causing serious hardship to the community or is prejudicial to the national interest. Government may, in addition, appoint or act itself as a special mediator in dispute resolutions; this is what government did in the case of the riot raised by the garments workers in Gazipur in May 24, 2006.

Modern Practices of Labor Management Relations

The larger employers of labor now have labor relations, or industrial relations, departments dealing with problems in the negotiation and administration of agreements. Such departments are usually divided into two branches, one responsible for day-to-day administration of agreements relating to wages and salaries, the other responsible for such matters as assignments to work, schedules of work, layoffs, promotions, discipline, grievances, and arbitration. Many international unions adapted their organizational structures to those of the principal companies with which they deal. These unions have specialists trained and assigned to deal with management specialists in matters relating to negotiations, grievances, arbitration, legal services, social security and welfare services, industrial engineering, economics, and public relations.

When the employees in a plant are not represented by a union, the terms and conditions of employment are usually determined by direct arrangements between plant management and employee. A union seeking to deal with an employer as the exclusive bargaining representative of its employees may try to persuade the employer to recognize it on the basis of authorization cards signed by a majority of employees in an appropriate bargaining unit and signifying the desire of these employees to be so represented. Failing such recognition, the union may file a representation petition with the appropriate federal or state agency. The agency will then proceed to determine the unit appropriate for collective bargaining and, if warranted, conduct a secret-ballot election among the employees in that unit.

Management is obliged to bargain in good faith with the union selected by the employees. The Labor-Management Relations Act requires that a notice of contract negotiations be given to The Federal Mediation and Conciliation Service and to the state mediation agency, where one exists. These agencies make available the services of their staff mediators to assist the parties in achieving agreement if their unassisted negotiations are not fruitful. Such services are optional; neither party to a negotiation is required to accept them. If agreement on contract terms cannot be reached through bargaining, the union is allowed to strike, except in certain industries, such as the railroads, in which strike action is delayed because a strike would be against the public interest. Most agreements provide for the filing of grievances by employees and by the union with respect to alleged violations of the agreement and require consideration of a grievance in prescribed time sequence by union and management officials with progressively greater authority. The agreements provide also that a grievance not so resolved may be appealed to arbitration for a final decision. A party to such an agreement may call upon federal and state courts to compel the other party to arbitrate.

Arbitrators of labor-management disputes are impartial, disinterested professionals chosen directly by the parties involved or selected from lists of nominees as submitted, for example, by the American Arbitration Association. In some instances arbitration is conducted by a board of arbitrators of which all members except a neutral chairperson with the deciding vote are interested individuals. Arbitration is conducted either by an arbitrator selected especially for a case or by an umpire, referee, or chairperson designated for the duration of the collective agreement. Arbitrators’ awards are enforceable, when filed, as judgments of a court of law, and may be set aside only for specific causes, such as lack of authority, fraud, interest, or misconduct by the arbitrator.

Dealings between most modern-day representatives of management and unions have been characterized by mutual respect, the product of years of negotiation and joint administration of agreements. This attitude of mutual confidence has fostered more cooperative labor relations than formerly prevailed. Labor-management arbitration has also contributed to industrial peace because it substituted the binding award of a respected neutral for the exertion of economic force during the term of a collective agreement. Although labor and management continue to differ on various economic problems, they generally realize that neither group can reach its goals without the assistance of the other.

By the mid-1980s the power of organized labor had decreased markedly. With more and more people employed in service occupations rather than in manufacturing, union membership declined—and so did union strength in labor negotiations. This process was exacerbated by other economic and political factors.

Part B

Trade Unions

What is Trade Union?

Trade Union means any federation of workmen of an establishment formed primarily for the purpose of regulating the relations between workmen and employers, or workmen and workmen, and safeguarding the rights and demands of the labors. In other words, an organization of workers created to protect and advance the interests of its members by negotiating agreements with employers on pay and conditions of work is called a trade union. Unions may also provide legal advice, financial assistance, sickness benefits and education facilities. Any definition, however, is limited by the changing horizons and the developing nature of the aims and objectives of Trade unions. But still, some attempt must be made to define the term ‘’Trade Union’’.

The nature of trade union varies due to the nature of the industry they exist. The role and objective also differ substantially due to changing working condition and very nature of the business. Trade Union is defined somewhat differently among different nations. To find a uniform definition is required for the better understanding of the followings:

· Understand why Union exist

· Evaluate the relationship between unions and consumers, society and government

· Current regulations, major laws and regulatory agencies, and what will be the impact on the consumers

· Understanding the collective bargaining process of the employees

To define what a trade union is by a single definition is a task almost impossible. The definition varies from author to author, organization to organization and country to country. Some important definitions of trade union are cited here:

Ø Definition provided in the book –Iqbal Ahmad, “Basic Labor Laws of Bangladesh”, 2nd edition, published by Ferdous Iqbal, Printed by Salmany Printing.

Trade Unions are the organizations which are engaged in protecting the rights of the labor force of the country. They are the registered unions which are devoted for the betterment of the workforce in the following aspects:

· Quality of Work Life (QWL)

· Legal Proceedings

· Resolving Industrial Disputes

· Working Conditions

· Welfare of the Workforce etc.

Trade Union movements are essential for a country, especially for the betterment for the existing and potential workforce. Trade unions are the Collective Bargaining Agents (CBA) which speaks for their rights.

Ø Definition according to The Industrial Relations (Northern Ireland) Order 1992

Statutory Instrument 1992 No. 807 (N.I.5)

The Industrial Relations (Northern Ireland) Order 1992

Definition and status of trade union

3. — (1) in this Order “trade union” means an organization (whether permanent or temporary) which either—-

(2) A trade union shall not be, or be treated as if it were, a body corporate, but—

(a) It shall be capable of making contracts;

(b) All property belonging t the trade union shall be vested in trustees in trust for the union;

(c) It shall be capable of suing and being sued in its own name; whether in proceedings relating to property or founder on contract or tort or any other cause of action whatsoever;

(d) Proceedings for any offense alleged to have been committed by it or on its behalf may be brought against in its own name; and

(e) Any judgment, order or award made in proceedings of any description brought against the trade union shall be enforceable by order under the Judgments Enforcement (Northern Ireland) Order 1981, punishment for contempt or otherwise, against any property held in trust for the trade union to the like extent and in the like manner as if the union were a body corporate.

(3) A trade union shall not be registered as accompany under the Companies Order and accordingly any registration of a trade union under that Order (whenever effected) shall be void.

(4) A trade union shall not be registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 or the Friendly Societies Act (Northern Ireland) 1970 and accordingly any registration of the trade union under either of those Acts (whenever affected) shall be void.

(5) The purposes of any trade union shall not, by reason only that they are in restraint of trade, be unlawful so as—

a) To make any member of trade union liable to criminal proceedings for conspiracy or otherwise; or

b) To make any agreement or trust void or voidable; nor shall any rule of a trade union be unlawful or unenforceable by reason only that it is in restraint of trade.

(6)Article 113 of the Judgment Enforcement (Northern Ireland) Order 1981 (sequestration order against company in contempt) shall apply to a trade union as it applies to a company.

Ø Definition of trade union by “The Canadian legal institute”

In this Act, “trade union” means such combination, whether temporary or permanent, for regulating the relations between workmen and masters, or for imposing restrictive conditions on the conduct of any trade or business, as would, but for this Act, have been deemed to be an unlawful combination by reason of some one or more of its purposes being in restraint of trade.

Ø BIZ/ED Definition of Trade Union

A trade union is an organization which represents workers. Trade unions aim to:

· Improve the pay of workers

· Improve working conditions and secure longer holidays.

· Protect members’ jobs.

· Provide local, social and welfare facilities.

· Influence government policy by sponsoring Members of Parliament and contributing to the political parties.

Each trade union has its own internal organization. Generally:

· Small groups of workers elect a local spokesman (shop steward)

· Every area has a branch which sends delegates (representatives) to a yearly national conference.

· Conference passes resolutions (policies) and elects a national executive. Only the national executive can call an official strike.

· The entire membership elects a general secretary. He general secretary acts as the union’s spokesman and manages everyday affairs, usually until he reaches retirement age.

Ø Definition of Trade Union according to “The Canadian Labor Law”

A trade union which is recognized by a labor board under the laws of Canada or any province or territory of Canada and which has its head office in Canada.

There can be a hundred other definitions as well. But most important thing is to recognize the core concept behind trade unions – how they came into being and which need had been the driving factor behind the creation of the trade unions.

Features of Trade Union

Types of Trade Union

1. Craft Union: Represents skilled workers from one occupation

2. General Union: Represents mainly unskilled workers from many occupations

3. Industrial Unions: Represents mainly workers from one industry

4. Professional/White-Collar Unions: Represents skilled workers in mainly service industries

Functions of Trade Union

· Improve the pay of the workers

· Improve working conditions and secure longer holidays

· Protect members’ jobs

· Provide local, social and welfare facilities

· Influence government policy by sponsoring Members of Parliament and contributing money to the political parties

Organization of Trade Union

Each trade union has its own internal organization. Generally:

· Small groups of workers elect a local spokesman.

· Every area has a branch, which sends delegates to a yearly national conference.

· Conferences pass resolutions and elect a national executive. Only the national executives can call an official strike.

· The entire membership selects a general secretary. The general secretary acts as the union’s spokesman and manages everyday affairs, usually until he reaches retirement age.

The Overall Objectives of Trade Union

Although different organizations have different trade unions but their objectives are more or less same.

· To secure the social and economic right of each and every member of the union and work for sustaining the above mentioned rights.

· To work for improving the working conditions of the organization.

· To settle the matter relating to wages and other job conditions.

· To safe guard the interest of the workers both from the management and outside parties.

· To retain the harmonic relationship among the workers both from the management and workers community.

· To regulate the relationship among the workers. In case of any dispute among the workers, try to solve the problem without the intervention of the third party.

· To support the workers in case of accident, injury, inability to work due to senility.

· To help the workers to get the retirement benefit.

· To extend financial help during hartal called by the union and lockout on the part of the employer.

· To provide financial help to the member who is exploited for working for the interest of the workers.

· To maintain a congenial relationship with the employer and management for the greater interest of the workers.

· To grow awareness among the workers for their role to the organization and society as well as to the country.

· To fix up the membership fee and other matters relating to raising fund and to make policy for the effective utilization of the fund.

· Full employment and the raising of living standards.

· Facilities of training policies in regard to wages, hours of work and other conditions of work calculated to ensure a just share of the fruits of progress to all.

· The effective recognition of the right of collective bargaining.

· The co-operation of management and labor in the continuous improvement of productive efficiency, and

· The collaboration of workers and employer in the preparation and application of social and economic measures, the extension of social security measures to provide a basic income to all in need of such protection and comprehensive medical care, etc.

· The right for workers to equal opportunities and equal treatment in matters of employment and occupation without discrimination on the ground of sex;

· The right for workers to be informed and consulted within the undertaking;

· The right for workers to take part in the determination and improvement of working conditions and the working environment in the under taking.

History of Trade Union

The traces of trade unions’ existence could be traced from the eighteenth century, when Western society (with most changes occurring earliest in Britain) witnessed a transformation from an agrarian culture with craft-based production to a culture shaped by the first industrial revolution. Some of the changes brought on by this new order, such as new work methods and downward pressure on traditional wage structures, sparked rising alarm in the crafts and guilds of the time, who feared encroachment on their established jobs.

The rapid expansion of industrial society was to draw women, children, rural workers, and immigrants to the work force in larger numbers and in new roles. This pool of unskilled and semi-skilled labor spontaneously organized in fits and starts throughout its beginnings, and would later be an important arena for the development of trade unions.

Trade unions have sometimes been seen as successors to the guilds of medieval Europe, though the relationship between the two is disputed. Medieval guilds existed to protect and enhance their members’ livelihoods through controlling the instructional capital of artisanship and the progression of members from apprentice to craftsman, journeyman, and eventually to master and grandmaster of their craft. They also facilitated mobility by providing accommodation for guild members traveling in search of work. Guilds exhibited some aspects of the modern trade union, but also some aspects of professional associations and modern corporations.

Additionally, guilds, like some craft unions today, were highly restrictive in their membership and included only artisans who practiced a specific trade. Many modern labor unions tend to be expansionistic, and frequently seek to incorporate widely disparate kinds of workers to increase the leverage of the union as a whole. A contemporary labor union might include workers from only one trade or craft, or might combine several or all the workers in one company or industry.

The National Labor Union was the first national union in the United States. It was created in 1866 and included many types of workers. This union did not accomplish any significant gains. After this union crumbled, the Knights of Labor became the leading countrywide union in the 1860s. This union did not include Chinese, and partially included blacks and women.

The Knights of Labor was founded in the United States in 1869. Eventually over 700,000 workers joined the Knights. They opposed child labor and demanded the eight-hour day. They hoped their union would give workers “a proper share of the wealth they create,” more free time, and generally more benefits of society. They also tried to set up companies owned by the workers themselves. Although the Knights were against strikes, some radical members went on strike anyway when the railroads cut wages in 1884. After they won the fight, membership in the Knights boomed to 700,000, but then, at the time of the Haymarket Massacre, a fearful public opinion grouped them with anarchists and Communists, and membership then rapidly declined.

The American Federation of Labor (AFL) was founded by Samuel Gompers. By 1904, AFL-affiliated unions had a membership of over 1.4 million nationwide. Under Gompers’s leadership, the AFL advocated an approach known as “business” or “pure and simple” unionism, which emphasized collective bargaining to reach its goals. Demands were centered on improvements to the immediate work environment, like better wages, hours and working conditions.

In France, Germany, and other European countries, socialist parties and anarchists played a prominent role in forming and building up trade unions, especially from the 1870s onwards. This stood in contrast to the British experience, where moderate New Model Unions dominated the union movement from the mid-nineteenth century and where trade unionism was stronger than the political labor movement until the formation and growth of the Labor Party in the early years of the twentieth century.

Trade Union Movement organized activities of workers to improve their workers to improve their working conditions. In the early stage of industrial development when there were personal contacts between employers (master) and employees (workers), there was no need of any organization to determine relations between the two. But under the modern factory system the personal touch is absent and the relations between the employer and the worker have come under strain. The conflict of interests between buyer and seller of labor power has become conspicuous and this has led to the rise trade union movement throughout the world.

Trade Unions take their place within the labor movement, which consists of several or more or less intimately related organizations, producers’ or consumers’ co-operatives and workers’ education and sports associations. All have the common objectives to improve the material, cultural, and social status of their members. Trade unions have a particular function in this, but relationships between the various parts of the labor movement vary from country to country and from period to period. Trade union movement was created and developed to meet human, economic, and political needs and aspirations, varying from region to region, country to country, and from continent to continent. There was no overall plan, and there are universally accepted models for the individual union, the national center, the international federation of industry based unions or the global and regional organizations of trade unions. These bodies display no single pattern of development, structure, organization or objective. The movement is a living organization in a continuous state of flux which develops, merges, and separates while responding to economic and political pressure. Through the courses of time it has been possible to trace the interaction between local, national, international changes on structure, objectives, and affiliations at all levels of the trade union movement.

Outbursts of economic activity; depressions, national or worldwide; wars, especially world war I and II, the Bolshevik Revolution in Russia and the establishment of the communist states; the rise of fascism in Europe; the evolution of political thought; all these have had their impact on the development of trade unions. The effects of these events have been to mould the workers’ protective organizations in many ways but always in order adequately to defend and further what they regard as their rights within society.

Trade Union Movement in Bangladesh

Before 1971

The tradition of parallel development of the nationalist and the trade union movement, which had originated in British India, continued through the Pakistan period down to the birth of Bangladesh. Trade union activity in Bangladesh has a long and at times, bloody history, leading back to the revolt by tea plantation workers in 1920-when the country was still a part of British rules India and the formation of the All India Trade Union Congress in the same year. The East Pakistan Trade Union Federation was formed following the creation of Pakistan in 1947, and split into five factions shortly before the independence of Bangladesh in 1971.

For the first time in India the Bombay Mill Hands association was formed on 24 April, 1980. This gave impetus to the trade union movement in British India. The establishment of ILO in 1919 provided a source of inspiration for the workers to organize themselves and shape their destiny. India’s membership of the same exerted great influence in the formation of a central

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Basic Concepts of Labor Management Relations and Trade Union

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Basic Concepts of Labor Management Relations and Trade Union

Introduction

Labor management relations has become one of the most delicate and complex problems of modern industrial society. Labor management progress is impossible without cooperation of labors and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and employers (management).

The term ‘Labor management Relations’ comprises of two terms: ‘Labor’ and ‘Relations’. “Labor” refers to “any productive activity in which an individual (or a group of individuals) is (are) engaged”. By “relations” we mean “the relationships that exist within the industry between the employer and his workmen.”

The term labor management relations explain the relationship between employees and management which stem directly or indirectly from union-employer relationship.

Labor management relations are the relationships between employees and employers within the organizational settings. The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.

Trade unions take their place within the wider labor movement, which consists of several more or less intimately related organizations. All have the common objectives to improve the material, cultural and social status of their members. Trade unions have a particular function in this, but relationships between the various parts of the labor movement vary from country to country and from period to period.

Trade union movement was created and developed to meet human, economic and political needs and aspirations, varying from region to region, country to country and continent to continent. There was no overall plan. These bodies display no single patter of development, structure, organization or objective. The movement is a living organization in a continuous flux which develops, merges and separates while responding to economic and political pressure. Through the courses of time, it has been possible to trace the interaction between local, national and international changes on structure, objectives and affiliations at all levels of the trade union movement.

Part A

Concepts of Labor Management Relations

Definition of Labor Management Relations

Labor refers to workers as a group. Workers in an industry sell their own labor in exchange for an income they negotiate with the management. While these negotiations may occur on an individual basis, many wage negotiations occur between employees who have organized into a group called a labor union (formed to improve the members’ wages and working conditions) and managers. This group wage- and benefit-negotiating process is called collective bargaining.

The relationship between labor and management can involve substantial conflict. While labor often requests higher wages to improve its standard of living, management may resist because wage increases may cut into industry profits. Managers can use the threat of layoffs (releasing employees) in order to keep wage increases down, while workers can go on strike (withhold their labor) if their demands are not met. Specialists in the field known as labor relations study how workers organize themselves, as well as the subsequent interactions between management and labor.

The nature and scope of labor management relations consists of an analysis of how people work together in a workplace, an evaluation of differences as well as relations arising among them, and how they regulate organizational arrangements for the reconciliation of different interests.

As the time passes, different determinants have come into the fields of industrial relations. These include government machineries for settlement of disputes, workers’ and management’s role into collective bargaining, settlement of grievances by arbitration, conciliation or adjudication workers’ participation at various levels of management etc.

The elements of industrial relations are as numerous as the production functions. These represent a combination of attitudes, personal contacts and relationships, standard procedures, agreements and documents in a variety of benefits and disciplines etc. The essence of the scope is a constant pursuit in which all men in industry should live together for which it must find ways and means of reconciling the differences between them and sometimes identical for two parties, i.e. management and worker. It involves economic, social and political objectives.

Perspective theories of Labor Relations

When studying the theories of labor management relations, there are three major perspectives that contrast in their approach to the nature of workplace relations. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of trade unions and job regulation very differently.

Unitary perspective

In unitarism, the organization is perceived as an integrated and harmonious whole with the ideal of “one happy family”, where management and other members of the staff all share a common purpose, emphasizing mutual cooperation. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees, being predominantly managerial in its emphasis and application.

Consequently, trade unions are deemed as unnecessary since the loyalty between trade unions and organizations are considered mutually exclusive, where there can’t be two sides of industry. Conflict is perceived as disruptive and the pathological result of agitators, interpersonal friction and communication breakdown.

Pluralistic perspective

In pluralism the organization is perceived as being made up of powerful and divergent sub-groups, each with its own legitimate loyalties and with their own set of objectives and leaders. In particular, the two predominant sub-groups of in the pluralistic perspective are the management and trade unions.

Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees, conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and if managed could in fact be channeled towards evolution and positive change.

Marxist Perspective

This view is also known as the conflict theory. This view of labor management relations looks the nature of the capitalist society, where there is a fundamental division of interest between capital and labor, and sees workplace relations against this background. This perspective sees inequalities of power and economic wealth as having their roots in the nature of the capitalist economic system. Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital. Whilst there may be periods of acquiescence, the Marxist view would be that institutions of joint regulation would enhance rather than limit management’s position as they presume the continuation of capitalism rather than challenge it.

Labor Management Relations: Attitudes and Approaches

There are some attitudes and approaches which have been influential in the study of labor management relations.

Systems Approach

A systems approach towards industrial relations has been much contributed by John T. Dunlop. This can be explained by three aspects. The first component relates to major inputs under two groups: i) External culture and environmental comprising values like traditional values of society, attitudes of labor and management to resolve differences, political system, government role, legislation etc. and ii) Internal inputs such as industrial relations-stuff philosophies, corporate views, technology input etc. The second component relating to labor management relations comprising of six sub-systems, such as recruitment, compensation, performance appraisal, labor relations, employee development and employee maintenance. These act as interconnections in developing human resource potential in the organization. The third component of this model is establishing of a mechanism to for monitoring performance of the labor management relations functional agencies and pre-established standards. This feedback mechanism includes both qualitative and quantitative indices of performance. This model provides a good mechanism for viewing the important factors which largely determines the effectiveness of the industrial activity.

This model was attacked by a lot of critics on several aspects. This model was found as heavily constructed on structural determinant of labor management relations, while neglected the functional components. The system was not only ambiguous and static in nature, but also omitted behavioral motivations, perceptions and attitudes. The critics also pointed out that this model leaves out of explanation the way in which key leaders in unions, enterprises, employers’ associations and government agencies are able to influence the events.

Oxford Approach

Developed by Alan Flander, this model views labor management relation as employment relation between management and workers within certain institutionalized regulations. The basic issue of this regulation is to regulate jobs. A system of labor management relations is seen as a system of rules. These rules appear in different ways such as in legislation and in statutory orders; in trade union regulations; in collective agreements and in arbitration awards; in social conventions; in managerial decisions; and in accepted “customs and practices”. The subject deals with certain regulated or institutionalized relationships in industry. In other words, the institution of job regulation is categorized as internal and external job regulations. According to him, collective bargaining is central to the industrial relations system. The rule making process of collective bargaining is regarded as a political institution involving a power relation between management and workers.

This approach was criticized in the sense that it is too narrow to provide a comprehensive framework for analyzing labor management relations problems. It has laid all its stress on collective bargaining as the principal method of rule-making but ignored the roles of “open warfare” as a separate process of determining rules. Institutional and power factors are given higher priority and the variables such as technology, market, status and ideology are not given any importance. This reveals a severe limitation of narrowness of this approach.

The main difference between Systems model and Oxford approach is that Systems model emphasizes the role of wide influences on rule determination and the Oxford approach stresses the process of rule-making through collective bargaining.

Industrial Sociology Approach

Industrial Sociology approach can be viewed as the opposite side of the coin to the systems and Oxford models. The industrial sociology model emphasizes on studying the behavioral aspects of the actors’ interaction in the work-place. The basic assumption of this model seems to be that conflict is an inherent part of industrial society and study industrial relations should focus its attention on identifying the factors that produce conflict as well as the method to resolve it. In order to understand the behavioral needs of the actors it is essential to study the motives and intentions, goals, interests and attitudes of the management and the workers that are likely to produce conflict.

These are two behavioral components in the labor management relations, i.e. managers and the workers. These two are influenced by respective rational objectives. The management’s rational objective is to seek maximum organizational control in order to secure maximum profit at the lowest minimum cost. Whereas the workers’ rational thinking is to seek maximum control of their work in order to obtain monetary reward.

The inconsistency and incompatibility of these two objectives tend to create tension in the labor management relations system. Clark Ferr argues that the conflict between labor and management is inevitable because the desires and aspirations of both the groups are unlimited but the means of satisfaction are limited. The conflict in a labor management relations system tends to arrive because of divergent interests. The relationship tends between diversity, conflict and resolution of the conflict. In a harmonious situation conflict is generated by diversity of interests and resolve through negotiation and compromise.

It is viewed that some of the conflicts lie in the dissatisfaction of the workers with the job itself, and other are with the physical and social environment at the workplace, lack of any meaningful job creates frustration to the worker as a result conflict tends to arise.

C.J.Margerison identified three kinds of conflicts, such as i) distributive, ii) structural and iii) human relations.

It is however realized that the conflict generates at two levels. Firstly, the intra-plant level where situational factors, such as job content, work task and technology and interaction factors produce three types of conflict, viz. distributive, structural and human relations. These conflicts are handled through bi-partite agreements, such as collective bargaining; structural analysis of the socio-technical system and man-management analysis respectively. In case of the second level intra-organization, resolution of conflict may involve some outside factors like governments regulation, policy of the federation or overall situation of the national economy.

It also suggests a method of inquiry which attempts to develop sociological models of conflicts. This model in fact, has concentrated all the attention of studying “people” in a situation, organization or system. The major limitation of this approach is that it takes economic and other variables as constant and emphasizes only on sociological factors. The emphasis on the significance of conflict in industrial relations is not a new one.

The Action Theory Approach

This system also stressed the collective regulations of industrial labor which is a focal point of the systems model. The actors operate within a framework which can at best be described as a coalition relationship. As a matter of fact, the actors agree to co-operation that takes place in the ways of bargaining. The action theory analysis of industrial relations points out collective bargaining as an instrumental took for solving the conflicts. It focuses mainly on bargaining mechanism

Pluralist Approach

The pluralist ideology says that people in an enterprise contains different interests, aims and aspirations. The social environment is an important factor in industrial conflicts. The strike activity will come down when the industrial jobs become pleasant and integrated into the wider society. Again, it is argued that the organization is a plural society, containing many related but separate interests and objectives which must be maintained in some kind of equilibrium. Management and government should not suppress any ideas or opinions and keep the conflict within accepted bounds; as a result it does not destroy the enterprise atmosphere. Ross’ and Harman’s “strike” postulates the declining incidents of strikes because of the institutional framework. They say that the strike activity in the entire world declined in spite of an increase in union membership. The need for collective bargaining mechanism for conflict resolution is stressed. For differentiates the two aspects of relationship between workers and management. Firstly, it is a market relationship which deals with the terms and conditions on which labor is hired. This relationship is necessarily economic in character and based on contracts executed between the parties. The second aspect is managements’ handling of labor, the interaction, negotiations, distribution of power and participation in decision making processes etc.

The important criticism of the pluralistic approach is the Marxists. They argue the exploitation and slavery will continue unabated in the institutional structure of pluralism. The difference in a social structure is that the worker will be deemed to be a better paid wage slave.

Gandhi and Marx on Labor Management Relations

Certain aspects of Gandhi’s social theory come very close to Marx’s teaching. Both accept the existence of social conflict as a fact. Gandhi also saw conflict between labor and capital in industry. Industrialization proceeds, as Gandhi recognized, on the basis of exploitation of labor on one hand and agriculture on the other. Gandhi was greatly perturbed by the ill-effects of industrialization and primarily because it leads to increasing inequality. In this assertion there is striking parallel between his analysis and Marx’s rejection of Adam Smith’s rejection.

Marxian program of action and Gandhian passive resistance program has its basis on the stronger force of human nature, the will of the deprived to fight exploitation. Both start with an awareness of the existence of social conflict, therefore, resisting exploitation of exploited. In both, further, the urge in revolutionary. While Marx envisages a war between workers and capitalists based on power relationships, Gandhi’s process is non-violent and passive resistance, Marxian labor management relations is equated with a power-struggle, unlike co-operation of Gandhian approach.

Nevertheless, the fundamental difference lies in the image of the ultimate society that they have in view. Removing the element of built-in hostility of a necessary clash between the interests of labor and capital, the concept of trusteeship was advocated by Gandhi.

Gandhi put forth the ideas of truth and passive resistance by the exploited against the exploiters. Truth and non-violence became the technique of labor management relations in Gandhian concept. Truth means social justice and non-violence which contains all embracing love, active goodwill, compassion for all humanity, resisting injustice – cooperation in terms of honorable equality. It laid emphasis in peaceful action to settle disputes, failing which recourse should be had to arbitration. Marx allowed violent proletariat action and ultimately state stewardship of industry. Gandhi was against state-ownership, because, although state while apparently doing good by minimizing exploitation, it does the greatest harm to mankind by destroying individuality, which lies at the root of all progress. On the other hand, Gandhi cultivated the idea of “trusteeship” among owners.

Human Relations Approach

In recent years, the management is displaying increasing interest which in the research findings of sociologists and psychologists in an area, what has become to be known as “human relations” in industry. Social scientists have been conducting investigations into such problems, as what makes for effective communications between management and workers, what leads to good and poor morale in a work situation; what causes employees to respond to union organizing drives; which factors lead to conflict and which to co-operation in industrial situations.

Better human relations may be possible through scientific personnel management. Personnel management can be viewed from various aspects. There is the management aspect in which the improved efficiency of the men in industry is the objective; there is the conciliatory aspect in which industrial peace is the primary object; and there is social reform aspect in which the improvement of the physical, moral and emotional environment of labor is predominant. It is ultimately concerned with the human and social implications of the internal organization and methods of working and of human and social change in the society. Thus efficiency, mental health and happiness go hand in hand for the approach of human relations. Human relations in industry simply mean relations at human level between management and man. Human relations approach is of developing man and not merely techniques and skills of labor force in industry. The labor force in industry spends the best part of their lives on their workplace. Their development as conscientious human beings is also responsibility of those who run the industries. Modern day worker is a delicate piece of mechanism which requires careful handling by a person knowing the art of management. Human element in industry is needed to be reorganized from a scientific and practical point of view.

The work of George Elton Mayo, professor of Industrial Research at Harvard University in the ‘30s, which is known as the Hawthorne experiment, discovered that what was forgotten in technological perfection was a human being who was doing the work. Mayo found that factory has two functions. First, to produce goods and second, is social function. But according to Mayo the situation in the factory produces the opposite in its social functions, i.e. human dissatisfaction. Industry must know the technique of handling people. Technical discipline and intellectual knowledge of professional managers are not enough to lead men at work. But the knowledge in which the men are brought to conduct themselves in life and in their profession according to a certain code of honor. Here lies the role of human relations in industry. An approach to human relations does with a man’s sense of his worth or concerning his moral values. Sound human relations in work situation cannot be achieved on the basis of cleverness but must rest on mutual trust and confidence. Somebody has truly said that industry is really a human system performing economic functions. Human relations motivate human beings in industry to serve and sacrifice for things with which they identify.

Labor Management Relations Framework

The term Labor management relations has a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, Labor management relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations. Now its meaning has become more specific and restricted. Accordingly, Labor management relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers.

The relationships which arise at and out of the workplace generally include the relationships between individual workers, the relationships between workers and their employer, the relationships between employers, the relationships employers and workers have with the organizations formed to promote their respective interests, and the relations between those organizations, at all levels. Labor management relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers’ participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises.

An industrial relations system consists of three elements:

1. Environmental Context (Technology, Market Pressure, Legal Environment)

2. Participants (Employees, Unions, Management, Government)

3. “Web of Rules” (Process by which Labor and Management interact)

For this system to work efficiently, the three participants must, to some degree, have a common ideology (acceptance of the economic system and the role of other participants). However, acceptance does not necessarily mean convergence of interests. To the contrary, some degree of worker-management conflict is inevitable as though the interests of the parties overlap, they diverge in key respects (e.g how to divide the profits).

So, an effective relations system does not eliminate conflicts, rather it provides with an initiation that minimizes its effect on management, society and employees.

The next page shows the Labor Management Relations System graphically:

Actors in Labor Management System

A labor management relations system consists of the whole gamut of relationships between employers and employees and employers which are managed by the means of conflict and cooperation.

A sound labor management relations system is one in which relationships between management and employees (and their representatives) on the one hand, and between them and the State on the other, are more harmonious and cooperative than conflictual and creates an environment conducive to economic efficiency and the motivation, productivity and development of the employee and generates employee loyalty and mutual trust.

Three main parties are directly involved in industrial relations:

Employers

Employers possess certain rights vis-à-vis labors. They have the right to hire and fire them. Management can also affect workers’ interests by exercising their right to relocate, close or merge the factory or to introduce technological changes.

Employees

Workers seek to improve the terms and conditions of their employment. They exchange views with management and voice their grievances. They also want to share decision making powers of management. Workers generally unite to form unions against the management and get support from these unions.

Government

The central and state government influences and regulates industrial relations through laws, rules, agreements, awards of court and the like. It also includes third parties and labor and tribunal courts.

Fig: Actors in Labor Management Systems

There are also some secondary actors, who basically evolve from the primary three actors. These actors are: 1. Trade Union

2. Employers’ Association

3. Court and Tribunal

Factors Influencing Labor Relations

There are mainly two types of factors Influencing labor relations:

Internal factors:

History and tradition

Our history of industrial relations is one of oppression from the owner’s/employers’ part. Our industrial relations date back to the 60’s of the 18th century when rail lines were established here for the first time. The workers had to endure colonial suppression and the employers main concern was their own profits-not the workers well being. Laborers were treated as animals. Any sort of objection raised on part of the labors could be faced with death in the hands of the owners. Reflections of this trend are still visible in contemporary Bangladesh.

Nature of Leadership

We have had dedicated leaders in Bangladesh who have led the trade union movement to its present state. But allegations of opportunism also exist among the trade union leadership of Bangladesh. Our trade union leadership can still be observed to be under the control of a certain class of bourgeoisie. They have no real respect for the class struggle of the working class and seek to meet their ends by maintaining liaisons with the employer class in the name of helping the working class. More often than not, basic unions are not much more than picket unions of the management. Our trade union movement has failed to develop to its full form due to the presence of these ailments.

Union Politics

The contemporary union scene is pockmarked with conflicts both within the unions itself and between different unions. Leaders are observed to be prone to break away from the mother union because of internal conflict and form unions of their own. This is leading to an increase in the number of unions without any significant increase in total membership.

Policies

Perhaps the most important determinants of the relationship between the parties are the policies adopted by the unions and management. Or lack of thereof. The policies adopted by the parties may be identical, different, or amenable to compromise. In any event, these policies and the extent to which to which they exist will influence the general relationship of the union and the management and their specific actions within that relationship.

External Factors:

Industry Characteristics

The elasticity of demand for a product produced in an industry and substitution availability are important industry characteristics which can influence collective bargaining. In some industries, such as education, medical care, or construction, there may be no available substitute available from the product.

In industries where labor costs are a significant cost item, costs such as transportation, education and construction shall be monitored closely. In other industries, such as utilities, which are capital intensive and where labor costs are not as important as other costs, management may be less inclined to strongly resist wage demands.

Technology

Some process industries, such as oil refineries, are easy for management personnel to operate during a strike. Others, such as steel mills, are impossible to operate without the regular work force. A strike in the former may mean no loss of production and is not very effective. A strike in the latter may be disastrous.

Socio economic Condition

Economic conditions are a very critical factor in influencing a union’s willingness to settle and also the nature of its respective concerns in bargaining. When economic conditions are good, the management is more prone to avoiding a strike and thus are more receptive to union demands. During economic downturns, unions maybe more concerned with security than money. The recent economic conditions of high unemployment, high inflation and low profits have made bargaining difficult.

All the factors mentioned above have a great effect on our trade union movement. For example, poor financial condition of the garments workers, according to many union leaders, is the main obstacle behind their lagging behind. Otherwise they could make the strongest movement in the country given the largest number of workers in the industry.

Legislation

Legislation is probably the greatest outside force affecting labor relations. The law has created a whole new framework within which unions and management operate. Many of the parties’ actions, from the recognition of the union, to the negotiation and administration of a contract, to conciliation, meditation, and sometimes arbitration is carried out because the law requires that it be done.

Whatever the laws and regulations neither are, the matter of regret is that they neither are nor reflected in real life situations. In the garments sector, the real picture is that the workers don’t even enjoy the right of being able to join a trade union. An attempt to join trader union is still in many cases translates into loss of job for the worker.

Government Administration and the Judiciary

Governments are not only responsible for the creations of labor relations law but also administering the law. Governments may intervene in labor disputes in a number of ways. In Bangladesh, government may by order in writing prohibit a strike or lockout if the strike or lockout continues for more than 30 days. Government may by order in writing prohibit a strike or lockout if it is satisfied that the continuance of such a strike or lockout is causing serious hardship to the community or is prejudicial to the national interest. Government may, in addition, appoint or act itself as a special mediator in dispute resolutions; this is what government did in the case of the riot raised by the garments workers in Gazipur in May 24, 2006.

Modern Practices of Labor Management Relations

The larger employers of labor now have labor relations, or industrial relations, departments dealing with problems in the negotiation and administration of agreements. Such departments are usually divided into two branches, one responsible for day-to-day administration of agreements relating to wages and salaries, the other responsible for such matters as assignments to work, schedules of work, layoffs, promotions, discipline, grievances, and arbitration. Many international unions adapted their organizational structures to those of the principal companies with which they deal. These unions have specialists trained and assigned to deal with management specialists in matters relating to negotiations, grievances, arbitration, legal services, social security and welfare services, industrial engineering, economics, and public relations.

When the employees in a plant are not represented by a union, the terms and conditions of employment are usually determined by direct arrangements between plant management and employee. A union seeking to deal with an employer as the exclusive bargaining representative of its employees may try to persuade the employer to recognize it on the basis of authorization cards signed by a majority of employees in an appropriate bargaining unit and signifying the desire of these employees to be so represented. Failing such recognition, the union may file a representation petition with the appropriate federal or state agency. The agency will then proceed to determine the unit appropriate for collective bargaining and, if warranted, conduct a secret-ballot election among the employees in that unit.

Management is obliged to bargain in good faith with the union selected by the employees. The Labor-Management Relations Act requires that a notice of contract negotiations be given to The Federal Mediation and Conciliation Service and to the state mediation agency, where one exists. These agencies make available the services of their staff mediators to assist the parties in achieving agreement if their unassisted negotiations are not fruitful. Such services are optional; neither party to a negotiation is required to accept them. If agreement on contract terms cannot be reached through bargaining, the union is allowed to strike, except in certain industries, such as the railroads, in which strike action is delayed because a strike would be against the public interest. Most agreements provide for the filing of grievances by employees and by the union with respect to alleged violations of the agreement and require consideration of a grievance in prescribed time sequence by union and management officials with progressively greater authority. The agreements provide also that a grievance not so resolved may be appealed to arbitration for a final decision. A party to such an agreement may call upon federal and state courts to compel the other party to arbitrate.

Arbitrators of labor-management disputes are impartial, disinterested professionals chosen directly by the parties involved or selected from lists of nominees as submitted, for example, by the American Arbitration Association. In some instances arbitration is conducted by a board of arbitrators of which all members except a neutral chairperson with the deciding vote are interested individuals. Arbitration is conducted either by an arbitrator selected especially for a case or by an umpire, referee, or chairperson designated for the duration of the collective agreement. Arbitrators’ awards are enforceable, when filed, as judgments of a court of law, and may be set aside only for specific causes, such as lack of authority, fraud, interest, or misconduct by the arbitrator.

Dealings between most modern-day representatives of management and unions have been characterized by mutual respect, the product of years of negotiation and joint administration of agreements. This attitude of mutual confidence has fostered more cooperative labor relations than formerly prevailed. Labor-management arbitration has also contributed to industrial peace because it substituted the binding award of a respected neutral for the exertion of economic force during the term of a collective agreement. Although labor and management continue to differ on various economic problems, they generally realize that neither group can reach its goals without the assistance of the other.

By the mid-1980s the power of organized labor had decreased markedly. With more and more people employed in service occupations rather than in manufacturing, union membership declined—and so did union strength in labor negotiations. This process was exacerbated by other economic and political factors.

Part B

Trade Unions

What is Trade Union?

Trade Union means any federation of workmen of an establishment formed primarily for the purpose of regulating the relations between workmen and employers, or workmen and workmen, and safeguarding the rights and demands of the labors. In other words, an organization of workers created to protect and advance the interests of its members by negotiating agreements with employers on pay and conditions of work is called a trade union. Unions may also provide legal advice, financial assistance, sickness benefits and education facilities. Any definition, however, is limited by the changing horizons and the developing nature of the aims and objectives of Trade unions. But still, some attempt must be made to define the term ‘’Trade Union’’.

The nature of trade union varies due to the nature of the industry they exist. The role and objective also differ substantially due to changing working condition and very nature of the business. Trade Union is defined somewhat differently among different nations. To find a uniform definition is required for the better understanding of the followings:

· Understand why Union exist

· Evaluate the relationship between unions and consumers, society and government

· Current regulations, major laws and regulatory agencies, and what will be the impact on the consumers

· Understanding the collective bargaining process of the employees

To define what a trade union is by a single definition is a task almost impossible. The definition varies from author to author, organization to organization and country to country. Some important definitions of trade union are cited here:

Ø Definition provided in the book –Iqbal Ahmad, “Basic Labor Laws of Bangladesh”, 2nd edition, published by Ferdous Iqbal, Printed by Salmany Printing.

Trade Unions are the organizations which are engaged in protecting the rights of the labor force of the country. They are the registered unions which are devoted for the betterment of the workforce in the following aspects:

· Quality of Work Life (QWL)

· Legal Proceedings

· Resolving Industrial Disputes

· Working Conditions

· Welfare of the Workforce etc.

Trade Union movements are essential for a country, especially for the betterment for the existing and potential workforce. Trade unions are the Collective Bargaining Agents (CBA) which speaks for their rights.

Ø Definition according to The Industrial Relations (Northern Ireland) Order 1992

Statutory Instrument 1992 No. 807 (N.I.5)

The Industrial Relations (Northern Ireland) Order 1992

Definition and status of trade union

3. — (1) in this Order “trade union” means an organization (whether permanent or temporary) which either—-

(2) A trade union shall not be, or be treated as if it were, a body corporate, but—

(a) It shall be capable of making contracts;

(b) All property belonging t the trade union shall be vested in trustees in trust for the union;

(c) It shall be capable of suing and being sued in its own name; whether in proceedings relating to property or founder on contract or tort or any other cause of action whatsoever;

(d) Proceedings for any offense alleged to have been committed by it or on its behalf may be brought against in its own name; and

(e) Any judgment, order or award made in proceedings of any description brought against the trade union shall be enforceable by order under the Judgments Enforcement (Northern Ireland) Order 1981, punishment for contempt or otherwise, against any property held in trust for the trade union to the like extent and in the like manner as if the union were a body corporate.

(3) A trade union shall not be registered as accompany under the Companies Order and accordingly any registration of a trade union under that Order (whenever effected) shall be void.

(4) A trade union shall not be registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 or the Friendly Societies Act (Northern Ireland) 1970 and accordingly any registration of the trade union under either of those Acts (whenever affected) shall be void.

(5) The purposes of any trade union shall not, by reason only that they are in restraint of trade, be unlawful so as—

a) To make any member of trade union liable to criminal proceedings for conspiracy or otherwise; or

b) To make any agreement or trust void or voidable; nor shall any rule of a trade union be unlawful or unenforceable by reason only that it is in restraint of trade.

(6)Article 113 of the Judgment Enforcement (Northern Ireland) Order 1981 (sequestration order against company in contempt) shall apply to a trade union as it applies to a company.

Ø Definition of trade union by “The Canadian legal institute”

In this Act, “trade union” means such combination, whether temporary or permanent, for regulating the relations between workmen and masters, or for imposing restrictive conditions on the conduct of any trade or business, as would, but for this Act, have been deemed to be an unlawful combination by reason of some one or more of its purposes being in restraint of trade.

Ø BIZ/ED Definition of Trade Union

A trade union is an organization which represents workers. Trade unions aim to:

· Improve the pay of workers

· Improve working conditions and secure longer holidays.

· Protect members’ jobs.

· Provide local, social and welfare facilities.

· Influence government policy by sponsoring Members of Parliament and contributing to the political parties.

Each trade union has its own internal organization. Generally:

· Small groups of workers elect a local spokesman (shop steward)

· Every area has a branch which sends delegates (representatives) to a yearly national conference.

· Conference passes resolutions (policies) and elects a national executive. Only the national executive can call an official strike.

· The entire membership elects a general secretary. He general secretary acts as the union’s spokesman and manages everyday affairs, usually until he reaches retirement age.

Ø Definition of Trade Union according to “The Canadian Labor Law”

A trade union which is recognized by a labor board under the laws of Canada or any province or territory of Canada and which has its head office in Canada.

There can be a hundred other definitions as well. But most important thing is to recognize the core concept behind trade unions – how they came into being and which need had been the driving factor behind the creation of the trade unions.

Features of Trade Union

Types of Trade Union

1. Craft Union: Represents skilled workers from one occupation

2. General Union: Represents mainly unskilled workers from many occupations

3. Industrial Unions: Represents mainly workers from one industry

4. Professional/White-Collar Unions: Represents skilled workers in mainly service industries

Functions of Trade Union

· Improve the pay of the workers

· Improve working conditions and secure longer holidays

· Protect members’ jobs

· Provide local, social and welfare facilities

· Influence government policy by sponsoring Members of Parliament and contributing money to the political parties

Organization of Trade Union

Each trade union has its own internal organization. Generally:

· Small groups of workers elect a local spokesman.

· Every area has a branch, which sends delegates to a yearly national conference.

· Conferences pass resolutions and elect a national executive. Only the national executives can call an official strike.

· The entire membership selects a general secretary. The general secretary acts as the union’s spokesman and manages everyday affairs, usually until he reaches retirement age.

The Overall Objectives of Trade Union

Although different organizations have different trade unions but their objectives are more or less same.

· To secure the social and economic right of each and every member of the union and work for sustaining the above mentioned rights.

· To work for improving the working conditions of the organization.

· To settle the matter relating to wages and other job conditions.

· To safe guard the interest of the workers both from the management and outside parties.

· To retain the harmonic relationship among the workers both from the management and workers community.

· To regulate the relationship among the workers. In case of any dispute among the workers, try to solve the problem without the intervention of the third party.

· To support the workers in case of accident, injury, inability to work due to senility.

· To help the workers to get the retirement benefit.

· To extend financial help during hartal called by the union and lockout on the part of the employer.

· To provide financial help to the member who is exploited for working for the interest of the workers.

· To maintain a congenial relationship with the employer and management for the greater interest of the workers.

· To grow awareness among the workers for their role to the organization and society as well as to the country.

· To fix up the membership fee and other matters relating to raising fund and to make policy for the effective utilization of the fund.

· Full employment and the raising of living standards.

· Facilities of training policies in regard to wages, hours of work and other conditions of work calculated to ensure a just share of the fruits of progress to all.

· The effective recognition of the right of collective bargaining.

· The co-operation of management and labor in the continuous improvement of productive efficiency, and

· The collaboration of workers and employer in the preparation and application of social and economic measures, the extension of social security measures to provide a basic income to all in need of such protection and comprehensive medical care, etc.

· The right for workers to equal opportunities and equal treatment in matters of employment and occupation without discrimination on the ground of sex;

· The right for workers to be informed and consulted within the undertaking;

· The right for workers to take part in the determination and improvement of working conditions and the working environment in the under taking.

History of Trade Union

The traces of trade unions’ existence could be traced from the eighteenth century, when Western society (with most changes occurring earliest in Britain) witnessed a transformation from an agrarian culture with craft-based production to a culture shaped by the first industrial revolution. Some of the changes brought on by this new order, such as new work methods and downward pressure on traditional wage structures, sparked rising alarm in the crafts and guilds of the time, who feared encroachment on their established jobs.

The rapid expansion of industrial society was to draw women, children, rural workers, and immigrants to the work force in larger numbers and in new roles. This pool of unskilled and semi-skilled labor spontaneously organized in fits and starts throughout its beginnings, and would later be an important arena for the development of trade unions.

Trade unions have sometimes been seen as successors to the guilds of medieval Europe, though the relationship between the two is disputed. Medieval guilds existed to protect and enhance their members’ livelihoods through controlling the instructional capital of artisanship and the progression of members from apprentice to craftsman, journeyman, and eventually to master and grandmaster of their craft. They also facilitated mobility by providing accommodation for guild members traveling in search of work. Guilds exhibited some aspects of the modern trade union, but also some aspects of professional associations and modern corporations.

Additionally, guilds, like some craft unions today, were highly restrictive in their membership and included only artisans who practiced a specific trade. Many modern labor unions tend to be expansionistic, and frequently seek to incorporate widely disparate kinds of workers to increase the leverage of the union as a whole. A contemporary labor union might include workers from only one trade or craft, or might combine several or all the workers in one company or industry.

The National Labor Union was the first national union in the United States. It was created in 1866 and included many types of workers. This union did not accomplish any significant gains. After this union crumbled, the Knights of Labor became the leading countrywide union in the 1860s. This union did not include Chinese, and partially included blacks and women.

The Knights of Labor was founded in the United States in 1869. Eventually over 700,000 workers joined the Knights. They opposed child labor and demanded the eight-hour day. They hoped their union would give workers “a proper share of the wealth they create,” more free time, and generally more benefits of society. They also tried to set up companies owned by the workers themselves. Although the Knights were against strikes, some radical members went on strike anyway when the railroads cut wages in 1884. After they won the fight, membership in the Knights boomed to 700,000, but then, at the time of the Haymarket Massacre, a fearful public opinion grouped them with anarchists and Communists, and membership then rapidly declined.

The American Federation of Labor (AFL) was founded by Samuel Gompers. By 1904, AFL-affiliated unions had a membership of over 1.4 million nationwide. Under Gompers’s leadership, the AFL advocated an approach known as “business” or “pure and simple” unionism, which emphasized collective bargaining to reach its goals. Demands were centered on improvements to the immediate work environment, like better wages, hours and working conditions.

In France, Germany, and other European countries, socialist parties and anarchists played a prominent role in forming and building up trade unions, especially from the 1870s onwards. This stood in contrast to the British experience, where moderate New Model Unions dominated the union movement from the mid-nineteenth century and where trade unionism was stronger than the political labor movement until the formation and growth of the Labor Party in the early years of the twentieth century.

Trade Union Movement organized activities of workers to improve their workers to improve their working conditions. In the early stage of industrial development when there were personal contacts between employers (master) and employees (workers), there was no need of any organization to determine relations between the two. But under the modern factory system the personal touch is absent and the relations between the employer and the worker have come under strain. The conflict of interests between buyer and seller of labor power has become conspicuous and this has led to the rise trade union movement throughout the world.

Trade Unions take their place within the labor movement, which consists of several or more or less intimately related organizations, producers’ or consumers’ co-operatives and workers’ education and sports associations. All have the common objectives to improve the material, cultural, and social status of their members. Trade unions have a particular function in this, but relationships between the various parts of the labor movement vary from country to country and from period to period. Trade union movement was created and developed to meet human, economic, and political needs and aspirations, varying from region to region, country to country, and from continent to continent. There was no overall plan, and there are universally accepted models for the individual union, the national center, the international federation of industry based unions or the global and regional organizations of trade unions. These bodies display no single pattern of development, structure, organization or objective. The movement is a living organization in a continuous state of flux which develops, merges, and separates while responding to economic and political pressure. Through the courses of time it has been possible to trace the interaction between local, national, international changes on structure, objectives, and affiliations at all levels of the trade union movement.

Outbursts of economic activity; depressions, national or worldwide; wars, especially world war I and II, the Bolshevik Revolution in Russia and the establishment of the communist states; the rise of fascism in Europe; the evolution of political thought; all these have had their impact on the development of trade unions. The effects of these events have been to mould the workers’ protective organizations in many ways but always in order adequately to defend and further what they regard as their rights within society.

Trade Union Movement in Bangladesh

Before 1971

The tradition of parallel development of the nationalist and the trade union movement, which had originated in British India, continued through the Pakistan period down to the birth of Bangladesh. Trade union activity in Bangladesh has a long and at times, bloody history, leading back to the revolt by tea plantation workers in 1920-when the country was still a part of British rules India and the formation of the All India Trade Union Congress in the same year. The East Pakistan Trade Union Federation was formed following the creation of Pakistan in 1947, and split into five factions shortly before the independence of Bangladesh in 1971.

For the first time in India the Bombay Mill Hands association was formed on 24 April, 1980. This gave impetus to the trade union movement in British India. The establishment of ILO in 1919 provided a source of inspiration for the workers to org

" 53,"

HISTORY OF BERGER PAINT

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Effectiveness of Distribution Channel Of Berger paints Bangladesh limited

History of BERGER
Berger is one of the oldest names in paint industry detailing back more than 200 years to 1760.

Lewis Berger, a German national, founded dye & pigment making business in England.

Lewis Berger & Sons Limited grew rapidly with a strong reputation for innovation and entrepreneurship culminating in perfecting the process of making Prussian Blue, a deep blue dye, a color widely used for many European armies’ uniform.

Production of dyes & pigments evolved into production of paints & coatings, which till today, remains the core business of Berger.

Berger grew rapidly by establishing branches the world over and through merging with other leading paint & coating companies.

 Berger in Bangladesh

Berger has been involved in paint business since 1950 in Bangladesh when paints were first imported from Berger UK and then from Berger Pakistan.

In 1970, Berger Paints Bangladesh Limited (BPBL) erstwhile Jenson & Nicholson had set up its paint

Factory in Chittagong at an estimated investment of TK.4 million. The shareholders were Jenson & Nicholson (J& N), Duncan Macneil & Co Ltd and Dada Group.

Duncan Macneil subsequently sold their shares to majority shareholder J& N group. The Dada group’s share ultimately vested with the Government of  Peoples’ Republic of Bangladesh after the independence

The name of the company was changed from J& N (Bangladesh) Limited to Berger Paints Bangladesh Limited on 1st January 1980. In August 2000, J& N investment (Asia) Ltd purchased Government shareholding. Now, Berger Paints Bangladesh Limited is 100% owned by J& N Investment (Asia) Limited, UK.

With the passage of time Berger has unfolded its kaleidoscopic wings into all kinds of paint solution be it Architectural paints or Industrial coatings, Marine paints or Powder coatings. Berger has it all!

Company profile

Berger Paints began its painting in Bangladesh since independence. And this has been a footstep to bring more than 230 years of global paint industry experience into Bangladesh. Over the decades, Berger has evolved to becoming the leading paint solution provider in this country and has diversified into every sphere of the industry – from Decorative Paints to Industrial Coatings, from Marine Coatings to Powder Coating and what not.

To give a comprehensive and sustainable painting solution to the need of the industry, Berger has invested more on technology and Research & Development (R & D) than any other manufacturer in this market. It selects the raw materials from some of the best known names in the world: MITSUI, MOBIL, DUPONT, HOECHST and BASF are a few to name. The superior quality of Berger’s products has been possible because of support from its advanced plants and an international-standard of strict quality.

Investment in technology and plant capacity is even more evident from the new factory of Berger Paints Bangladesh Limited at Savar. The state-of-the-art factory is an addition to Berger’s capacity to make it the paint-giant in Bangladesh. Not to forget about the first Double Tight Can manufacturing unit in its Chittagong factory. All, together with a devotion into R & D to make it the reputed center of Basic & Applied Research in paint and Resin Technology, proof the commitment that Berger has for this industry.

With its strong distribution network, Berger has reached almost every corner of Bangladesh. Nationwide Dealer Network, supported by 7 Sales Depots strategically located at Dhaka, Chittagong, Rajshahi ,Khulna, Bogra, Sylhet and Comilla has an unmatched capability to answer to paint needs at almost anywhere in Bangladesh.

The sheer innovation and development drive is reflected on the various products Berger has so far launched in this market. The product range includes, specialized outdoor paints protective of the worst weather conditions, Color Bank, superior Marine Paints, Textured Coatings, Heat Resistant Paints, Roofing Compound and Epoxies. In each of the product category, Berger has always been the pioneer and will continue to do so proudly.

Berger’s one of the prime objectives is to provide best customer support-connecting consumers to technology through specialized services like free technical advice on surface preparation, color consultancy, special color schemes etc. To bolster customer satisfaction, Berger has recently launched Home Decor Service from which once can get an array of services pertaining to painting.

With world class range and durability, Berger is always ready to answer to all weather conditions.

It was honored with “The top tax payer’s award 2003” in June 2004 by the income tax authorities of the government of Bangladesh.

Additionally the company received the “Channel I performance award 2004” for its effort in promoting the young painters and architects of the country through the burger young painter’s art promotion and young architects award. This award recognized the role of Berger paint Bangladesh limited (BPBL) as a responsible corporate citizen

Nature of business

The core business of Berger `is manufacturing and marketing of paints, varnishes and coatings. It produces a wide range of paints including architectural paints, industrial coatings, marine paints and powder coatings. With a view to improving consumer satisfaction, Berger has also introduced end-user oriented services such as color bank, home décor, pro link and tinting. Its wholly owned subsidiary, JENSON & NICHOLSON BANGLADESH LIMITED, is engaged in tin container production – most of which is supplied to their parent company

Major products of Berger paint Bangladesh limited

Production of paints and coatings is the core business of Berger. Berger produce a wide range of paints including decorative/architectural paints, industrial coatings, marine paints and powder coatings. The main products of the company are:

Major categories Brand name
Decorative
Synthetic enamel Robbialac  synthetic enamel
Jhilic synthetic enamel
Interior emulsion Robbialac acrylic plastic emulsion
Exterior  emulsion Weather coat
Distemper Robbialac distemper SPD
Cement paint Durocem
Industrial

 

 Jensolin
Epoxy
Berger industrial enamel
Marine Berger marine
Powder coatings Supracoat

SWOT analysis to

Formulate Strategies

To formulate the marketing & overall strategy of Berger paints Bangladesh limited,(BPBL) the management 1st analyze their mission and objective and then use the steps  of SWOT analysis to find out the strength, weakness, opportunities and threats and then find out the main strategies for the company.

Vision
Berger  shall remain as the benchmark in the Paint industry by:

Being an innovative and technology driven Company consistently delivering world-class products ensuring best consumer satisfaction through continuous value added services provided by highly professional and committed team.
Mission
     Increase turnover by 100% in the next five years.

Socially committed ethical Company.

Strength

Weakness

Opportunities

Threats

After SWOT analysis the company makes its strategies for its product and service

Marketing strategies of Berger

Marketing strategies of Berger is built on STP – Segmentation, Targeting and Positioning. Berger discovers different needs and groups in the market place, target those needs and groups that it can satisfy in the superior way and then position its offerings,  so that the target market recognize the companies distinctive offerings and image.

Marketing strategies of Berger depends on

Segmentation strategies of Berger

Before segmentation their product Berger segments its business through the year. Generally the summer and winter is the peak season not only for Berger but also every paint producer. October to June is peak season and July to September is the lean season for the paint industry in Bangladesh, which is related to weather conditions.

The peak and lean months of the year, on the basis of the seasonality of the paint market, is as follows:

Month/ period Conditions
January Peak
February Peak
March Peak
April Peak
May Peak
June Peak
July Lean
August Lean
September Lean
October Peak
November Peak
December Peak

Berger paint Bangladesh limited mainly segments their product mainly on three categories. These are

Berger Decorative

Premium emulsions, regular acrylic emulsions, distempers, first quality enamels, exterior finishes, textured finishes, automotive refinishes- you would expect a company like BERGER, the premier paint company in Bangladesh, to have leading brands in all these categories. Yes, BERGER does. BERGER also leads in a vast range of other formulations. Stoving paints, chloro-rubber based enamels, epoxies, silicone heat resistant paints, flooring compounds, Polyurethanes…………

1, top coat finishes

2 color bank

3 premier/ undercoat /thinner

Top coat finishes

Product Name Product Description
Luxury Silk A marvel of international emulsion technology, Luxury Silk combines the best of aesthetic appeal with the best of functional properties like..
Robbialac Acrylic Plastic Emulsion (APE) A standard emulsion paint formulated with acrylic..
Robbialac Super Gloss Synthetic Enamel (RSE) Robbialac Super Gloss Synthetic Enamel is hardworking, premium quality synthetic enamel formulated to retain its gloss and film integrity in the face of extreme climatic variations…
Robbialac Acrylic Distemper (SPD) A specially formulated acrylic co-polymer emulsion based washable distemper for elegant, smooth, durable, matt finish for interiors…
Weather Coat Smooth Weather coat is smooth water based super exterior wall finish formulated to give exceptional durability in adverse climatic conditions…
Jhilik Synthetic Enamel Jhilik Synthetic Enamel is an economy synthetic enamel formulated for interior and exterior application to give a glossy durable surface…
Durocem Cement Coating Durocem is an exceptional formulation based on selected raw materials and specially treated white cement that makes it ideal for both indoor and outdoor applications…
Wood Keeper
Robbialac Aluminium Paint Robbialac Aluminium Paint is a superior 2- pack aluminium paint with a brilliant silver-like luster. It is ideal for application on the exteriors of storage tanks for water, petrol, oil…
Tartaruga Textured Coating This is one of the most famous BERGER formulations in the world. The product is paste like having special aggregate to facilitate drawing desired textured patterns on the surface…
illusion Berger illusions is not just a paint… it’s a whole new lifestyle for your walls. A range of designer wear for your walls with thousands of color options….

 

Color bank

Robbialac Plastic Emulsion Classic
Robbialac Synthetic Enamel Gold
Luxury Silk Splendour
Robbialac Pearl Lustre Finish
Weathercoat Smooth Classic
Robbialac SPD Super
Wood Keeper Finesse

Premier/ Undercoat /Thinner

 

BERGER INDUSTRIAL
This is a different segment of Berger’s wide range of paints mostly used for the industries both as raw materials and as protective paints for the equipments and buildings. Berger industrial paint is the economy brand of industrial paints.

Very soon an Industrial manual will be available in this site which is a guidebook to the exhaustive range of products offered from Berger Paints. Soon you’ll find, as you start using this book, that Berger has an answer to almost each of your need when it comes to painting.

1 industrial finishes

2 high productive coatings

3 Industrial premiers

4 Others.

Industrial finishes

Product Name Product Description
Berger Suprakoat Powder Coating
Jensolin Industrial Enamel A top quality glossy paint based on high quality selected resins and pigments. It has versatile applications…
Jensolin Aluminium Paint
Jensolin Stoving Primer This primer is based on Alkyd / Amino resin combination as well as anti-corrosive pigment and is most suitable under stoving finishes…
Jensolin Chlororubber Lacquers A chlorinated rubber based finish with exceptional properties like water impermeability, resistance to salt spray, spillage and fumes of most acids…
Jensolin Stoving Enamel This is high performance enamel based on a blend of high grade thermo¬setting Alkyd-Amino resin together with high quality pigments…

High productive coatings

Product Name Product Description
Jensolin Epoxies A two pack anticorrosive epoxy primer for use on steel surfaces. This primer is ideally designed for offering superior performance in highly corrosive chemical and coastal environments…
Jensolin Polyurethanes

Industrial premiers

Product Name Product Description
Jensolin Red Oxide Primer
Jensolin Red Lead Primer This is a quick drying Red Lead Primer to use on structural steel. Provides a hard drying, anticorrosive coating, suitable for over coating with conventional finishes and chlorinated rubber coatings…
Jensolin Zinc Phosphate Primer Jensolin Zinc Phosphate Primer is based on a special synthetic resin in which zinc phosphate is used as a rust-inhibiting pigment…
Jensolin Zinc Chromate Primer Jensolin Zinc Chromate Primer is based on a special synthetic resin in which zinc chromate is used as a rust-inhibiting pigment…
Jensolin Wash Primer A two pack etch primer for use on C.I. sheets, G. I. Sheets or pipe…

 

BERGER MARINE
Bangladesh is a riverside country with a large no. of big & small rivers and their tributaries. Moreover, it has a large sea coastal area with Bay of Bengal.

Because of this facility a good proportion of transportation is being done by sea & river. Bay of Bengal is well known for its fish reserves. Our fishing trawlers & boats are engaged in fishing in Bay of Bengal.

We have two sea-ports and a good no. of river ports. A good no. of ships are coming to and going out from these seaports. Large no. of sea-coasters, launches, trawlers, barges, country – boats (powered and unpowered) are plying everyday through sea-coasts and rivers.

So huge activity could be seen in sea-ports, river- ports, dockyards & dry-docks. Besides there are shore and off-shore constructions, Pontoons, Buoys, oil/gas rigs, underground or underwater pipelines.

To cater to the need of maintaining these vessels & other constructions Berger has introduced a wide range of Marine paints suitable to withstand rigorous marine weather both at sea & sea-coasts and also at river & river-ports.

Berger is here to help you choose the kind of protection you need for your belongings.

The maring products of Berger are devided in

1 Thinners

2 Premiers

3 top coat finishes

4 Special coatings

Thinners

Product Name Product Description
Seaborne Thinner T-1
Seaborne Thinner T-6
Seaborne Thinner T-7
Jensolin Thinner T-1 For Stoving paints, cycle paints..
Jensolin Thinner T-2 For Chlororubber paints, Swimming pool paints, Tennis court paints..
Jensolin Thinner T-3 For N.C paints..
Jensolin Thinner T-4 For Road / Runway marking paints..
Jensolin Thinner T-7 For all epoxy paints..
Jensolin Thinner T-8 For polyurethanes..

Premiers

Product Name
Seaborne Red Lead Primer
Seaborne Zinc Chromate Primer
Seaborne Zinc Phosphate Primer
Seaborne Metallic Protective Coatings
Berger Marine Red Lead Primer
Berger Marine Anticorrosive Primer

Top coat finishes

Product Name
Seaborne High Gloss Enamel
Seaborne Aluminium Paint
Seaborne Aluminium Hold Paint
Seaborne Boot Topping
Seaborne Topside
Seaborne Deck Paint
Seaborne Funnel Heat Resisting Chimney Black
Seaborne Bituminus Black
Berger Marine Enamel

Special coatings

Product Name
Seaborne High Performance Epoxy Coatings
Seaborne Chlororubber Antifouling

Target market selection

Strategies

 Berger has chosen target markets to co-operate in the interest of overall company in a socially responsible manner. The total size of the paint industry in Bangladesh is estimated at taka 4.29-4.44billion in 2005. The paint industry can be divided into three segments. These are

  1. a) Decorative.
  2. b) Industrial.
  3. c) marine.

The decorative segments of the market accounts for a whopping 83.42% of the total industry, whereas industrial, marine segments contribute 12.17%, and 4.41%, respectively.

The major focus of the companies, operating in the industry, is towards decorative segment. Only a few of the companies have their product offerings in industrial and marine segment. All the competitors are concentrating their best efforts for carving out their share of the pie in the decorative segment of the industry. The enamel segment accounts for around 50% of the decorative paint market, by value, and approximately 40% by volume.

Berger market share in the synthetic enamel category increasing gradually. As this product is accountable for the major share of the paint market, its continued success will result in significant growth of the overall market share of the company. This will also enable Berger to battle its competitors by weakening then in such a strategically important segment.

 Positioning strategies

 Berger designs the company’s offerings and image to occupy distinctive place in the mind of the target market.

For positioning in the mind of the target market Berger has differentiated its variables.

Product differentiation

Product differentiation on the basis of size, shape, color shade, convenient size of their paint container, plastic container and so on. It’s also maintain its better quality product, finest color shade, durable & long lasting paint, and they are also responsible to the customer wants and satisfaction.

Service differentiation

Every company in the service market differentiate their service to be the best service company and capturing most of the market share. Berger differentiates its service comparing to the other competitors. These are

Ordering ease

Ordering ease of Berger refers to how easy it is for the customer to place an order to the company. So they introduce the online service in case of order. So the customer can order and receive its product without going to market.

Customer consulting & delivery Service

With a view to bolstering consumer satisfaction, Berger Paints Bangladesh Limited has introduced “Berger Home Décor” on June 15, 2002 through which one can get an array of services pertaining to painting.

Berger Home Decor offers two-stage services:

Berger Home Décor is currently offering wide range of services to its prospects and existing consumers embracing:

Technical advice on surface preparation and application guideline.

There is defined Telephone number, 02-9354067 for queries. By ringing simply in the number one can make query or seek available services from the company. According to the nature of query, the company provides solutions.

Personnel differentiation

Berger always gain a strong competitive advantage through having better trained people. To recruit personnel Berger follows some strategies that are

Channel distribution

Berger achieve competitive advantage through the way they design their distribution channels coverage, expertise and performance

Distribution of product

With its strong distribution network, Berger has reached almost every corner of Bangladesh. Their nationwide dealer network, supported by seven sales depots strategically located in Dhaka, Chittagong, Rajshahi, khulna, Bogra, Sylhet and Comilla has an unmatched capability of cater to the needs of the consumers of paints products, almost everywhere in Bangladesh

Special shade & products

Image differentiation 

Berger has taken many powerful marketing strategies to build a high image in the market. It has strong slogan and symbols to identify image powerfully.

Media & sponsorship

Media is the mainstream to built and develop image not in our country but also allover the world. Burger built up its image through advertising, sponsoring different social and cultural activities.

Social responsibility

 Berger paints has been organizing Young Painters; Art Competition for the last nine (9) years and also introduced Young Architects’ Award from 2003. The company regularly contributes to a number of causes and social welfare institutions through donations and sponsorships. These efforts results in a better image for BPBL, as minds of the general public, who are, after all, consumers of their products.

Quality policy of the company

Burgers objective is to achieve business excellences through quality by understanding, accepting, meeting and exceeding customer expectations. Berger follows international standard on quality management system to ensure consistent quality of product and services to achieve customer satisfaction.

ISO Quality Policy

Berger Paints Bangladesh Limited is Committed to achieving total consumer satisfaction.

They commit to project themselves as an ethical and socially responsible company.

Berger commits to continue as the market leader through consistent sales growth, increasing productivity and developing new products befitting consumer needs.

It shall ensure continual improvement in their operations through utilization of highly professional and dedicated team, proper process management and participation of stakeholders.

Berger will set measurable targets at appropriate stages and shall continuously monitor them.

Environment strategies of Berger for marketing 

Berger is committed to main etingtain the harmonious balance of our eco system and therefore constantly seeks ways to manufacture and produce products in an eco friendly manner. From its inception, Berger has played a pioneering role in introducing new paint and paint technologies to the Bangladeshi market; Berger’s efforts have established it as the most esteemed paint company of the country and have contributed significantly in its growth. Berger intends to continue its ceaseless endeavors in the future years, and it is expected that such efforts will contribute immensely to the sustained and growing success of the company’s business.

Technology orientation Berger has always been the most technology oriented paint company of the country. It has the most modern state-of-the-art production facilities installed in its Dhaka factory. Its Research and Development (R&D) and Quality Control (QC) departments are equipped with the best technologies in this country. Such technolo0gy driven strategy will definitely assist the future business growth of the company. 

Market responsiveness: Berger has always tried to respond promptly to market feedback. AS a result, Berger enjoys competitive advantage over its competitors. It is expected that Berger will enjoy more growth in the future, if it continues to be so be market responsive.

Pricing strategies 

The fierce competition has also made the industry highly price competitive. Most of the competitors consider pricing as one of the major marketing tools.

The price strategy of Berger is to offer a high quality product at a competitive price. They set its price in relation to the value delivered and perceive by the customer. Because it believes that if the price is higher than the value perceived, the company will miss potential profits and if the price is lower than the value received the company will fail to harvest potential profits.

Conclusion

Berger Prints Bangladesh ltd is the market leader of paint industry having about 40% shares. The company has strong distribution network all over the country. It has more than 1000 direct dealers. In addition, numerous secondary dealers operating in the outskirts of the major markets are engaged in selling the products of the company. BPBL introduced many new products into the market like exterior emulsion, silk emulsion, readymade wall putty etc. it first introduced Color Bank back in 1998, which enabled the customers to choose his desired shades from an exclusive array of over 5,000 shades. It also introduces home décor service. It has good brand image. Berger has been trying to increase its brand image further through more media presence, arranging programmers like Berger Young Painters are competition, Berger Young architects award, scholarship program for architecture students of BUET. It is constantly working to improve its products quality through comparative study and customer feedback in order to maintain competitive edge.

Recommendation

 By reviewing report it can be recommended that

 

 

 

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BETTER WORK-LIFE BALANCE SURVEY IN THE BANKING SECTOR OF BANGLADESH

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BETTER WORK-LIFE BALANCE SURVEY IN THE BANKING SECTOR OF BANGLADESH

BANK OVERVIEW

SONALI BANK LTD

Sonali Bank was established in 1972 under the Bangladesh Banks (Nationalization) Order, through the amalgamation and nationalization of the branches of National Bank of Pakistan, Bank of Bhowalpur and Premier Bank branches located in East Pakistan until the 1971 Bangladesh Liberation War. When it was established, Sonali Bank had a paid up capital of 30 million taka. In 2001, its authorized and paid up capital were Tk 10 billion and Tk 3.272 billion respectively. The bank’s reserve funds were To 60 million in 1979 and To 2.050 billion on 30 June 2000.

BANK ASIA LTD

Bank Asia Limited is a scheduled commercial bank in the private sector established under the Banking Company Act 1991 and incorporated in Bangladesh as a public limited company under the Companies Act 1994 to carry out banking business in Bangladesh. Bank Asia Limited acquired the business of Bank of Nova Scotia, Dhaka in the year 2001 and at the beginning of the year 2002 the Bank also acquired the Bangladesh Operation of Muslim Commercial Bank Limited (MCBL), a bank incorporated in Pakistan, having two branches at Dhaka and Chittagong with one booth at Dhaka. Bank Asia at present carrying its banking activities through thirty six branches including ATM, Locker, SMS, Internet Banking, SME & Foreign Exchange services in the country.

EASTERN BANK LTD

Eastern Bank Limited (EBL) is one of the modern, fully online and technologically superior private commercial Banks in Bangladesh. Eastern Bank markets a wide range of depository, loan & card products. These products include different types of Savings & Current Accounts, Personal Loans, Auto Loan, Debit Card, Pre-paid Cards, Internet Banking, Treasury, Syndication, Corporate Banking and SME Banking services through a network of branches & centers countrywide. Tracing its origin back to 1992, EBL is serving the individual and corporate clientele alike with remarkable success offering innovative banking services since then.

CITY BANK LTD

City Bank is one of the oldest private Commercial Banks operating in Bangladesh. It is a top bank among the oldest five Commercial Banks in the country which started their operations in 1983. The Bank started its journey on 27th March 1983 through opening its first branch at B. B. Avenue Branch in the capital, Dhaka city. It was the visionary entrepreneurship of around 13 local businessmen who braved the immense uncertainties and risks with courage and zeal that made the establishment & forward march of the bank possible. Those sponsor directors commenced the journey with only Taka 3.4 core worth of Capital, which now is a respectable Taka 330.77 core as capital & reserve.

IBBL

Bangladesh is one of the largest Muslim countries in the world. The people of this country are deeply committed to Islamic way of life as enshrined in the Holy Qur’an and the Sunni. Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in accordance with the precepts of Islam. The establishment of Islamic Bank Bangladesh Limited on March 13, 1983, is the true reflection of this inner urge of its people, which started functioning with effect from March 30, 1983. This Bank is the first of its kind in Southeast Asia.

3.1 Better Work-Life Balance Survey

The survey was developed as part of a research project, called the Work and Family Project – Pilot Program, which involved conducting pilot programs with ten workplaces to evaluate the effectiveness of their work-life balance policies. The project was a collaboration between the then Department of Industrial Relations (DIR) and the University of Queensland with an Australian Research Council funding grant and funding from DIR. The Better Work-Life Balance Survey (or BWLB Survey for short) was developed as a self-assessment measure to evaluate the work-life balance policies of workplaces. Between 2002 and 2004 ten Queensland organizations participated in the project and around 3,000 employees in both rural and urban areas in Queensland completed the survey.

The Better Work Life Balance Survey aims to measure how effectively organizations accommodate work life balance, by assessing employee’s awareness of work life balance policies and their comfort levels in using these policies.

Effective work life balance and flexible work policies are imperative to business for many reasons, including:

The Better Work Life Balance Survey can help your organization improve and promote work life balance in the workplace by:

3.2 Aspects of analysis

The design of the BWLB Survey is structured around the three basics an organization needs to have in place to effectively accommodate employees’ work-life balance:

1. It must have institutionalized work-life balance policies;

2. Its employees must be aware of the existence of these policies; and

3. Employees must be able to fairly and appropriately access these policies.

Based on these three main themes, the survey items examine:

1. Current organizational policies (in the form of a separate survey for the employer);

2. Dissemination and awareness of policy information; and

3. Prevailing workplace culture with regards to work-life balance issues. In addition, the survey examines how important work-life balance policies are to employees.

The survey examines four types of policies:

– leave arrangements (e.g. careers leave, purchased leave);

– Policies relevant to parenting and pregnancy (e.g. parental leave, breastfeeding facilities);

– Flexible work arrangements (e.g. job sharing, flexi-time); and

– Additional work provisions (e.g. counseling services, health programs).

3.3 Method

The survey can be conducted in just about any workplace and is designed to be completed by both employers and employees. It is provided in a Microsoft Excel format and requires Microsoft Excel to view and use. The survey is available in electronic and in hardcopy format, however, all data needs to be entered into the electronic version of the survey to enable information to be analyzed and interpreted. The Better Work Life Balance Survey Manual provides detailed information on how to conduct the survey.

ANALYSIS

4.1 ASPECT BASIS ANALYSIS OF EACH BANK

Here showing the importance of the policies of organization from each possible aspect of each bank both the perspective from organization & employee/employer.

SONALI BANK

From the table we can easily understand that this bank providing some facilities for the employees like careers leave, opportunity leave, study leave, career break & pooling of leave entitlements. This bank offer better facilities for the mother of the child by providing the paid maternity leave, opportunity to reenter the existing job after leave, safety at workplace & staggered return to job after pregnancy. In the flexible work arrangements section the performance of the bank is very poor they don’t provide any type of the facilities according to the flexibility of the work. The employee feel worthy if they provide the employee oriented service in the workplace because it is his/her second home so they expect much more flexibility to work according to their capacity. In the additional work provisions the bank gives limited facilities to its employees like telephone for personal use, health programs and equal access to promotion, training & development. But it is very much flexible & easy to give incentive to them by providing these facilities & give a boost in the productivity of the bank.

Overall satisfaction of employee/employer is not close to up to the level.

BANK ASIA LTD

From the table we can easily understand that this bank providing some facilities for the employees like careers leave, study/training leave, bereavement leave & pooling of leave entitlements. Bur the bank doesn’t provide other facilities relating to the leave arrangements of which he give emphasizes on the cultural/religious leave as a important one. This bank offer better facilities for the mother of the child by providing the paid maternity leave, opportunity to reenter the existing job after leave, safety at workplace & staggered return to job after pregnancy. But this bank didn’t provide any other facilities to the mother & her partners because fathers also have some responsibilities for the child & mother so he have to take some time off for the family related matters. Moreover it is very much important to bring child in the workplace & keep them in the childcare but the employer didn’t provide any type of this facility for this reasons women are sometimes losing their momentum because of the extra pressure from the family. In the flexible work arrangements section the performance of the bank is very poor they don’t provide any type of the facilities according to the flexibility of the work. The employee feel worthy if they provide the employee oriented service in the workplace because it is his/her second home so they expect much more flexibility to work according to their capacity. In the additional work provisions the bank gives limited facilities to its employees like telephone for personal use, health programs and equal access to promotion, training & development but they don’t provide the other necessary facilities stated in the table. The employee is feeling if the bank has the program for the employee like relocation or placement assistance because it is very much needed for the employee to cope up with the new environment in case of the transfer or newly appointed from other location.

Overall satisfaction of employee/employer is close to up to the level.

EASTERN BANK LTD

In case of Eastern Bank Ltd it is clear that they are giving Study/Training leave, cultural/ religious leave, pooling of leave entitlements & bereavement leave so there are some facilities are given to the employees working in the organization. But they don’t provide other benefits expected by the employee like careers leave, career break so it is very much attention grabber things to the management of the organization. In the parenting & pregnancy policies the bank has some distinctive features for the employees. It has gave paid maternity leave, opportunity to return to same job after maternity/paternity & adoption leave, pre-natal leave & safety at work during pregnancy to its employees. The given facilities to the employees is feel enough to them & other facilities which aren’t given to employees aren’t get importance in the view of the employees of the organization. In this bank they have 1 clause achieve for flexibility requirement in the workplace which is job sharing which is very much important for the employee to retain their normal work process. This bank also inflexible in terms of the various job related terms & conditions. From the employee viewpoint job sharing, cap on overtime, time off in lieu, roistered days off & self-roistered and/or staggered start & finish times get attention for their perspective. In the additional work provisions this bank gives poor facility for their employee because they provide the facilities like telephone for personal use, health programs & equal access to promotion, training & development. Among the other facilities which aren’t given to the employee two facilities are get importance like referral services for employees’ personal needs, counseling services for employees because of some reasons.

Overall satisfaction of employee/employer is up to the level. It can be easy to give incentive to them by providing these facilities & give a boost in the productivity of the bank.

CITY BANK LTD

From the table we can easily understand that this bank providing some facilities for the employees like study/training leave, bereavement leave, pooling of leave entitlements to its employees but other facilities entitled to the leave arrangements don’t give to the employees of their organizations. But among the facilities not given to them some facilities are prefer by the employees of the bank. Those are – careers leave, 48/52 pay averaging for purchasing additional annual leave, cultural/religious leave. In case of parenting & pregnancy policies the bank provide some basic facilities like paid maternity leave, opportunity to return to same job after maternity/paternity & adoption leave, pre-natal leave, staggered return to work after pregnancy. But this bank don’t provide any type of childcare or other necessary facilities for their betterment & they haven’t safety in the workplace so it is the most vulnerable position for the mothers who have children under 6 because these mother can’t match their feeding for their children. In terms of the flexibility this bank perform poorly according to the duties & responsibilities to the employees of the organization because it don’t provide any type of the clause stated in the table containing flexible work arrangements. In the analysis of additional work provisions this bank gives poor facility for their employee because they provide the facilities like telephone for personal use, health programs and equal access to promotion, training & development. Among the other facilities which aren’t given to the employee 3 facilities are get importance like telephone for personal use, health programs and equal access to promotion, training & development because of some reasons.

Overall satisfaction of employee/employer is close to up to the level.

IBBL

From the table we can easily understand that this bank providing some facilities for the employees like study/training leave, career breaks, cultural leave. But they do not give bereavement leave & pooling of leave entitlements. This bank offer better facilities for the mother of the child by providing the paid maternity leave, opportunity to reenter the existing job after leave, safety at workplace & staggered return to job after pregnancy. In the flexible work arrangements section the performance of the bank is very poor they don’t provide any type of the facilities according to the flexibility of the work. But this bank don’t provide any type of childcare or other necessary facilities for their betterment & they haven’t safety in the workplace so it is the most vulnerable position for the mothers who have children under 6 because these mother can’t match their feeding for their children. In terms of the flexibility this bank perform poorly according to the duties & responsibilities to the employees of the organization because it don’t provide any type of the clause stated in the table containing flexible work arrangements. The employee feel worthy if they provide the employee oriented service in the workplace because it is his/her second home so they expect much more flexibility to work according to their capacity. In the additional work provisions the bank gives limited facilities to its employees like telephone for personal use, health programs and equal access to promotion, training & development. But it is very much flexible & easy to give incentive to them by providing these facilities & give a boost in the productivity of the bank.

Overall satisfaction of employee/employer is no satisfactory.

4.2 COMPARATIVE ANALYSIS AMONG BANKS

Here showing the comparative analysis among the banks showing their importance of the policies of organization from each possible aspect of each bank both the perspective from organization & employee/employer.

From the chart analysis it is indicating that Sonali bank being a state owned bank giving working satisfaction is satisfactory level. On the other hand, rest of the 4 banks is moving around the state owned bank in their performance of work level satisfaction.

LEAVE ARRANGEMENTS:

In terms of leave arrangements EBL is playing satisfactory level of performance. On the other hand, IBBL is the weakest participant in providing leave facilities.

PARENTING & PREGNANCY POLICIES:

In terms of leave arrangements all banks are playing same level of satisfaction.

FLEXIBLE WORK ARRANGEMENTS:

In terms of leave arrangements EBL is playing satisfactory level of performance. On the other hand, SONALI bank is the weakest participant in providing leave facilities.

ADDITIONAL WORK ARRANGEMENTS:

In terms of leave arrangements EBL is playing satisfactory level of performance. On the other hand, SONALI bank is the weakest participant in providing leave facilities.

FORMALITY OF POLICIES:

From the answers taken from the responders in the survey it is obvious that one common thing is discovered in front of me it is – no bank has formal work-life balance policy in the written form. But another interview taken from them it is clear that they have unstructured but corporate culture based informal policies for the work-life balance policies. But it is one of the major debacles that no bank has the formal policies regarding the work-life balance policies & the employees even don’t know how they can be benefitted by the organization they are worked for. Moreover because of the not having of the formal written work-life balance policies employees can’t maintain their life according to the corporate culture & they can’t prepare themselves with previous idea about the work-life balance.

EXPERIENCE IN ORGANIZATION:

In terms of leave arrangements IBBL is playing satisfactory level of performance. On the other hand, EBL is the weakest participant in providing leave facilities.

But after all aspects basis analysis it can be stated that In the eyes of the employee Eastern Bank Ltd is a ultimate bank which provide better service among selected five banks to the employee because the employee are much more satisfied in the Eastern Bank Ltd than other 4 banks in the score & percentage of the total score given to highest possible marks.

ASPECTS IBBL CITY BANK LTD SONALI BANK LTD BANK ASIA LTD EBL
Leave arrangements 18 19 22 20 17
Policies relevant to parenting and pregnancy 24 24 24 24 24
Flexible work arrangements 9 24 13 14 15
Additional work provisions 17 19 18 19 19
Formality of policies 7 5 6 5 5
Personal experience at the organization 60 61 66 63 68
TOTAL 135 140 148 149 152

RECOMMANDATIONS

After analyzing the questionnaire filled by the employees of the 5 different levels of 5 different banks some loopholes are get attention of me as a fault of creating the better work-life balance policy in the organization. So I have some recommendation for the banks as an aggregate manner. Recommendations are:

· Banks should write down complete work-life balance policies for the employees.

· Banks should treat all the employees in different way but creating equitable balance of treatment.

· Employers have to think of the mental expectation of the employees to reduce the gap between the employer & employee.

· Banks should introduce new department for the employee relations which can be named employee welfare division.

· Banks can facilitate the employees how to cope up with the complex world to keep free from the anxiety & tension in their mind.

· Banks should provide better facilities to keep the employee happy to achieve the better productivity from the employees.

· Banks can create workshop to work-life policy manual with inclusion of the all levels of management & general employees.

· When regulatory organizations check the banks performance they can add one more thing to check the human development ratio in the banking sector to evaluate the actual development performance of the banks in terms of human also.

CONCLUSION

After analyzing the answers given by the employees of the various banks it is very much clear that people are much more sacrificed their family life for the betterment in the work life. Even most of the employees are unknown about the facilities or their rights what should be getting from the organization where they worked. Another important thing is that companies are very much unknown about the workers expectation & need because of the complex system in the corporate world. Only few facilities are known of the basic work-life balance policies. Even they haven’t any written policy for the work-life balance maintenance. Employers have to give proper attention to the employees expectation & need because banking job is the people oriented job where a employee can uplift the image of the bank to the customers on the other hand he/she can downsize the whole business by not doing proper things.

REFERENCES

I. Asubonteng, P., McCleary, K.J. and Swan, J.E. (1996), ” Better Work Life survey”, Journal of HRM, Vol. 10, No. 6, pp. 62-81.

II. Brysland, A. And Curry, A. (2001), “BETTER WORK LIFE”, Vol.11, No.6, pp. 389-401.

BIBLIOGRAPHY

· http://www.commerce.wa.gov.au/labourrelations/Content/Work%20Life%20Balance/Resources/Better_Work_Life_Balance_Surve.html

· http://www.google.com/url?sa=t&source=web&cd=2&ved=0CCIQFjAB&url=http%3A%2F%2Fwww.docep.wa.gov.au%2FLabourRelations%2FPDF%2FWork%2520Life%2520Balance%2FMarjolein_Broers_Presentation_250608.pdf&rct=j&q=BETTER%20WORK%20LIFE%20BALANCE%20SURVEY&ei=rDYwTcKOIYSVOqu5yKwK&usg=AFQjCNEBuc1xyIT6biUccMGLIx5TkMMivQ&sig2=3shSArJYBd-dmHZ8vU72-A&cad=rja

· http://www.google.com/url?sa=t&source=web&cd=6&ved=0CEcQFjAF&url=http%3A%2F%2Fwww.worklifebalance.com%2Fassets%2Fpdfs%2Fcasestudy.pdf&rct=j&q=BETTER%20WORK%20LIFE%20BALANCE%20SURVEY&ei=rDYwTcKOIYSVOqu5yKwK&usg=AFQjCNHnvNUQYKYy6DbQYQozhR8smyCqvQ&sig2=41BnthMfqHWBuq6wXGdIIg&cad=rja

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Beximco Group the largest conglomerate in the private sector of Bangladesh

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Beximco Group the largest conglomerate in the private sector of Bangladesh

EXECUTIVE SUMMARY

Beximco Pharmaceuticals Industry is one of fastest growing and one of the largest foreign revenue earning sectors in Bangladesh. It is pleasure to do my internship program from such a reputed organization which is known for its renowned quality. Beximco Pharmaceutical Ltd. is a part of Beximco Group the largest conglomerate in the private sector of Bangladesh. Beximco Pharmaceuticals Ltd. started its journey as a public limited company in 1976 by registration. But the company starts its commercial production in 1980. Currently Beximco Pharma has been established as leading Pharmaceuticals Company in Bangladesh. BPL is not only fulfilling the demand of local market but also fulfilling the demand of foreign market. BPL is UN approved supplier of pharmaceutical product in the world. It is also greatly contributing to our national economy by exporting their product in abroad.

Currently BPL has exports market in 19 countries including , Cambodia, Georgia, Hong Kong, Iran, Kenya, Malaysia, Mozambique, Myanmar, Nepal, Pakistan, Philippines, Russia, Singapore, South Korea, Sri Lanka, Taiwan, Ukraine, Vietnam and Yemen. For the contribution to national economy BPL has been awarded National Export Trophy several occasions. BPL has share holder over 50,000. In 2005 the total turn over of BPL was 3879.42 million.

The Pharmaceuticals Industry of Bangladesh is very bright in fact we are such a country who fulfills the local demand by ourselves. The local pharmaceutical company’s produce 78% products out of the total consumption and only 21% products are been produced by foreign company’s in Bangladesh. Beximco Pharmaceutical Ltd holds the maximum 19.26% prescription market share among the all local pharmaceuticals company in Bangladesh. Its position in different therapeutic class is also very good. To face the challenges of 21st century BPL has a clear vision for the future and they are preparing themselves according to that manner. In 21st century BPL want to place it as a one of the leading pharmaceutical company in Asia with comparison with other leading pharmaceutical companies. To accomplish it vision BPL are implementing aggressive strategies and relentlessly pursuing operational excellence.

CHAPTER ONE: INTRODUCTION

1.1 INTRODUCTION

Medicine is directly related to human life and therefore, its manufacturers have immense social responsibility of providing safe and effective medicine, demanding uncompromising efforts, at all levels of its activities. Beximco pharmaceuticals Ltd the leading health care company in Bangladesh has been making every effort to ensure the effectiveness and safety of the medicine that it produces. Physicians and patients of the company reply on the efficacy of the medicines of Beximco Pharma at the time of critical needs demonstrating their confidence and trust on BPL products. BPL has a remarkable mission statement, which is being seriously pursued in its thoughts and actions. An increasing amount of contribution is ploughed back into social causes demonstrating BPL’s commitment to the nation. As we continue to grow, it should not only benefit BPL itself but it should also positively contribute to the nation and society where we live.

In BPL believe that they manufacture and sell medicine to provide health, happiness and smile back in life of our fellow citizens. We intend to help realize the ultimate aspiration of the nation for a lifetime of good health ensuring a healthier tomorrow for the people.

1.2 ORIGIN OF THE REPORT

Today, practical experience is as much essential as academic education that enables someone to be successful business executive especially in the glove, competitive business environment. In order to gather knowledge and exposure regarding the organization culture, behavior the business students has to be go internship after the successful completion of their Business degree.

Stamford University Bangladesh is known for the global standard education. Due to this slogan of Stamford University, the business students of this university is known for their excellent knowledge both theoretical and also practical which makes them a competitive and more global across the globe. This internship program of mine at BPL is a process of gathering practical knowledge regarding Pharmaceutical industry in Bangladesh.

Beximco Pharmaceutical Ltd is the manufacturer and marketer of pharmaceutical product under chemical divisions of Beximco Group. Beximco Pharmaceuticals is one of the leading pharmaceutical companies in Bangladesh. It also is one of the biggest suppliers of pharmaceutical product of any Bangladeshi based company. BPL is the first Bangladeshi company to supply pharmaceutical product to Riffles Hospital the most prestigious hospital of Singapore.

1.3 SCOPE OF THE STUDY

The end users of pharmaceuticals products are the doctors and pharmacists. So, we need find to out the prescription market share of BPL by analyzing and collecting the prescription through the prescription survey. We also need to analyze whether the survey findings are been properly implemented and proper strategy is been taken or not.

1.4 LIMITATION OF THE STUDY

Every matter has got some limitation. So, this is also not an exception. The limitation of this research are been stated bellow.

1) Time limitation is one of the biggest limitations regarding this research. Due to lack of time larger number prescription from different parts of the country can not been collected.

2) The attendants of different chemist shops are sometimes not co-operative in survey activities.

3) Sometimes the patient or the guardians sometimes do not participate with the survey people.

4) As I am a business students, it was sometimes become difficult for me identify the name of the product referred by the doctors in the prescription for lack training and skills.

CHAPTERTWO: RESEARCHMETHODOLOGY

2.1 RESEARCH OBJECTIVE

The main objective of this research is to identify whether there is any discrepancy between the survey finds of MRC and also the implementation of the survey findings. More broadly if we categorized the objective of this research we can find the following objective stated bellow.

1) The prescription percentage of BPL products in comparison with different companies under different therapeutic class.

2) The generic percentage of BPL products under different therapeutic class.

3) To see whether the survey findings of MRC are been properly implemented by Central product Management Department in terms strategies.

2.2 RESEARCH TECHNIQUE

For conducting and analyzing this research project the following technique are been followed which are stated bellow.

1) In order to identify the product collecting the prescription from the patient or their guardian from the different chemist shop in Dhaka city.

2) Keep standing besides the chemist shop and looking for prescription coming?

3) Talking with the MRC and CPM authority of Beximco Pharmaceuticals whether the survey findings are been properly implemented or not.

2.3 POPULATION

The population for this research project is prescription suggested by doctors of different chemist shop, hospital and clinics. The target population of this project is been stated in details in the followings.

Elements: Prescriptions.

Sampling Units: Hospital, Clinic and chemist shop.

Area: Dhaka Metropolitan City.

2.4 SAMPLE SIZE

For any research sample size is the most important factor and this research is also not an exception. For analyzing this research 496 prescriptions and 1101 products are been analyzed for identifying the market share of BPL products.

2.5 SOURCES OF INFORMATION

For any research work the information play the most significant part. Because without the update information no research can be conducted successfully. Besides in this case two sources of information are been adopted for further continuation of the research project.

1. Primary sources.

2. Secondary sources.

2.5.1 PRIMARY SOURCES

Before discussing about the primary sources of this research project let us try to know first of the basic concept regarding primary sources. The primary sources are that information which has been collected for the first time relevant with the research project. In this regard the primary sources are the direct personal prescription observation from the chemist shop are been used.

2.5.2 SECONDARY SOURCES

The secondary sources are that information which has been already collected by some other research project.

In this case of research project the adopted two secondary sources of information.

1. Internal Sources: For my project the internal secondary sources of information was the brochures, medical book and annual report of 2005 of Beximco Pharmaceuticals Ltd. Besides the also taken some other unpublished information from the staffs of MRC dept.

2. External Sources: As an external secondary source of information the taken data from some other reports of other pharmaceuticals companies.

2.6 SAMPLING FRAME

There are many hospital, clinics and chemist shop in Dhaka city. I have selected the following hospital, clinics and chemist shop randomly for my research project.

· BSMMU Hospital.

· BIRDEM Hospital.

· Dhaka Medical College Hospital.

· Holy Family Hospital.

· Manoyara Hospital, siddeswari.

· Mitford Hospital.

· Bangladesh Medical College Hospital.

· Popular Diagnostic Center.

CHAPTER THREE PHARMACEUTICALS INDUSTRY IN BANGLADESH

3.1 BACKGROUD OF PHARMACEUTICAL INDUSTRY

The pharmaceuticals sector is a high-technology and knowledge-intensive industry in Bangladesh. The industry has two-tier structure. The largest firm accounts for the majority of the R&D investment in the industry and hold the majority of patents. There are a large number of smaller firms producing mostly for local markets. The pharmaceuticals industry is heavily regulated.

Once a product is brought to market, pharmaceuticals companies spend heavily on marketing and promotion. The larger drug companies maintain a large sales force, which makes direct regular contact with individual prescribing physicians and other pharmaceuticals decision makers. The money spent on marketing is huge. Pharmaceuticals marketing efforts are not only directed at physicians and consumers; drug companies have also sought to directly influence pharmacist, in some cases paying pharmacist to induce customers to change their drug consumption habits.

The nature of competition in this industry differs between the two sets of firms. The second tier of firms holds fewer patents and relies primarily on manufacturing off patent generic medicines or patent medicines under license. Competition between these firms takes the conventional form of competition on price, cost efficiency and quality. In contrast, a few large research-based pharmaceutical companies invest heavily in R&D and hold the bulk of the patents, and can often enjoy substantial market power while these patents are in force. For these companies, competition is not primarily on the basis of price, but rather on the basis of marketing and innovation. These companies compete to develop entirely new drugs which treat new medical conditions, improve upon existing drugs, or serve as substitute for existing patented drugs. Some large pharmaceutical companies in this tier export and compete in international markets.

The scenario of pharmaceutical industry can be depicted in two parts-before the Drug policy ordinance, 1982 and after the Drug policy ordinance, 1982. Before the ordinance there were 177 pharmaceutical companies in the country but local production is used to be dominated by multinational drug companies which manufactured 75% of total production. 25 medium sized national companies manufactured about 15% of total production. 133 small local based companies produced the remaining 10%. The multinational companies were fully armed with modern technology for producing sophisticated essential drugs, but they were only engaged, t a large extent, in formulation of simple drugs including many useless products. At that time, the unregulated drug market of the country had very little favorable conditions for pharmaceuticals to over price their products. Near monopoly market conditions mean that local firms could not compete effectively with these multinational market tycoons.

A great change was noticeable in the pharmaceutical industry after the drug policy ordinance of 1982. The total national production of pharmaceuticals has risen by a substantial 63%; the value of essential drugs made in national factories has gone up to 140% over the four years. At present there are 260 national & multinational based pharmaceutical companies in Bangladesh.

3.2 TOP TEN PHARMACEUTICAL COMPANIES IN BANGLADESH

Name of the Company Market Share
Square. 22.5%
Beximco 19.75%
Aventis 12.78%
Acme 11.28%
Opsonin 9.77%
Glaxo 7.52%
Drug International 6.01%
SK+F 4.51%
ACI 3.75%
Renata 3.38%

3.3 MARKET SHARE OF NATIONAL COMPANIES

Name of the companies Market share
BPL 19.26%
Square 13.62%
Acme 6.27%
Opsonin 6.09%
Incepta 5.90%
Renata 3.45%
Ibn Sina 3.09%
Aristopharma 2.82%
Orion 2.18%
Others 15.89%
Total 78.57%

3.4 MARKET SHARE OF MULTINATIONAL COMPANIES

Name of the companies Market Share
Sk+F 5.72%
Aventis 5.09%
Organon 4.04%
Roche 2.04%
Drug International 2%
Glaxo 1.36%
Novartis 1.18%
Total 21.43%

CHAPTER FOUR: BEXIMCO GROUP ITSELF

4.1 HISTORY OF BEXIMCO GROUP

Beximco is the largest business conglomerate of private sector in Bangladesh. Over the years since started it could gain a position to symbolize effective management, fund generation, and diversification of exploring business opportunities. Today it is one of the most known name is the country’s business arena.

Beximco was the first private sector company to be registered in Bangladesh as a public limited company in September 1972. Since then, Beximco has taken the lead in public equity offerings in Bangladesh.

At the end of 1996, the ten publicly listed companies of the Beximco Group accounted for Tk. 33.87 billion or 20.4% of the market capitalization of the Dhaka stock exchange and Tk. 31.12 billion or 21.3% of the market capitalization in Chittagong stock exchange. Beximco shares are also the volume leaders on the national bourses, accounting for 22.08% of turnover at the DSE and 29.23% turnover at the CSE in 1996.

The Beximco Group has also played a pioneering role in establishing and expanding the debt instruments market in Bangladesh. Beximco Pharmaceuticals Ltd was the first Group Company to issue debentures in 1988 and has been followed by seven additional Groups companies since.

Beximco equities and debentures continue to perform the market as a rule, and have been often rated as buys by several foreign investments firms such as UBS, Crosby Securities, Peregrine and the erstwhile Smith New court. Beximco stocks are also well represented in the emerging market funds portfolios of leading mutual funds world wide.

An emerging economy like that of Bangladesh needs not just newer and bigger industries, but also a reliable service infrastructure, especially in financial services. Anticipating this, the Group decided to start Beximco securities Ltd., which is the first firm formed especially for the retail individual investor offering a customer friendly environment for its growing number of individual clients. The firm is also aggressively engaged with institutional clients and issue underwritings.

4.2 MISSION OF BEXIMCO GROUP

“Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact; namely: our employees, our customers, our business associates, our fellow citizens and our shareholders. Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact; namely: our employees, our customers, our business associates, our fellow citizens and our shareholders.”

4.3 BUSINESS UNITS OF BEXIMCO GROUP

Beximco Group has got some diversified business units in different challenging sectors of Bangladesh. Beximco Group is consists of 34 different companies under 8 divisions.

4.3.1 TEXTILE DIVISIONS

Beximco Textile Divisions comprises of seven companies. They are:-

1. Padma Textile Mills.

2. Beximco Synthetics Ltd.

3. Beximco Apparels Ltd.

4. Beximco Knitting Ltd.

5. Beximco Textile Ltd.

6. Beximco Denims Ltd.

7. Beximco Fashion Ltd.

Padma Textile Mills is manufacturer of both cotton and blended yarn while Beximco Synthetics Ltd. Is the manufacturer of POY and DTY for polyester filament yarn. Beximco Apparels has a 100% export oriented ready made garments units. Beximco Knitting is into manufacturing, dyeing and finishing of Knit fabrics while Beximco Textile is into weaving, dyeing and finishing. Beximco Denims is into manufacturing, dyeing and finishing of denims fabrics while Beximco Fashion is into ready made garments manufacturing. Beximco Apparels, Beximco Knitting, Beximco Textile, Beximco Denim and Beximco Fashion are continuously exporting their quality products to various countries of the world with major emphasis on USA and EU market. Among these Padma Textile Mills, Beximco Synthetics Ltd, Beximco Knitting Ltd, Beximco Textile Ltd and Beximco Denims Ltd are listed in Dhaka stock exchange.

4.3.2 JUTE DIVISION

Beximco jute division comprises of four companies, namely

1. New Dhaka Industries Ltd.

2. Sonali Ansh Ltd.

3. Esses Exporters Ltd.

4. Shinepukur Jute Spinners Ltd.

Jute division’s activities include manufacturing of high quality jute yarn and twine, and trading in raw jute. New Dhaka industries Ltd. Manufactures jute yarn and twice, while Sonali Ansh Ltd. and Esses Exporters Ltd. are into trading of raw jute and jute goods. The high quality products of jute divisions are exported to USA, UK France, Belgium, Spain and Iran.

CONSTRUCTION DIVISION

Beximco construction division comprises of two companies, namely

1. Beximco Engineering Ltd.

2. Shinepukur Holdings Ltd.

Beximco Engineering Ltd is into construction of roads, bridges and buildings while Shinepukur Holdings Ltd manufacturer jute yarn and twice. It is also engaged in real estate business as a developer of land, multistoried private apartments and commercial shopping complexes. Shinepukur Holdings Ltd is listed in Dhaka stock exchange.

TRADING DIVISIONS

Although the group’s emphasis shifted from trading to manufacturing 25 years ago, the divisions still plays significant role in group’s overall business activities. Its major strength lies in dealing under Special Trade Agreement which Beximco introduced in Bangladesh for the first time in 1972, at a time, when acute hard currency shortage demanded innovate approach to selling country’s marketable in exchange for import of much needed essential commodities, which the country had no resources to finance. Beximco Trading Divisions comprises of three companies namely

1. Bangladesh Export Import Company Ltd.

2. Beximco Holdings Ltd.

3. Beximco Securities Ltd.

Beximco Ltd is into trading and indenting business. Beximco Holdings Ltd is an investment company, while Beximco Securities Ltd is engaged in stock brokerage, underwriter and portfolio management business. Among these three companies, Beximco Ltd is listed in Dhaka stock exchange.

MARINE FOOD DIVISION

Bangladesh is endowed with lot of marine food resources which the group did not miss to identify and utilize. Marine Foods is engaged in cultivation and processing of shrimp and other sweets & salt water fishes, all of which are exported. Marine food Divisions comprises of two companies, namely

1. Beximco Foods Ltd.

2. Beximco Fisheries Ltd.

Beximco Foods Ltd is into fish processing and export business and Beximco Fisheries Ltd. is into shrimp cultivation. Beximco Fisheries ltd. is listed in Dhaka Stock Exchange.

IT DIVISION

IT Division has five companies that are related to development of software, providing IT education, reseller of IBM pc, and one of the largest internet service providers in Bangladesh. The IT Divisions of Beximco is comprises of five companies namely

1. Beximco Computers Ltd.

2. Beximco System Ltd.

3. Bangladesh On-line Ltd.

4. Beximco Softech Ltd.

5. Beximco Zenith Ltd.

Beximco Computers Ltd is involved in marketing of mid-range and personal computers and develops banking and business software’s which are widely used in Bangladesh. Bangladesh On-line Ltd is into IT business. It is also renowned Internet Service Providers (ISP). Beximco System Ltd is an IT training center, joint ventures with NIIT software development.

BUSINESS UNIT

Three business unit of Beximco are

1. Beximco Media Ltd.

2. Gammmatech Ltd.

3. Shinepukur Ceramics Ltd.

Beximco Media Ltd. is engaged in publication of The Independent- the leading national English newspaper of the country. Gammatech Ltd. a joint venture project with Bangladesh Atomic Energy Commission. This is the country’s only such facility which provides sterilization of medical products and preservation of foods. Shinepukur Ceramics Ltd. manufactures table wares from poracelain and Bone china. Currently, the company is marketing and selling its high quality products both at home and abroad. It exports its products to USA, UK, Germany, France, Spain, KSA, India and Pakistan.

CHEMCIAL DIVISION

The introduction of pharmaceutical plant in 1979 marked the beginning of today’s chemical divisions. BPL started its journey back in 1980 with manufacturing and marketing of licensee products of Bayer AG, Germany an Upjohn Inc. of USA. After its initial years of struggle, it broke ground with the launching of its own products in 1983. Today in addition to manufacturing pharmaceutical formulations in dosage forms and basic chemicals at Beximco Pharmaceutical Ltd, the divisions also produces intravenous fluids at Beximco Infusions Ltd. a state-of-art ISO 9001 certified intravenous fluid production facility. The Chemical Division also has I & I Service Ltd, its own in-house organization for direct distribution national wide.

Today Beximco Pharmaceutical Ltd is one of the market leadings in Bangladesh. The bulk of the profit BEXIMCO group comes from the chemical division. Its quality services and high standard of professionalism helped to earn public recognition both home and abroad. Today Beximco Pharmaceutical Ltd is one of the market leadings in Bangladesh. Its success is evidence of what a strict focus on quality can achieve. Beximco Pharmaceuticals product range continues to expand every year and each new product adds to the many lives already improved.

A partnership with former Ciba-Giedy now Aventis of Switzerland, the Beximco Pharma center for Etc & Industrial Research Ltd. was set up to conduct collaborative research programs through which Beximco scientists will be developing high performance pigments, which Aventis will screen for commercial potential and ultimate commercialization.

BOARD AND MANAGEMENT

The management of BEXIMCO PHARMA is simply exceptional in comparison to any other listed companies in this country. It has a blend of professionalism and wisdom, which plays a key role in managing the champion organization. The Board of Directors includes:

A S F Rahman Chairman
Salman F Rahman Vice Chairman
Iqbal Ahmed Director
M.A. Qasem Director
O.K. Chowdhury Director
Dr. Abdul Alim Khan Director
A.B. Siddiqur Rahman Director
Dr. Farida Huq Director
Chowdury Hafizur Rahman Director
Faheemul Huq Director
Ahsanul Karim Director

A dedicated Management committee and an Executive Committee make sure that BEXIMCO PHARMA achieves its target with sheer professionalism. The committees are:

The Management Committee:

The Executive Committee:

SUBDIVISION OF CHEMICAL DIVISION

Beximco Chemical Division
Beximco Pharmaceuticals
Pharmatek Chemical
I&I services
Basic Chemical Unit
Fine Chemicals

4.6 MAJOR ACHIEVEMENT OF BEXIMCO PHARMA

1976-1985

1976 : Registration of the company

1980 : Started manufacturing and marketing of licensee products of Bayer AG of Germany and Upjohn Inc. Of USA

1985 : Listing in the Dhaka Stock Exchange (DSE) as a Public Limited Company

1986-1995

1990 : Commissioning of Basic Chemical Unit

1992 : Started export operation with Active Pharmaceutical Ingredients (apis)

1993 : First export market operation with finished formulation

1996-2005

1996 : Introduction of Sustained Release Dosage Form

1997 : Introduction of Suppository Dosage Form Commissioning of Metered Dose Inhaler (MDI) plant Introduction of Metered Dose Nasal Spray

1998 : First pharmaceutical company of the country achieving ‘National Export Trophy (Gold)’for 1994-95

1999 : UNICEF approval of BPL as an enlisted supplier

2000 : Agreement to manufacture Metered Dose Inhaler (MDI) for Glaxo smithkline

2001 : Introduction of Small Volume Parenterals (Injectables) Establishment of Analgesic-Antiinflammatory API plant 2002 : Won the first prize of ICAB National Awards 2000 for ‘Best Published Accounts and Reports’in Non- Financial Sector Category The first Bangladeshi company to supply pharmaceuticals to Raffles Hospital- the most prestigious hospital of Singapore

2003 : Received ‘National Export Trophy (Gold)’for consecutive 2 years (1998-99, 1999-2000) Won the Silver prize of ICAB National Awards 2003 for ‘Best Published Accounts and Reports’in Non-Financial Sector Category. Won a tender to supply Neoceptin R and Neofloxin to Raffles Hospital of Singapore for the whole year’s consumption. Introduced Anti-HIV drugs for the first time in Bangladesh. Diversification into Anti-Cancer therapeutic class.

2004: signed contract with Novartis to manufacture their liquid, cream, ointment and suppository products under “Toll Manufacturing “agreement. Visit of Saudi delegated by Hon’ble Minister, Kingdom of Saudi Arabia

2005: Merger of Beximco Infusions Ltd. With Beximco pharmaceuticals Ltd. Admission to alternatives Investment market (AIM) of London Stock Exchange (LSE)

4.7 THE FASTES GROWING COMPANY

With a record of highest growth rate in the history of Bangladesh Pharmaceutical industry, BPL has maintained its leadership position with consistent growth over the year. The company maintained its growth performance in 1999 even when the industry experienced a decline in market growth during the same period of time. It is continuously adding new products of different therapeutic classes in its portfolio and those products are always appreciated by the health professionals. In the year 2001, BPL added 26 new products to its existing product lines.

4.8 OVERSEAS BUSINESS

BPL has been able to establish a very successful international marketing network in Asia, Middle East and Africa. In 2001, BPL signed and agreement with one of the leading distributors of Singapore with an objective to consolidate i9ts presence in Singapore market. In Pakistan, BPL comes into an agreement with one of the leading local companies to manufacture BPL brands locally and to market the same in Pakistan market. So, far Beximco has market its presence in 22 countries. These countries are.

1. Cambodia

2. Georgia

3. Hong Kong.

4. Iran.

5. Kenya

6. Malaysia

7. Mozambique.

8. Myanmar.

9. Nepal.

10. Pakistan.

11. Philippines.

12. Russia

13. Singapore.

14. South Korea

15. Srilanka.

16. Taiwan

17. Ukraine.

18. Vietnam.

19. Yemen.

4.9 THE VISION OF NEW MILLENNIUM

BPL has transformed its activities, culture, style and philosophy to meet the demands of the new millennium. Business diversification that is strategically important for sustained growth today is followed here as a result of its vision of the future. BPL has been producing solid products like tablets and capsules and liquid products like syrup, suspension and solution, as well as semisolid products like cream and ointment. BPL is the pioneer company to manufacture and market nasal sprays, inhalation aerosols and suppositories in Bangladesh. BPL stepped forward to manufacture small volume parental or inject able dosage form in 2001.

A multi-million dollar pharmaceutical formulation plant is being built. This world class facility is structured and erected in line with international guidelines for cGMP (Current Good Manufacturing Practices) and with particular regard to the USFDA. This plant will be one of the finest facilities to be available anywhere in the globe.

4.10 NEW CUSTOMER APPROACH

A BPL mission statements states “Each of our activities must benefit and add value to the common wealth of our society”; BPL stands on the heritage of bringing innovative medicine to people. Commitment to customers is one of the hallmarks of BPL. Its sales force of over 540 highly professional sales representative ensures timely promotion and smooth delivery of products to anywhere of the country.

4.11 BLOCKBUSTER PRODUCT OF BPL

Increased market complexity now a days places great demand on the sales and marketing operations of pharmaceutical companies, making it even more difficult and costly to manage. But our marketing and sales team was able to withstand competition successfully in 2004 which enabled us not only to retain market leadership of all the key brands but also to grow in other therapeutic areas. Several new brands like Bextrum/Bextrun Gold, Frenxit, Ultrafen Plus, Neofloxin XR, Vercef, Tycil DS etc. have already shown potential to become future Block buster brands.

4.12DEPARTMENT OF BEXIMCO PHARMACEUTICALS

4.12.1 CPM DEPARTMENT

Central product management department includes the activities of marketing and sales promotion of both BPL (Beximco Pharmaceutical Ltd) and BIL (Beximco Infusion Ltd). The head of the department guides products officers. The activities that are performed by the CPM department are-

· Preparing product literature and promotional material for doctors.

· Determining the packaging pattern, color and size.

· Fixing target sales.

· Searching about competitor strength, weakness, opportunity and threat.

· Issuing budget in consulting with different departments.

· Setting price for each products.

· Collecting statistical data which are relevant to their operations.

The downward communication system of the CPM department is shown in figure below:-

Executive Director
Manager
Assistant Manager
Senior Product Officer
Product Officer

Chart: Layout of CPM Department

4.12.2 SALES DEPARTMENT

CPM department determines the target sales and the responsibility of the sales department is to achieve the sales target by its workforce. An executive sales director is the head of the department. This department consists of senior sales manager, regional sales controller, field supervisor and medical representative. The department divided the whole country into 20 regions and assigned 20 regional sales controllers to control sales activities. Again 6 Medical representatives are working under 5 supervisors in each region. The whole process is going on a chain of command. Field supervisor supervise all the activities of medical representatives and field supervisor are supervised by regional sales controller. The regional sales controllers take necessary indication from the senior sales manager of the sales department.

The downward communication system has been developed which is shown in figure below-

Executive Director (sales)
Sales Manager
Regional Sales Manager

Field Supervisor
Medical Representative

Chart: Layout of Sales Department

Main activities of Sales Department:

· Forecasting future sales in consultation with central product Management department.

· Recruitment of sales force in consultation with Human resources department.

· Budget estimation in consultation with finance department and with the director of marketing and commercial.

· Strategy developing for effective sales force.

· Arranging training for field force.

· Handling critical customers.

· Ensuring product availability.

· Donation handling.

· Performance evaluation of the sales force.

Responsibilities of Regional sales controller:

· Leading the subordinates according to the sales manager’s instruction.

· Evaluating the employee’s performance and reporting to the department.

· Making good relationship with major customers.

Responsibilities of Field Supervisor:

· Supervising medical representative’s activities.

· Maintaining good relationship with customers.

· Monitoring the market conditions.

· Evaluating MRs field performance and reporting to regional sales controller.

Responsibilities of Medical Representative:

· Visiting doctors with product sample and literature to promote products.

· Visiting chemist shop to check out the product availability.

· Listing the products that should be supplied to the chemist shop.

· Generating comments and information from doctors and chemists and informing it to field supervisors.

4.12.3 MRC DEPARTMENT

In the competitive business market, “Market Research” is a vital part of any type of company .especially who has wide rage of product like (medicine, cosmetic, and consumer goods, etc. Market research is necessary for making any types of sense about the market and which save the time, resources and wastage of money. Market research is a systematic and objective identification, collection analysis, dissemination and use of information for the purpose of assisting management in decision making related to identification and solution of the problems. MR helps to knowing the condition of the existing product, helps to set furthers steps, helps to achieve know the condition of the competitor, market share and market growth rate. Through the MR (Market research) company can keep the record of each and every product and also some others factors like which the product is earning more value for the company and which one is not, which one the number one product by unit or which one the highest selling drug in different market (like-antibiotic) and also the performance of medical representatives (MRs). MR helps to identify the products records also keeps the doctors record, which doctor helps to earn more revenue by prescribing medicine of Beximco Pharma.

MRC department was established in 1987 with one Sr. product officer and five market reach representative (MRR) under CPM department. MRC depts. divided the whole country into 440 territories under 20 regions. Headed by manger, market research representative do the task of market survey. The department discloses the trend of increasing or decreasing market share by compiling the received data from the market

Organogram of MRC Department

MR Supervisor
MR Supervisor

Figure: Organogram of MRC department

Responsibilities of Marketing Research Department:

· Calculating the market share of the company in respect to prescriptions, slip and OTC by visiting the chemist shop in different territories.

· Recruiting research person in consultation with human resource department.

· Strategy developing for effective market survey.

· Arrange training for field force.

· Performance evaluation of market researcher.

· Secret tours are arranged by the department to cross-check the accuracy of the data collected by Market research representative.

Responsibilities of Marketing Research Representative:

· Visiting chemist shop to collect prescription, slip and OTC drugs.

· Filling up product manuals where the doctor’s name and territory code, the name of the prescribed medicine are written down.

At the conclusion would like to say that marketing research and statistical cell department plays the most important role in company because it indicates the ultimate position of company in industry by identifying the market share. But in order to be marketing researcher wide product knowledge is very much essential because without product knowledge survey can not be conducted. The market research representative visit 440 territories around the year and need two day visit per territory.

4.12.4 PLANNING & INVENTORY CONTROL DEPARTMENT

This department has a direct relation with the purchase, production, and finance department. Finance department develops a cash flow budget at the beginning of the year. The sales department fixes the sales target. According to the demand, planning department starts its operation which is mentioned below in the sequential basis.

· According to the market demand. Planning department fragmented every finished goods in different particulars.

· Then they calculate how much and what raw materials they need to produce the products according to the demand through out the year.

· Split out the whole year’s demand on monthly basis for each product type.

· It determines day to day requirements of raw materials: raw material in hand, in pipe lines, and in finishes goods.

· Estimate the price or cost of the product required on a month.

· Decide which product to purchase from the local market and which to import.

· Submit a tender to different suppliers in the first week of every month.

· Raw materials are received every tow or three months after the reorder. The department sends it to the production department for finished goods. Then the production department starts producing the finished goods according to monthly requirements. It is again divided into 10 days operation for better performance.

· This department also decides about the machinery requirements for a specific production process.

4.12.5 PURCHASE DEPARTMENT

This department interacts directly with the planning, production and finance department. Finance department develops a cash flow budget at the beginning of the year. The sales department fixes the sales target. According to the demand, purchase department starts its operation which are mentioned below in the sequential basis-

· Being ordered from the planning department, the department estimates and calculates the cost of raw materials necessary.

· Split out the whole year’s demand for raw materials on monthly basis.

· It asks for cash to the finance department.

· Decide which product to purchase from the local market and which to import.

· It arranges for bidding to the suppliers which involves close interaction with the planning department.

· Along with the planning department, it has to cooperate through the whole process of purchasing raw materials form available sources.

· This department also involves about the machinery requirements for a specific production process and their purchasing.

4.12.6 MEDICAL SERVICES DEPARTMENT

In 1990this department was formally announced as a separate department and the objective is to provide continuously Medical Education program to the practicing doctors. It is involved in indirect promotion of the company by helping the doctors with academic support. As a result it causes a good image of the company among the doctors. As the medical science if an ongoing process, many know about all those things unless and until they do through all medical journals. In our country there are very few magazines on medical science. There are some good world class medical journals which are very expensive. The medical service department of Beximco Pharma prepares its own medical journal from other journals which are relevant to our medical practices and supply it to the doctors at free of cost. So the doctors can know about the new contribution of the medical world.

The functions of medical service department have been listed below:

· Every three months the department publishes a medical news letter of 24 pages. 22500 copies are published among which 18000 copies are most important here is Beximco is the only company in Bangladesh who has the initiative to publish such an article for the doctors.

· 4 to 5 booklets are published in a year about disease related its available medicines in Bangladesh.

· MSD arranges different seminars, meetings, symposiums on different topics of medical science. They focus on a particular topic which has a significant affect in our medical practice recently. Doctors are requested to deliver a speech on that particular topic. After their speeches a medical officer of Beximco Pharma Ltd. gives a speech with the multimedia projection. They focus on their products and their functions over the diseases.

· It keeps doctor’s request by making multimedia projections for them that would be used by them nationally and internationally in seminars and symposiums. Most important tasks of MSD here were adding video clippings inside the presentations. Over 15000 requests were attended by MSD last year.

· BMA (Bangladesh Medical Association) arranged clinical meetings are attended by MSD.

· It responds to the queries of the doctors through mail or medical representatives around the country.

4.12.7 MIS DEPARTMENT

Management information system department functions as a communication highway for all other departments. The functions of the department are-

· It is possible to fax and enter into the internet mail by relating file of working department with the network.

· Communication with the production department that is situated in Tongi is possible through radio link.

· The operation department can communicate and exchange information with the BEL tower and corporate headquarters through fiber optic cable.

· I & I service department can communicate with the head office through modem.

· Employees are provided computers service according to their range of activities. NT server also has a backup server to stay in the safe side. Communication between departments is also done through e-mail. Any user can use these facilities from any workstation. The users need the log in number from MIS department to use computers.

4.12.8 BRDD

It is a staff department. It comprises of four specialists comprising of a pharmacist, a financial specialist, a marketing specialists and an engineer.

Major Jobs performed by this Department:

· Business development agent: It acts as the business development agent of BPL. It is the duty of this department unveils the alternatives regarding business functions available in the world.

· International Affairs: It tries to interact with WTO, USFDA (United States Food and Drug administration authority), MCA (Medical Council) and other regulatory authority of the world.

· Source Department: It searches of raw materials, accessories, and machineries around the world and selects the best source available.

· International Market: It seeks for international export markets for BPL products.

· Projects Development:

1. It takes new projects in hand.

2. It does the financial projections for the new projects.

3. It searches cheaper sources of machineries and accessories around the globe.

4.12.9 MULTIMEDIA DEPARTMENT

BPL is the only pharmaceutical company that has a multimedia department. This is helping the product promotion. It designs medical videos for the doctor. The color, size, littering etc of the text are carefully selected to attract the target audience easily.

Major function of multimedia department

· Web page designing

· Developing multimedia presentation on program

· Making video conference

· Designing cover page of the annual report

· Making video for product

· Making video for company

· Keeping the record of annual meeting and others meeting

· Storing still photograph and video on medical science

4.12.10 TRAINING DEPARTMENT

Beximco Pharmaceuticals Ltd. has an in-house training program for their employee which is controlled by training department. This department consists of three experts who give the training to their employees. Training has been provided through lectures with the assistance of handout, multimedia projector, technical memorandum, and training materials. This department provides three types of training-

1. Refreshers training program.

2. Training program for MR.

3. Training program for supervisors.

Refreshers Training Program:

This training program f

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BILL OF LADING

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Bill of Lading that cannot be transferred by endorsement is called a Non-Negotiable Bill of Lading. A negotiable bill of lading instructs the carrier to deliver goods to anyone in possession of the original endorsed negotiable bill, which itself represents title to and control of the goods.

A bill of lading is a document issued by or on behalf of a carrier of goods by sea to the person with whom he has contracted for the carriage of goods  . It is a document of title at common law. In the early Middle Ages the bill of lading was used as a form of “on board” record of the goods and by the eighteenth century, when owners could no longer travel with the goods to their destination, the bill became negotiable by indorsement to any third party.  The bill can be used as a receipt for the goods, as a contractual document and as a document of title. The document can be made out to ‘order’ or to ‘other assigns’ (order bill) or to a named consignee (straight bill).Either way, they are both documents of title, as I will analyze later, and are transferable to other consignees. However, just because a bill of lading is transferable, that does not mean that it is also negotiable. So, it would be better to use the word ‘quasi-negotiable’.

Functions of the Bill of lading

1) As a receipt

First of all, a bill of lading is conclusive evidence of a receipt for shipment. It is used as evidence acknowledging that the goods have been shipped or received for shipment  .Moreover, the carrier will provide a bill of lading with information concerning the apparent order and condition of the goods and quantity of the products on shipment, any leading marks necessary for identification and date of shipment  .As far as the shipper of the goods is concerned the bill as a receipt works as prima facie evidence that he has fulfilled his part of the contract and as far as the consignee is concerned that the goods have been shipped  .However, it is of great importance that a bill of lading is clean, meaning that the goods have been shipped in good order and condition, because the consignee is not able to physically examine the goods and takes for granted that the goods were in good order and condition when shipped, as written on the bill of lading  . A shipowner who signs a bill of lading for goods “shipped in apparent good order and condition” is estopped from alleging that the goods were not in good condition when shipped and also that by reason of the particular nature and shape of the containers in which the goods are placed damage to the goods has been caused by “insufficiency of packing”  .

2) As evidence of contract

Secondly, the bill of lading functions as evidence of the contract of carriage and is treated by the law  as the actual contract once it has been indorsed to a third party  .Between the seller and the carrier the bill of lading is not the complete contract, but it is only evidence. For example, in the Ardrennes  there was an oral agreement between the shipowners and the shipper to proceed directly to the destination port, whereas the Bill of Lading contained a clause enabling the carrier to divert and stop at other ports before reaching the destination. The Court held that ‘the parties could vary the Bill of Lading through the oral undertaking’.

Between the buyer and the carrier, though, the bill of lading becomes a contract and not just evidence. That is quite logical because the buyer cannot be aware of any oral agreements between the shipper and the carrier. So, in the Leduc &Co v Ward the court held that the terms represented by the bill of lading are conclusive and no evidence may be admitted to contradict or vary them. Based on the Bills of Lading Act 1985  the buyer, consignee or endorsee has the right to sue and is subject to the same liability in respect of such goods, as if the contract contained in the Bill of Lading had been made with himself.

3) As a document of title

Thirdly, it is a document of title to the goods. This last function entitles the holder of the bill of lading, who at the same time is the owner of the goods, to sell the goods while they are still in transit to any third party simply by endorsing the bill of lading and delivering it to a third party. The case where we can truly understand the nature of the bill of lading as a document of title is the Sanders v Maclean  and in particular judge, Bowen L.J. said: “A cargo at sea while in the hands of the carrier is necessarily incapable of physical delivery. During this period of transit and voyage, the bill of lading by the law merchant is universally recognized as its symbol, and the indorsement and delivery of the bill of lading operates as a symbolical delivery of the cargo. Property in the goods passes by such indorsement and delivery of the bill of lading, whenever it is the intention of the parties that the property should pass, just as under similar circumstances the property would pass by an actual delivery of the goods. It is the key which, in the hands of the rightful owner, is intended to unlock the door of the warehouse, floating or fixed, in which the goods may chance to be”

Moreover, the bill of lading can be used as a document of title only if it is negotiable, i.e. able to be transferred to any third party simply by delivery or indorsement. In practice, a substantial number of carriers issue negotiable bills of lading, principally because these are required as security under a letter of credit (or other financing arrangement) and because they are often requested or suggested by the seller or shipper because it is intended that the goods should be sold during transit  .A document of title in order to be negotiable has to be transferable. An ‘order’ bill, made out to a named consignee or his “order or assigns” is transferable and is without doubt a document of title at common law. A ‘straight’ bill, on the other hand, has been an issue of great controversy in the past whether it is a document of title after all. The ‘straight’, non- negotiable, bill can be transferred only once to a named consignee. In the Henderson &Co v Comptoire d’ Escompte de Paris  a bill naming a consignee or ‘ordrer of assigns’ was not transferrable. In the Happy Ranger  the straight bill, referencing to the Hague-Visby Rules, was not considered a document of title. Rafaela S  was the case where the House of Lords indicated that a straight bill is a document of title, under the Hague- Visby Rules. Hamburg Rules  , on the contrary, make it clear that all types of bill of lading (straight bills included) are considered documents, Last but not least, the Carriage of Goods by Sea Act, who replaced the Bills of Lading Act 1855, applies to “any bill of lading, any sea waybill and any ship’s delivery order”, excluding though “references to a document which is incapable of transfer either by indorsement or, as a bearer bill, by delivery without indorsement” Thus, ‘straight’ bills are not included as documents of title and treated in the same way as a species of sea waybill.  .That is not truly correct, though. They may both be non transferable, but the distinction between them can be drawn in the way the document describes itself and in the wording and form of the document, which makes the goods deliverable to a named consignee. Furthermore, it is a document of title, requiring its presentation to obtain delivery of the cargo. In the case of a straight bill, while the characteristic of transferability is absent, there is no reason why one should thereby infer that the parties had intended to do away with the other main characteristic, ie delivery upon presentation  .

Negotiable bill of lading

Despite a bill of lading is not a negotiable instrument, it is often stamped as “negotiable”, resolving in a lot of confusion. It must be stated that a bill of lading is not a truly negotiable instrument in the full legal sense  and when “stamped” as a negotiable bill of lading what is really meant is that it is transferable by indorsement and delivery. Rix LJ in the Rafaela S  stated that ‘the bill was of the hybrid kind which can, according to the way blanks in it are filled in, be used either as an order or as a straight bill: one of its printed boxes was headed “Consignee: BL not negotiable unless ‘ORDER OF”’; and the bill merely gave the name of the consignee without adding these two words’. The best way to describe a document of title like the Bill of Lading is to use the term ‘quasi-negotiable’. It is a written contract without the full privileges of a negotiable paper, but enjoys many of them and it occupies a kind of middle ground negotiable paper and the ordinary contract  .

The Bill of Lading has been stamped ‘negotiable’ or ‘non- negotiable’ in relation to its use in certain occasions. For example, it is considered ‘negotiable’ when used in commodity trade, such as trade in grain or oil where Bills of Lading are purchased and sold in string contracts  .Moreover, another occasion is when the buyer pledges the Bill as a collateral security to the bank before the arrival of the goods  . Whereas, it is considered ‘non-negotiable’ when the consignee will take delivery of the goods on arrival and has no intention of endorsing the Bill  .A bill of Lading is not truly negotiable, but only transferable. This can be seen in the Kum v Wah Tat Bank Ltd  where Lord Devlin stated that “The bill of lading obtains its symbolic quality from the custom found in Lickbarrow v Mason and that is a custom which makes bills of lading “negotiable and transferable” by endorsement and delivery or transmission” .However, there are cases that still refer to the Bill as a negotiable instrument, like the OK Petroleum AB v Vitol Energy SA  .

Moreover, English law is based on the concept that the bill of lading represents the goods and therefore its transfer should not have greater effect than the transfer of what it represents  .It is stated in Lickbarrow v Mason  that ‘possession of a bill of lading is considered the same with the actual possession of the goods and simply by indorsing the bill the goods are under a different owner’. The bill of lading should not be negotiable, since the goods cannot be negotiable. Resulting to the fact that when the buyer endorsees to another third party without having paid for the goods, the latter cannot have possession of the goods ,even if his was acting in good faith.

Furthermore, a bill of lading is not a negotiable instrument, because a negotiable instrument gives to the transferee a better title than that possessed by a transferor. As it has been said in the Lickbarrow v mason ‘the word negotiable was not used in the sense in which it is used as applicable to a bill of exchange, but as passing the property in goods only’. Thus, a bill of lading, like a bill of exchange, may be made out to a named consignee or his order or assigns, but that is not enough to be characterized as a negotiable instrument. ‘The negotiability of bills of lading is less developed than that of bills of exchange in two respects. First, while a bill of exchange is negotiable unless its negotiability is expressly excluded, a bill of lading is only negotiable if made negotiable. Secondly, a holder of a bill of lading , unlike the holder in due course of a bill of exchange, cannot acquire a better title than that of his predecessor’  .There is one exemption, though, where the transferee might have a better title than that of his transferor in the bill of lading. The bill of lading in the hands of a transferor is only prima facie evidence against the carrier, while against a transferee of the bill the carrier is precluded from denying accuracy of its content  .

Conclusion

In short, a bill of lading is a document of title both in common law and in the statutory sense and can perform three functions. As expressed above, I believe that a bill of lading would best be described as a quasi-negotiable document of title, a hybrid kind. That is because when it is stamped as negotiable, what is only meant is that it is transferable to another third party. But, that is not enough so as to be characterized as negotiable, because in contrast to a negotiable instrument a bona fide transferee in a bill of lading cannot acquire a better title to the goods represented in the bill of lading. Furthermore, since a bill of lading represents the goods on shipment and the goods are not negotiable it is quite logical to assume that the bill of lading is also not negotiable.

BIBLIOGRAPHY

CASES

  1. APL Co Pte Ltd v Voss Peer [2002] 4 SLR 481
  2. C P Henderson &Co v Comptoire d’ Escompte de Paris [1873] LR 5PC 253
  3. J I MacWilliam Co Inc v Mediterranean Shipping Co S [1990] 2 All ER 1024(Rafaela S)
  4. Leduc &Co v Ward [1988] 20 Q.B.D. 475
  5. Parsons Corp v CV Scheepvaartonderneming Happy Ranger [2002] EWCA Civ 694(The Happy Ranger)
  6. Sanders v Maclean (1883) 11 Q.B.D. 327
  7. Ss Ardennes v ss Ardennes [1951] 1KB 55
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Biological Investigation of polyalthia Longifolia

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Biological Investigation of polyalthia Longifolia

Section: 1

Introduction:

1.1. Objective and rationality of the present study:

Medicinal components from plants play many important roles in traditional medicine. People in all continents have long applied poultices and imbibed infusions of hundreds, if not thousands, of indigenous plants, dating back to prehistory (Cowan, 1999). It is estimated that there are about 2,500,000 species of higher plants and the majority of these have not been investigated in detail for their pharmacological activities (Ram el al., 2003). In developing countries, about 80% of the population relies on traditional medicine for their primary health care (Matu and Staden, 2003).

Since Bangladesh has a vast resource of medicinal plants and majority of our population has to rely upon indigenous system of medication from economic point of view. The high cost of imported conventional drugs and/ or inaccessibility to western health care facility, imply that traditional mode of health care is the only form of health care that is affordable and available to the rural people. On the other hand, even when western health facilities are available, traditional medicine is viewed as an efficient and an acceptable system from a cultural perspective (Munguti, 1997) and as a result, traditional medicine usually exist side by side with western forms of health care.

Identification and isolation of the active constituents from traditionally used phyto-therapy can ensure the health care of the poor people. In addition, herbal drugs could be scientifically modified for better pharmacological activity and to establish safe and effective drugs and the rationality of the present study lies in meeting the challenge of developing herbal medicines, which needs a systematic research on indigenous medicinal plants for the welfare of the humanity.

Thus to strengthen the existing health care system, biological analyses of an indigenous plant Polyalthia longifolia (Family: Annonaceae) is the primary objective of the present study.

1.2 The plant family: Annonaceae

The Annonaceae, also called custard apple family or soursop family, is a family of flowering plants consisting of trees, shrubs or lianas. With about 2300 to 2500 species in 120 to 130 genera, it is the largest family in the Magnoliales. The family is concentrated in the Tropics, with few species found in temperate regions. About 900 species are neotropical, 450 are African, and the other species Asian.

Members of the Annonaceae have simple, alternate, petiolate leaves with smooth, entire margins. The leaves are arranged in two rows along the stems. There is no stipules. The flowers are radially symmetrical and often bisexual. In most species the 3 sepals are united at the base. There are 6 brown to yellow petals, many stamens in a spiral, and many pistils, each with a one-chambered ovary containing many ovules. The pistils generally remain distinct and develop into berry-like fruits but sometimes they coalesce into multiple fruits like the custard apple. Flowers are sometimes borne directly on large branches or on the trunk.

Cultivation and uses:

The large, pulpy fruits of some members are edible, including species of Annona (the custard apple, the cherimoya, the soursop), Asimina (the papaw), Rollinia (the biriba).

Besides bearing edible fruits, some members also have aromatic oil and are used for perfumes or spices. The strong bark is used for carrying burdens in Amazonia. The wood is valued as firewood.

The bark, leaves and roots of some species are used in folk medicines. Besides, pharmaceutic research has found antifungal, bacteriostatic, and especially cytostatic capability of some chemical constituents of the leaves and bark.

Some species are also grown as ornamental plants, especially Polyalthia longifolia pendula.

Annonaceae includes about 120–130 genera:

Table 1: 130 genera of Annonaceae family:

1. Artabotrys 2. Cananga
3. Deeringothamnus 4. Guatteria
5. Oxandra 6. Rollinia
7. Stelechocarpus 8. Afroguatteria
9. Alphonsea 10. Ambavia
11. Anaxagorea 12. Annickia
13. Annona 14. Anomianthus
15. Anonidium 16. Artabotrys
17. Asimina 18. Asteranthe
19. Balonga 20. Bocagea
21. Bocageopsis 22. Boutiquea
23. Cananga 24. Cardiopetalum
25. Cleistochlamys 26. Cleistopholis
27. Craibella 28. Cremastosperma
29. Cyathocalyx 30. Cyathostemma
31. Cymbopetalum 32. Dasoclema
33. Dasymaschalon 34. Deeringothamnus
35. Dendrokingstonia 36. Dennettia
37. Desmopsis 38. Desmos
39. Diclinanona 40. Dielsiothamnus
41. Disepalum 42 Duguetia
43. Ellipeia 44. Ellipeiopsis
45. Enicosanthum 46. Ephedranthus
47. Exellia 48. Fissistigma
49. Fitzalania 50. Friesodielsia
51. Froesiodendron 52. Fusaea
53. Gilbertiella 54. Goniothalamus
55. Greenwayodendron 56. Guamia
57. Guatteria 58. Guatteriella
59. Guatteriopsis 60. Haplostichanthus
61. Heteropetalum 62. Hexalobus
63. Hornschuchia 64. Isolona
65. Letestudoxa 66. Lettowianthus
67. Malmea 68. Marsypopetalum
69. Meiocarpidium 70. Meiogyne
71. Melodorum 72. Mezzettia
73. Mezzettiopsis 74. Miliusa
75. Mischogyne 76. Mitrella
77. Mitrephora 78. Mkilua
79. Monanthotaxis 80. Monocarpia
81. Monocyclanthus 82. Monodora
83. Duckeanthus 84. Neostenanthera
85. Neo-uvaria 86. Onychopetalum
87. Ophrypetalum 88. Oreomitra
89. Orophea 90. Oxandra
91. Pachypodanthium 92. Papualthia
93. Petalolophus 94. Phaeanthus
95. Phoenicanthus 96. Piptostigma
97. Platymitra 98. Polyalthia
99. Polyceratocarpus 100. Popowia
101. Porcelia 102. Pseudartabotrys
103. Pseudephedranthus 104. Pseudoxandra
105. Pseuduvaria 106. Pyramidanthe
107. Raimondia 108. Reedrollinsia
109. Richella 110. Rollinia
111. Ruizodendron 112. Sageraea
113. Sanrafaelia 114. Sapranthus
115. Schefferomitra 116. Sphaerocoryne
117. Stelechocarpus 118. Stenanona
119. Tetrameranthus 120. Toussaintia
121. Tridimeris 122. Trigynaea
123. Trivalvaria 124. Unonopsis
125. Uvaria 126. Uvariastrum
127. Uvariodendron 128. Uvariopsis
129. Woodiellantha 130. Xylopia

1.2.1 Annonaceae species available in Bangladesh:

Annonaceae plants grow well in Bangladesh. They are found in plain areas as well as in hilly areas like Sylhet and Chittagong. According to the recent reports of Bangladesh National Herbarium, the following Annonaceous plants are available in Bangladesh as shown in the following Table:

Table 2: Annonaceous plants & their medicinal uses are listed below:

Genus/Species Plant parts/Isolated Products Medicinal or other uses Ref.
1. Annona

(a) Annona bullata

 Bullataci & Bullatacinone

(Acetogenins)

 Selective cytotoxic agent in human tumor cell line.

Bullatacin is a pesticidal at a concentration of 1 ppm

 Hui et al., 1989
(b) Annona glabra Liriodenine (Alkaloid) Antibacterial, antifungal & antitumor agent. Warthen et al., 1969, Hufford et al., 1980
(c) Annona muricata Flowers fruits, seeds & roots Effective in cough & chronic dysentery, emetic, astringent , antispasmodic & parasiticidal Hossain et al., 1991
(d) Annona reticulata Fruits Effective against biliousness & thirst (Ayurveda) & also used as anthelmentic Kirtikar & Basu, 1980
(e)Annona senegalensis Extracts of stem bark

Root bark

 Showed good antibacterial activity

Antineoplastic activity against sarcoma 180 ascities tumor cells

 Hasan et al., 1988

Adesogan & Durdola, 1976
Genus/Species Plant parts/Isolated Products Medicinal or other uses Ref.
(f) Annona squamosa Leaves & fruits

Seeds

 In ulcer. Tonic effect on the body which increases blood, muscular strength, relieve vomiting, lessen burning sensation & biliouness

Fatal to insects & worm

 Ayurveda

Kirtikar & Basu, 1980
2. Artabotrys Leave extract In treatment of cholera Ayurveda
(a) Artabotrys odorotissimus Essential oils from flower

Alkaloidal mixtures

 In perfumery

Showed antibacterial action

 Chopra et al., 1953

Haider, 1988
(b) Artabotrys suaveolens Leaves Used against cholera Kirtikar & Basu 1980
3. Cananga

(a) Cananga odorata

 Oils from flowers In treatment of gout, opthalmia & cephalagia Kirtikar & Basu
4. Desmos

(a)Desmos longiflorus

 Alkaloids from stembark Good antibacterial agent & antifungal agent Hossain, 1991
(b)Desmos chinensis Chloroform extract Strong inhibitor of tyrosine kinase enzyme
5.Goniothalamus

(a)Goniothalamus giganteous

 Acetogenius Selectively & significally cytotoxic to human tumor cell. Some of them active against murine leukemia. One of the was insecticidal & inhibited formation of crown gall tumor on potato discs, Antimitotic acetogenins was also isolated. Alkokfahi et al.,1988; Fang et al.,1990, 1991
(b) Goniothalamus grifithi & Goniothalamus sesquipedalis Powered leaves An embryotoxic and teratogenic compound was isolated Sam et al., 1987
(c) Goniothalamus macrophyllus Plant constituents Cytotoxic to human tumor cell Fang et al.,1990
(d) G.malayanus

G.montanus

G.tapis

 Different parts of these plants Antibacterial agent Hasan et al.,1994b, 1994c
6. Miliusa
(a)Miliusa tomentosa Essential oil from this plant Used as analgesic & possesses antibacterial activity Menon & kar 1970, Kar & jain, 1971
(b)Miliusa cf. banacea Oxoaporphine like alkaloids from root Has been reported as good bioactive and cytotoxic compounds
Genus/Species Plant parts/Isolated Products Medicinal or other uses Ref.
(c)Miliusa velutina Sesquiterpenes (Spathuenol) and aromatic ester ( Benzyl benzoate) from stem bark Enamul et al.,1998
7. Polyalthia
(a) Polyalthia longifolia Volatile oils from this plant

Alkaloids from methanol extract of stem bark

Crude chloroform extract

 Antibacterial agent

Good antibacterial & antifungal agents

Good antibacterial agent

 Kar & Jain, 1971

Hasan et al., 1988b

Shaheen, 1986
(b) Polyalthia longifolia var pendulla Different plant parts and pure compound Antimicrobial Ferdous et al.,1992 & Hasan et al.,1994, 1994a
(c) Polyalthia suaveolens Extract of bark In black water fever & stomach disorder Keay et al., 1964
(d) Polyalthia suberosa Crude extract of stem bark plant parts Good antibacterial activity
8. Uvaria
(a)Uvaria afzelli Plant parts Good activity against Bacillus subtilis, microbacterium semagmatis & Staph. Aureus Hufford et al., 1981
Genus/Species Plant parts/Isolated Products Medicinal or other uses Ref.
(b)Uvaria chamae C-benzylated flavonoids Cytotoxic against human carcinoma of the nasopharynx in vitro Laswell & Hufford 1977a, Hufford & Oguntimein, 1980
(c)Uvaria duclis Root bark Astringent, stimulant & alternative properties Kirtikar & Basu, 1980
9. Xylopia

(a) Xylopia aethiopica

 Plant parts and isolated Diterpenes Anticaugh, antifungal & antibacterial agent Boakye, 1987
(b)Xylopia danguyell Plant parts CNS depressant & hypotensive Cordell, 1981

1.2.2 Chemistry of the Annonaceae:

Though there are about 120 genera and more than 2100 species (Trease & Evans, 1993) in the family Annonaceae, chemical investigation has been very limited with only a few GENERA, notably Annona, Ennantia, Goniothalamus, Uvaria and Xylopia have been examined widely. Research carried out on Annonaceous paints till present time revealed that the plants of this family posses many interesting, structurally varied secondary metabolites including alkaloids. Terpenoids & steroids, flavonoids, coumarins, volatile oils, styryl lactones, acetogenins and other Oxygen containing heterocycles. Alkaloids are most probably the major and most widespread group of compounds isolated from the Annonaceae.

A short description about the chemistry of Annonaceae is shown below:

1.2.2.1 Terpenoids:

Terpenes consist of five carbon isoprene units, derived from mevalinic acid and are classified according to the number of isoprene units involved. Terpenes are moderately distributed in Annonaceae, Broadly terpenes are classified as

I. Monoterpenes (C10)

II. Sesquiterpenes (C15)

III. Diterpenes (C20)

IV. Triterpenes (C30)

Almost every type of terpenes is isolated form various genus and species of Annonaceae. Some of them are shown in table 2:

Table 3 Terpenoids from Annonaceae plants:

Class Terpene isolated Source Investigator
1. Monoterpenes Camphor Borneol Annona squamosa Rao et al.,1978
Chamanen (1) Uvaria chamae Hufford et al.,1977
2. Diterpenes (-)-Kaur-16-en-19-ol (2)

(-)-Kaur-16-en-19-yl acetate (3)

 Annona glabra Bohlmann et al.,1978
(-)-Kauran-17-ol-19-oc acid Annona glabra Yarng et al.,1973
Stachanoic acid (6) Annona seegalensis Adesogan et al., 1976
(-)-Kauran-16?-ol (7) Xylopia aethiopica Ekong et al.,1969
3. Triterpenes steroids Sitosterol (8) Annona muricata

Annona Senegalensis

Annona squamosa

 Ca. llan, 1911 Mackie, 1958 Farnsworth, 1974
Stigmasterol (9) Polyalthia longifolia Beraz, 1976
Polycarpol (10) Fusaea longifolia

Polyalthia oliveri

Xylopia longifolia

 Cave et al.,1977

Toeche, 1981
4. Sesquiterpenes ?-caryophyllene (11) Annona squamosa Bohlmann et al.,1973
Yingzhaosu A (12) Artabotrys Uncniatus Liang et al.,1979
Yingzhaosu B (13)
Ishwarane (14) Cymbopetalum penduliflorum

[1] [4] [2] R= CH2OH

[3]R= CH2OAc

[4] R= COOH

[6] [7] [8 ]

[10] [11] [12]

[13] [14]

FIG: Structural types of terpenoids and steroids found in Annonaceae

1.2.2.2 Alkaloids:

More than two hundred alkaloid have been isolated from Annonaceous species. From THE BIOGENETIC point of view, these alkaloids are classified in to two major classes:

  1. Isoquinoline alkaloids
  2. Non-Isoquinoline alkaloids

i. Isoquinoline alkaloids:

Isoquinoline alkaloids are characterized by Isoquinoline skeleton. Some examples of this type of alkaloids with their subclasses are given in the following Table:

Table4: Occurrence of Isoquinoline alkaloids in ANNONACEAE:

Sub Class Alkaloids Source Investigators
1. Simple isoquinolines Salsolinol (15) Annona reticulata Forgacs et al.,1981
Corydaldine (16) Enantia polycarpa Jossang et al.,1977
2.Benzyltetrahydro isoquinolines Reticuline (17) Annona montana Yang et al.,1979
Anomuricine Annona muricata Leboeuf et al.,1980
3. Bisbenzylisoquinoline & Bisbenzyltetrahydro isoquinoline Curine cycleanine Isolana pilosa Hocquemiller et al.,1977
Isolana hexaloba
4. Protoberberines Berberine `Xylopia polycarpa Schermerhorn et al.,1974
Oxypalmatine (18) Enantia polycarpa Leboeuf et al., 1977
5. Tetrahydropro-toberberine Coreximine Annona montana Leboeuf et al., 1982
6. Proaporphines Stepharine Annona muricata Leboeuf et al.,1981
Crotsparine Monodora angolensis Leboeuf et al.,1974
7. Aporphines- Anolobine Annona squamosa
a. Simple aporphines Oliveridine Enantia pilosa
b. 7-Substituted aporphines Liriodenine (19) Annona Squamosa Yang et al.,1970
c. Oxoaporphines
8. Phenanthrenes Argentinine (20)

Uvariopsine

 Annona montana

Uvariopsis congolana

Yang et al.,1979

Bouquet et al.,1972

[15] [16] [17]

[18] [19] [20]

FIG: Structural types of various isoquinoline alkaloids from Annonaceae

1.2.2.3 Flavonoids:

The flavonoid compounds can be regarded as C6-C3-C6 compounds, in which each C6 moiety is a benzene ring, the variation in the state of oxidation of the connecting C3 moiety determining the properties and class of each such compound.

Flavonoid compounds usually occur in plants as glycosides in which one or more of the phenolic hydroxyl groups are combines with sugar residues. The hydroxyl groups are nearly always found in positions 5 and 7 in ring A, while B ring commonly carries hydroxyl or alkoxyl groups at the 4’ position, or at 4’-position, or at both 3’-and 4’-positions. Glycosides of flavonoid compounds may bear the sugar on any of the available hydroxyl groups.

Table 5: FLAVONOIDS from Annonaceae plants:

Compounds Source Investigator
1. Quercetin Annona glabra

A.senegalensis

Asimia triloba

 Heganuer, 1964

Mackie et al.,1958
2. Quercetrin rutin Annona senegalensis Mackie et al.,1958
3. Nicotiflorin Cananga latifolia Siv et al.,1972
4. Pachypodol (33) Pachypodanthium confine Cave et al.,1973
5. 5,6,7-trimethoxyflavone (34) Monanthotaxis Cauliflora Waterman et al.,1979
5-hydroxy-6,7-dimethoxyflavon (35)
5,7,8-trimethoxyflavanone (36)
5,6,7,8-tetramethoxyflavanone (37)
6. Dependensin U.dependens Nkhunya et al.,1993
7. Triuvaretin U.leptocladon Nkhunya et al.,1993
8. Triuvaretin U.scheffleri Chantrapromma et al.,1989
9. Tetochrysin (38) U. rufa Chantrapromma et al.,1989
10. Angoluvarin U. angolensis Hufford et al.,1987
U.leptocladon Nkhunyet al.,1993
11. Uvangoletin (39) U. angolensis Hufford et al.,1980
12.Chamanetin (40) U. chamae Hufford et al.,1980
Compounds Source Investigator
13. Isochamaetin U. lucida lucida Achenbach et al.,1997

Okorie et al.,1977

Weenen et al.,1990
Dichamanetin
14. Uvaretin (41)

Diuvaretin (42)

 U. chamae

U. lucida lucida

U. kirkii

 Nkunya et al.,1985
15. Isovaretin U. angelonsis Hufford et al.,1980
16. Pinocembrin (43)

Pinostrobin (44)

Chamuvaritin

Uvarinol

 U. chamae Hufford et al.,1978,1979

[33] [34] R= Me

[35} R=H

[36] R=H [38]

[37] R= OMe

[39] [40]

[44]

[42] R1= R2= H

[43] R1=R2=

[45]

FIG: Structural of flavonoids isolated from Annonaceae

1.2.3 Taxonomy of Annonaceae:

On the basis of morphology and habit Annonaceae is a very homogenous plant family .They are trees or shurbs, sometimes climbing, usually evergreen, with resin canals septate pith in the stems. The leaves are alternate, entire and exsipulate.

The leaves are simple, alternate, lack stipules, and generally are distichously arranged in flat sprays. The flowers are bisexual and the fragrant flowers frequently open before all parts are fully developed. The elongated floral axis also bears many helically disposed stamens and several to many simple pistils. All of the floral parts are distinct. The stamens are very short, consisting of the fertile central anther portion, a distal pad of fleshy connective tissue, and a short fleshy basal portion. The stamens are generally so tightly packed on the receptacle that often only the fleshy connective tissue of each is exposed. The pistils each have a superior ovary with one locule and 1-many parietal ovules. Sectioned seeds reveal channels or partitions in the ruminate endosperm. The pistils generally remain distinct and develop into berry-like fruits but sometimes they coalesce into multiple fruits like the custard apple.

1.3: Information about : Polyalthia longifolia:

Polyalthia longifolia (Sonn.) Thw

(=Unona longifolia (Sonn.) Dunal, Uvaria longifolia Sonn.)

Family: Annonaceae

Common Names: Debdaru, Saralgachh (Beng.);Mast tree (Eng.), Ashoka (Hindi).

1.3.1: Plant Description: A tall evergreen tree with

Fig 1: P.longifolia(Mast tree, Debdaru, Asoka)

undulate-margined narrow lanceolate leaves, axillary solitary flowers, and an etaerio of distintc and separate berries, grows wild as well as planted throughout the country. It is most commonly used as an ornamental street tree due to its effectiveness in combating noise pollution.

Leaves:

Each leaf is a foot long, having 3-7 pairs of wavy-edged leaflets. Young leaves are dropping, coppery, limp and remain pendent even after attaining full maturity. The leaves grow alternately on the branches. Fresh leaves are a coppery brown color and are soft and delicate to touch; as the leaves grow older the color becomes a light green and finally a dark green.

Flowers: The flowers are star-shaped, yellowish-green in colors, inconspicuous borne on long slender stalks, appearing from February to April.

Fruits: The fruiting season is July and the fruits are egg-shaped. Fruit are borne in clusters of 10-20. Initially green but turning purple or black when ripe. These are loved by bats including the flying foxes.

1.3.2: Uses: Bark possesses antibacterial and antifungal activities. (Hasan et al, 1989). It is used as febrifuge in treatment of fevers.

1.3.3: Compounds isolated from the plant Polyalthia longifolia

Table 6:Compounds isolated from the plant Polyalthia longifolia

Plant Part Compound Isolated Ref.
Leaves § Azafluorene alkaloid

§ Polylongine

§ 3-aporphine

§ N-oxide alkaloids

§ (+)-O methyl bulbocapnine-?-N-oxide

§ (+)-O methyl bulbocapnine-?-N-oxide

 Goyal & Gupta
Stem bark Tetrahydroprotoberine

(-)-Stepholidine

Oxychine

Darienine

6,7-dimethoxychime

Aporphine alkaloid

Liriodenine (cytotoxic)

Noroliveroline

oliveroline oxide

Azofluorene alakloid

Polyfothine

Iso-oncodine

 Wu, 1989; Chakrabarty & Patra, 1990; Wu et al.,1990
Bark & Seeds Clerodane diterpenoids (Phadnis et al.,1988; Chakrabarty & Nath 1992; Hara et al.,1995; Hasan et al.,1995b; Rashid et al.,1996

1.4: Biological Investigation Of P.longifolia

· Anti-inflammatory and cytotoxic diterpenes from formosan P. longifolia var. pendula:

Chang FR, Hwang TL, Yang YL, Li CE, Wu CC, Issa HH, Hsieh WB, Wu YC.

Graduate Institute of Natural Products, Kaohsiung Medical University, Kaohsiung, Taiwan, ROC.

PMID: 17022008 [PubMed – indexed for MEDLINE]

· New antimicrobial alkaloids from the roots of P. longifolia var. pendula.

Faizi S, Khan RA, Azher S, Khan SA, Tauseef S, Ahmad A.

H.E.J. Research Institute of Chemistry, International Center for Chemical Sciences, University of Karachi, Karachi, Pakistan. shaheen@khi.comsats.net.pk

PMID: 12709903 [PubMed – indexed for MEDLINE]

· Hypotensive activity and toxicology of constituents from root bark of P. longifolia var. pendula.

Saleem R, Ahmed M, Ahmed SI, Azeem M, Khan RA, Rasool N, Saleem H, Noor F, Faizi S.

Dr. HMI Institute of Pharmacology and Herbal Sciences, Hamdard University, Karachi-74600, Pakistan. rs127pk@yahoo.com

PMID: 16261519 [PubMed – indexed for MEDLINE]

· Cytotoxic constituents of P. longifolia var. pendula.

Chen CY, Chang FR, Shih YC, Hsieh TJ, Chia YC, Tseng HY, Chen HC, Chen SJ, Hsu MC, Wu YC.

Graduate Institute of Natural Products, Kaohsiung Medical University, Kaohsiung 807, Taiwan

PMID: 11087586 [PubMed – indexed for MEDLINE]

· Cytotoxic clerodane diterpenes from P. longifolia

Phadnis et al.,1988; Chakrabarty & Nath 1992; Hara et al.,1995; Hasan et al.,1995b; Rashid et al.,1996

Section: 2

Materials and Methods

2.1. Chemical investigation of the experimental plants

Theplant species belonging to Annonaceae is investigated in this study.

Name of plant

Family

Plant part
Polyalthia longifolia Annonaceae Stem Bark

Taxonomic hierarchy of the investigated plants (Wekepedia)

P.longifolia
Kingdom Plantae
Phylum Magnoliophyta
Class Magnoliopsida
Order Magnoliales
Family Annonaceae
Genus Polyalthia
Species Polyalthia longifolia

Figure 2.1: Taxonomic hierarchy of the investigated plant

2.2: CHEMICAL investigation of Polyalthia longifolia

2.2.1: Collection of Plant Material:

The plant was collected from BCSIR, Dhaka on 20th February 2007. The stem bark was collected.

2.2.2: Drying and Grinding:

The stem bark collected was grounded in to powder in University of Dhaka. The powder was stored in an airtight container and kept in a cool, dark and dry place until analysis commenced.

Methods:

2.2.3: Extraction can be done in two ways:

  1. Cold extraction.
  2. Hot extraction.

A. Cold Extraction:

In cold extraction the powdered plant material is submerged in a suitable solvent or solvent system in an air-tight flat bottom container for several days, with occasional shaking and stirring. The major portion of the extractable compounds of the plant material will be dissolving in the solvent during this time and hence extracted as solution.

B. Hot Extraction:

In hot extraction the powdered plant material is successively extracted to exhaustion in a soxhiet at an elevated temperature with several solvents of increasing polarity. The individual extractives are then filtered through several means, e.g., cotton, cloth, filter paper etc. All the extractives are concentrated with a rotary evaporator at low temperature (40°-50°) and reduced pressure. The concentrated extract thus obtained is termed as crude extract.

2.3: Extraction of the plant material:

About 350gm of the powdered material was taken in a clean, round bottom flask and soaked in 1300ml of methanol. The container with its content was sealed and kept for a period of 10 days accompanying occasional shaking and stirring. The whole mixture then filtered through filter paper and filtrate thus obtained was concentrated at 50°C using airflow.

2.3.1: Solvent-solvent Partition (Modified Kupchan partition) of crude extract:

2.3.1.1: Principle of Modified Kupchan Partition:

The crude extract is diluted with 100ml of aqueous alcohol (90%) and then gently shaken in a separating funnel with almost equal volume of a suitable organic solvent (SUCH as petroleum ether) that is immiscible with aqueous alcohol. The mixture is kept undistributed for several minutes for separation of the organic layer from the aqueous phase. The materials of the crude extract will be partitioned between the two phases depending on their affinity for the respective solvents. The organic layer is separated and this process is carried out thrice for maximum extraction of the sample. After separating of the organic phase, the aqueous phase thus obtained is successively extracted with other organic solvents, usually of the increasing polarity (such as carbon tetrachloride, dichloromethane, chloroform, ethyl acetate, butanol etc). Finally, all the fractions (organic phases as well as the aqueous phase) are collected separately and evaporated to dryness. These fractions are used for the detection and identification of the antibacterial activity of the compound.

2.3.1.2: Preparation of Aqueous methanol solution:

3gm of methanol extract was triturated with 50ml of methanol containing 5ml of distilled water. (45ml MeOH+ 5ml H2O). The crude extract went to the solution completely. This is called mother solution, which was partitioned off successively by three solvent of different polarity.

2.3.1.3: Pet ether extract:

The mother solution was taken in a separating funnel. 75ml of Pet ether was added to it and the funnel was shaken and then kept undistributed. The organic portion was collected. The process was repeated thrice. The fractions were collected together and evaporated to dryness and kept for further analysis. The aqueous fraction was preserved for the next step.

2.3.1.4: Carbon tetrachloride extract:

The aqueous mother solution left after washing with pet ether, 6ml water was added and mixed. The mother solution was taken in a separating funnel and extracted with 75ml of CCl4. This process was repeated thrice. The fractions were collected together and evaporated to dryness and kept for further analysis. The aqueous fraction was preserved for the next step.

2.3.1.5: Dichloromethane Extract:

The aqueous stock solution left after washing with pet ether and CCl4 subsequently 8ml of distilled water was added and mixed uniformly. The stock solution was then taken in a separating funnel and extracted with 3X75ml of CH2Cl2. The CH2Cl2 fractions were collected together and evaporated to dryness and kept for further analysis.

The whole partitioning process is schematically shown in the following flow chart:

Solvent-solvent partitioning of methanol extract:

Methanol (45ml) + Water (5 ml)

Figure: Schematic representation of the modified Kupchan partioning of methanolic crude extract of Polyalthia longifolia.

Section: 3

Antibacterial Screening:

3.1: Introduction:

Herbal medicines in developing countries are commonly used for the traditional treatment of health problems (Martinez et al., 1996). It is estimated, in developing countries, 80% of the population rely on traditional medicine for their primary health care (Esther and Staden, 2003). Owing to hot temperature and high humidity, the infections due to wounds are common in Bangladesh. For a developing country like Bangladesh, the therapy with synthetic antibiotic is not always possible due to their high cost. Additionally, the rapid development of drug resistant microbes has lead to the search of new antimicrobial agents especially from plant extracts to discover new chemical structures. The antimicrobial compounds from plants may inhibit bacterial growth by different mechanisms than those presently used antimicrobials and may have a significant clinical value in treatment of resistant microbial strains. In recent times, traditional medicine has served as an alternative form of health care and to overcome microbial resistance has led the researchers to investigate the antimicrobial activity of medicinal plants (Austin et al., 1999).

3.1.1. Antimicrobial screening:

The antimicrobial potency of the plant can be visualized by antimicrobial screening which measures the ability of a test sample to inhibit the in vitro microbial growth by any of the following three methods:

A) Disc diffusion method.

B) Serial dilution method.

C) Bio autographic method.

In 1966, Bauer et al. published a detailed description of a standardized single-disk method for performing the anti-microbial susceptibility test. This procedure has been widely accepted as the preferred reference method for bacterial susceptibility screening.

A. Diffusion methods:

Diffusion technique does not require homogenous dispersion in water and the agar overlay method require disc, hole or cylinder as reservoir. The reservoir containing the test sample is bought in to contact with an inoculated medium and after incubation the diameter of the clear zone around the reservoir (inhibition diameter) is measured. In order to increase the precision the inoculated system can be kept at a low temperature before incubation, which favors diffusion through the culture medium, and this increase the inhibition diameter. The aqueous solubility of lipophilic samples, such as essential oils or non-polar extracts, makes it difficult to use an aqueous medium in the study of microbial activity (Allergini et al., 1973; Pellecuer et al., 1976). Therefore, the use of other solvents or the aqueous dispersions or emulsions using a surface-active agent may be helpful. Several solvents including alcohols, acetone, chloroform, dimethylsulfoxide, dioxane, glycerol, and others and different emulsifiers such as macrogol ethers, sorbitan, and cellulose derivative etc., have been used (leven et al., 1979, Janssen et al., 1987). Solvents other than water should always be tested simultaneously with the extracts to make sure that they have no antimicrobial properties in the test system. Diffusion methods are not the best choice for testing non-polar or other samples, which are difficult to diffuse in media; however there is no relation between diffusion process and antimicrobial activity (Rios et al., 1988). Also aqueous dispersions containing high molecular weight solubilizer (mol. wt.>100,000) should be avoided in diffusion methods since they cannot diffuse in to 1% agar medium. The pH should be adjusted to neutrality (between pH 6.0 and 8.0) (Berghr and Vlietinck 1990) for this assay.

B. Dilution methods:

Dilution technique requires a homogenous dispersion of the sample in water. They are used to determine, principally, the minimum inhibitory concentration (MIC) values of an extract, essential oils or pure substance but can also be used in the preliminary screening of antimicrobial activity. The physicochemical properties of dispersions are important for observing the activity, and surface active agents, such as Tween 80 or Span 80 can improve the dispersion of test substances.

In the liquid dilution method, turbidity is taken as a measure of bacterial density. When no growth takes place, the medium remains clear, when the sample is inactive against the organism used in the test as there is growth, it appears turbid. The grade of inhibition is related to the turbidity of the medium and is measured spectrophotometrically (Rios et al., 1988). This method is simple and speedy and i.e. is possible to study the antibacterial activity of water soluble or insoluble samples such as essential oils using this technique.

C. Bioautographic methods:

According to Betina (1973), bioautography is the most important detection method for new or unidentified antimicrobial compounds. It is based on the biological (antibacterial, antiprotozoal, antitumoral, etc.) effects of the substances under study. Both paper chromatography (PC) and thin-layer chromatography (TLC) are utilized in bioautographic technique, although the later has greater resolving power and is more rapid of the two techniques (Rios et al., 1988). The typical bioautographic procedure is based on the so called agar diffusion technique, where the bacterial compounds are transferred from the chromatographic layer to an inoculated agar plate. Inhibition zones are visualized by dehydrogenase activity detecting reagents (Begit and Kline, 1972).

3.1.2: Principle of disc diffusion method:

In this classical method, antibiotics diffuse from a confined source through the nutrient agar gel and create a concentration gradient. Dried and sterilized filter paper discs (6 mm diameter) containing the test samples of known amounts are placed on nutrient agar medium uniformly seeded with the test microorganisms. Standard antibiotic (kanamycin) discs and blank discs are used as positive and negative control. These plates are kept at low temperature (4°C) for 24 hours to allow maximum diffusion of the test materials to the surrounding media (Barry, 1976). The plates are then inverted and incubated at 37°C for 24 hours for optimum growth of the organisms. The test materials having antimicrobial property inhibit microbial growth in the media surrounding the discs and thereby yield a clear, distinct area defined as zone of inhibition. The antimicrobial activity of the test agent is then determined by measuring the diameter of zone of inhibition expressed in millimeter (Bary, 1976; Bauer et al, 1966).

3.2: Experimental:

3.2.1: Apparatus and Reagents:

1. Filter paper discs. 9. Screw cap test tubes
2. Sterile cotton. 10. Autoclave
3. Micropipette 11. Nutrient Agar Medium
4. Laminar air flow hood 12. Inoculating loop
5. Refrigerator 13. Spirit burner
6. Chloroform 14. Nose mask and Hand gloves
7. Petri dishes 15. Incubator
8. Sterile forceps 16. Ethanol

3.2.2: Test Organisms:

The microbial strains used for the experiment were listed in the Table:

Table 7: List of Test bacteria:

1. Bacillus cereus
2. Bacillus megaterium
3. Bacillus subtilis
4. Salmonella paratyphi
5. Salmonella typhi
6. Vibrio parahemolyticus
7. Vibrio mimicus
8. Staphylococcus
9. E.coli
10. Shigella dysenteriae
11. Pseudomonas aureus
12. Sarcina lutea
13. Shigella boydii
14. Saccharromyces cerevaceae
15. Candida albicans
16. Aspergillus niger

3.2.3. Test materials:

Table 8: List of Test materials

Plant Test Samples Samp

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Biomechanics And Rehabilitation Of Cricket Injured Player

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Biomechanics And Rehabilitation Of Cricket Injured Player

DEFINITION
 
Sports injuries result from acute trauma or repetitive stress associated with athletic activities. Sports injuries can affect bones or soft tissue (ligaments, muscles, tendons). Professional dancers are increasingly recognized as performing athletes, and many of the treatments and preventive measures utilized in sports medicine are now applied to dance-related injuries. It is also important to remember that many types of injuries that affect athletes may also occur in workers in certain occupations; for example, many people in the building trades develop tennis elbow or golfer's elbow. The principles of sports medicine can be applied in the treatment of most common musculoskeletal injuries.
OR
The contentious issue of injury definition dominates discussions about sports injury epidemiology. Definitions include injuries resulting in an insurance claim, hospital treatment, time lost from sporting participation and assessment by the team physician; consequently inter-study comparisons are often difficult. Although a standard injury definition for all sports and all levels of participation would improve comparability, it may be unsuitable for individual sports populations. For example, a single definition based on absence from competition and training may not be appropriate for both amateur and professional cohorts, as the incidence of injury may be affected by the frequency of training and competition. It is necessary, therefore, to ensure that the definition is appropriate for the population studied and the surveillance objectives of each epidemiological study, and where comparisons are made between sports and groups that the definitions are compatible.

Common mechanism of cricket injury
Bowling injury
Rotator Cuff InjuryThe rotator cuff is a group of muscles which work together to provide the Glenohumeral (shoulder) joint with dynamic stability, helping to control the joint during rotation (hence the name). The rotator cuff muscles include:
[*]       [*]         
[*]       [*]        Teres Minor
[*]         
[*]       Supraspinatus and Infraspinatus are the most commonly injured rotator cuff muscles. Due to the function of these muscles, sports which involve a lot of shoulder rotation – for example, bowling in cricket, pitching in baseball, swimming, kayaking – often put the rotator cuff muscles under a lot of stress. Problems with the rotator cuff muscles can be classed into two categories – Tears of the tendons/muscles, and inflammation of structures in the joint.
Acute Tear
This tends to happen as a result of a sudden, powerful movement. This might include falling over onto an outstretched hand at speed, making a sudden thrust with the paddle in kayaking, or following a powerful pitch/throw.

The symptoms will usually include:
Sudden, tearing feeling in the shoulder, followed by severe pain through the arm. Limited movement of the shoulder due to pain or muscle spasm. Severe pain for a few days (due to bleeding and muscle spasm) which usually resolves quickly. Specific tenderness (“x marks the spot”) over the point of rupture/tear If there is a severe tear, you will not be able to abduct your arm (raise it out to the side) without assistance

Chronic Tear
A chronic tear develops over a period of time. They usually occur at or near the tendon, as a result of the tendon rubbing against the overlying bone. This is usually associated with an impingement syndrome. Usually found on the dominant side more often an affliction of the 40+ age group. Pain is worse at night, and can affect sleeping. Gradual worsening of pain, eventually some weakness. Eventually unable to abduct arm (lift out to the side) without assistance or do any activities with the arm above the head. Some limitations of other movements depending on the tendon affected

Seek medical attention if:The pain persists for more than 2-3 days you are unable to work due to the pain/limitations. You are unable to reach up or to the side with the affected arm after 2-3 days. You are unable to move the shoulder and arm at all. For any acute injury where you are unable to move the injured shoulder as well as the uninjured shoulder.
 
What should we expect when we visit a healthcare professional with a possible Rotator Cuff problem?A detailed history of your general health, past problems and injuries, and what happened to cause this injury will be taken Both shoulders will be looked at and compared (you will need to partially undress for this) both visually and using palpation (feeling). Your neck, elbows and wrists will be checked to make sure they are not contributing to the problem. Range of movement will be assessed, you’ll be asked to do certain movements and the clinician will observe and ask you to report any pain (but will not be done if a fracture is suspected) Passive range of movement will be assessed – you will be asked to lie on a couch while the clinician moves your shoulder (but will not be done if a fracture is suspected) Sensation and strength in the arm will be assessed. Some specific tests will be done which can help to identify which tendon is causing the problem and confirm if it is a rotator cuff tear, or due to inflammation or some other cause.
What can we do to help our rotator cuff muscles recover?Treatment for an Acute Rotator Cuff Tear.
Apply ice to reduce swelling
Control the pain with appropriate medications
Rest the arm – a sling can sometimes be quite useful if you still need to go to work/school, which can be removed at night
You may require imaging studies (x-ray, MRI, CT Scan) to identify what the problem is and rule out any fractures Consider consulting a physiotherapist who can assist you with rehabilitating the injury. If the injury is quite severe and you are young and active, you might require an operation to fix the tear.
 Indications include:
Under 60 years old Complete tears of the tendon/muscle Failure of other treatments after 6 weeks Professional/keen sports people. If your job requires constant shoulder use
Treatment for a Chronic Rotator Cuff Tear
Control pain Apply ice as above. Alternating heat and ice may also be benficial. Sometimes you might be referred for an injection of steroid medication directly into the site of the problem to help reduce any inflammation and allow you to proceed with rehabilitation. Shoulder exercises which can be provided by a physiotherapist. You may require surgery, with the indications as above
[subscapularis] How long will it take to get better? [infraspinatus] 
Depending on several factors, conservative treatment has a 40-90% success rate at fixing the problem. Surgery often has good results, with some studies citing a 94% satisfaction rate with the surgery, resulting in lasting pain relief and improved function. Very extensive tears often have a poor surgical outcome; however this injury is thankfully quite rare. If you are older, it will take you longer to heal due to changes in your physiology.
Shoulder DislocationShoulder dislocation is a very common traumatic injury across a wide range of sports. In most cases, the head of the humerus (upper arm bone) is forced forwards when the arm is turned outwards (externally rotated) and held out to the side (abducted). This causes an anterior dislocation, which make up approximately 95% of all shoulder dislocations.
The shoulder joint is particularly prone to dislocations due to its high mobility, which sacrifices stability. It is the most commonly dislocated joint, with elbow, knee, finger and wrist dislocations occurring far less regularly.
Although some consider this to be a minor injury, most shoulder dislocations cause tears to the glenoid labrum. This is a ring of cartilage which deepens the glenoid fossa and acts as a cup, in which the humerus rests, forming the Glenohumeral (or shoulder) joint – which can cause an injury known as a Bankart Lesion, and may even cause a fracture to the attached bone (a Bony Bankart Lesion).  There may also be damage to the surrounding ligaments, tendons, nerves, blood vessels and fractures to other bones.
Shoulder dislocations commonly become a reoccurring problem, with many people learning how to reduce (re-position) them on their own. This is only the case in those with highly unstable glenohumeral joints. A thorough rehabilitation program can help most individuals to prevent the shoulder repeatedly dislocating.
What are the symptoms of a dislocated shoulder?
The injury is usually acute, caused by direct or indirect trauma such as a fall or forced abduction and external rotation. There is a sudden onset of severe pain, and often a feeling of the shoulder 'popping out'. The shoulder will often look obviously different to the other side, usually loosing the smooth, rounded contour. The patient will usually hold the arm close into their body and resist abducting and externally rotating the shoulder. If there is any nerve or blood vessel damage there may also be pins and needles, numbness or discoloration through the arm to the hand. There is usually quite severe pain associated with a dislocation.
What should the athlete do about their dislocated shoulder?Immediate treatment for a dislocated shoulder has two stages. Firstly to protect the shoulder joint and prevent further damage (e.g. rest in a sling), and secondly to seek medical attention as soon as possible. The shoulder should be reduced (put back in) by a trained medical professional as soon as possible, never attempt to pop it back yourself as you may cause further damage! Ideally an X-Ray should be sought prior to reduction to rule outfractures.  If this is not possible a post reduction X-Ray must always be sought.
What can a doctor or sports therapist do?If you sustain a dislocation, it is vitally important to seek medical attention, even if the shoulder pops straight back into position on its own. There is a strong likelihood that you will need some rehabilitation to help you regain both the function of the shoulder, and to prevent it from dislocating again. Some cases may even require surgery if the shoulder is regularly dislocating, or if there is an associated fracture. If the reduction is difficult it may be necessary to conduct the procedure under anesthetic.
Following a reduction you will usually be advised to:
Rest and immobilise the shoulder in a sling for 5-7 days. If there are complications such as fractures or soft tissue damage, immobilisation may be over a longer period. You may be prescribed NSAIDS such as ibuprofen to ease pain and inflammation. After the period of initial immobilisation you should be directed to gradually increase your range of pain free movement. You will also need to strengthen the rotator cuff muscles which support the shoulder joint to prevent reoccurrences.
[*]        Exercises using resistance band are excellent for this in the early stages.
When is Surgery an option?Surgery is sometimes necessary following a shoulder dislocation if there has been extensive damage to muscles, tendons, nerves, blood vessels or the labrum. Surgery is then usually performed as soon as possible after the injury.

[anterior shoulder dislocation image]
In cases of recurrent shoulder dislocations, surgery may be offered in an attempt to stabilise the joint. There are a number of procedures which can be performed. The decision over which procedure to use depends largely on the patients lifestyle and activity. Some procedures result in reduced shoulder external rotation and so are not suitable for athletes involved in throwing or racket sports as this would affect performance.
                                    Tennis elbow / Lateral epicondylitisTennis elbow or lateral epicondylitis is an extremely common injury that originally got its name because it is a frequent tennis injury, appearing in a large proportion of tennis players. Nevertheless it commonly manifests in a vast proportion of people who do not play tennis at all.
Lateral epicondylitis occurs most commonly in the tendon of the extensor carpi radialis brevis muscle at approximately 2cm below the outer edge of the elbow joint or lateral epicondyle of the humerus bone.
Specific inflammation is rarely present in the tendon but there is an increase in pain receptors in the area making the region extremely tender.
Signs and symptoms of tennis elbow / lateral epicondylitis:
Pain about 1-2 cm down from bony area at the outside of the elbow (lateral epicondyle)
Weakness in the wrist with difficulty doing simple tasks such as opening a door handle or shaking hands with someone.
 Pain on the outside of the elbow when the hand is bent back (extended) at the wrist against resistance.
Pain on the outside of the elbow when trying to straighten the fingers against resistance.  
Pain when pressing (palpating) just below the lateral epicondyle on the outside of the elbow..Other injuries and conditions with similar symptoms:
[*]        The symptoms for this injury are very similar to Entrapment of the radial nerve which we recommend you also have a look at.
[*]        It is important to have the neck examined as well, as elbow pain can be referred from problems in this region. See the neck pain page for further details.
Causes of tennis elbowTennis elbow is often caused by overuse or repetitive strain caused by repeated extension (bending back) of the wrist against resistance. This may be from activities such as tennis, badminton or squash but is also common after periods of excessive wrist use in day-to-day life
                                           Tennis elbow may be caused by:
[*]        A poor backhand technique in tennis.
[*]        A racket grip that is too small.
[*]        Strings that are too tight.
[*]        Playing with wet, heavy balls.
[*]        Repetitive activities such as using a screwdriver, painting or typing.
Two types of onset are commonly seen:
Sudden Onset: Sudden onset of tennis elbow occurs in a single instance of exertion such as a late back hand where the extensors of the wrist become strained. This is thought to correspond to micro-tearing of the tendon.
Late Onset: This normally takes place within 24-72 hours after an intensive term of unaccustomed wrist extension. Examples may be a tennis player using a new racket or even a person who's spent a weekend doing DIY.
Tennis elbow management and treatmentNo single treatment has been shown to be totally effective, however a combination of the treatments below are known to resolve tennis elbow over time. Each individual will react differently to different treatments.
What can the athlete do?
Apply ice or cold therapy to the elbow (15 mins up to six times a day). This will help reduce pain and inflammation if present.
Rest – an extremely important component in the healing of this injury.
Wear a brace or support (Play video) to protect the tendon whilst healing and strengthening, particularly when returning to playing / equivalent. The brace should not be put on the painful area but rather approximately 10cm down the forearm.
As with all soft tissue injuries a comprehensive rehabilitation program should be carried out.
                                            Fig: tennis elbow.
Concussion
A concussion is an injury to the head caused by a direct or indirect blow to the head. It is defined as a complex pathophysiological process affecting the brain, induced by traumatic biomechanical forces. Simply put concussion is an injury to the brain caused by imact against the skull. It can often involve a loss of consciousness but does not in all cases. Concussion can be mild, moderate or severe.

Mild concussion
[*]        Slight mental confusion.
[*]        Possibly some memory loss.
[*]        Mild tinitus (ringing in the ears).
[*]        Mild dizziness or headache.
[*]        Pain in the area of the trauma.
The athlete will however have normal balance and will not have lost consciousness from a mild concussion.

Moderate concussion
[*]        Mental confusion.
[*]        Post traumatic memory loss.
[*]        Moderate tinitus (ringing in the ears).
[*]        Moderate dizziness or headache.
[*]        Moderate balance disturbance.
[*]        Possible nausea and vomiting.
[*]        Loss of consciousness no longer than 5 minutes.

Symptoms of a severe concussion
[*]        Mental confusion lasting 5 minutes or more.
[*]        Severe tinitus, dizziness or headache.
[*]        Prolonged retrograde amnesia (memory loss of events before the accident).
[*]        Loss of consciousness longer than 5 minutes.
[*]        Possible increase in blood pressure with decrease in heart rate.
 
What should be done?
[*]        The athlete should be removed from the competition immediately.
[*]        The athlete should not be left alone.
[*]        Professional medical advice and evaluation should be done.
[*]        Avoid contact or collision sports for at least 3 weeks.
[*]        Repeated concussions may indicate retirement from contact sports altogether.
What about returning to sport?
This should be a gradual process and should be done under the supervision of qualified people. When the athlete does not have any symptoms then they may be able to do light exercise, stationary cycling or walking.
The next step is to to do sports specific activity without contact for or example running. If there are any symptoms returning then take a step back.
Next step is on field practice without contact. Again, any symptoms indicate a return to the previous stage.
When a medical doctor has given the go ahead onfield practice with contact can begin. The time taken to get to this stage will depend on the severity of the concussion.

Torn Anterior Cruciate Ligament / ACL Knee Injury

 
Definition

A torn ACL is an injury or tear to the anterior cruciate ligament (ACL). The ACL is one of the four main stabilising ligaments of the knee, the others being the Posterior Cruciate Ligament (PCL), Medial Collateral Ligament (MCL) and Lateral Collateral Ligament (LCL). The ACL attaches to the knee end of the Femur (thigh bone), at the back of the joint and passes down through the knee joint to the front of the flat upper surface of the Tibia (shin bone).
It passes across the knee joint in a diagonal direction and with the PCL passing in the opposite direction, forms a cross shape, hence the name cruciate ligaments.
The role of the Anterior Cruciate Ligament is to prevent forward movement of the Tibia from underneath the femur. The Posterior Cruciate Ligament prevents movement of the Tibia in a backwards direction. Together these two ligaments are vitally important to the stability of the knee joint, especially in contact sports and those that involve fast changes in direction and twisting and pivoting movements. Therefore a torn ACL has serious implications for the stability and function of the knee joint.

How does a torn ACL occur?

A torn ACL or acl injury is a relatively common knee injury amongst sports people. A torn ACL usually occurs through a twisting force being applied to the knee whilst the foot is firmly planted on the ground or upon landing. A torn ACL can also result from a direct blow to the knee, usually the outside, as may occur during a football or rugby tackle. This injury is sometimes seen in combination with a medial meniscus tear and MCL injury, which is termed O’Donohue’s triad.
Anterior cruciate ligament injuries are more frequent in females with between 2 and 8 times more females suffering a rupture than males, depending on the sport involved and the literature reviewed. The reason for this is as yet unknown, however areas of current research include anatomical differences; the effect of oestrogen on the ACL and differences in muscle balance in males and females.

Symptoms of a torn ACL

There may be an audible pop or crack at the time of injury
A feeling of initial instability, may be masked later by extensive swelling.
A torn ACL is extremely painful, in particular immediately after sustaining the injury.
Swelling of the knee, usually immediate and extensive, but can be minimal or delayed
Restricted movement, especially an inability to fully straighten the leg
Possible widespread mild tenderness
[*]         
[*]        Positive signs in the anterior drawer test and Lachman's test.
[*]        Tenderness at the medial side of the joint which may indicate cartilage injury.
[*]         
[*]        Treatment for an Anterior Cruciate Rupture
What can the athlete do?
[*]        Immediately stop play or competition
[*]        Apply RICE (Rest, Ice, Compression, Elevation) to the knee immediately
[*]        Seek medical attention as soon as possible.
What can a Professional do?
A Doctor or Sports Injury Professional can assess the knee joint to confirm a torn ACL
Diagnose any additional injuries
If unsure you may be sent for an MRI scan or X-ray
Refer for ACL Surgery if required
[*]        Provide a pre-surgery rehabilitation program in order to strengthen the knee and reduce the swelling in preparation for surgery. This will help produce the best results following surgery.

What does surgery involve?

Surgery involves either repairing or reconstructing the torn ACL. With a repair, the exisiting damaged ligament is sutured (stitched) if the tear is in the middle. If the ligament has detached from the bone (avulsed) then the bony fragment is reattached.
Surgical reconstruction of the torn ACL is performed using either an extraarticular technique (taking a structure that lies outside the joint capsule such as a portion of the hamstring tendon) or an intraarticular technique (using a structure from within the knee such as part of the patellar tendon) which will replace the anterior cruciate ligament.

When is Surgery Required?

Surgery is performed more often than not following Anterior Cruciate ligament tears
The decision on whether to operate is based on a number of factors, including the athletes age; lifestyle; sporting involvement; occupation; degree of knee instability and any other associated injuries
Older people who are less active and perhaps injured their ACL following a fall as opposed to during sport would be unlikely to undergo surgery
A younger, fit person who regularly plays sport and would be more likely to adhere to a complex rehabilitation program is very likely to be offered surgery

How long will the athlete with a torn ACL be out of action?

[*]        This largely depends on your surgeon or physiotherapists approach to rehabilitation. Some therapists advocate an accelerated rehabilitation programme returning the athlete to full competition within 6 months, others prefer a 9 month rehabilitation period.
More information on rehabilitation of an acl knee injury can be see on our anterior cruciate ligament rehabilitation page.

Which types of knee brace are available?

A knee support or knee brace provides protection and support. They prevent injury to healthy joints and support unstable joints.

Hinged Knee Braces
A hinged knee brace is likely to provide the best support for the knee and contains metal reinforcements in the sides which are connected by a hinge in the middle. Some knee braces use a geared hinge system in the middle which means the pivot point of the support moves as the knee bends (because the pivot point of the knee changes as it bends) providing a more snug fit.
This provides excellent lateral support to protect the medial and lateral ligaments and knee joint in general. No support can guarantee protection to the anterior cruciate ligament as it only requires just a few degrees of twisting to damage it.
Stabilized Knee Supports
A stabilized knee support has reinforced side panels to provide extra support over the standard knee support – again helping to provent sideways stress on the knee ligaments. Stabilized knee supports may have flexible steel springs sewn into the material at the side or may have elastic straps which wrap around the side for additional support.
Stabilized knee supports will provide less lateral support for the knee joint but will often be less bulky than a full hinged knee support.
 
Basic Knee Supports
A simple neoprene heat retainer will not usually have any additional springs, stays or supports. Some are open patella and have a hole for the patella to fit through. This can decreases the pressure on the kneecap or patella. A padded knee support will be closed and have additional padding over the patella to protect from knocks or minor impact as well as pressure from the ground when kneeling for long periods or landing on the knees for example in volleyball.
These will provide only very moderate support and are not usually sufficient to provide protection to joints where ligament injury has occured or is a risk.

[acl knee injury]
Medial Cartilage Meniscus Injury

Medial Cartilage Meniscus

Each knee joint has two crescent-shaped cartilage menisci. These lie on the medial (inside) and lateral (outside) of the upper surface of the tibia (shin) bone. They are essential components of the knee, acting as shock absorbers as well as allowing for the proper interaction and weight distribution between the tibia and the femur (thigh bone). As a result, injury to either meniscus can lead to critical impairment of the knee itself.

What is a Medial Meniscus Injury?

The medial meniscus is more prone to injury than the lateral meniscus as it is connected to the medial collateral ligament and the joint capsule and so is less mobile. Hence, any forces impacting from the outer surface of the knee, such as a rugby tackle, can severely damage the medial meniscus. In addition, medial meniscal injuries are often also associated with injuries to the anterior cruciate ligament. Other mechanisms of injury may be twisting the knee or degenerative changes that are associated with age. Any of these circumstances may lead to tearing of the medial meniscus, which in serious cases may require surgical intervention.

What are the Symptoms?

[*]        A history of trauma or twisting of the knee.
[*]        Pain on the inner surface of the knee joint.
[*]        Swelling of the knee within 48 hours of injury.
[*]        Inability to bend knee fully- this may be associated with pain or a clicking noise.
[*]        A positive sign (pain and/or clicking noise) during a ""McMurrays test"".
[*]        Pain when rotating and pressing down on the knee in prone position – ""Apley's test""
[*]        ""Locking"" or ""giving way"" of the knee.
[*]        Inability to weight bear on the affected side.

Types of Meniscal Tear:

[*]        Longitudinal Tears: This is a tear that occurs along the length of the meniscus and can vary in length
[*]        Radial Tears: These tear from the edge of the cartilage inwards.
[*]        Bucket-Handle Tears: This is an exaggerated form of a longitudinal tear where a portion of the meniscus becomes detached from the tibia forming a flap that looks like a bucket handle
[*]        Degenerative Changes: This may lead to edges of the menisci becoming frayed and jagged
Treatment
What can the athlete do:
[*]        Apply RICE to the injured knee.
[*]        Wear a knee compression support.
[*]        Try to keep the knee moving using our mobility exercises.
[*]        Gentle exercises to maintain quadriceps strength, although care should be taken not to aggravate the symptoms.
[*]        Take a glucosamine / joint healing supplement.
[*]        Consult a Sports Injury Specialist.
A sports injury specialist may:
[*]        Assess the knee to confirm the injury.
[*]        Refer you for an MRI scan.
[*]        Decide if conservative treatment will be effective or if surgery may be required.
1.Conservative Treatment
This may be indicated in the case of a small tear or a degenerative meniscus and may involve:
Ice, compression and recommendation of NSAID's e.g. Ibuprofen.
Electrotherapy i.e. ultrasound, laser therapy and TENS.
Massage to decrease swelling and relax surrounding muscular tension.
Manual therapy
[*]        Once pain has subsided, exercises to restore the range of movement, improve balance and maintain quadriceps strength may be prescribed. These may include: squatting, single calf raises and wobble-board techniques.
2. Surgical Intervention
In the event of more severe meniscal tears such as a bucket handle tear, arthroscopic surgical procedures may be necessary to repair the lesion. The aim of surgery is to preserve as much of the meniscus cartilage as possible. The procedure itself will normally involve stitching of the torn cartilage. The success of the surgery depends not only on the severity of the tear but also on the age and physical condition of the patient. Younger and fitter patients are known to have better outcomes.
Following surgery a rehabilitative exercise program will be outlined for the patient which may include mobility strengthening and balance training. Full co-operation with the rehabilitative technique will be necessary to maximise recovery.

[medial mensicus tear]   [rehabilitation]

Tight hamstrings

Many people suffer with tight hamstrings. Most of the time they will not cause a problem but can be more prone to bad tears and also limit sporting activity. The hamstring muscles consist of the semitendinosus, semimembrinosus and biceps femoris.
Tight hamstrings can also be responsible for postural problems and other back problems as they will tend to pull the pelvis out of normal position.
Why do we have tight hamstrings?
[*]        Genetic reasons. You can be born with naturally short hamstrings when some people are naturally supple.In general women and children are more supple than men.
[*]        Not enough stretching. If you participate in a lot of sport and do not stretch properly then you are more likely to have your hamstrings tighten up. It is especially important to stretch properly after exercise as this is when the muscles are warm and more receptive to stretching. If you tend to make a beeline for the bar after your game of football think about spending 20 minutes stretching first.
[*]        Problems in your lower back can put pressure on your sciatic nerve which runs down the legs and cause muscles to tighten.
What can we do about it?
Even if you are not naturally supple you can still improve your flexibility by stretching.
Types of stretching include dynamic, static, passive, PNF and CRAC. A full description of these can be seen here.
Avoid ballistic stretching which is bouncing and forcing the muscle to go further than is comfortable and will damage it.
Sports massage can help in loosening tight muscles. Have a regular sports massage on the legs.
What problems can tight hamstrings cause?
[*]        More susceptible to tearing. If you force a muscle to go further than it can normally go at speed it is likely to tear.
[*]        Tight hamstrings can cause the hips and pelvis to rotate back flattening the lower back and causing back problems.
[*]        If your muscles have tightened up then blood has been squeezed out of them therefore your muscles are working at less than 100 % of capacity and your performance will be down as a result. Regular sports massage and stretching to improve muscle condition will not only reduce the likelihood of injury but may improve performance.

Quadriceps Muscle Strain

Quadriceps strain?
The quadriceps muscles are the muscles on the front of the thigh. They consist of the Vastus lateralis, Vastus medialis, Vastus intermedius and the Rectus femoris. A strain is a tear in the muscle. These can range in severity, from a very small tear to a complete rupture.

Tears to the quadriceps muscles usually occur following an activity such as sprinting, jumping or kicking. Any of these muscles can strain (or tear) but probably the most common is the Rectus femoris. This is because it is the only one of the four muscles which crosses both the hip and knee joints. This make it more susceptible to injury. The most common site of injury is around the musculotendinous junction (where the muscle becomes tendon), just above the knee.
Injuries that occur following a direct impact to the muscle, such as being hit by a ball or other hard object, are more likely to be contusions and should be treated slightly differently.
Muscle strains are graded 1, 2 or 3 depending on the severity of the damage. It is important you understand what grade of injury you have suffered to be able to treat it appropriately.

Grade 1 thigh strain:

Symptoms?
[*]        A twinge in the thigh is usually felt.
[*]        A general feeling of tightness in the thigh.
[*]        Mild discomfort on walking.
[*]        Probably no swelling.
[*]        Trying to straighten the knee against resistance may be uncomfortable
[*]        An area of local spasm may be felt at the site of the suspected tear.
What can the athlete do about it?
[*]        Apply the R.I.C.E (rest, ice, compression, elevation) procedure for the first 24 hours.
[*]        Apply cold therapy as soon as possible and every 2-3 hours.
[*]        Use a compression bandage until you feel no pain.
[*]        Rest for at least 72 hours before commencing light training
[*]        If there is no pain, continue with training.
[*]        See a sports injury professional.
What can a sports injury specialist do?
[*]        Use sports massage techniques to speed up recovery (very important).
[*]        Use ultrasound and electrical stimulation.
[*]        Prescribe a rehabilitation programme.

Grade 2:

 Symptoms?
[*]        A sudden sharp pain when running, jumping or kicking.
[*]        Unable to play on.
[*]        Pain affects walking.
[*]        The athlete may notice swelling or even mild bruising.
[*]        Pain on feeling the area of the tear.
[*]        Straightening the knee against resistance causes pain
[*]        Unable to fully bend the knee.
What can the athlete do about it?
[*]        Use the R.I.C.E procedure as above.
[*]        Apply cold therapy straight away and every 2-3 hours for 48 hours.
[*]        Wear a compression bandage and rest with the leg elevated.
[*]        Use crutches if necessary.
[*]        See a sports injury specialist.
What can a sports injury specialist do?
[*]        Use sports massage techniques to speed up recovery (very important).
[*]        Use ultrasound and electrical stimulation.
[*]        Prescribe a rehabilitation programme.

Grade 3:

Symptoms?
[*]        Sudden, severe pain in the thigh.
[*]        Unable to walk without the aid of crutches.
[*]        Bad swelling appearing immediately.
[*]        Bruising usually appears within 24 hours.
[*]        A static contraction will be painful and might produce a bulge in the muscle.
[*]        Expect to be out of competition for 6 to 12 weeks.
What can the athlete do about it?
[*]        Stop play immediately.
[*]        Rest with the leg elevated, using a compression bandage.
[*]        Apply cold therapy immediately.
[*]        Seek medical attention. It is important you do this if you suspect a grade three strain. If you do not you may be permanently injured or weakened.
 
What can a sports injury specialist do?
[*]        Use sports massage techniques to speed up recovery (very important).
[*]        Use ultrasound and electrical stimulation.
[*]        Prescribe a rehabilitation programme and monitor it.Operate if needed (rare).

 
Groin Strain (Adductor muscle tear)

Groin strain?

A groin strain is a tear or rupture to any one of the adductor muscles. There are five adductor muscles, the pectineus, adductor brevis and adductor longus (called short adductors which go from the pelvis to the thigh bone) and the gracilis and adductor magnus (long adductors which go from the pelvis to the knee).
The most common muscle to be injured is the adductor longus muscle which connects from the pubic ramus (part of the lower pelvis) to the medial (inner) surface of the femur (thigh bone).
The main function of the adductors is to pull the legs back towards the midline, a movement called adduction. During normal walking they are used in pulling the swinging lower limb towards the middle to maintain balance. They are also used extensively in sprinting, playing football, horse riding, hurdling and any sport which requires fast changes in direction.
A rupture or tear in the muscle usually occurs when sprinting, changing direction or in rapid movements of the leg against resistance such as kicking a ball. Repetitive overuse of the groin muscles may result in adductor tendinopathy.

Grade 1, 2 or 3?

Groin strains, as with all muscle tears, are graded 1, 2, or 3 depending on how bad they are. Grade one is a minor tear where less than 10% of fibres are damaged. Grade 2 is a moderate tear and can be anything from 10 to 90% of fibres torn. For this reason, grade 2 injuries are often termed 2+ or 2-. Grade 3 injuries are the most serious being either partial or full ruptures.

Symptoms of a groin strain

Grade 1
[*]        Discomfort in the groin or inner thigh. This may not be noticed until after exercise stops.
[*]        The groin muscles will usually feel tight.
[*]        There may be an area which is tender to touch
[*]        Walking is normal, discomfort may only be when running or even just on changes in direction.
Grade 2
[*]        A sudden sharp pain in the groin area or adductor muscles during exercise.
[*]        Tightening of the groin muscles that may not be present until the following day.
[*]        There may be minor bruising or swelling (this might not occur until a couple of days after the initial injury).
[*]        Weakness and possibly pain on contracting the adductor muscles (squeeze your legs together)
[*]        Discomfort or pain on stretching the muscle
[*]        Walking may be affected. Running is painful.
Grade 3
[*]        Severe pain during exercise, often on changing direction suddenly when sprinting.
[*]        Inability to contract the groin muscles (squeeze your legs together).
[*]        Substantial swelling and bruising on the inner thigh within 24 hours.
[*]        Pain on attempting to stretch the groin muscles.
[*]        It may be possible to feel a lump or gap in the muscles

Groin strain treatment

What can the athlete do?
[*]        Apply R.I.C.E. (Rest, Ice, Compression, and Elevation) immediately.
[*]        Use crutches if needed.
[*]        Gently stretch the groin muscles provided this is comfortable to do so.
[*]        See a sports injury professional who can advise on rehabilitation of the injury.
[*]        For a suspected grade 3 strain seek professional help immediately.
What can a sports injury specialist or doctor do?
[*]        Use ultrasound or laser treatment.
[*]        Tape the groin to take the pressure off the area.
[*]        Use sports massage techniques after the acute phase. This is extremely important.
[*]        Operate if the muscle has torn completely.
[*]        Advise on a rehabilitation programme consisting stretching and strengthening exercises

[Groin strain]
Low back pain / muscle strain

muscle strain?
Low back pain/ muscle strain or ruptures can occur in the back just like they can anywhere else in the body. A muscle strain (or tear) in the back is usually caused by a sudden movement or trying to lift something that is too heavy. The low back pain however is often a long time coming on as the muscles in the back gradually tighten up due to bad posture and overuse.
These muscles go into spasm and do not get enough blood through them resulting in weakness. So when someone complains of low back pain when they bend down to pick up a piece of paper and tear a muscle in the back, it is not just the piece of paper that caused it but a gradual build up of tension over weeks and months.
If you have suffered a direct blow to a muscle, particularly one near a bone then you must treat it as a contusion.
Symptoms include:
[*]        A sudden sharp pain in the back.
[*]        Possibly swelling or bruising over the area of the rupture.
[*]        Difficulty in moving – bending forwards, sideways or straightening.
Muscle tears are graded 1, 2 or 3 depending on how bad the tear is:
 
Grade 1 What does it feel like?
[*]        Tightness in the back.
[*]        May be able to walk properly.
[*]        Probably won't have much swelling.
What can the athlete do?
[*]        See a sports injury professional or therapist who specializes in back problems.
[*]        Use a heat retainer until you feel no pain.
[*]        Ease down training for a week or two but no need to stop unless there is getting pain.
What can a Sports Injury Specialist or Doctor do?
[*]        Use sports massage techniques to speed up recovery (very important).
[*]        Use joint manipulation techniques.
[*]        Use ultrasound and electrical stimulation.
[*]        >Prescribe a rehabilitation and strengthening programme.
Grade 2 What does it feel like?
[*]        Probably cannot walk properly.
[*]        May get occasional sudden twinges of pain during activity.
[*]        May notice swelling.
[*]        Pressing in causes pain.
What can the athlete do?
[*]        Rest.
[*]        See a sports injury professional for rehabilitation advice.
What can a Sports Injury Specialist or Doctor do?
[*]        Use sports massage techniques to speed up recovery (very important).
[*]        Use ultrasound and electrical stimulation.
[*]        Prescribe a rehabilitation programme of mobility, stretching and strengthening exercises.
Grade 3: What does it feel like?
[*]        Unable to walk properly.
[*]        In severe pain.
[*]        Bad swelling appearing immediately.
[*]        A static contraction will be painful and might produce a bulge in the muscle.
[*]        Expect to be out of competition for 3 to twelve weeks or more.
What can the athlete do?
[*]        Seek medical attention immediately.

[*]        (Rest, Ice, Compress, Elevate.)

[*]        Use crutches.
[*]        Follow a rehabilitation plan as directed by the sports therapist.
What can a Sports Injury Therapist or Doctor do?
[*]        Use sports massage techniques to speed up recovery (very important).
[*]        Apply joint manipulation techniques.
[*]        Use ultrasound and electrical stimulation.
[*]        Prescribe a rehabilitation programme and monitor it.
[*]        A surgeon will operate if indicated.
If you suspect a grade two or three injury it is recommend you see a Sports Injury or back Specialist immediately.

 
[Low back pain]
 

Carpal Tunnel Syndrome (pressure on the median nerve)

Carpal tunnel syndrome?
Carpal tunnel syndrome is caused by compression of the median nerve in the wrist. The median nerve is one of the nerves which supplies the hand (shown opposite). It passes through the wrist in a narrow channel called the carpal tunnel, along with the flexor digitorum superficialis and flexor pollicis longus tendons.

caused
[*]        Traumatic wrist injury such as sprains and fractures.
[*]        Repetitive use of the wrist (Carpal tunnel syndrome is a form of RSI).
[*]        Pregnancy – causing fluid retention in the wrist.
[*]        Use of vibrating machinery.
[*]        Congenital – some people naturally have a smaller, narrower carpal tunnel.

[*]        .

All of these conditions can cause a narrowing of the space through which the median nerve passes. The cause may be structural such as with a fracture or congenital cases, or due to swelling, inflammation or fluid retention.
Carpal tunnel syndrome is three times more common in women, probably because they have a smaller carpal tunnel. It also has a higher prevalence in people with diabetes and other conditions which directly affect the nervous system. It usually occurs firstly and sometimes solely in the dominant hand, where it is also more painful. Some professions are more at risk of developing carpal tunnel syndrome, especially people working on an assembly line, who are continually repeating the same movement.

Symptoms of carpal tunnel syndrome?

Symptoms usually increase gradually and may initially only be present at night. Carpal tunnel syndrome may be in one or both wrists.
[*]        A dull ache in the wrist and forearm.
[*]        Pain which radiates into the thumb and four fingers (excluding the little finger).
[*]        Sensations of tingling or burning in the hand or four fingers.
[*]        Pain which is worse at night.
[*]        Pain may radiate into the forearm, elbow or shoulder.
[*]        Weakness in the fingers and hands.

How is carpal tunnel syndrome diagnosed?

If you suspect carpal tunnel syndrome you should visit your Doctor as soon as possible. They will ask you about your symptoms and examine your hand and wrist for tenderness, sensation, warmth and colour. They will often try to get you to reproduce your symptoms by performing an aggravating movement, or one of the following tests:
Tinels sign – Tapping with two fingers over the palm side of the wrist. The test is positive if any of the symptoms are reproduced.
Phalens test – Place your hands in front of you at chest height with the fingers of the two hands touching. Flex the wrists so that you put the backs of your hands together. Hold this position for a minute. Reproduction of any symptoms is a positive result.
Investigations may also be performed to confirm the diagnosis. You may be offered an MRI scan, ultrasound imaging, electromyography or a nerve conduction study.

Carpal Tunnel Syndrome Treatment

Treatment of carpal tunnel syndrome should initially be conservative and led by your Doctor. The first period of treatment should include complete rest for the wrist, which is normally immobilised in a splint, as shown above. If there is inflammation and swelling present, using a form of cold therapy will help to relieve this. Your Doctor may also prescribe anti-inflammatory medication such as ibuprofen to reduce inflammation, or diuretics to clear fluid retention .
Following a period of immobilisation, stretching and strengthening exercises can be used to help prevent a reoccurrence of symptoms. All exercises should be performed pain-free. If pain occurs, go back a step. Firstly you should aim for a full, pain-free range of motion, before moving on to strengthening. Resistance bands are excellent for performing wrist strengthening exercises.
Other, more alternative treatments, which may be worth trying include acupuncture and yoga, which have been linked to an improvement in carpal tunnel syndrome symptoms.
If symptoms do not improve following rest and anti-inflammatories, other options include Corticosteroids or lidocaine injections. If all of this treatment fails and symptoms persist over a 6 month period, surgery may be required.

What does surgery involve?

A carpal tunnel release is a very common operation, which involves cutting the carpal ligament to make more space for the median nerve. This can either be done as an arthroscopic operation (keyhole), or as an open release, where a 5-6cm incision is made. It is a straightforward procedure which is usually carried out on an outpatient basis. Your hand and wrist will be bandaged and may be placed in a sling for a few days to help it rest and reduce swelling.

[Wrist supports can be beneficial in immobilising the wrist in many different sporting injnuries]
 
de Quervains Tenosynovitis

Tenosynivitis?

Tenosynivitis is inflammation of the sheath that surrounds a tendon as opposed to inflammation of the actual tendon itself (tendinitis or tendonitis). de Quervain's tenosynivitis is inflammation of the synovium of the abductor pollicis longus and extensor pollicis longus muscles as they pass through the wrist (on the thumb side of the wrist). It occurs more frequently in racket sports such as tennis, squash or badminton as well as canoing and ten pin bowling. It also occurs in golfers (left thumb of a right handed golfer and vice versa). Tendon injuries such as this are often labelled with the umbrella term RSI (repetitive strain injury).

Symptoms of de Quervain's tenosynovitis

[*]        Tenderness and swelling on the thumb side of the wrist where the tendons pass.
[*]        Creptius may be felt (a creaking of the tendon as it moves).
[*]        Finkelstein's test may be positive (thumb is placed in the palm of the hand and wrist moved laterally towards the little finger to stretch the tendons – pain may be felt).

Treatment

[*]        Rest, splinting if necessary.
[*]        Using an extra thick pen may help as this reduces the stretch on the tendons when writing.
[*]        Ice or cold therapy to reduce pain and inflammation.

[*]       

[*]        Stretching and strengthening.
[*]        A cortisone injection may be given
[*]        In rare cases surgery may be indicate

 
[Abductor Pollicis Longus]
Fractured Rib

Fractured rib?

This injury is common in contact sports and usually occurs when you have a hard impact to the chest such as an elbow.

Fractured rib symptoms include:

[*]        Pain and swelling at a particular point in the ribs.
[*]        Pain when you breathe in deeply or when you cough or sneeze.
[*]        Pain at a specific point when someone presses in over the whole of your rib cage

What can the athlete do?

Rest is all you can do.
If it is very severe then you should seek medical attention to ensure no damage has been done inside the rib cage. If you have a severe fracture of the ribs I think you would know about it!

What an a sports injury specialist or doctor do?

There is not much a sports injury specialist can do except confirm the diagnosis and advise rest.
A doctor can X-ray the ribs and rule out any internal damage.

How long will it take to heal?

If it is not a severe fracture then you should be back in action from between 3 to 6 weeks so long as you rest.

 
[Rib support belt]
 
Sacroiliac Joint Pain

Sacroiliac Joint?

The Sacroiliac joints are located at the very bottom of the back. You have one either side of the spine. The Sacroiliac joints help make up the rear part of the pelvic girdle and sit between the sacrum (vertebrae S1-S5) and the Ilia (hip bones).
The function of the SI joints is to allow torsional or twisting movements when we move our legs. The legs act like long levers and without the sacroiliac joints and the pubic symphesis (at the front of the pelvis) which allow these small movements, the pelvis would be at higher risk of a fracture.
The concept of the SIJ causing lower back pain is now pretty well understood. However, due to the complex anatomy and movement patterns at the joints and area in general, evaluation and treatment of sacroiliac dysfunctions is still controversial.
SIJ dysfunction is a term which is commonly used when talking about sacroiliac injuries. This dysfunction refers to either hypo or hyper mobility (low or high respectively). Or in other words, the join can become 'locked' or be too mobile. This can then lead to problems with surrounding structures such as ligaments (e.g. Iliolumbar ligament) and muscles, which means SIJ problems can cause a wide range of symptoms throughout the lower back and buttocks, or even the thigh or groin.

Symptoms of SI Joint Injury?

Pain located either to the left or right of your lower back. The pain can range from an ache to a sharp pain which can restrict movement.
The pain may radiate out into your buttocks and low back and will often radiate to the front into the groin. Occasionally it is responsible for pain in the testicles among males.
Occasionally there may be referred pain into the lower limb which can be mistaken for sciatica.
Classic symptoms are difficulty turning over in bed, struggling to put on shoes and socks and pain getting your legs in and out of the car.
Stiffness in the lower back when getting up after sitting for long periods and when getting up from bed in the morning.
Aching to one side of your lower back when driving long distances.
There may be tenderness on palpating the ligaments which surround the joint.

Causes of Sacroiliac Pain

Causes of Sacroiliac joint pain can be split into four categories:
[*]        Traumatic
[*]        Biomechanical
[*]        Hormonal
[*]        Inflammatory joint disease
Traumatic
Traumatic injuries to the SIJ are caused when there is a sudden impact which 'jolts' the joint. A common example is landing on the buttocks. This kind of injury usually causes damage to the ligaments which support the joint.
Biomechanical
Pain due to biomechanical injuries will usually come on over a period of time and often with increased activity or a change in occupation/sport etc. The most common biomechanical problems include:
[*]        Leg length discrepancy
[*]        Overpronation
[*]        'Twisted pelvis'
[*]        Muscle imbalances
Hormonal
Hormonal changes, most notably during pregnancy can cause sacroiliac pain. In preparation for giving birth, the ligaments of the pelvis especially increase in laxity. Combining this with an increase in weight putting extra strain on the spine, may lead to mechanical changes which can result in pain.
Inflammatory joint disease
Spondyloarthropathies are inflammatory conditions which affect the spine. These include Ankylosing Spondylitis which is the most common inflammatory condition to cause SI joint pain.

Treatment of SIJ Pain

What can you do to treat sacroiliac joint pain yourself?
[*]        Rest from any activities which cause pain.
[*]        If the surrounding muscles have tightened up, use a warm-pack to help them relax.
[*]        Don't heat if an inflammatory condition is suspected.
[*]        Anti-inflammatory medications such as ibuprofen may be helpful. Always check with your Doctor first.
[*]        Try wearing a sacroiliac belt
What can a sports injury specialist or doctor do?
[*]        Use diagnostic tests to discover the cause of the problem.
[*]        Rule out medical diseases such as Ankylosing Spondylitis.
[*]        Treat the cause as well as the symptoms.
[*]        Use electrotherapy equipment to treat affected tissues.
[*]        If indicated and safe to do, level the pelvis via manipulation.
[*]        Sports massage will help relieve any soft tissue tension in the area.
[*]        Advise you on a rehabilitation program to correct any muscle imbalances.
[*]        If the above treatment fails, a Corticosteroid injection into the SIJ may be used [Sacroiliac joint inflamed]
 
    L                Injury in Australian elite cricket
 
Prevention of cricket injury
According to research conducted by John Orchard into cricket injury, 9% of cricketers are injured at any point in time. Fast bowlers are at increased risk of injury as well, with 15% of them falling susceptible to injury at any given time. Some cricket injuries can abbreviate careers of good cricketers like Ian Bishop-who had persistent back injuries. Clearly, knowing how to prevent injuries during a cricket match can save your career or even your life.
Cricket is a multi-dimensional sport where players engage in a wide range of activities (batting, bowling and fielding). Therefore, there are myriad ways of preventing injury during a cricket game that include:
i) Wearing proper protective equipment
ii) Using additional strain-minimizing gear
iii)Training properly
iv) Avoiding overload
Wearing protective equipment ==
In modern cricket, protective equipment reduces and prevents the occurrence of serious injury. A hard ball at high pace can do considerable damage to susceptible areas of the human body. The first port of call for any cricketer is to wear as much protective equipment as possible. In many cases, it is not just enough to have the equipment but to have quality protection.
a) Helmets: Batters and close-in fielders should wear helmets. Having a helmet is far better than having none but it is advisable to use a helmet with a grill that protects the face as well as the head. In the past batters played without helmets (notably Viv Richards). That requires tremendous skill and is a serious risk that few could and should take. Wicketkeepers often come up to the stumps without helmets, although it is clearly not an injury-proof practice.
b) Pads and guards: Batters must wear pads when batting because a hard ball delivered at 90 miles or even 50 miles can damage your shin and knees. Wicketkeepers also wear specially designed and less cumbersome pads as part of their necessary equipment. Close-in fielders should opt to wear shin guards. Batters should also reduce injury-risk by using use arm guards, thigh guards, chest guards and 'box' guards.
c) Gloves: Batting gloves help with gripping the bat, but they also help protect against injury to the hand. Batters should ensure that the gloves are properly padded- especially around the fingers.
Using strain-minimizing optional equipment ==
Fielders, bowlers and batters have the option of wearing additional aids that reduce wear, tear and stress on joints, ligaments and tissues. Ankle braces, shock-absorbing insoles, specially designed cricket boots, knee straps and compression shorts are just some of the aids to minimize strain. While protective gear seeks to prevent serious injury and impact injuries, strain-minimizing gear seeks to prevent recurrent, minor injuries that can become lingering problems over time.
Proper training ==
Proper training is important for cricket since the modern game requires a higher degree of athleticism. Batsmen and fielders must be able to sprint, fielders have to throw and bowlers have to deliver with an action that naturally places stress on certain body parts. Improper execution of these can increase the risk of injury.
Before any match or training activity, cricket players must warm up to get the muscles more flexible and joints accustomed to movement. It is also critical for players to train consistently between games, since cricket requires sudden, intense activity over long periods.
Bowling is a very unnatural act for the human body. It is no surprise that side strains, back pain and hamstring injuries are the most common cricket injuries. Fast bowlers have many stress fractures- particularly in the lower back. The type of bowling action of a fast bowler and his physical characteristics determine his susceptibility to injuries. Even spin bowlers can develop shoulder injuries, wrist and finger injuries.
The type of bowling that a cricketer does should influence his exercise routine. Fast bowlers must place emphasis on core-strengthening exercises and proper rotator-cuff action. Spinners normally bowl many overs and rely more on their shoulder and wrists. Rotator-cuff exercises should be done gradually, with a view to avoiding excessive activity.
Avoiding overload or unnecessary risks ==
Captains also have a role in preventing injury during a cricket match by properly rotating their bowlers. A single spell of 12 overs can do more damage to a fast bowler than two spells of 8 overs with a fair break in-between. Fielders can sometimes get exuberant during cricket matches in attempting to save runs- especially on the boundary. While fielding near the boundary, fielders must be mindful of advertising boards and the boundary rope. Ramnaresh Sarwan of the West Indies ruled himself out of the West Indies 2007 tour of England by sliding into an advertising board.
Even with the best methods and equipment, injuries can occur in sports from time to time. In an odd sport like cricket, many 'freak' injuries can occur as well. The most important thing to note is that you can minimize or prevent certain injuries. Many cricketers cut corners or take chances with their equipment and methods on the field of play. To avoid injury during a cricket match it is important to control what you do and wear on the field and even off of it.
Darrell Victor is a freelance writer and cricket enthusiast from the West Indies. For more articles on West Indies cricket, read: Reasons for the decline of West Indies cricket:
 
COMMON MANAGEMENT OF CRICKET INJURY
COMMON MANAGEMENT OF CRICKET INJURY
With the cricket season now in full swing, injuries are already making their way through our doors.
Some of the more common injuries incurred by cricketers are simple muscle strains or joint sprains. Hamstring and calf muscles are often “pulled” when taking off for a quick single or going for a catch in the outfield. These acute injuries must be managed in the first 48 hours with, Rest, Ice, Compression and Elevation (R.I.C.E.). Once the acute management has commenced the injuries should be assessed by a professional qualified to assess and treat sports injuries, these include a Sports Medicine doctor or a physiotherapist.
Early assessment and appropriate treatment planning will reduce the risk of a simple injury blowing out to become a complicated chronic injury.
The more complex injuries are those that come on slowly over time, these could include injuries such as shoulder rotator cuff injuries, stress fractures in the low back and shin splints.
These types of injuries are often characterized by:-
1. Bowling too many overs without the appropriate conditioning.
2. Technique faults in the bowling action.
3. Inadequate recovery time.
4. Inadequate muscle flexibility and strength
5. Previous injury
Simple tips to avoid injury:-
1. Ensure correct conditioning which includes appropriate flexibility and strength to allow you to bat, bowl or wicket keep for the duration of a match.
2. Correct any technique or biomechanical faults. Speak to your coach and have your action video analysed.
3. Do not push through pain. PAIN is our bodies warning system to say that something is wrong.
If you develop musculo-skeletal pain, a sports physiotherapist is well positioned in the management and prevention of cricket related injuries. The key to the prevention of  chronic pain from injury is in the early detection, management and correction of faults.
 
Rehabilitation
Rehabilitation Protocol
Sports Massage for the Hamstring Muscles
Sports massage applied to the back of the thigh is excellent for helping reduce hamstring strains. Blood is flushed through tight knots and muscle spasm, loosening what would be potential week points in the muscles.
Technique 1: Effleurage
Aim – light stroking to warm up the area in preparation for deeper techniques.
With the hands stroke lightly but firmly upwards from just above the back of the knee to the top of the hamstring muscle (image 1).
Always stroke upwards towards the heart as this is the direction of blood flow. The other way can damage veins.
Then lightly bring the hands down the outside of the leg (image 2) keeping them in contact but do not apply pressure.
Repeat the whole movement using slow stroking techniques, trying to cover as much of the leg as possible.
Repeat this technique for about 5 to 10 minutes, gradually applying deeper pressure on the up strokes.
Technique 2: Petrissage
Aim – kneading movements to manipulate and loosen the muscle fibres more. There are a number of different types or methods of petrissage massage techniques. A couple of simple ones are described below:
With the hands apply a firm, kneading technique. Try to pull half the muscle towards you with the fingers of one hand whilst pushing half the muscle away with the thumb of the other hand (image 3).
Then reverse to manipulate the muscle in the other direction.
Work your way up and down the muscle, trying to cover as much of the surface as possible.
Apply this technique for around 5 minutes, alternating with light stroking (above) occasionally.
Another slight variation on this and a very commonly used technique is a circular kneading action.
Techniques 3 and 4: Stripping the muscle and Circular frictions.
Aim – to apply sustained pressure to the muscle, ironing out any lumps, bumps and knots.
With the thumb of the right hand (for the left leg), apply deep sustained pressure along the full length of the muscle (image 4).
This technique should be slow and deliberate to 'feel' the muscle underneath.
Repeat this 3 to 5 times in a row, alternating with petrissage for 5 to 10 minutes.
This technique can be applied to the whole muscle group with the forearm (image 5).
If the therapist comes across and tight, tender knots in the muscle (usually at the point of strain or rupture), these can be worked out with deep circular frictions to the knot (image 6).
Massage should be deep but not so deep that the athlete tightens up with pain.
Finishing off
Complete the hamstring massage by finishing off with a  effleurage techniques

[Effleurage to the hamstrings]
Effleurage to the hamstring muscles
Sports Massage for the Calf Muscles

Technique 1: Effleurage
Aim – light stroking to warm up the area in preparation for deeper techniques.
With the hands stroke lightly but firmly upwards from just above the heel to the back of the knee (image 1).
Always stroke upwards towards the heart as this is the direction of blood flow. The other way can damage veins.
Then lightly bring the hands down the outside of the leg keeping them in contact but do not apply pressure (image 2).
Repeat the whole movement using slow stroking techniques, trying to cover as much of the leg as possible.
Repeat this technique for about 5 to 10 minutes, gradually applying deeper pressure on the up strokes
Technique 2: Petrissage
Aim – kneading movements to manipulate and loosen the muscle fibres more.
With the hands apply a firm, kneading technique. Try to pull half the muscle towards you with the fingers of one hand whilst pushing half the muscle away with the thumb of the other hand (image 3).
Then reverse to manipulate the muscle in the other direction.
Work your way up and down the muscle, trying to cover as much of the surface as possible.
Apply this technique for around 5 minutes, alternating with light stroking (above) occasionally.
Technique 3: Stripping the muscle
Aim – to apply sustained pressure to the muscle, ironing out any lumps, bumps and knots.
With both thumbs together, apply deep pressure up the middle of the calf muscle aiming to separate the heads (sides) of the big gastrocnemius muscle (image 4).
This technique should be slow and deliberate to 'feel' the muscle underneath.
Repeat this 3 to 5 times in a row, alternating with petrissage for 3 to 5 minutes.
Another similar technique is applied with a single thumb, which can be reinforced with a couple of fingers from the other hand if more pressure is required (image 5).
A great deal of pressure can be applied with this technique. Massage should be deep but not so deep that the athlete tightens up with pain.
Aim to cover all the muscles in the lower leg, feeling for all the lumps and bumps.
Techniques 5 and 6: Circular frictions and Trigger points
With either a single thumb, a reinforced thumb as shown (or fingers as shown in video clip), apply pressure in a circular pattern to any tight spots, lumps or bumps (image 6).
Apply 10 to 20 circular frictions at a time and alternate with stripping and petrissage techniques.
Frictions can be applied to a specific point in the muscle, or applied over a small area of muscle moving gradually.
Again, pressure should be firm but not so deep as to cause the muscle to tighten up with pain.
If the therapist finds any lumps and bumps or particularly sensitive spots then apply deep, sustained pressure to these points using the thumbs. A trigger point is a localised, highly sensitive point in the muscle.
Increase the pressure on the trigger point until it ranks 7/10 on the pain scale (10 being painful). Hold this pressure until it eases off to 4/10 on the pain scale (usually about 5 seconds).
Without easing off with the pressure, increase again until it reaches 7/10 on the pain scale once more. Hold until it eases, repeat once more.
This technique is very hard on the thumbs. It is important to keep the thumb slightly bent (flexed) when applying pressure to avoid damaging the joints.
Finishing off
The therapist can finish off with more petrissage techniques and then finally effleurage again. The whole process should not last more than half an hour.
Massage therapy can be applied every day if it is performed lightly however deeper techniques may result in a days recovery period to allow tissues to 'recover'.
For rehabilitation of muscle strains, sports massage is very important in softening / preventing scar tissue forming at the site of injury and re-aligning the new healing fibres in the direction of the muscle fibres. This will help prevent re-injury.

[Effleurage to the calf muscles]
Fig: Effleura

Sports Massage for the Front Thigh

Technique 1: Effleurage to front of the whole leg
Aim – light stroking to warm up the area in preparation for deeper techniques.
With the hands stroke lightly but firmly upwards from the ankle up the whole leg to the hip and then down the side of the leg. (image 1)
Try to cover as much of the surface as possible with the hands but avoid going directly over the patella (knee cap).
Apply this technique 5 to 10 times before moving on to concentrate just on the thigh area (image 2).
Technique 2: Deep effleurage to thigh
Aim – light stroking to warm up the area in preparation for deeper techniques.
With the hands stroke lightly but firmly upwards from just above the patella to to the top of the thigh. Try to cover as much of the surface as possible with the hands (image 2).
Always stroke upwards towards the heart in the direction of blood flow. Veins have valves which prevent blood from flowing back the wrong way. Forcing it through with massage can damage the veins.
Then lightly bring the hands down the outside of the leg (image 3) keeping them in contact but do not apply pressure.
Use slow, smooth movements. Many beginners tend to rush the massage techniques.
Repeat the whole movement using slow stroking techniques, trying to cover as much of the leg as possible.
Repeat this technique for about 2 to 5 minutes, gradually applying deeper pressure on the up strokes.
Technique 2: Petrissage
Aim – kneading movements which mobilise and manipulate muscle tissue. There are a number of different types or methods of petrissage massage techniques but it is not the quantity of techniques but the quality of how they are performed. A couple of simple ones are described below:
With the hands apply a firm, circular kneading technique. Try to pull half the muscle group towards you with the fingers of one hand whilst pushing half the muscle away with the thumb of the other hand (image 4).
Then reverse to manipulate the muscle in the other direction (image 5).
Work your way up and down the muscle, trying to cover as much of the surface as possible.
Apply this technique for around 2 to 5 minutes. This technique can be alternated with light stroking or effleurage (above) occasionally to add variety
Another slight variation on the above technique is a forwards and backwards type technique rather than circular movements.
The overall aim of these techniques is to mobilise and manipulate the muscle tissues making them soft, supple and easy to work with.
Aim to keep as much of the hand in contact with the skin at all times.
 
 
Techniques 3 and 4: Stripping the muscle and Circular frictions.
Aim – to apply sustained pressure to the muscle, ironing out any lumps, bumps and knots.
With the thumb of the right hand (for the left leg), apply deep sustained pressure along the full length of the muscle (image 6).
This technique should be slow and deliberate to 'feel' the muscle underneath. A good therapist will gradually build up a mental picture of exactly where the tension and scar tissue is in the muscle.
The thumb can be reinforced using the thumb or two fingers of the other hand, as shown in image 7.
Repeat this 3 to 5 times in a row, alternating with petrissage for 5 to 10 minutes.
If the therapist comes across any tight, tender knots in the muscle (usually at the point of strain or rupture), these can be worked out with deep circular frictions to the knot (image 8).
Massage should be deep but not so deep that the athlete tightens up with pain.
Technique 4: Stripping the Iliotibial Band
Apply sustained pressure with the heel of the hand along the length of the iliotibial band. This technique can be uncomfortable or even painful so start gently (image 9).
Technique 5: Trigger points
Any lumps and bumps or particularly sensitive spots can be treated with deep, sustained pressure to these points using the thumbs. Increase the pressure on the spot until it ranks 7/10 on the pain scale (10 being painful). Hold this pressure until it eases off to 4/10 on the pain scale (usually about 5 seconds).
Without easing off with the pressure, increase again until it reaches 7/10 on the pain scale once more. Hold until it eases, repeat once more.
This technique is very hard on the thumbs. It is important to keep the thumb slightly bent (flexed) when applying pressure to avoid damaging the joints. Finger nails need to be short to apply this technique correctly.
Finishing off
The therapist can finish off with more petrissage techniques and then finally effleurage again. The whole process need not last more than half an hour.
Massage therapy can be applied every day if it is performed lightly however deeper techniques may result in a days recovery period to allow tissues to 'recover' just like they would after a training session.
For rehabilitation of muscle strains, sports massage is very important in softening / preventing scar tissue forming at the site of injury and re-aligning the new healing fibres in the direction of the muscle fibres. This will help prevent re-injury.

[Effleurage to the front of the leg]
Fig:Effleurage to the front of whole leg

Sports Massage for the Knee

Technique 1: Circular frictions
Apply small circular frictions around the side of the knee joint starting from the front of the patella and working round.
This technique can be useful for breaking down and reducing firm swelling around the knee joint.
It may take many treatments to effect long term swelling around the knee.
Technique 2: Patella tendon
With the thumb apply gentle cross frictions to the patella tendon.
A more vigorous form of this technique can be applied to the patella to treat jumper's knee or patella tendinitis. The knee would be bent placing the tendon on stretch for best results.

[Circular frictions to the sides of the knee]
Fig: Circulator friction to the knee
 

Sports Massage for the Lower Leg & Shin

Technique 1: Effleurage
Light stroking movements from the ankle moving up to the knee then down the sides of the leg returning to the start position (image 1).
Try to cover as much of the area as possible with the hands.
Apply firmer pressure on the up strokes and very light contact on the down strokes.
Apply effleurage for 2 to 5 minutes gradually increasing pressure.
This can also be done with one hand as shown in the video clip below.
Technique 2: Stripping
Placing the hand over the leg as shown in apply sustained pressure from the ankle, along the full length of the muscle.
Apply gradually deeper pressure alternating this technique with effleurage for variety.
When massaging the inside of the leg stay well away from the bone. Massaging the muscle attachments to the bone may cause or increase inflammation of the periostium (a sheath that surrounds the bone).
Technique 3: Cross frictions to the tibialis anterior
With both thumbs apply cross frictions to the tendon of the tibialis anterior gradually working up the tendon.
Either repeat this technique concentrating on the tendon only or continue further up the full length of the tibialis anterior muscle.

[Effleurage lower leg]
Fig: Circular friction to the knee
 
                                    Hamstring Taping

            The following guidelines are for information purposes only. We recommend
            seeking professional advice before beginning rehabilitation.
            The aim of this taping is to provide compression to a strain or contusion
            in the acute stage.
            What is required:
 
Adhesive spray
Under wrap
1.5 inch non stretch oxide tape
6 inch non adhesive elastic bandage bandage
            Step 1
The athlete should be standing. Ideally the hair should be shaved from the
back of the      thigh.
Apply adhesive spray and under wrap starting at the bottom and work up.
                        Step 2
            Apply a pressure pad over the site of the injury.
            Using 2 inch non stretch zinc oxide tape apply one anchor strip on the
            outside of the injury and another on the inside.

                        Step 3
            Using 2 inch non stretch tape again apply the first compression strip from
            just below        the site of injury on the inside anchor upwards and across at 45
            degrees.
            The next supporting strip goes from the outside anchor just below the
            site of injury and crosses the first strip as it passes upwards to the inside
            of the thigh again at 45 degrees.
                                                                                
Step 4
            Repeat the above overlapping each strip by half working upwards until the entire area is covered.
            Note the strips do NOT go completely around the thigh as this would stop circulation of blood.
            The taping is covered with under wrap to help prevent it from moving.

Step 5
 
Close the entire taping with 6 inch crepe type compression bandage. Starting at the bottom wrap the tape around working upwards at 45 degrees applying a tug on the bandage at the 45 degree angle. Then as it comes around the thigh and back down at 45 degrees apply another tug. Work upwards crossing at 45 degrees all the way. Ensure the athlete tenses muscles in the thigh when this is being done to allow for muscle expansion after the job is finished.
                        Treatment therapies for cricket injury

                        Treatment Therapies for Sports Injuries

                        Sports Massage
                        Sports massage is a deep tissue form of massage which is excellent for                                  treating soft tissue injuries …..
[Aromatherapy]

                        Ultrasound
                        Ultrasound is a common treatment for sports injuries which uses sound                                 waves to provide a 'micro-massage' within the tissue
[Ultrasound]

[line]

                        TENS
                          TENS is transcutaneous electrical stimulation and can be used mainly for                                        pain-relief
[TENS]

[line]

                   Heat Therapy
            Heat therapy is the use of warm packs and heat retaining supports in the treatment of long-standing             chronic injuries

Ultrasound Therapy

Therapeutic ultrasound?
 
Therapeutic ultrasound as a treatment modality that has been used by therapists        over the last 50 years to treat soft tissue injuries. Ultrasonic waves (sound waves        of a high frequency) are produced by means of mechanical vibration of the metal           treatment head of the ultrasound machine. This treatment head is then moved over      the surface of the skin in the region of the injury. When sound waves come into          contact with air it causes a dissipation of the waves, and so a special ultrasound             gel is placed on the skin to ensure maximal contact between the treatment head         and the surface of the skin.
            effects of therapeutic ultrasound?
            The effects of therapeutic ultrasound are still being disputed. To date, there   is still very little evidence to explain how ultrasound causes a therapeutic        effect in injured tissue. Nevertheless practitioners world wide continue to use          this treatment modality relying on personal experience rather than scientific    evidence. Below are a number of the theories by which ultrasound is             proposed to cause a therapeutic effect.
Thermal Effect:
As the ultrasound waves pass from the treatment head into the skin they cause the vibration of the surrounding tissues, particularly those that contain collagen. This increased vibration leads to the production of heat within the tissue. In most cases this cannot be felt by the patient themselves. This increase in temperature may cause an increase in the extensibility of structures such as ligaments, tendons, scar tissue and fibrous joint capsules. In addition, heating may also help to reduce pain and muscle spasm and promote the healing process.
Effects on the Inflammatory and Repair Processes:
One of the greatest proposed benefits of ultrasound therapy is that it is thought to reduce the healing time of certain soft tissue injuries.
Ultrasound is thought to accelerate the normal resolution time of the inflammatory process by attracting more mast cells to the site of injury. This may cause an increase in blood flow which can be beneficial in the sub-acute phase of tissue injury. As blood flow may be increased it is not advised to use ultrasound immediately after injury.
Ultrasound may also stimulate the production of more collagen- the main protein component in soft tissue such as tendons and ligaments. Hence ultrasound may accelerate the the proliferative phase of tissue healing.
Ultrasound is thought to improve the extensibility of mature collagen and so can have a positive effect to on fibrous scar tissue which may form after an injury.
Application of Ultrasound:
Ultrasound is normally applied by use of a small metal treatment head which emits the ultrasonic beam. This is moved continuously over the skin for approximately 3-5 mins. Treatments may be repeated 1-2 times daily in more acute injuries and less frequently in chronic cases.
Ultrasound dosage can be varied either in intensity or frequency of the ultrasound beam. Simply speaking lower frequency application provides a greater depth of penetration and so is used in cases where the injured tissue is suspected to be deeply situated. Conversely, higher frequency doses are used for structures that are closer to the surface of skin.
Contraindications For Use:
As ultrasound is thought to affect the tissue repair process and so it is also highly possible that it may affect diseased tissue tissue in an abnormal fashion. In addition the proposed increase in blood may also function in spreading malignancies around the body. Therefore a number of contraindications should be followed when using therapeutic ultrasound:
Do not use if the patient suffers from:
Malignant or cancerous tissue
Acute infections
Risk of haemorrhage
Severely ischeamic tissue
Recent history if venous thrombosis
Exposed neural tissue
Suspicion of a bone fracture
If the patient is pregnant
Do not use in the region of the gonads (sex organs), the active bone growth plates of children, or the eye.

Transcutaneous Electrical Nerve Stimulation (TENS)
TENS?
Transcutaneous electrical nerve stimulation (TENS) is a method of providing pain relief. As the name suggests, it involves the application of electrical current to the affected area. This is achieved via a number of electrodes that can be fixed to the skin.
TENS relieves pain mainly by stimulating the pain gate mechanism. When tissue becomes damaged, the pain nerve fibres in the area become irritated and increasingly sensitive which leads to a heightened perception of pain in that area. However, in that region there are also a number of mechanoreceptors which respond to touch. Stimulation of these nerve fibres can override the pain impulses from that area- this is known as the pain gate mechanism. These mechanoreceptors can stimulated by an electrical current at certain frequency (usually 90-130 Hz) as provided by the TENS machine which in turn causes a pain relieving effect.
The use of TENS is an extremely popular method of pain relief. It is relatively cheap, easy to use and the side effects are minimal when compared to some oral pain killers. It is thought that TENS can provide pain relief in the region of almost 70% of cases suffering from an acute injury.
Application of TENS:
TENS machines can now be purchased quite readily from certain retail specialists
and are easy to apply. However a certain amount of care should be taken as a small proportion of patients suffer from an allergic reaction to the conductive gel, the electrodes themselves or the tape used to secure them in place. Most newer machines come with self-adhesive electrodes that can be changed after each application to decrease the risk of cross infection if more than one person is using the machine.
As each patient's symptoms are different the settings on the TENS machine need to be adjusted to suit the individual. We always recommend that you follow the instructions that come with machine or seek professional advice. TENS machines usually have 3 main variable settings:
1. Frequency
Most machines offer a frequency of approximately 2-200 Hz. To stimulate the mechanoreceptors the frequency should usually be in the region of between 90-130Hz.
2. Intensity
The intensity of the current is also adjustable and most machines will be able to reach intensities of between 80-100mA.
3. Pulse Width
This setting controls the period of time that electrical current passes through the electrodes. Many professionals place less emphasis on this setting than the intensity and frequency while some machines do not even have this particular control.
Will TENS hurt?
TENS machines should not cause discomfort but it will be possible to feel a slight tingling sensation when the machine is on. Again, as each person is different adjusting the above settings is highly important to gain the maximal effect from the machine.
Electrode position:
As with the above settings the position of the electrodes may be varied in response to the individual's symptoms. Usually an electrode is placed either side of the painful area however any number of variations may be possible. Some practitioners focus on targeting a particular peripheral nerve or acupuncture point.
Care should be taken when:
If the area of skin has abnormal sensation.
If the patient suffers from seizures or epilepsy seek professional advice
Using TENS machines in children- this is due to the fact that the child's growth regions may be affected by electrical current
If the individual is pregnant always seek professional advice prior to using.
TENS should NOT be used if:
The patients has a pacemaker
Patients have an allergic reaction to the electrodes, gel or adhesive strapping
The patient has any skin conditions such as eczema
Patients with open wounds in the area
Patients who have circulatory problems
Application to the neck and upper trunk region.

Heat Therapy
Heat treatment is used as a treatment for many sports related musculoskeletal injuries. There are many forms of heat treatment, with the most effective often depending on the injury in question. Time scale is also an important factor when deciding whether to use heat therapy.
What are the Benefits of Heat?
Heat acts to:
reduce pain
reduce stiffness
decrease muscle spasm
increase blood flow to the area which promotes healing
When Should I Use Heat Therapy?
Heat therapy should be used on chronic injuries and late stage acute injuries. A chronic injury is one that has persisted for a length of time and is usually due to overuse and biomechanical issues, as opposed to a traumatic incident. Heat can be used before exercise to warm the muscles, but should be avoided after exercise.
How Can Heat be Applied at Home?
At home the easiest way of applying heat to an injury is by using a widely available heat pack. These can be made of varying materials, often gel or wheat based which either require heating in a microwave or submerging in hot water. Wrapping such an item in a towel and applying it to the injuy is perfectly suitable. This should be applied be 15-20 minutes at a time. Warm, damp towels, warm baths and heat rubs can also be easily used at home although may not be as effective at warming deeper tissues.
What are the Contraindications to Using Heat Therapy?
The following are contraindications (times when heat treatment is not suitable) which apply to heat therapy:
Sensory changes (cannot feel if it is too hot)
Heat injury
Hyper or hypo-sensitive to heat
Circulatory problems
During the acute phase of injury
DVT
Infections
Malignant tumours
            Most of these are due to the massive increase in blood flow to the area. With conditons such as infection or malignant tumours, heat would increase the risk of spreading the infected or cancerous cells in the much increased blood flow.

A reusable hot and cold pack

            Stretching exercises

            Here is a list of stretches for the entire body. Static stretches such as these can be
            used with         great effect in improving flexibility in both injury prevention and rehabilition.
            All of these s tretches should be held (without bouncing) for 20-30 seconds.
            Stretching can be performed from cold provided it is gentle initially and you
            gradually move further into the stretch. Click on a stretch to view a picture, description,
            muscles being stretched and related injuries.

            Neck Stretches

[Lateral neck flexion stretch]
Lateral neck flexion
[Forward neck flexion]
Forward neck flexion
[Neck rotation]
Neck rotation
[scm stretch]
Sternocleidomastoid stretch

Chest and Shoulder Stretches
[line]

[Anterior shoulder stretch]
Anterior shoulder stretch
[Anterior shoulder 2 stretch]

Anterior shoulder stretch 2
[Posterior shoulder]
Posterior shoulder stretch
[Supraspinatus shoulder exercise]
Posterior shoulder stretch 2
[supraspinatus]

Supraspinatus stretch
[Internal rotation of the shoulder partner stretch]

Internal rotation stretch
[external rotation shoulder stretch partner]
External rotation stretch
[Chest stretch using a wall]
Chest stretch
[Chest with a partner]
            Partnered chest stretch
 
            ArmStretches
[line]

[Wrist flexors for golfers elbow]
Wrist flexor stretch
[Tricep back of the arm]
Tricep stretch
[wrist extensors for tennis elbow]
Wrist extensor stretch
[Tennis elbow]
Tennis elbow stretch

            Back and Abdominal Stretches

[Back stretch]
Back stretch
[Latissimus dorsi]  
Lat dorsi stretch

[Latissimus dorsi in the kneeling position]

Lat dorsi stretch 2
 
[Cat exercise for the back extensors]
Back arch stretch
[slump stretch]
Back slump stretch
[Spine rotation]
Rotation stretch
[Abdominal ball stretch]
Abdominal stretch
[Abdominal stomach stretching exercise]
Abdominal stretch 2
[side stretch]
Side stretch

            Hip and Groin Stretches

[Gluteus Maximus]
Gluteus maximus stretch
[Outer hip muscles]
Outer hip stretch
[ITB]
Standing outer hip stretch
[Piriformis muscle]
Piriformis stretch
[gluteal]
Gluteal stretch
[Short adductors including pectineus]
Short adductor stretch
[long adductor or groin muscles]
Long adductor stretch
[Standing groin or adductor muscles]
Standing groin stretch

            Thigh Stretches

[Standing quadriceps]
Quadriceps stretch
[Quads in a laying position]
Laying quad stretch
[Hip flexor muscles such as iliopsoas]
Hip flexor stretch
[hamstrings in a sitting position]
hamstrings stretch
[hamstring muscle group in a standing position]
Standing hamstring stretch
[Hamstring partner]
Partnered hamstring stretch
[Quad stretch]
Kneeling quad stretch

            Lower leg Stretches

[Shin anterior lower leg]
Shin stretch
[shin muscles including Tibialis Anterior]
Standing shin stretch
[Advanced shin]
Advanced shin stretch
[GAstrocnemius stretch]
Gastrocnemius stretch
[Advanced gastrocnemius stretch]
Advanced gastrocnemius stretch
[soleus stretch]
Soleus stretch
[soleus stretch 2]
Soleus stretch 2
[calf stretch with a bent knee for soleus]
Advanced
soleus stretch

Foot and Ankle Stretching

[Plantar fascia]
Plantar fascia stretch
[peroneals]
Peroneal stretch
 

Types of stretching
Static Stretching
Static stretching is the type of stretching where you take a muscle to its outer range, until you can feel a gentle stretch in the muscle belly, and hold it at that point. Stretches are usually held for between 20 and 60 seconds and should be pain-free.
Static stretches work because as you hold the position, with the muscle under tension, a stretch reflex causes muscle relaxation. When this occurs the muscle can be stretched a little further, without pain or discomfort. If there are feelings of pain or discomfort then the stretch should be reduced to prevent over-stretching and muscle damage.
Static stretching is the most commonly performed type of stretching, partly due to it being the safest method of stretching due to the relatively low levels of tension developed.
Static stretches can be either active or passive. Active stretches involve the athlete moving the joint through its range of motion and holding it at the point of stretch themselves. Passive stretching is sometimes also known as partner stretching and involves a partner moving the joint to the point of tension in the muscle and holding it for the athlete, whilst they relax! If using this type of stretching, communication is important to ensure the partner is aware of any discomfort in the muscle and eases off accordingly.

Dynamic Stretching
Dynamic stretching is sometimes also known as active stretching and is now being seen as a replacement for static stretching during a warm-up as it replicates the kind of movements which are common in most sports, and can be adapted to suit the sport and individual. Dynamic stretches involve taking a muscle through its entire range of motion, starting with a small movement and gradually increasing both movement range and speed. Examples of these types of drills include high knees, cariocas and lunges.
In a warm-up, dynamic stretches are usually performed following an initial period of CV exercise (jogging/cycling etc) and usually include a minimum of 5 of this type of drill, each performed 6-8 times at slow, medium and fast speeds. All movements should be under complete control.

PNF Stretching
PNF stands for Proprioceptive Neuromuscular Facilitation and can take on several forms including hold-relax; contract-relax; and rhythmic initiation. PNF started to become popular in the 1960's and has since become a common treatment for many physiotherapists and other sports injury professionals.
PNF can be either completely passive (meaning the therapist moves the limb through its ranges of motion) or active assisted, in which the athlete plays a role in the treatment. In this case it requires an isometric contraction before the stretch. So for example, to a use hold-relax PNF technique on the hamstrings, the athlete would lay on the back and raise the straight leg up off the bed (contracting the hip flexors Rectus Femoris and Iliopsoas) to the starting position. From here, the therapist or partner provides resistance as the athlete isometrically contracts the hamstrings (as if trying to push the foot back down to the floor) for a minimum of 6 seconds. Following this the athlete contracts the hip flexors again to raise the leg higher and further stretch the hamstrings.
This works on the theories of reciprocal inhibition (or innervation) and post-isometric relaxation. Reciprocal inhibition is based on a reflex loop, controlled by the muscle spindles. When an agonist muscle contracts (for example the quads, causing knee extension), the antagonist muscle is inhibited, causing it to relax (in this example the hamstrings), allowing the full movement of the antagonist muscle (knee extension). Post-isometric relaxation is thought to be controlled by the golgi tendon organs, sensors within the muscle which are sensitive to muscle tension. When a muscle is contracted isometrically for a period of time, this results in an inhibition of the muscle, resulting in relaxation.
PNF can also be used for treatments other than stretching, for example muscle strengthening in a rehabilitation setting. PNF in this sense involves spiral-diagonal movements, as are used in most daily and sporting activities. Very few activities use only one plane of movement, there is usually an combination of two or all three planes (flexion/extension; adduction/abduction; and rotation). For this reason, PNF incorporates these spiral-diagonal movements to help train the body in the way in which it is most often used.

Muscle Energy Techniques

Muscle Energy techniques (or MET's) are another form of active-assisted stretches, similar to PNF, and developed around the same time, in the world of Osteopathy. Like PNF, MET's use an isometric contraction of the agonist prior to stretching. The difference is in the force of the isometric contraction, which in MET's are a lot lower. An MET stretch is performed in the following way, using the hamstrings as an example:
The therapist moves the hip into flexion, with the athlete on their back, until they encounter the point of resistance – where the movement stiffens, due to tightness in the hamstrings. They hold this position for 15-20 seconds. They then ease off slightly from the stretch and ask the athlete to try to push the leg back down to the couch, which causes an isometric contraction of the hamstrings. In MET's, this contraction should be a maximum of 20% of the athletes total strength. This contraction is held for around 10 seconds, before the therapist asks them to relax and pushes the limb further, increasing the stretch, until resistance is felt once more. The process is usually repeated 3-5 times for each muscle.

Ballistic Stretching
Ballistic stretching is the bouncing type of stretching, where you take the muscle to near its limit and then bounce to stretch it further. For example reaching over to touch your toes and bouncing to increase the range. This type of stretching is rarely recommended due to the injury possibilities and no beneficial effect over other, safer, forms of stretching such as PNF and dynamic stretches.

Neural Stretching

Neural stretching refers to stretching the structures of the nervous system. This is necessary in injuries where there is excess neural tension or restriction of movement of neural structures, commonly around the neck and shoulder girdle, or pelvis area. Neural stretches are adaptations of neural tension tests, such as the slump test and the upper limb tension test. The limb is taken to the point of stretch and held for a maximum of 10 seconds, although initially this may be as little as 3-4 seconds to avoid causing damage to the nerves. This kind of stretching should only be performed under the supervision of a qualified therapist.
[Hip flexor static stretch]
Static stretch
[dynamic hamstring stretches]

Dynamic stretching
Play video

Benefits of stretching

There are many benefits to be gained from a regular stretching programme:
[*]        Increased flexibility and range of motion
[*]        Injury prevention
[*]        Preventing DOMS
[*]        Improved posture
[*]        Improvements in sports performance
[*]        Stress relief
Increased flexibility and range of motion
This is the most obvious benefit of regular stretching and usually the reason that people start a startching programme. However, reasons for stretching ususally go much deeper than this. For example, why do you want to increase your flexibility? Is it to improve your sporting performance, posture, or prevent injury?
Injury Prevention
Being flexible can help to prevent injuries. This can include acute injuries, such as a hamstring strain and overuse injuries such as IT band syndrome of plantar fasciitis.
Stretching has been used in the warm-up process for many years. It is thought that having flexible muscles can prevent acute injuries by gently stretching the muscle through its range before exercise. Dynamic (active) stretches are now recommended for warm-ups, over the traditional static stretch.
 
Preventing DOMS
Delayed Onset Muscle Soreness (DOMS) occurs 24-48 hours after exercise. It is thought to be due to microscopic tears in the muscle. Stretching before and after training is thought to minimise this damage.
Improving Posture
In many cases of poor posture which has developed over time, muscle imbalances are to blame. A good example is the chest muscles becoming shortened in people who slouch over a computer for long periods. Stretching these muscles can help to improve posture.
Improving sporting performance
Many sports obviously require high levels of flexibility, for example athletics and gymnastics. But even athletes in sports such as Rugby, where flexibility is not immediately thought of as a key component, can improve their performance by becoming more flexible.
In order to have healthy muscles, they must be flexible. This will help to prevent injuries as already discussed, but it will also allow you to develop strength through the full range of motion at the joint. This gives an advantage over someone who has a limited range.
Stress relief
Muscle tightness is often associated with stress – we tend to tighten up when stressed. For example the neck muscles. Stretching relaxes these muscles and you at the same time!

Resistance Band Exercises
Here is a list of exercises which can be performed using resistance bands.
                                    Click on an      exercise to view a description, video, the muscles being worked and related injuries.
                                    All Resistance band exercises should be performed slowly and under control.                                   Begin with the b           and at the start of tension which increases as you perform the exercise. To make the           exercise more difficult, shorten the section of band you are using to increase the tension over the range of motion.
                        Upper Body

[Bicep curl]
Bicep Curl
[tricep extension]
Tricep Extension
[triceps extension overhead]
Overhead Tricep Extension
[pronation]
Pronation
[Supination]
Supination
[wrist extension]
Wrist Extension
[wrist flexion]
Wrist Flexion
[upright row]
Upright row
[band lateral raise]
Lateral raise
[lat pull down]
Lat pull down
[pec fly]
Pec fly
[press up]
Push up
[reverse fly]
Reverse fly
[seated row]
Seated row
[Pullover]
Pullover
[chest press]
Standing chest press
[internal rotation]
Internal rotation
[front raise]
Front raise
[External rotation]
External rotation
[Shoulder press]
Shoulder press

Lower Body
[line]

[hip flexion with a resistance band]
Standing hip flexion
[abduction]
Standing abduction
[seated hip flexion]
Seated hip flexion
[laying hip abduction]
Laying hip abduction
[hip extension]
Hip extension
[hip adduction]
Hip adduction
[Band knee flexion]
Knee flexion
[Eversion]
Eversion
[knee extension]
Knee extension
[inversion]
Inversion

Trunk
[line]

[crunch]
Crunch
[sitting twist]
Sitting twist
[standing twist]
Standing twist
[woodchop]
Woodchop

Free Weights Exercises
            Free weights exercises usually incorporate one or two dumbbells, a barbell or a medicine
             ball or kettle bell. They are great for people who have already built up a base of
            strength using   resistance machines, body weight or resistance band exercises.
            The most important thing with free weights is to get the technique of each exercise right.
            It is very easy to start off right and loose your form as your muscles fatigue. Always
            think    about your posture when performing strength exercises and start with a light
            Weight and gradually build up.
 
            Upper Body

[Bench press free weights strengthening exercise]
            Bench Press
[Pec fly]
Pec Fly
[Dumbbell pullover]
Dumbbell Pullover
[Single arm row]
Single Arm Row
[Bent over row]
Bent Over Row
[Lateral raise]
Lateral Raise
[Front raise]
Front Raise
[Bent over raise]
Bent Over Raise
[Internal shoulder rotation]
Internal Shoulder Rotation
[external shoulder rotation]
External Shoulder Rotation
[upright row]
Upright Row
[shrugs]
Shrugs
[Chest Press]
            Chest Press
[military press]
Military Press
[shoulder press]
Shoulder Press
[bicep curl]
Bicep Curl
[hammer curl]
            Hammer Curl
[concentration curl]
Concentration Curl
[extended bicep curl]
Extended Bicep Curl
[tricep kickback]
Tricep Kickback
[french press]
            French Press
[jaw breaker]
Jaw Breaker
[wrist flexion]
Wrist Flexion
[wrist extension]
Wrist Extension

            Lower Body
[line]

[dead lift]
            Dead Lift
[good morning]
Good Morning
[straight leg deadlift]
Straight Leg Deadlift
[front squat]
Front Squat
[clean]
            Power Clean
[snatch]
Snatch
[Squat]
Squat

Abdominals
[line]

[side bend]
Side Bend
[med ball twist]
Medicine Ball Twist
[medicine ball crunch]
Medicine Ball Crunch
[medicine ball reverse crunch]
Medicine Ball Reverse Crunch
[v-up]
Single Leg V-Up

            Resistance Machine Exercises

            Resistance machines (or weights machines) are the pieces of equipment usually
            found in a gym which incorporate a weight stack and pulley system to provide
            resistance         against a fixed movement. They are excellent pieces of machinery
            for beginners especially, to help develop strength and co-ordination before progressing
            to free-weights. They are also effective for use in rehabilitation following injury.
            When using a resistance machine, all movements should be slow and under
            control, maintaining an emphasis on technique and posture throughout.
            Inbetween repetitions the weight being lifted should not return to meet the rest
            of the stack. This maintains continuous           tension on the muscles.
 
Upper Body

[chest press]
            Chest Press
[pec fly]
Pec Fly
[Bicep curl]
Bicep Curl
[bench press]
Bench Press

            Pull Over
[shoulder press]
Shoulder Press
[Triceps push down]
Tricep Push Down

Assisted Dips

            Lower Body
[line]

[knee extension]
            Knee Extension
[knee curl]
Knee Curl
[leg press]
Leg Press
[adductor inner thigh resistance machine]
Inner Thigh (adductors)
[abductor machine]
            Outer Thigh     (abductors)

Seated Calf Raise
[calf raise]
Standing Calf Raise

            Trunk
[line]

[seated row]
            Seated Row
[lat pull down]
Lat Pull Down
[chin-ups]
Assisted Chin-ups
 
Suggestion/follow up
SHOULD A CRICKET PLAYER GO ABOUT IMPROVING ALL THESE AREAS?
Suggested methods of improving the following areas of conditioning include:
FITNESS COMPONENT
SUGGESTED METHODS
OTHER CONSIDERATIONS
Aerobic Endurance

Unit Running
Repeated Sprint Drills

Running technique and form
Heart rate monitoring
Speed
Understand injury profile of player

Strength

Body weight exercises
Free weights
Machine weights

Correct technique
Protocols (i.e. choice & order of exercise, sets, repetitions, rest periods, resistance…etc)
Training loads (i.e. volume vs intensity, training age…etc)
Movement patterns, types & speed of contraction.
Understand injury profile of player

Power

Plyometrics
Acceleration drills
Weight training

See above

Flexibility

Static, dynamic, PNF
Yoga
Feldenkrais
Alexandra Technique

Correct technique
Mental concentration & focus
Warm-up & warm-downs
Understand injury profile of player

Core Stability

Lumbar stabilisation
Scapula stabilisation
Shoulder stabilisation (rotator cuff)

Correct technique
Mental concentration & focus
Body, muscular & motor pattern awareness
Balance, co-ordination & skill of movement
Choice of exercises & progression
Understand injury profile of player

Agility

Acceleration and deceleration drills
Changing direction drills under various speeds
Drills requiring rapid changes of pace, direction and non-linear type movements

Balance, co-ordination & skill of movement
Understand injury profile of player

POSITION
GENERAL PERFORMANCE OBJECTIVES
GENERAL INDICATORS OF POOR CONDITIONING
FAST BOWLER

The ability to sustain blistering pace for a number of overs.
Capable of bowling 10-15 consecutive overs (less for under age players) at 80-90% max speed.

The inability to maintain a fast pace
The inability to bowl for long periods
The inability to maintain good line & length

SPIN BOWLERS
The ability to consistently spin the ball.
Capable of bowling in excess of 20 consecutive tight overs.

The inability to maintain consistent ""turn""
The inability to bowl for long periods
The inability to maintain good line & length

BATSMAN
The ability to occupy the crease continuously for 2 hour periods (longer in one day matches) without fatigue affecting speed in running between the wickets, reaction time, movement speed and scoring opportunities.

Reluctance to run quick singles
Poor recovery after running 2+ runs
Concentration lapses and poor skill execution throughout a session
Inability to score

WICKET KEEPER
The ability to sustain a concentrated effort for 6 hours without fatigue affecting running speed, reaction time and movement time.
Capable of explosive bursts at any given time.

Slow to get to the stumps to take returns.
Lack of agility.
Concentration lapses and poor skill execution throughout a session.

FIELDER
The ability to sustain a concentrated effort for a 6 hour period without fatigue affecting motor co-ordination.
Capable of explosive bursts at any given time – whether ground fielding, throwing or catching.

Slow moving towards the ball
Slow chasing the ball
Lack of agility & flexibility
Concentration lapses and poor skill execution throughout a session
Inability to maintain explosive actions throughout sessions 
EXAMPLE OF A TRAINING YEAR PLAN
May – July
General Preparation
Core Stability
Flexibility
Endurance
Strength & Power
Speed
Specific localised stabilisation training
Develop body awareness
Develop aerobic base
General preparation
Develop speed components
July – Sept.
Specific Preparation
Core Stability
Flexibility
Endurance
Strength & Power
Speed
General trunk stabilisation training
Increase range of movement; static stretching
Increase stamina and volume of work in duration.
Specific development, increase intensity, contraction speed.
Specific development, acceleration, agility
Sept. – Oct.
Pre-Competition
Core Stability
Flexibility
Endurance
Strength & Power
Speed
Functional stabilisation training
PNF stretching and dynamic flexibility
Develop anaerobic threshold through repeated high intensity workloads
Develop power, plyometrics, speed of contraction
Specific drills, acceleration, deceleration, agility, turning speed
Nov – March
Competition
Maintain
Maintain
 
Suggestion/follow up
Long barrier method of fielding
This is used when the fielder does not want to miss the ball in case it rolls over the boundary. The fielder runs to a position where he is in line with the oncoming ball. If he is running to his right-hand side he puts his right foot down and then his left knee, which should touch the heel of his right foot.
The lower left leg is then flat on the ground forming a long barrier which will stop the ball should the fielder miss it with his hands. Make sure that the left ankle is also flat on the ground so that the ball has no escape route.
The fielder then scoops the ball up and throws it to the wicket keeper using an overarm throw. At this stage accuracy and distance is more important.
Practical suggestion
Make this fun and by constructing a boundary of sorts, using a skipping rope or something similar. Challenge the child by encouraging him to reach and field the rolled ball before it crosses the boundary line. Should the ball cross the boundary before they field it, then you, the “batsman” gets 4 runs (this is game related).
Bowling
Place the ball in the best hand, grasping it with the middle and fore fingers extended over ball (the ball faces backwards). Place the best foot square behind a line and the front foot pointing forward at a target. The other arm is slightly bent and points upwards so that the child can look over the shoulder of this arm at the target.
The bowling action is similar to that of a windmill where the front arm is pulled down past the outside of the front leg while the bowling arm (absolutely straight) is brought past the head shaving the ear en route and the ball is released in the direction of the wickets. The bowler keeps his eyes on the wickets throughout.
Practical suggestion
Make this fun and challenging by placing a target about eight meters in front of the child. See how many times out of 12 attempts he hits the wickets; in other words, see how many batsmen he can dismiss in two overs.
Make this more progressive by introducing a few approach steps and later a short run up before bowling.
Batting
Place the bat flat on ground and pick it up as one would an axe – retain that grip. Place the best foot square behind a line (the popping crease) while the front foot points forward in direction of the opposite wicket. The bat is swivelled back so that the toe of the bat points at the batsman’s own middle stump. The bat is horizontal to ground and the arms form a circle with the hands on the handle just below the belly button.
The best hand must grip tightly, while the other hand relaxes. During batting action the other elbow leads forward and up while the best hand pushes forward in the direction of ball. Bat in an upright vertical position throughout the forward stroke. At the end of this position, follow through with the other elbow pointing upwards and the toe of the bat in the direction that the ball has been hit. Arms maintain a circular position for a split second after the stroke.
Practical suggestion
Start the batting by placing a large plastic ball on a bean bag in the front and slightly towards the best side of the batsman. The batsman steps towards ball and places the other foot next to the ball and hits ball forward with a straight bat. Maintain the finishing position for the adult to check if it’s correct.
Later the adult can roll a big ball straight towards the batsman. The batsman watches carefully and steps next to ball, leans forward and drives the ball forward at a slight angle. These later progresses to actually throwing tennis ball underarm to the batsman.
A fun idea is continuous cricket – a game in which a minimum of three people are needed. The batsman stands in front of wicket and the adult stands about four meters away and throws the ball underarm to the batsman. The batsman bats the ball and runs around a beacon that is set up about three meters away square to the batsman (behind him).
The fielder retrieves the ball and throws it back to the bowler as quickly as possible. As soon as the bowler receives the ball he bowls, regardless of whether the batsman is ready or not. If he hits the wicket, the batsman and fielder change positions. This is also called “tip-and-run” where the batsman has to run even if he only touches the ball. See how many runs are scored before being bowled or caught out.
Running between the wickets
In order to score a “run” cricketers have to run from the crease on one side of the pitch to the crease on the other side of the pitch.
Practical suggestion
As a warm up or fun running activity, the adult can place two beacons about eight meters apart. The adult can be the batsman on one side and the child the batsman on the other. When the adult shouts, “yes”, they run towards and past each other to the opposite wicket. Remind the child to stick to his side of the pitch as batsmen are never allowed to crash when scoring runs.
The players could score two or three runs at a time and see who gets back to their crease first. This teaches them how to run economically by turning sharply and just touching over the crease line with the bat as they turn for the next run.
Catching
To teach a child to catch low balls, you could play “leggy” with those who are five years and older. An adult and a child stand about three meters apart with feet wide apart. The adult tries to roll the ball through child’s legs and vice versa. Should the ball go through either one’s legs, the other scores a point. This is lots of fun when there are about four versus four players. Scoring can be done any way you choose.
Conclusion:
Cricket is a major international sport played in more than 60 countries. The laws of cricket were drawn up by the London Club in 1744, formalising a game that had been played for a hundred years before. While its popularity spread throughout the countries of the British Empire and Western Europe, it was not until the mid-19th century that cricket gained its international status and regular international matches were played between touring teams.
The first recorded international took place in 1844, at St George’s Park, New York, between the United States and Canada. Canada won. The inaugural test match was played between Australia and England at the Melbourne Cricket Ground in 1877. Professionalisation and more recently, media coverage have led to a huge expansion and popularisation of the game as we know it today. Ten nations are full members of the International Cricket Conference, and 45 more are associated or affiliated members.
Although strictly a non-contact sport, injuries in cricket are common, and have been documented as far back as 1751, when Frederick, Prince of Wales (son of George II), expired suddenly from an abscess in his head as a consequence of a blow he’d received from a cricket ball. For one of the widely popular team sports, there have been relatively few publications in the medical literature on cricket injuries. This article reviews the injuries occurring commonly in cricket and describes measures to prevent or minimize them.
Bibliography
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30. Biomechanics 2005; 38: 445-452
 

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BIRD FLU SYMPTOMS 2

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View With Charts & Images

REPORT
ON HOW CAN BIRD FLU BE DETECTED?

Bird
flu symptoms

Although there have been few human cases to
determine the exact incubation period of bird flu, it would be expected to be
from three to 10 days. The symptoms of bird flu in humans are similar to those
of regular influenza and include:

Complications Of Bird flu

Bird flu in humans can cause a range of serious and potentially fatal
complications, including:

Tell your doctor if you’ve
been to a country where there is bird flu

 

If you have recently returned from a country that had an outbreak of bird flu
and you get flu symptoms, see your doctor immediately. When making the
appointment, tell the clinic staff about your travel including any visits to
markets, farms or anywhere else where birds were present.

Influenza viruses can mutate

Influenza viruses that infect animal species can mutate and infect humans. The
human immune system may have no defences against viruses that previously only
infected animals. That’s why infection with these viruses can result in more
severe disease in people.

If the H5N1 bird flu virus were to mix with a human influenza virus, such a
‘combined’ virus could create a new human influenza virus that could spread
rapidly.

Health experts are concerned that the current bird flu affecting Asia could
become a worldwide pandemic if the virus does mutate. The worst influenza
pandemic in modern history was the Spanish flu, which occurred in 1918–19 and
killed up to 50 million people.

Measures to contain the spread of the current bird flu virus include
identifying and culling affected poultry flocks, research into tests and
vaccines, and rigorous quarantine practices.

Treatment options

Several antiviral medications used to treat human influenza are also effective
for bird flu. These could be used if a person developed symptoms after possible
exposure to bird flu, or to prevent illness in a person who was in close
contact with bird flu. Currently testing for bird flu vaccines is an ongoing
process.

 

At the moment, there is no need for people living in USA, or people making
short visits to countries with cases of bird flu, to have antiviral
medications. Americans living long-term in countries affected by bird flu
should consider having a supply of antiviral medications in the home to use on
medical advice should the situation change while they are away from the US.

The Federal government is stockpiling Relenza and Tamiflu, two drugs that may
be used in the treatment of human cases of bird flu. In the case of an outbreak
in humans, these drugs would be used to maintain essential services, prevent
transmission and provide treatment for people who are already ill.

A vaccine against bird flu is in development, but is not currently available.
The current influenza vaccines will not protect humans against bird flu.
However, people who may be exposed to bird flu should consider being vaccinated
against human influenza viruses to reduce the risk of the viruses ‘mixing’ to
form a new flu strain.

Advice for travelers

Be aware of the risk of bird flu if you are travelling to a country where
outbreaks are occurring. Suggestions include:

Control of avian
influenza A(H5N1): public health concerns

10 February 2004

The current outbreaks of highly pathogenic H5N1
avian influenza in poultry in parts of Asia have had immediate and severe
consequences for the agricultural sector.1 Human cases, with a high
fatality, have been reported in two countries, Viet Nam and Thailand, with very
widespread outbreaks in poultry.

It can be anticipated that human cases will also
be detected in other countries where outbreaks in poultry are rapidly
spreading.

The number of human cases presently detected is
very small compared with the large number of infected birds distributed over a
wide geographical area. This suggests that the H5N1 virus strain may not easily
infect humans.

To date, no human-to-human transmission is known
to have occurred. However, the continuing presence of infection in poultry may
also create opportunities for the emergence of a new influenza virus subtype
with a capacity to spread easily among humans, thus marking the start of an
influenza pandemic. Should this rare event occur (three pandemics occurred
during the previous century), it would immediately have serious consequences
for human health throughout the world.

For this reason, public health concerns about the
present H5N1 situation must be given the highest priority when weighing the
immediate and measurable economic losses in animals against possible yet
unpredictable consequences for humans.

Several other diseases in animals can be
transmitted to humans. Experience with such diseases, known as “zoonoses”, has
shown that strict measures on animal health, imposed by the need to protect
human health, helped rebuild consumer confidence.2

Recent experience has also shown that measures
for the control of zoonotic diseases, aimed at halting further spread in
animals and minimizing economic losses, need to be closely coordinated with
measures that minimize the longer-term risks to human health. In the present
situation, measures aimed at eliminating the disease in poultry will also
reduce the presence of the virus in the environment and thus reduce
opportunities for human exposures and infections. These measures must be
carried out urgently, giving highest priority to the protection of human
health. Previous outbreaks of highly pathogenic avian influenza associated with
human infections occurred in areas, such as Hong Kong and the Netherlands, with
industrial poultry production and well developed health and agricultural
infrastructures. Even so, elimination of infection in poultry was a complex,
difficult, and costly undertaking. Both outbreaks were eventually controlled
through immediate culling of infected flocks, quarantine and disinfection of
farms, strict biosecurity, restrictions on the movement of animals, and
compensation for farmers.

The present situation is different. Control of
outbreaks of highly pathogenic avian influenza is known to be especially
difficult in areas where poultry range freely. In several affected countries,
up to 80% of the total poultry population is raised in small backyard farms.
Most rural families keep a small free-range flock.

Given these features of the present situation
there is potential that the H5N1 virus could become established in bird
populations in this geographical region and possibly spread to other parts of
the world. This was one of several conclusions reached during a joint FAO/OIE/WHO
technical consultation on the control of avian influenza, held in Rome from
3–4 February.

No single blueprint for control in animals, and
thus reduction of risks for humans, is available. Over the past four decades,
only 18 outbreaks of highly pathogenic avian influenza, most caused by strains
other than H5N1, have occurred throughout the world. Existing evidence will not
suffice to provide universally applicable recommendations for a rapid and
effective response in affected countries.

Control measures must be tailored to each
country’s unique epidemiological situation and unique capacity, with health and
agricultural sectors working hand-in-hand. Agricultural authorities face the
immediate challenge of rapidly eliminating the H5N1 reservoir in poultry.
Authorities in all affected countries need to work together in a coordinated
way

Transparency in reporting of human and animal
disease is absolutely essential.

Despite the uncertainties, experts fully agree
that immediate culling of infected and exposed birds is the first line of
defence for both the protection of human health and the reduction of further
losses in the agricultural sector. Other measures, such as the vaccination of
healthy flocks, may play a supportive role in some cases when undertaken in
conjunction with measures for preventing further spread of infection. WHO has
repeatedly stressed the
need to ensure that culling is carried out in a way that does not fuel more
human cases. and that vaccination of poultry should not lead to the dropping of
vigilance or compromise other necessary control measures.

In responding to the situation, WHO emphasises
three strategic goals: to avert an influenza pandemic, to control the present
human outbreaks and prevent further spread, and to conduct the research needed
for better preparedness and response, including the immediate development of a
new vaccine for humans against H5N1. WHO has issued a series of technical
guidelines aimed at minimizing the risk of further human cases and
facilitating a coordinated international response.

1 Highly pathogenic avian influenza is
categorized by OIE as a “list A” disease. List A includes transmissible
diseases “which have the potential for very serious and rapid spread,
irrespective of national borders, which are of serious socio–economic or public
health consequence and which are of major importance in the international trade
of animals and animal products.”

2 One example is the spread of bovine spongiform
encephalopathy, or “mad cow disease”, in cattle, which led to the emergence of
a rare yet invariably fatal new disease in humans.

History of Avian Flu

The Avian Flu disease has captured considerable
international attention over the past year with serious epidemics of this
disease affecting Japan, South Korea, and areas of South-east Asia earlier this
year.  Now considered a pandemic, serious outbreaks of avian influenza had
also affected the Netherlands, Belgium, and Germany in 2003.  Avian flu had
also been reported in Australia, Pakistan, Italy, Chile, and Mexico.  The
impact of this serious disease has been disruptive to the poultry industries as
millions of chickens, geese, and turkeys were slaughtered to prevent further
transmission of this highly contagious disease.

Besides its devastating effect on domestic
poultry, Avian Flu has received unprecedented publicity because of what
occurred in Hong Kong in 1997.  Before this time, Avian flu was thought to
infect birds only, however, a different strain of Avian Flu virus was detected
in humans, marking the first time that Avian Flu was transmitted to
humans.  During this outbreak, 18 people were hospitalized and 6 of them
died.  To control the outbreak, authorities killed about 1.5 million
chickens to remove the source of the virus.

Earlier this year in January, a major outbreak of
Avian influenza surfaced again in Vietnam’s and Thailand’s poultry
industry.  Within a few short weeks, the disease had spread to ten
countries and regions in Asia, including Indonesia, South Korea, Japan and
China.  Over 50 million chickens, ducks, geese, and turkey were
slaughtered in an intensive effort to stop the disease from spreading any
further.  The outbreak was then contained in March.  Unfortunately,
this outbreak took a considerable toll on human lives.  There were 34
people infected with the Avian Flu in Vietnam and Thailand, of which 23 of them
tragically died.

Though scientists determined that the spread of
the Avian flu virus from birds to humans are rare occurrences, they were also
quick to express grave caution that this problem could become significantly
worse if the virus mutated into a more lethal form, or a form that could pass
easily from humans to humans.  The World Health Organization (WHO) is particularly
concerned about the Avian virus’ potential to swap genes with a common flu
virus, creating a lethal form of the virus that could spread around the globe
within months.

Avian Flu was first recorded in Italy more than
100 years ago in 1878.  As the cause of massive poultry epidemics, this
disease was then known as “Fowl Plague”.  This disease reared its ugly
head in the United States in 1924-25, and then again in 1929.  In 1955, it
was determined that the virus causing Fowl Plague was one of the influenza
viruses.  All influenza viruses affecting domestic animals (equine, swine,
avian) belong to Type A, and Type A influenza virus is the most common type
producing serious epidemics in humans. Types B and C do not affect domestic
animals.

There are two forms of Influenza A viruses
occurring worldwide – (i) highly pathogenic and (ii) mildly pathogenic.
The outbreaks in Hong Kong, and those that were found reported recently are
caused by the Highly Pathogenic Avian Influenza A virus (HPAI – subtypes H5 and
H7).  It is a form of this virus that has the ability to be transmitted to
humans.  Although our understanding of Avian Flu is relatively limited,
the recent outbreaks have stimulated research all around the world to further
our knowledge of this important disease and virus.

History of Avian Influenza

Confirmed instances of avian influenza viruses
infecting humans since 1997 include :

1997: In Hong Kong, avian influenza A (H5N1)
infected both chickens and humans. This was the first time an avian influenza
virus had ever been found to transmit directly from birds to humans. During
this outbreak, 18 people were hospitalized and 6 of them died.

1999: In Hong Kong, cases of avian influenza
A (H9N2) were confirmed in 2 children. Both patients recovered, and no
additional cases were confirmed. The evidence suggested that poultry was the
source of infection and the main mode of transmission was from bird to human.

2003: Two cases of avian influenza A (H5N1)
infection occurred among members of a Hong Kong family that had traveled to
China. One person recovered, the other died. How or where these 2 family
members were infected was not determined. Another family member died of a
respiratory illness in China, but no testing was done. No additional cases were
reported.

2003: Avian influenza A (H7N7) infections
among poultry workers and their families were confirmed in the Netherlands
during an outbreak of avian flu among poultry. More than 80 cases of H7N7
illness were reported (the symptoms were mostly confined to eye infections,
with some respiratory symptoms), and 1 patient died (in a veterinarian who had
visited an affected farm). There was evidence of some human-to-human
transmission.

2003: H9N2 infection was confirmed in a child
in Hong Kong. The child was hospitalized but recovered.

Diagnosis
of Avian Influenza

Clinical signs and post-mortal lesions may be
indicative of avian influenza infection. Virus isolation is needed for a
definitive diagnosis.

Laboratory Diagnosis

Samples

  1. Identification
    of the agent
    • Live
      birds – tracheal swabs and cloacal swabs or faeces
    • Dead
      birds – organs and faeces
  2. Serology
    • Clotted
      blood samples or
    • serum

Procedures

Identification of the Agent

Inoculation of 9-11-day-old embryonated chicken
eggs followed by:

  1. Haemagglutination
    immunodiffusion test to confirm the presence of influenza A virus
  2. Subtype
    determination with monospecific antisera
  3. Strain virulence
    evaluation: evaluation of the intravenous pathogenicity index (IVPI) in
    4-8-week-old chickens

Serology

Tests
available:

ELISA:

AGID (Agar Gel Immunodiffusion
test)

HI (Haemagglutination Inhibition
test)

IFT (Immunofluoresence test)

RT-PCR (Reverse-transcriptase
polymerase chain reaction)

Transmission of
Influenza A Viruses Between Animals and People
Avian Flu: The Virus
& its Spread
Transmission
Between Animal & People

Influenza
A viruses have infected many different animals, including ducks, chickens,
pigs, whales, horses, and seals. However, certain subtypes of influenza A virus
are specific to certain species, except for birds, which are hosts to all known
subtypes of influenza A. Subtypes that have caused widespread illness in people
either in the past or currently are H3N2, H2N2, H1N1, and H1N2. H1N1 and H3N2
subtypes also have caused outbreaks in pigs, and H7N7 and H3N8 viruses have
caused outbreaks in horses.

Influenza
A viruses normally seen in one species sometimes can cross over and cause
illness in another species. For example, until 1998, only H1N1 viruses
circulated widely in the U.S. pig population. However, in 1998, H3N2 viruses
from humans were introduced into the pig population and caused widespread
disease among pigs. Most recently, H3N8 viruses from horses have crossed over
and caused outbreaks in dogs.

Avian
influenza A viruses may be transmitted from animals to humans in two main ways:

Influenza
A viruses have eight separate gene segments. The segmented genome allows
influenza A viruses from different species to mix and create a new influenza A
virus if viruses from two different species infect the same person or animal.
For example, if a pig were infected with a human influenza A virus and an avian
influenza A virus at the same time, the new replicating viruses could mix
existing genetic information (reassortment) and produce a new virus that had
most of the genes from the human virus, but a hemagglutinin and/or
neuraminidase from the avian virus. The resulting new virus might then be able
to infect humans and spread from person to person, but it would have surface
proteins (hemagglutinin and/or neuraminidase) not previously seen in influenza
viruses that infect humans.

This
type of major change in the influenza A viruses is known as antigenic shift.
Antigenic shift results when a new influenza A subtype to which most people
have little or no immune protection infects humans. If this new virus causes
illness in people and can be transmitted easily from person to person, an influenza
pandemic can occur.

It is
possible that the process of genetic reassortment could occur in a human who is
co-infected with avian influenza A virus and a human strain of influenza A
virus. The genetic information in these viruses could reassort to create a new
virus with a hemagglutinin from the avian virus and other genes from the human
virus. Theoretically, influenza A viruses with a hemagglutinin against which
humans have little or no immunity that have reassorted with a human influenza
virus are more likely to result in sustained human-to-human transmission and
pandemic influenza. Therefore, careful evaluation of influenza viruses
recovered from humans who are infected with avian influenza is very important
to identify reassortment if it occurs.

Although
it is unusual for people to get influenza virus infections directly from
animals, sporadic human infections and outbreaks caused by certain avian
influenza A viruses and pig influenza viruses have been reported. (For more
information see Avian
Influenza Infections in Humans .) These sporadic human infections and
outbreaks, however, rarely result in sustained transmission among humans.

Avian Influenza: Introduction

 (Fowl plague)

Avian influenza
(AI) viruses infect domestic poultry and wild birds. In domestic poultry, AI
viruses are typically of low pathogenicity (LP), causing subclinical
infections, respiratory disease, or drops in egg production. However, a few
AI viruses cause severe systemic infections with high mortality. This highly
pathogenic (HP) form of the disease has historically been called fowl plague.
In most wild birds, AI viral infections are subclinical.
Etiology:
Avian
influenza viruses are type A orthomyxoviruses characterized by
antigenically homologous nucleoprotein and matrix internal proteins, which
are identified by serology in agar gel immunodiffusion (AGID) tests. AI
viruses are further divided into 15 hemagglutinin (H1-15) and 9
neuraminidase (N1-9) subtypes based on hemagglutinin inhibition and
neuraminidase inhibition tests, respectively. Most AI viruses (H1-15
subtypes) are of LP, but some of the H5 and H7 AI viruses are HP for
chickens, turkeys, and related gallinaceous domestic poultry.
 

Epidemiology and
Transmission:
LP viruses are
distributed worldwide and are recovered frequently from clinically normal
shorebirds and migrating waterfowl. Occasionally, LP viruses are recovered
from imported pet birds and ratites. The viruses may be present in backyard
flocks and other birds sold through live-poultry markets, but most
commercially raised poultry in developed countries are free of AI viruses.
The HP viruses arise from mutation of some H5 and H7 LP viruses and cause
devastating epizootics. Depopulation and quarantine programs are used to
quickly eliminate the HP viruses.
The incubation
period is highly variable and ranges from a few days to 1 wk. Transmission
between individual birds is by ingestion or inhalation. Experimentally,
cats have been infected with 1 strain of H5N1 Asian HP AI following
respiratory exposure, ingestion of infected chickens, or contact with
infected cats. Potentially, domestic house cats could serve as a
transmission vector between farms, but the ability of other AI viruses,
including other H5N1 strains, to infect cats is unknown. Transmission
between farms is the result of breaches in biosecurity practices,
principally by movement of infected birds or contaminated feces and
respiratory secretions on fomites such as equipment or clothing. Airborne
dissemination may be important over limited distances.
 

Clinical Findings and
Lesions:
Clinical
signs, severity of disease, and mortality rates vary depending on AI virus
strain and host species.

 

Low Pathogenicity AI Viruses:

These AI
viruses typically produce respiratory signs such as ocular and nasal
discharge and swollen infraorbital sinuses. Sinusitis is common in domestic
ducks, quail, and turkeys. Lesions in the respiratory tract typically
include congestion and inflammation of the trachea and lungs. In layers and
breeders, there may be decreased egg production or fertility, ova rupture
(evident as yolk in the abdominal cavity) or involution, or mucosal edema
and inflammatory exudates in the lumen of the oviduct. Some layer and
breeder chickens may have acute renal failure and visceral urate deposition
(visceral gout). The morbidity and mortality is usually low unless
accompanied by secondary bacterial or viral infections or aggravated by
environmental stress factors.

 

High Pathogenicity AI Viruses:

Even in the
absence of secondary pathogens, HP viruses cause severe, systemic disease
with high mortality in chickens, turkeys, and other gallinaceous birds. In
peracute cases, clinical signs or gross lesions may be lacking before
death. However, in acute cases, lesions may include cyanosis and edema of
the head, comb, and wattle; edema and discoloration of the shanks and feet
due to subcutaneous ecchymotic hemorrhages; petechial hemorrhages on
visceral organs and in muscles; and blood-tinged oral and nasal discharges.
In severely affectedbirds,
greenish diarrhea is common. Birds that survive the fulminating infection
may develop CNS involvement evident as torticollis, opisthotonos, or
incoordination. The location and severity of microscopic lesions are highly
variable and may consist of edema, hemorrhage, and necrosis in parenchymal
cells of multiple visceral organs, skin, and CNS.
Avian influenza, hemorrhagic skin, chicken
Avian influenza, hemorrhagic skin, chicken
 

Diagnosis:
AI viruses can
be readily isolated from tracheal and cloacal swabs. They grow well in the
allantoic sac of embryonating chicken eggs and agglutinate RBC. The
hemagglutination is not inhibited by Newcastle disease or other
paramyxoviral antiserum. AI viruses are identified by demonstrating the
presence of 1) influenza A matrix or nucleoprotein antigens using AGID or
other suitable immunoassays, or 2) viral RNA using an influenza A specific
RT-PCR tests.

Differential
Diagnosis:

LP AI must be
differentiated from other respiratory diseases or causes of decreased egg
production including: 1) acute to subacute viral diseases such as
infectious bronchitis, infectious laryngotracheitis, lentogenic Newcastle
disease, and infections by other paramyxoviruses; 2) bacterial diseases
such as mycoplasmosis, infectious coryza, ornithobacteriosis, turkey
coryza, and the respiratory form of fowl cholera; and 3) fungal diseases
such as aspergillosis. HP AI must be differentiated from other causes of
high mortality such as velogenic Newcastle disease, peracute septicemic
fowl cholera, heat exhaustion, and severe water deprivation.
 

Prevention and Treatment:
Vaccines can
prevent clinical signs and death. Furthermore, viral replication and
shedding from the respiratory and GI tracts may be reduced in vaccinated
birds. Specific protection is achieved through autogenous virus vaccines or
from vaccines prepared from AI virus of the same hemagglutinin subtype.
Antibodies to the viral neuraminidase antigens may provide some protection.
Currently, only inactivated whole AI virus and recombinant fowlpox-AI-H5
vaccines are licensed in the USA. The use of AI vaccine requires approval
of the state veterinarian. In addition, use of H5 and H7 AI vaccines in the
USA requires USDA approval. Treating LP-affected flocks with broad-spectrum
antibiotics to control secondary pathogens and increasing house
temperatures may reduce morbidity and mortality. Treatment with antiviral
compounds is not approved or recommended. Suspected outbreaks should be reported
to appropriate regulatory authorities.
 

Zoonotic Risk:
Avian
influenza viruses exhibit host adaptation and rarely infect humans, usually
as isolated individual cases without human-to-human transmission. In the
1997 Hong Kong outbreak, the risk factor for human infection was direct
contact with infected poultry, but not the handling, cooking, or
consumption of poultry meat. In 2004, HP AI of strain H5N1 infected poultry
and wild birds in 9 Asian countries. In Thailand and Vietnam, 37 human cases
were confirmed, with a case fatality rate of 68%.

Avian influenza is an infectious disease of birds caused by
type A strains of the influenza virus. The disease occurs worldwide. While all
birds are thought to be susceptible to infection with avian influenza viruses,
many wild bird species carry these viruses with no apparent signs of harm.

Other bird species, including domestic poultry, develop
disease when infected with avian influenza viruses. In poultry, the viruses
cause two distinctly different forms of disease – one common and mild, the
other rare and highly lethal. In the mild form, signs of illness may be
expressed only as ruffled feathers, reduced egg production, or mild effects on
the respiratory system. Outbreaks can be so mild they escape detection unless
regular testing for viruses is in place.

In contrast, the second and far less common highly
pathogenic form is difficult to miss. First identified in Italy in 1878, highly
pathogenic avian influenza is characterized by sudden onset of severe disease,
rapid contagion, and a mortality rate that can approach 100% within 48 hours.
In this form of the disease, the virus not only affects the respiratory tract,
as in the mild form, but also invades multiple organs and tissues. The
resulting massive internal haemorrhaging has earned it the lay name of “chicken
Ebola”.

All 16 HA (haemagluttinin) and 9 NA (neuraminidase)
subtypes of influenza viruses are known to infect wild waterfowl, thus
providing an extensive reservoir of influenza viruses perpetually circulating
in bird populations. In wild birds, routine testing will nearly always find
some influenza viruses. The vast majority of these viruses cause no harm.

To date, all outbreaks of the highly pathogenic form of
avian influenza have been caused by viruses of the H5 and H7 subtypes. Highly
pathogenic viruses possess a tell-tale genetic “trade mark” or signature – a
distinctive set of basic amino acids in the cleavage site of the HA – that
distinguishes them from all other avian influenza viruses and is associated
with their exceptional virulence.

Not all virus strains of the H5 and H7 subtypes are highly
pathogenic, but most are thought to have the potential to become so. Recent
research has shown that H5 and H7 viruses of low pathogenicity can, after
circulation for sometimes short periods in a poultry population, mutate into
highly pathogenic viruses. Considerable circumstantial evidence has long
suggested that wild waterfowl introduce avian influenza viruses, in their low pathogenic
form, to poultry flocks, but do not carry or directly spread highly pathogenic
viruses. This role may, however, have changed very recently: at least some
species of migratory waterfowl are now thought to be carrying the H5N1 virus in
its highly pathogenic form and introducing it to new geographical areas located
along their flight routes.

Apart from being highly contagious among poultry, avian
influenza viruses are readily transmitted from farm to farm by the movement of
live birds, people (especially when shoes and other clothing are contaminated),
and contaminated vehicles, equipment, feed, and cages. Highly pathogenic
viruses can survive for long periods in the environment, especially when
temperatures are low. For example, the highly pathogenic H5N1 virus can survive
in bird faeces for at least 35 days at low temperature (4oC). At a much higher
temperature (37oC), H5N1 viruses have been shown to survive, in faecal samples,
for six days.

For highly pathogenic disease, the most important control measures
are rapid culling of all infected or exposed birds, proper disposal of
carcasses, the quarantining and rigorous disinfection of farms, and the
implementation of strict sanitary, or “biosecurity”, measures. Restrictions on
the movement of live poultry, both within and between countries, are another
important control measure. The logistics of recommended control measures are
most straightforward when applied to large commercial farms, where birds are
housed indoors, usually under strictly controlled sanitary conditions, in large
numbers. Control is far more difficult under poultry production systems in
which most birds are raised in small backyard flocks scattered throughout rural
or periurban areas.

When culling – the first line of defence for containing
outbreaks – fails or proves impracticable, vaccination of poultry in a
high-risk area can be used as a supplementary emergency measure, provided
quality-assured vaccines are used and recommendations from the World Organisation for Animal
Health (OIE) are strictly followed. The use of poor quality vaccines
or vaccines that poorly match the circulating virus strain may accelerate
mutation of the virus. Poor quality animal vaccines may also pose a risk for
human health, as they may allow infected birds to shed virus while still
appearing to be disease-free.

Apart from being difficult to control, outbreaks in
backyard flocks are associated with a heightened risk of human exposure and
infection. These birds usually roam freely as they scavenge for food and often
mingle with wild birds or share water sources with them. Such situations create
abundant opportunities for human exposure to the virus, especially when birds
enter households or are brought into households during adverse weather, or when
they share areas where children play or sleep. Poverty exacerbates the problem:
in situations where a prime source of food and income cannot be wasted,
households frequently consume poultry when deaths or signs of illness appear in
flocks. This practice carries a high risk of exposure to the virus during
slaughtering, defeathering, butchering, and preparation of poultry meat for
cooking, but has proved difficult to change. Moreover, as deaths of birds in
backyard flocks are common, especially under adverse weather conditions, owners
may not interpret deaths or signs of illness in a flock as a signal of avian
influenza and a reason to alert the authorities. This tendency may help explain
why outbreaks in some rural areas have smouldered undetected for months. The
frequent absence of compensation to farmers for destroyed birds further works
against the spontaneous reporting of outbreaks and may encourage owners to hide
their birds during culling operations.

During 2005, an additional and significant source of
international spread of the virus in birds became apparent for the first time,
but remains poorly understood. Scientists are increasingly convinced that at
least some migratory waterfowl are now carrying the H5N1 virus in its highly
pathogenic form, sometimes over long distances, and introducing the virus to
poultry flocks in areas that lie along their migratory routes. Should this new
role of migratory birds be scientifically confirmed, it will mark a change in a
long-standing stable relationship between the H5N1 virus and its natural
wild-bird reservoir.

Evidence supporting this altered role began to emerge in
mid-2005 and has since been strengthened. The die-off of more than 6000
migratory birds, infected with the highly pathogenic H5N1 virus, that began at
the Qinghai Lake nature reserve in central China in late April 2005, was highly
unusual and probably unprecedented. Prior to that event, wild bird deaths from
highly pathogenic avian influenza viruses were rare, usually occurring as
isolated cases found within the flight distance of a poultry outbreak.
Scientific studies comparing viruses from different outbreaks in birds have
found that viruses from the most recently affected countries, all of which lie
along migratory routes, are almost identical to viruses recovered from dead
migratory birds at Qinghai Lake. Viruses from Turkey’s first two human cases,
which were fatal, were also virtually identical to viruses from Qinghai Lake.

The outbreaks of highly pathogenic H5N1 avian influenza
that began in south-east Asia in mid-2003 and have now spread to a few parts of
Europe, are the largest and most severe on record. To date, nine Asian countries
have reported outbreaks (listed in order of reporting): the Republic of Korea,
Viet Nam, Japan, Thailand, Cambodia, the Lao People’s Democratic Republic,
Indonesia, China, and Malaysia. Of these, Japan, the Republic of Korea, and
Malaysia have controlled their outbreaks and are now considered free of the
disease. Elsewhere in Asia, the virus has become endemic in several of the
initially affected countries.

In late July 2005, the virus spread geographically beyond
its original focus in Asia to affect poultry and wild birds in the Russian
Federation and adjacent parts of Kazakhstan. Almost simultaneously, Mongolia
reported detection of the highly pathogenic virus in wild birds. In October
2005, the virus was reported in Turkey, Romania, and Croatia. In early December
2005, Ukraine reported its first outbreak in domestic birds. Most of these
newer outbreaks were detected and reported quickly. Further spread of the virus
along the migratory routes of wild waterfowl is, however, anticipated.
Moreover, bird migration is a recurring event. Countries that lie along the
flight pathways of birds migrating from central Asia may face a persistent risk
of introduction or re-introduction of the virus to domestic poultry flocks.

Prior to the present situation, outbreaks of highly
pathogenic avian influenza in poultry were considered rare. Excluding the
current outbreaks caused by the H5N1 virus, only 24 outbreaks of highly
pathogenic avian influenza have been recorded worldwide since 1959. Of these,
14 occurred in the past decade. The majority have shown limited geographical
spread, a few remained confined to a single farm or flock, and only one spread
internationally. All of the larger outbreaks were costly for the agricultural
sector and difficult to control.

Influenza viruses are normally highly species-specific, meaning that viruses
that infect an individual species (humans, certain species of birds, pigs,
horses, and seals) stay “true” to that species, and only rarely spill over to
cause infection in other species. Since 1959, instances of human infection with
an avian influenza virus have been documented on only 10 occasions. Of the
hundreds of strains of avian influenza A viruses, only four are known to have
caused human infections: H5N1, H7N3, H7N7, and H9N2. In general, human
infection with these viruses has resulted in mild symptoms and very little
severe illness, with one notable exception: the highly pathogenic H5N1 virus.

Of all influenza viruses that circulate in birds, the H5N1
virus is of greatest present concern for human health for two main reasons.
First, the H5N1 virus has caused by far the greatest number of human cases of
very severe disease and the greatest number of deaths. It has crossed the species
barrier to infect humans on at least three occasions in recent years: in Hong
Kong in 1997 (18 cases with six deaths), in Hong Kong in 2003 (two cases with
one death) and in the current outbreaks that began in December 2003 and were
first recognized in January 2004.

A second implication for human health, of far greater
concern, is the risk that the H5N1 virus – if given enough opportunities – will
develop the characteristics it needs to start another influenza pandemic. The
virus has met all prerequisites for the start of a pandemic save one: an
ability to spread efficiently and sustainably among humans. While H5N1 is
presently the virus of greatest concern, the possibility that other avian
influenza viruses, known to infect humans, might cause a pandemic cannot be
ruled out.

The virus can improve its transmissibility among humans via
two principal mechanisms. The first is a “reassortment” event, in which genetic
material is exchanged between human and avian viruses during co-infection of a
human or pig. Reassortment could result in a fully transmissible pandemic
virus, announced by a sudden surge of cases with explosive spread.

The second mechanism is a more gradual process of adaptive
mutation, whereby the capability of the virus to bind to human cells increases
during subsequent infections of humans. Adaptive mutation, expressed initially
as small clusters of human cases with some evidence of human-to-human
transmission, would probably give the world some time to take defensive action,
if detected sufficiently early.

During the first documented outbreak of human infections
with H5N1, which occurred in Hong Kong in 1997, the 18 human cases coincided
with an outbreak of highly pathogenic avian influenza, caused by a virtually
identical virus, in poultry farms and live markets. Extensive studies of the
human cases determined that direct contact with diseased poultry was the source
of infection. Studies carried out in family members and social contacts of
patients, health workers engaged in their care, and poultry cullers found very
limited, if any, evidence of spread of the virus from one person to another.
Human infections ceased following the rapid destruction – within three days –
of Hong Kong’s entire poultry population, estimated at around 1.5 million birds.
Some experts believe that that drastic action may have averted an influenza
pandemic.

All evidence to date indicates that close contact with dead
or sick birds is the principal source of human infection with the H5N1 virus.
Especially risky behaviours identified include the slaughtering, defeathering,
butchering and preparation for consumption of infected birds. In a few cases,
exposure to chicken faeces when children played in an area frequented by
free-ranging poultry is thought to have been the source of infection. Swimming
in water bodies where the carcasses of dead infected birds have been discarded
or which may have been contaminated by faeces from infected ducks or other
birds might be another source of exposure. In some cases, investigations have been
unable to identify a plausible exposure source, suggesting that some as yet
unknown environmental factor, involving contamination with the virus, may be
implicated in a small number of cases. Some explanations that have been put
forward include a possible role of peri-domestic birds, such as pigeons, or the
use of untreated bird faeces as fertilizer. At present, H5N1 avian influenza
remains largely a disease of birds. The species barrier is significant: the
virus does not easily cross from birds to infect humans. Despite the infection
of tens of millions of poultry over large geographical areas since mid-2003,
fewer than 200 human cases have been laboratory confirmed. For unknown reasons,
most cases have occurred in rural and periurban households where small flocks
of poultry are kept. Again for unknown reasons, very few cases have been
detected in presumed high-risk groups, such as commercial poultry workers,
workers at live poultry markets, cullers, veterinarians, and health staff
caring for patients without adequate protective equipment. Also lacking is an
explanation for the puzzling concentration of cases in previously healthy
children and young adults. Research is urgently needed to better define the
exposure circumstances, behaviours, and possible genetic or immunological
factors that might enhance the likelihood of human infection.

Investigations of all the most recently confirmed human cases, in China,
Indonesia, and Turkey, have identified direct contact with infected birds as
the most likely source of exposure. When assessing possible cases, the level of
clinical suspicion should be heightened for persons showing influenza-like
illness, especially with fever and symptoms in the lower respiratory tract, who
have a history of close contact with birds in an area where confirmed outbreaks
of highly pathogenic H5N1 avian influenza are occurring. Exposure to an
environment that may have been contaminated by faeces from infected birds is a
second, though less common, source of human infection. To date, not all human
cases have arisen from exposure to dead or visibly ill domestic birds. Research
published in 2005 has shown that domestic ducks can excrete large quantities of
highly pathogenic virus without showing signs of illness. A history of poultry
consumption in an affected country is not a risk factor, provided the food was
thoroughly cooked and the person was not involved in food preparation. As no
efficient human-to-human transmission of the virus is known to be occurring anywhere,
simply travelling to a country with ongoing outbreaks in poultry or sporadic
human cases does not place a traveller at enhanced risk of infection, provided
the person did not visit live or “wet” poultry markets, farms, or other
environments where exposure to diseased birds may have occurred.

In many patients, the disease caused by the H5N1 virus follows an unusually
aggressive clinical course, with rapid deterioration and high fatality. Like
most emerging disease, H5N1 influenza in humans is poorly understood. Clinical
data from cases in 1997 and the current outbreak are beginning to provide a
picture of the clinical features of disease, but much remains to be learned.
Moreover, the current picture could change given the propensity of this virus
to mutate rapidly and unpredictably.

The incubation period for H5N1 avian influenza may be
longer than that for normal seasonal influenza, which is around two to three
days. Current data for H5N1 infection indicate an incubation period ranging
from two to eight days and possibly as long as 17 days. However, the
possibility of multiple exposure to the virus makes it difficult to define the
incubation period precisely. WHO currently recommends that an incubation period
of seven days be used for field investigations and the monitoring of patient
contacts.

Initial symptoms include a high fever, usually with a
temperature higher than 38oC, and influenza-like symptoms. Diarrhoea, vomiting,
abdominal pain, chest pain, and bleeding from the nose and gums have also been
reported as early symptoms in some patients. Watery diarrhoea without blood
appears to be more common in H5N1 avian influenza than in normal seasonal
influenza. The spectrum of clinical symptoms may, however, be broader, and not
all confirmed patients have presented with respiratory symptoms. In two
patients from southern Viet Nam, the clinical diagnosis was acute encephalitis;
neither patient had respiratory symptoms at presentation. In another case, from
Thailand, the patient presented with fever and diarrhoea, but no respiratory
symptoms. All three patients had a recent history of direct exposure to
infected poultry.

One feature seen in many patients is the development of
manifestations in the lower respiratory tract early in the illness. Many
patients have symptoms in the lower respiratory tract when they first seek
treatment. On present evidence, difficulty in breathing develops around five
days following the first symptoms. Respiratory distress, a hoarse voice, and a
crackling sound when inhaling are commonly seen. Sputum production is variable
and sometimes bloody. Most recently, blood-tinted respiratory secretions have
been observed in Turkey. Almost all patients develop pneumonia. During the Hong
Kong outbreak, all severely ill patients had primary viral pneumonia, which did
not respond to antibiotics. Limited data on patients in the current outbreak
indicate the presence of a primary viral pneumonia in H5N1, usually without
microbiological evidence of bacterial supra-infection at presentation. Turkish
clinicians have also reported pneumonia as a consistent feature in severe
cases; as elsewhere, these patients did not respond to treatment with
antibiotics.

In patients infected with the H5N1 virus, clinical
deterioration is rapid. In Thailand, the time between onset of illness to the
development of acute respiratory distress was around six days, with a range of
four to 13 days. In severe cases in Turkey, clinicians have observed
respiratory failure three to five days after symptom onset. Another common
feature is multiorgan dysfunction. Common laboratory abnormalities, include
leukopenia (mainly lymphopenia), mild-to-moderate thrombocytopenia, elevated
aminotransferases, and with some instances of disseminated intravascular
coagulation.

Limited evidence suggests that some antiviral drugs,
notably oseltamivir (commercially known as Tamiflu), can reduce the duration of
viral replication and improve prospects of survival, provided they are
administered within 48 hours following symptom onset. However, prior to the
outbreak in Turkey, most patients have been detected and treated late in the
course of illness. For this reason, clinical data on the effectiveness of
oseltamivir are limited. Moreover, oseltamivir and other antiviral drugs were
developed for the treatment and prophylaxis of seasonal influenza, which is a
less severe disease associated with less prolonged viral replication.
Recommendations on the optimum dose and duration of treatment for H5N1 avian
influenza, also in children, need to undergo urgent review, and this is being
undertaken by WHO.

In suspected cases, oseltamivir should be prescribed as
soon as possible (ideally, within 48 hours following symptom onset) to maximize
its therapeutic benefits. However, given the significant mortality currently
associated with H5N1 infection and evidence of prolonged viral replication in
this disease, administration of the drug should also be considered in patients
presenting later in the course of illness.

Currently recommended doses of oseltamivir for the
treatment of influenza are contained in the product
information at the manufacturer’s web site. The recommended dose of
oseltamivir for the treatment of influenza, in adults and adolescents 13 years
of age and older, is 150 mg per day, given as 75 mg twice a day for five days.
Oseltamivir is not indicated for the treatment of children younger than one
year of age.

As the duration of viral replication may be prolonged in
cases of H5N1 infection, clinicians should consider increasing the duration of
treatment to seven to ten days in patients who are not showing a clinical
response. In cases of severe infection with the H5N1 virus, clinicians may need
to consider increasing the recommended daily dose or the duration of treatment,
keeping in mind that doses above 300 mg per day are associated with increased
side effects. For all treated patients, consideration should be given to taking
serial clinical samples for later assay to monitor changes in viral load, to
assess drug susceptibility, and to assess drug levels. These samples should be
taken only in the presence of appropriate measures for infection control.

In severely ill H5N1 patients or in H5N1 patients with
severe gastrointestinal symptoms, drug absorption may be impaired. This
possibility should be considered when managing these patients.

Avian influenza: methods
for the disease control

Avian influenza, also known as bird flu, is a
highly contagious viral disease affecting mainly chickens, turkeys, ducks and
other birds.

While avian influenza caused by highly pathogenic
virus strains have sometimes been shown to infect man, this disease should not
be confused with human influenza, a common human disease. However, avian influenza
under certain circumstances could pose a serious threat to humans.

The OIE, through its experts and its world
network of Reference Laboratories and Collaborating Centres remain at the
disposal of all Member Countries requesting assistance in the defintion of
policies on diagnosis, control and eradication of the disease in animals.

The following information is meant to help
Governments and the Veterinary Services of Member Countries which are affected
by or which want to protect the territories from the disease :

Background information

Conclusions
and recommendations: FAO/OIE/WHO Expert Consultation on Avian Influenza,
Rome (Italy) 3-4 February 2004

Message from Dr Bernard Vallat, OIE Director General –
Meeting on Avian Infuenza in Thailand

Letter
addressed to the Honourable Prime Minister of Vietnam

The
use of vaccination as an option for the control of avian influenza (Ilaria
Capua & Stefano Marangon)

Provisional
Report of the Ad hoc Group on Avian Influenza (non official – to be
submitted to OIE International Committee in May 2004)

Safety of International Trade

– Actual
Avian Influenza Chapter (2003)

– Actual Newcastle
Disease Chapter (2003)

– Proposed
Chapter on Avian Influenza (non official – to be submitted to OIE
International Committee in May 2004)

Vaccines and Diagnostic Methods

– Avian
influenza chapter and Sampling
methods

– List
of OIE Reference Laboratories and other experts on avian influenza

Methods of Humane Killing and Carcass
Disposal

– Provisional
Report of the OIE Ad hoc Group on Humane Killing of animals

– Slaughter
of poultry for disease control purposes

– Provisional
Report of the OIE Ad hoc Group on the Slaughter of animals for human
consumption

– Provisional
Report of the OIE Ad hoc Group on Carcass Disposal

– Interim
Guidelines on protection of farmers and slaughterhouses workers (WHO)

Food Safety

– Risks for
consumers

Description of the disease

– Disease card

Guidelines for Control of the Disease

– Conclusions
and recommendations: FAO/OIE/WHO Expert Consultation on Avian Influenza,
Rome (Italy) 3-4 February 2004

– Extract
from IZSV Contingency Manual for Avian Influenza (Avian Influenza, Eds
Edizioni Tecnico Scientifiche, Bologna, Italy, 2000) 
" 60,"

BRAC 2

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Executive summary
Accounting provides rules and regulation to record a company’s daily transactions. Not only this it also give some instructions how a company should maintain its Financial Statements as well as maintain its books of accounts. But in the absence of specific accounting and financial reporting standards and diverse interpretation of certain terms under the laws of the land, it has become a very difficult task to follow a standardized procedure in generation and presentation of accounting and financial information of NGOs.

The practices followed by NGOs in Bangladesh are varied and diverse and there by preparation of financial statements are incomparable and difficult for uses to understand. The paper tries to demonstrate financial reporting and accounting system of a BRAC’s project and provide a guideline for constituting suitable financial reporting and accounting systems for NGOs.

The article elaborates on basis of preparation of financial statements and reporting procedure and then followed by accounting systems of regional office and head office of that project. The final part of the article discuses issues relating to financial report and financial transparency of the project.

INTRODUCTION

NGOs have become major players in the field of international and national development. Since the mid-1970s, the NGO sector in both developed and developing countries has experienced exponential growth. From 1990 to 2000 total development aid disbursed by international NGOs increased ten-fold. In 1992 international NGOs channeled over $7.6 billion of aid to developing countries. Bangladesh has largely failed to assist the poor or reduce poverty because of limited resources and planning, while NGOs have grown dramatically, but it ostensibly fails to fill this gap. There are more and bigger NGOs here than in any other country of equivalent size.

The Association of Development Agencies in Bangladesh (ADAB) had a total membership of 886 NGOs/PVDOs (Private Voluntary Development Organizations) in December 1997, of which 231 were central and 655 chapter (local) members (ADAB, 1998). The ADAB Directory lists 1007 NGOs, including 376 nonmembers NGOs. The NGO Affairs Bureau of the Government of Bangladesh (GOB), which has to approve all foreign grants to NGOs working in Bangladesh, released grants worth about $250 million US dollars in FY 1996-97 to 1,132 NGOs, of which 997 are local and 135 are foreign (NGO Affairs Bureau, 1998). NGOs have mainly functioned to service the needs of the landless, usually assisted by foreign donor funding as a counterpoint to the state’s efforts (Lewis, 1993). Besides all these advancement the field of NGO, Financial Reporting process and application of accounting is disgraceful. NGOs in Bangladesh have increasingly become subject to question and criticism from the government, political parties, intellectuals and the public in genus for misuse of funds, gender discrimination, and nepotism. Absence of proper guidelines in preparing financial statements and reports makes it more complex. The government of Bangladesh doesn’t have any unique rules for preparing the financial reports.

BRAC is one of the largest NGOs in Bangladesh. It has more than hundreds projects. BRAC maintains books of accounts and other record on a program or project basis. And its reporting process is transparent and one of the most structured system in Bangladesh. This report we will discuss about the financial reporting and Accounting system of BRAC Education Program (BEP). BEP begun experimentally in 1985, it is an independent education program organized and managed by BRAC with the approval of NGO Bureau of the Government of Bangladesh. The analysis and discussion of reporting systems of BRAC Education Program will give guidance and support to other NGOs about the generation of accounting systems and reporting procedure, and to maintain a transparent system of utilizing grants.

LITERATURE REVIEW

International Accounting Standards (IAS) doesn’t have specific guidelines for NGOs. Regarding applicability of Accounting Standards to NGOs, the Accounting Standards Board (ASB) has given an opinion in September 1995.

“The Institute will issue Accounting Standards for use in the presentation of the general purpose financial statements issued to the public by such commercial, industrial or business enterprises as may be specified by the Institute from time to time and subject to the attest function of its members”

It is clear from the above that the Accounting Standards are applicable to NGOs who are some, or more, of the activities are commercial or business in nature. However, it is very difficult to determine what the exact meaning of commercial is or business activities with reference to NGOs. NGOs are not meant for earning profit out of their activities. There are some NGO related laws and regulations in Bangladesh. While registration is not mandatory for any NGOs, 2 types of legal frame work govern NGOs of Bangladesh.

  1. Laws for Incorporation Acts: There are four such Acts in Bangladesh: the Societies Registration Act, 1861; the Trust ACT, 1882; Co-operative Societies Act, 1952 and the Companies Act of 1994.
  2. Three laws and ordinances for regulation the relationship of such associations with the Government: The Voluntary Social Welfare Agencies (Regulation and Control) Ordinance, 1961; the Foreign Donation (Voluntary Activities) Regulation Ordinance, 1982. This Forms the basis for registration with the NGO Affairs Bureau (NGOAB); the Foreign Contribution (Regulation Ordinance 1982)
Government organization, The NGO affairs Bureau, has been carrying out NGOs registration and processing of funds. NGO Bureau examines and evaluates reports submitted by NGOs and the checking of their income and expenditure accounts. The inspection and audit of accounts kept by NGOs are under section 4 and 5 of the Foreign Donation (Voluntary Activities) Regulation Ordinance 1978. As per Bangladesh Chartered Accountants Order 1973, the NGO Affairs Bureau will prepare a list of Bangladesh Chartered Accountants for annual audit of NGO accountants.

The NGOs prepare their annual program report within three months of ending the financial year and send copies to NGOAB’s Economic Relation Divisions, Concern Ministries, Concerned Deputy Commissioner and Bangladesh Bank, the following information should be incorporated with it:

  1. Project should be shown separately in the annual report. The main theme of project based report should expenses against actual target achieved in detail on the proposal, expenses against the Thana & Districts in the project should also be shown clearly
  2.  full list of permanent or liquid assets with vehicles of the organization
  3.  Sources of organizations own income & expenditure
  4. Details of organization’s foreign travels by its officers & employees
  5. Details of organization’s revolving loan fund investment described by sector
  6. Details of fund for projects implemented with fund generated through agreement with Government’s different ministries and directors and other sources
  7. Details of persons employed by the organization (with monthly salaries of Taka 5,000 and above or one time Taka 10,000 or above, their names, designation, qualifications, age, total salaries, allowance and length of services with the organization) should be attached.
In preservation of foreign aid accounts NGO Bureau have guidelines for NGOs according to The Foreign Donation (Voluntary Activities) Regulation Ordinance, 1982:
  1. In the case of foreign aid material Form, FD-5
  2.  In the case of foreign funds through double entry system Cash Book.
All documents maintained in should be preserved on an annual basis-one from 1st July to 31st December and the other 1st January to 30th June. The World Bank put emphasis on the reporting practice of NGOs but the existing laws and regulations has minimal emphasis on the reporting of the NGOs. It would be effective if there could be a simple and single form of reporting for all NGOs and for all of their activities.

But the activities of the NGOs’ are too numerous and diverse and the legal interests of the government and the public are too diverse to make this possible. BRAC has consistently maintained high levels of transparency in all its operations; its extraordinary effort towards financial transparency was recognized in 2005 when it won the CGAP (Consultative Group to Group to Group to Assist the Poor). BRAC follows and prepare the financial reports on the basis of GAAP and International Accounting Standards (IAS).

FINANCIAL ACCOUNTING SYSTEM OF BRAC EDUCATION SYSTEM
EP has some principles; these principles guide the Project behavior and help in the development of policies and procedures for financial activities. The principles are: stewardship or safekeeping of the project resources, accountability to explain how funds are being used, transparency to ensure financial information is recorded accurately and presented clearly; consistency is maintained over the years so that comparisons can be made; non-deficit financing, it represents sufficient funding source, standard documentation guides the system of maintaining financial records and documentation according to internationally accepted accounting standards and principles. The procedures and the implications of the accounting standards followed by BRAC Education Program for reporting; are adopted depending on the expertise and resources available; the volume and type of transactions; reporting requirements of managers; and obligations to donors.

Basis of Preparation of Financial Statements of BEP

According to the IAS-1, non-profit, government and other public sector enterprises seeking to apply this standard may need to amend the description used for certain line items in the financial statements and for the financial statements themselves. BRAC prepare the BEP’s financial statements under the historical cost convention on a going concern basis. BEP also follows the accrual basis of accounting or a modified form there of key income and expenditure items. The head office or the main center records all treasury, investment and management functions. The accounting records and financial statements are maintained and presented in accordance with the principles of fund accounting. Funds are established and maintained the under fund accounting principles.

Donors’ Grants

BRAC preserve and accumulate foreign grants according to Foreign Donations (Voluntary Activities) Regulation Ordinance, 1978. At present three practices are widely followed by NGOs in recognition of grants: Grants recognized as income, grants recognized as liabilities and grants recognized as income only to the extent of the expenditure incurred (Anand Pagaria, 2006). BEP recognize grants as income when conditions on which they depend have been met. If the grants are specified for the funding of specific project, then income is recognized equal to expenditure incurred on the project or program. For donors’ grants which involve funding fixed assets, income is recognized as the amount equivalent to depreciation expenses charged on the fixed assets concerned. All donors’ grants received are initially recorded at fair value as liabilities in the “Grants Received in Advance Account”. For grants utilized to purchase fixed assets are transferred to deferred income accounts. Donors’ grants received in-kind through the provision of gift and/ or services, are also recorded in fair value. Income reorganization of such grants follows that of cash based donor and any expenditure yet to be funded but for which funding has been agreed at the end of any specific period is recognized as grant receivable.
Revenue Recognition

According to ISA-18, revenue should be measured at fair value of consideration received or receivable. NGOs don’t have revenues like the normal business organizations, they recognize grants as revenues. BRAC maintains a bank account for foreign donors
(According to: Foreign Donations Regulation Ordinance, 1978 (30) under sub-rule (4) of rule 4) and revenue is recognized as the interest accrued and as per IAS-18, interest revenue is recognized on a time-proportion basis using the effective interest rate. All other incomes are recognized when the right to receive such income has been reasonably determined and all conditions precedent is satisfied.

Matching of Expenses

BEP’s program related expenses arise from goods and services being distributed to beneficiaries in accordance with the program related objectives and activities. Head office’s program related expenses are allocated to the program at approximately 7% of their costs, most of the time these allocations are made with the consent of the donors.

Assets

IAS-1 standards requires certain disclosures on the on the financial statements.
Enterprises need to present current and non-current assets and liabilities on the face of the balance sheet as separate classifications considering nature of operation of the enterprises. When an enterprise chooses not to make this classification, assets and liabilities should be presented broadly in order of their liquidation value. As BEP is a project of BRAC, it presents the balance sheet according to its operational nature, and it doesn’t classify its assets and liabilities as current and non-current assets. According to
IAS-16 and IAS-1, the NGO states its’ fixed assets at cost less accumulated depreciation, depreciation is provided for on a straight line basis over the estimates useful life. Like the profitable business organization, accounts receivables are stated at nominal value and stated net provision for irrecoverable amounts.

Provisions for Liabilities
BEP’s Provisions for liabilities are recognized when there is a present obligation as a result of a past event and it is probable that an overflow of resources embodying economic benefit will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If the effect of time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligations.

Taxation
Under the income Tax Ordinance 1984 (Amended),in addition to its commercial activities, BEP is also subject to taxation on income derived from its other non commercial activities unless they are tax exempt. The tax charge is in respect of taxable income arising from Deferred taxation is provided for using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose. Deferred taxation benefits are only recognized when their recognition is probable.

Impairment of Assets
IAS-36 addresses mainly accounting for impairment of goodwill, intangible assets and property plant and equipment. The standard includes requirements for identifying an impaired asset, its recoverable amount, recognizing or revising any resulting impairment loss and disclosing information on impairment losses or reversal of impairment loss. At each balance sheet date, BEP carried out a review, on the carrying amount of assets to determine whether there is any indication of impairment. If any such indication exists, impairment is measures by comparing the carrying values of the assets with their recoverable amounts.

Financial Instruments

According to IAS-32, BEP recognize and disclosure financial instruments in the balance sheet when the NGO become a party to the contractual provisions of the instrument.
Receivables are carried at anticipated realizable values. Unlike the profitable organization bad debts are written off when identified and an estimate is made, based on all outstanding amounts of the balance sheet.

ACCOUNTING SYSTEMS OF THE REGIONAL OFFICE

Traditionally, Accounting records fall into two main categories: Supporting Documents and Books of Account. BEP keep files of the following original documents to support every transaction taking place: Receipt or voucher for money received, receipt or voucher for money paid out, invoices, certified and stamped as paid, paying-in vouchers for money paid into the bank, bank statements, and journal vouchers for adjustments and noncash transactions. BEP maintains several books of accounts as part of a full bookkeeping system: General/Nominal Ledger, Journal or Day Book, Wages book, Assets Register and Bank Reconciliations statements. The management information system of BEP collects data from 565 area office then these are integrated under 139 regional offices and then send it to head office for analysis. The accounting system of these regional offices is well organized and supported by computer aided accounting software but we will discuss the systems manually.

Charts of Accounts
The first step taken by BRAC is to choose an accounting software package which is clear and concise and easy to operate and maintain the NGO accounting. The second step of BRAC was to clarify purpose of organization and reflect that in a clear and concise chart of accounts. It is important that a chart of accounts reflect all the major functions and project operation of the organization in a concise and systematic manner (retrieved from:
http://www.global.net.pg/atprojects/manage.htm, retrieved on February 23, 2007). BRAC has more than hundreds projects, it prepares charts of accounts and codes them for computer aided soft ware. The coding of the account head represents the specific project, regional office, and lastly the respective income, expenditure, liabilities or assets.

Cash Book
Regional office maintains separate cash books according to IAS-7 for different area office under it. The area office maintains petty cash books for the recording of cash. The area office conveys all its accounts (mainly expenditure) at the end of the month to the regional office. The regional office then prepare separate cash book for every area office. The opening balances of these cash book represent the cash on hand of the area office. All expenditure and revenue recorded in the cash book are supported by vouchers.

Ledger Book
The format and procedure of preparing the ledger is same as the normal business organization. Different transactions of account heads are accumulated here. After recording the transaction of the last date of the month, balance is drowned. As it is a computerized system, data is typically entered into the system only once. Once the entry has been approved by the user, the software includes the information in all reports in which the relevant account number appears

Receipt and Expenditure Statement
The receipts and expenditure statement is one kind of trial balance which is prepared by regional office, which include the balances of the ledger. In computer aided accounting system the receipt and expenditure statement is automatically prepared when ledger is prepared.

Head Office Current Account Breakup Statement
The regional office maintains and transfers a ledger account to HO it includes transactions like Motorcycle loan, Bonus Provisions, Gratuity Provisions, Provident Fund, Insurance provisions for the employees. The regional office also transfers a Motorcycle Loan Schedule as motorcycle is considered as assets.

ACCOUNTING SYSTEMS of THE HEAD OFFICE

The head office transactions are same like the regional office. Most of the transactions are recorded at cash and the accounts are automatically posted to Receipts and
Expenditure statement under different heads. Head office maintains two sets of ledger accounts other then the normal account heads. These are “Field Area Current Account breakup” to record transaction with the regional office and Head Office Current Account Break up to maintain correlation with the Regional Offices’ breakups. It provides a provision to reconcile and find out the accounts in transit.
Fund Control
The income generating micro finance project transfer money to all projects and at the end of every month and the money transferred is adjusted with Head Office Current Account and it is done to avoid cash payment from the HO. The transactions are made by passing journal entries “Fund Control Account” and it is shown on the Head Office Current Account Break up Statement. In the field or regional office when micro finance project transfer money to other project, then the journal is assed like this:Here cash is being transferred from microfinance project to other project. Both projects submit Head Office Breakups to the Head Office. To adjust and prepare the combined financial statements, all the details accounting statements are transferred to head office by Head Office Breakup statement. The head office adjusts the journal like this:

The detailed accounts accumulated under Receipt and Expenditure Statement and Head Office Current Account Breakup Statement prepared in the Regional Offices are monthly transferred to the Head Office. The accounting information collected by auto taker (a computer supported device) is then automatically posted to ledger account maintained by the head office. Then finally management prepares the financial statements, which includes Balance Sheet, the Statement of Receipts and Payments, Statement of Changes in Net Assets and Statement of Cash Flows.

REPORTING OF BEP

BRAC submit audit reports for all projects, along with FD-4 certified by the auditors, to the NGO Affair Bureau and to Prime Minister’s Office.

BEP’s reporting for the Board is done quarterly (or as required). This reporting includes a Balance Sheet and a Statement of Receipts and Payments. This entail accounting for all funds (i.e.: including USD funds). A uniform and consistent format is used for reporting to the Board. This is also the report that is provided to auditors and used in the annual report.
BEP’s prepares management reports monthly, at the end of every quarter or as required. There are different kinds of reports used by managers of BEP to take decisions: the Budget Compared to Actual Performance Report, the narrative progress Report (represents the achievements and impact of the project on the beneficiaries), the internal financial report (prepared for 18 months to analysis cost, expenditure and their change), quarterly cash flow projections report (to analysis exchange gains and fund deficits), monitoring report (prepared by the monitoring team of 14members for every unit of the NGO, which lists 20 issues need to be followed up).
Donors have their own reporting requirements and specifications and an NGO should attempt to meet these as much as possible. Conversely, if donors are amenable, a generic format may be agreeable. Donor reports are submitted no more than one month after the close of the accounting period being reported upon. A donor tracking schedule is set up to monitor due dates and for work planning purposes.

FINDINGS AND RECOMMENDATIONS

The accounting system of BRAC Education Program is well planned and contemporary and it is highly eulogize by the donors. It assists the internal control, cash control, internal auditing process, budget formulation and execution, facilities or property management, financial operations and analysis, grants management and information resources management. But there are some weaknesses in this financial Accounting system. Like:

  1. The project grassroots links are not efficient enough so the generation of information in that level is weak and some times not supported by documents
  2. The filed based development expertise some times fails to develop innovative measures to support modern financial Management
  3. The project doesn’t give more emphasis on long-term commitment and sustainability; which could assist the progress and accountability of the project.
  4. The cost effectiveness of the project is not used uniformly in every outlets
  5. For generation of accounting information and reporting the project authority don’t have modern process oriented approach and they failed to increase institutional capacity.
Recommendations and Conclusions:
In order to make the project accounting process modern some recommendations could be considered: The project could hire more expertise and modern management technique; it could be more participative and transparent; the information could be modernized by use of internal network and of process oriented approach and value based management approach could make the accounting process efficient. BRAC Education Program is one of the largest projects in Bangladesh which is financed by the foreign donors; the accounting system of this project is well organized and transparent. The processes of presenting the financial statements are unique and very systematic. BEP after all these limitations; could give the other NGOs some guidelines for preparing and installing accounting systems, making assumptions about accounting principles and lastly but not the list to prepare and present financial statements and submit financial reports.
  1.  Ananda Pagaria. CA. 2006. NGO’s-Accounting and Legal Intricacies, The Chartered Accountant, June2006: 1716-1723.
  1.  ADAB. (1998). Directory of PVD0s1NGD0s in Bangladesh (Ready Reference). Dhaka: ADAB.
  1.  Ahmad Mokbul Morshed. 2005. “The State, Laws and Non-Governmental Organizations (NGOs) inBangladesh”. International Journal of Not-for-Profit Law. Vol. 3. Issue. 3
  1.  BBS. (1998). Statistical Pocketbook of Bangladesh. Dhaka: BBS
  1.  Bird, P., Morgan-Jones, P. (1981), Financial Reporting by Charities, Institute of Chartered Accountantsin England and Wales, London.
  1.  www,BRAC.net.com
  1.  NGO Affairs Bureau. 1998. Flow of Foreign Grant Fund Through NGO Affairs Bureau at a Glance.Dhaka: NGO Affairs Bureau, PM’s Office/GOB.
  1.  Report of the NAB for the Prime Minister. “There are several complaints of irregularity and corruptionagainst the NGOs”, Bhorer Kagoj. 29 July, 1992 (Daily Newspaper in Bangla).
" 61,"

Brac

","
Executive summary
 
Accounting provides rules and regulation to record a company’s daily transactions. Not only this it also give some instructions how a company should maintain its Financial Statements as well as maintain its books of accounts. But in the absence of specific accounting and financial reporting standards and diverse interpretation of certain terms under the laws of the land, it has become a very difficult task to follow a standardized procedure in generation and presentation of accounting and financial information of NGOs.
 
The practices followed by NGOs in Bangladesh are varied and diverse and there by preparation of financial statements are incomparable and difficult for uses to understand. The paper tries to demonstrate financial reporting and accounting system of a BRAC’s project and provide a guideline for constituting suitable financial reporting and accounting systems for NGOs.
 
The article elaborates on basis of preparation of financial statements and reporting procedure and then followed by accounting systems of regional office and head office of that project. The final part of the article discuses issues relating to financial report and financial transparency of the project.
 
INTRODUCTION
 
NGOs have become major players in the field of international and national development. Since the mid-1970s, the NGO sector in both developed and developing countries has experienced exponential growth. From 1990 to 2000 total development aid disbursed by international NGOs increased ten-fold. In 1992 international NGOs channeled over $7.6 billion of aid to developing countries. Bangladesh has largely failed to assist the poor or reduce poverty because of limited resources and planning, while NGOs have grown dramatically, but it ostensibly fails to fill this gap. There are more and bigger NGOs here than in any other country of equivalent size.
 
The Association of Development Agencies in Bangladesh (ADAB) had a total membership of 886 NGOs/PVDOs (Private Voluntary Development Organizations) in December 1997, of which 231 were central and 655 chapter (local) members (ADAB, 1998). The ADAB Directory lists 1007 NGOs, including 376 nonmembers NGOs. The NGO Affairs Bureau of the Government of Bangladesh (GOB), which has to approve all foreign grants to NGOs working in Bangladesh, released grants worth about $250 million US dollars in FY 1996-97 to 1,132 NGOs, of which 997 are local and 135 are foreign (NGO Affairs Bureau, 1998). NGOs have mainly functioned to service the needs of the landless, usually assisted by foreign donor funding as a counterpoint to the state's efforts (Lewis, 1993). Besides all these advancement the field of NGO, Financial Reporting process and application of accounting is disgraceful. NGOs in Bangladesh have increasingly become subject to question and criticism from the government, political parties, intellectuals and the public in genus for misuse of funds, gender discrimination, and nepotism. Absence of proper guidelines in preparing financial statements and reports makes it more complex. The government of Bangladesh doesn’t have any unique rules for preparing the financial reports.
 
BRAC is one of the largest NGOs in Bangladesh. It has more than hundreds projects. BRAC maintains books of accounts and other record on a program or project basis. And its reporting process is transparent and one of the most structured system in Bangladesh. This report we will discuss about the financial reporting and Accounting system of BRAC Education Program (BEP). BEP begun experimentally in 1985, it is an independent education program organized and managed by BRAC with the approval of NGO Bureau of the Government of Bangladesh. The analysis and discussion of reporting systems of BRAC Education Program will give guidance and support to other NGOs about the generation of accounting systems and reporting procedure, and to maintain a transparent system of utilizing grants.
 
 
LITERATURE REVIEW
 
International Accounting Standards (IAS) doesn’t have specific guidelines for NGOs. Regarding applicability of Accounting Standards to NGOs, the Accounting Standards Board (ASB) has given an opinion in September 1995.
 
“The Institute will issue Accounting Standards for use in the presentation of the general purpose financial statements issued to the public by such commercial, industrial or business enterprises as may be specified by the Institute from time to time and subject to the attest function of its members”
 
It is clear from the above that the Accounting Standards are applicable to NGOs who are some, or more, of the activities are commercial or business in nature. However, it is very difficult to determine what the exact meaning of commercial is or business activities with reference to NGOs. NGOs are not meant for earning profit out of their activities. There are some NGO related laws and regulations in Bangladesh. While registration is not mandatory for any NGOs, 2 types of legal frame work govern NGOs of Bangladesh.
 
  1. Laws for Incorporation Acts: There are four such Acts in Bangladesh: the Societies Registration Act, 1861; the Trust ACT, 1882; Co-operative Societies Act, 1952 and the Companies Act of 1994.
  2. Three laws and ordinances for regulation the relationship of such associations with the Government: The Voluntary Social Welfare Agencies (Regulation and Control) Ordinance, 1961; the Foreign Donation (Voluntary Activities) Regulation Ordinance, 1982. This Forms the basis for registration with the NGO Affairs Bureau (NGOAB); the Foreign Contribution (Regulation Ordinance 1982)
 
Government organization, The NGO affairs Bureau, has been carrying out NGOs registration and processing of funds. NGO Bureau examines and evaluates reports submitted by NGOs and the checking of their income and expenditure accounts. The inspection and audit of accounts kept by NGOs are under section 4 and 5 of the Foreign Donation (Voluntary Activities) Regulation Ordinance 1978. As per Bangladesh Chartered Accountants Order 1973, the NGO Affairs Bureau will prepare a list of Bangladesh Chartered Accountants for annual audit of NGO accountants.
 
The NGOs prepare their annual program report within three months of ending the financial year and send copies to NGOAB’s Economic Relation Divisions, Concern Ministries, Concerned Deputy Commissioner and Bangladesh Bank, the following information should be incorporated with it:
  1. Project should be shown separately in the annual report. The main theme of project based report should expenses against actual target achieved in detail on the proposal, expenses against the Thana & Districts in the project should also be shown clearly
  2.  full list of permanent or liquid assets with vehicles of the organization
  3.  Sources of organizations own income & expenditure
  4. Details of organization’s foreign travels by its officers & employees
  5. Details of organization’s revolving loan fund investment described by sector
  6. Details of fund for projects implemented with fund generated through agreement with Government’s different ministries and directors and other sources
  7. Details of persons employed by the organization (with monthly salaries of Taka 5,000 and above or one time Taka 10,000 or above, their names, designation, qualifications, age, total salaries, allowance and length of services with the organization) should be attached.
 
In preservation of foreign aid accounts NGO Bureau have guidelines for NGOs according to The Foreign Donation (Voluntary Activities) Regulation Ordinance, 1982:
  1. In the case of foreign aid material Form, FD-5
  2.  In the case of foreign funds through double entry system Cash Book.
 
All documents maintained in should be preserved on an annual basis-one from 1st July to 31st December and the other 1st January to 30th June. The World Bank put emphasis on the reporting practice of NGOs but the existing laws and regulations has minimal emphasis on the reporting of the NGOs. It would be effective if there could be a simple and single form of reporting for all NGOs and for all of their activities.
 
But the activities of the NGOs’ are too numerous and diverse and the legal interests of the government and the public are too diverse to make this possible. BRAC has consistently maintained high levels of transparency in all its operations; its extraordinary effort towards financial transparency was recognized in 2005 when it won the CGAP (Consultative Group to Group to Group to Assist the Poor). BRAC follows and prepare the financial reports on the basis of GAAP and International Accounting Standards (IAS).
 
FINANCIAL ACCOUNTING SYSTEM OF BRAC EDUCATION SYSTEM
EP has some principles; these principles guide the Project behavior and help in the development of policies and procedures for financial activities. The principles are: stewardship or safekeeping of the project resources, accountability to explain how funds are being used, transparency to ensure financial information is recorded accurately and presented clearly; consistency is maintained over the years so that comparisons can be made; non-deficit financing, it represents sufficient funding source, standard documentation guides the system of maintaining financial records and documentation according to internationally accepted accounting standards and principles. The procedures and the implications of the accounting standards followed by BRAC Education Program for reporting; are adopted depending on the expertise and resources available; the volume and type of transactions; reporting requirements of managers; and obligations to donors.
 
Basis of Preparation of Financial Statements of BEP
 
According to the IAS-1, non-profit, government and other public sector enterprises seeking to apply this standard may need to amend the description used for certain line items in the financial statements and for the financial statements themselves. BRAC prepare the BEP’s financial statements under the historical cost convention on a going concern basis. BEP also follows the accrual basis of accounting or a modified form there of key income and expenditure items. The head office or the main center records all treasury, investment and management functions. The accounting records and financial statements are maintained and presented in accordance with the principles of fund accounting. Funds are established and maintained the under fund accounting principles.
 
Donors’ Grants
 
BRAC preserve and accumulate foreign grants according to Foreign Donations (Voluntary Activities) Regulation Ordinance, 1978. At present three practices are widely followed by NGOs in recognition of grants: Grants recognized as income, grants recognized as liabilities and grants recognized as income only to the extent of the expenditure incurred (Anand Pagaria, 2006). BEP recognize grants as income when conditions on which they depend have been met. If the grants are specified for the funding of specific project, then income is recognized equal to expenditure incurred on the project or program. For donors’ grants which involve funding fixed assets, income is recognized as the amount equivalent to depreciation expenses charged on the fixed assets concerned. All donors’ grants received are initially recorded at fair value as liabilities in the “Grants Received in Advance Account”. For grants utilized to purchase fixed assets are transferred to deferred income accounts. Donors’ grants received in-kind through the provision of gift and/ or services, are also recorded in fair value. Income reorganization of such grants follows that of cash based donor and any expenditure yet to be funded but for which funding has been agreed at the end of any specific period is recognized as grant receivable.
Revenue Recognition
 
According to ISA-18, revenue should be measured at fair value of consideration received or receivable. NGOs don’t have revenues like the normal business organizations, they recognize grants as revenues. BRAC maintains a bank account for foreign donors
(According to: Foreign Donations Regulation Ordinance, 1978 (30) under sub-rule (4) of rule 4) and revenue is recognized as the interest accrued and as per IAS-18, interest revenue is recognized on a time-proportion basis using the effective interest rate. All other incomes are recognized when the right to receive such income has been reasonably determined and all conditions precedent is satisfied.
 
 
Matching of Expenses
 
BEP’s program related expenses arise from goods and services being distributed to beneficiaries in accordance with the program related objectives and activities. Head office’s program related expenses are allocated to the program at approximately 7% of their costs, most of the time these allocations are made with the consent of the donors.
 
Assets
 
IAS-1 standards requires certain disclosures on the on the financial statements.
Enterprises need to present current and non-current assets and liabilities on the face of the balance sheet as separate classifications considering nature of operation of the enterprises. When an enterprise chooses not to make this classification, assets and liabilities should be presented broadly in order of their liquidation value. As BEP is a project of BRAC, it presents the balance sheet according to its operational nature, and it doesn’t classify its assets and liabilities as current and non-current assets. According to
IAS-16 and IAS-1, the NGO states its’ fixed assets at cost less accumulated depreciation, depreciation is provided for on a straight line basis over the estimates useful life. Like the profitable business organization, accounts receivables are stated at nominal value and stated net provision for irrecoverable amounts.
 
Provisions for Liabilities
BEP’s Provisions for liabilities are recognized when there is a present obligation as a result of a past event and it is probable that an overflow of resources embodying economic benefit will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If the effect of time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligations.
 
 
Taxation
Under the income Tax Ordinance 1984 (Amended),in addition to its commercial activities, BEP is also subject to taxation on income derived from its other non commercial activities unless they are tax exempt. The tax charge is in respect of taxable income arising from Deferred taxation is provided for using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose. Deferred taxation benefits are only recognized when their recognition is probable.
 
Impairment of Assets
IAS-36 addresses mainly accounting for impairment of goodwill, intangible assets and property plant and equipment. The standard includes requirements for identifying an impaired asset, its recoverable amount, recognizing or revising any resulting impairment loss and disclosing information on impairment losses or reversal of impairment loss. At each balance sheet date, BEP carried out a review, on the carrying amount of assets to determine whether there is any indication of impairment. If any such indication exists, impairment is measures by comparing the carrying values of the assets with their recoverable amounts.
 
Financial Instruments
 
According to IAS-32, BEP recognize and disclosure financial instruments in the balance sheet when the NGO become a party to the contractual provisions of the instrument.
Receivables are carried at anticipated realizable values. Unlike the profitable organization bad debts are written off when identified and an estimate is made, based on all outstanding amounts of the balance sheet.
 
ACCOUNTING SYSTEMS OF THE REGIONAL OFFICE
 
Traditionally, Accounting records fall into two main categories: Supporting Documents and Books of Account. BEP keep files of the following original documents to support every transaction taking place: Receipt or voucher for money received, receipt or voucher for money paid out, invoices, certified and stamped as paid, paying-in vouchers for money paid into the bank, bank statements, and journal vouchers for adjustments and noncash transactions. BEP maintains several books of accounts as part of a full bookkeeping system: General/Nominal Ledger, Journal or Day Book, Wages book, Assets Register and Bank Reconciliations statements. The management information system of BEP collects data from 565 area office then these are integrated under 139 regional offices and then send it to head office for analysis. The accounting system of these regional offices is well organized and supported by computer aided accounting software but we will discuss the systems manually.
 
Charts of Accounts
The first step taken by BRAC is to choose an accounting software package which is clear and concise and easy to operate and maintain the NGO accounting. The second step of BRAC was to clarify purpose of organization and reflect that in a clear and concise chart of accounts. It is important that a chart of accounts reflect all the major functions and project operation of the organization in a concise and systematic manner (retrieved from:
http://www.global.net.pg/atprojects/manage.htm, retrieved on February 23, 2007). BRAC has more than hundreds projects, it prepares charts of accounts and codes them for computer aided soft ware. The coding of the account head represents the specific project, regional office, and lastly the respective income, expenditure, liabilities or assets.
 
Cash Book
Regional office maintains separate cash books according to IAS-7 for different area office under it. The area office maintains petty cash books for the recording of cash. The area office conveys all its accounts (mainly expenditure) at the end of the month to the regional office. The regional office then prepare separate cash book for every area office. The opening balances of these cash book represent the cash on hand of the area office. All expenditure and revenue recorded in the cash book are supported by vouchers.
 
Ledger Book
The format and procedure of preparing the ledger is same as the normal business organization. Different transactions of account heads are accumulated here. After recording the transaction of the last date of the month, balance is drowned. As it is a computerized system, data is typically entered into the system only once. Once the entry has been approved by the user, the software includes the information in all reports in which the relevant account number appears
 
Receipt and Expenditure Statement
The receipts and expenditure statement is one kind of trial balance which is prepared by regional office, which include the balances of the ledger. In computer aided accounting system the receipt and expenditure statement is automatically prepared when ledger is prepared.
 
Head Office Current Account Breakup Statement
The regional office maintains and transfers a ledger account to HO it includes transactions like Motorcycle loan, Bonus Provisions, Gratuity Provisions, Provident Fund, Insurance provisions for the employees. The regional office also transfers a Motorcycle Loan Schedule as motorcycle is considered as assets.
 
ACCOUNTING SYSTEMS of THE HEAD OFFICE
 
The head office transactions are same like the regional office. Most of the transactions are recorded at cash and the accounts are automatically posted to Receipts and
Expenditure statement under different heads. Head office maintains two sets of ledger accounts other then the normal account heads. These are “Field Area Current Account breakup” to record transaction with the regional office and Head Office Current Account Break up to maintain correlation with the Regional Offices’ breakups. It provides a provision to reconcile and find out the accounts in transit.
Fund Control
The income generating micro finance project transfer money to all projects and at the end of every month and the money transferred is adjusted with Head Office Current Account and it is done to avoid cash payment from the HO. The transactions are made by passing journal entries “Fund Control Account” and it is shown on the Head Office Current Account Break up Statement. In the field or regional office when micro finance project transfer money to other project, then the journal is assed like this:

Here cash is being transferred from microfinance project to other project. Both projects submit Head Office Breakups to the Head Office. To adjust and prepare the combined financial statements, all the details accounting statements are transferred to head office by Head Office Breakup statement. The head office adjusts the journal like this:
 
 
The detailed accounts accumulated under Receipt and Expenditure Statement and Head Office Current Account Breakup Statement prepared in the Regional Offices are monthly transferred to the Head Office. The accounting information collected by auto taker (a computer supported device) is then automatically posted to ledger account maintained by the head office. Then finally management prepares the financial statements, which includes Balance Sheet, the Statement of Receipts and Payments, Statement of Changes in Net Assets and Statement of Cash Flows.

REPORTING OF BEP
 
BRAC submit audit reports for all projects, along with FD-4 certified by the auditors, to the NGO Affair Bureau and to Prime Minister’s Office.
 

BEP’s reporting for the Board is done quarterly (or as required). This reporting includes a Balance Sheet and a Statement of Receipts and Payments. This entail accounting for all funds (i.e.: including USD funds). A uniform and consistent format is used for reporting to the Board. This is also the report that is provided to auditors and used in the annual report.
BEP’s prepares management reports monthly, at the end of every quarter or as required. There are different kinds of reports used by managers of BEP to take decisions: the Budget Compared to Actual Performance Report, the narrative progress Report (represents the achievements and impact of the project on the beneficiaries), the internal financial report (prepared for 18 months to analysis cost, expenditure and their change), quarterly cash flow projections report (to analysis exchange gains and fund deficits), monitoring report (prepared by the monitoring team of 14members for every unit of the NGO, which lists 20 issues need to be followed up).
 
Donors have their own reporting requirements and specifications and an NGO should attempt to meet these as much as possible. Conversely, if donors are amenable, a generic format may be agreeable. Donor reports are submitted no more than one month after the close of the accounting period being reported upon. A donor tracking schedule is set up to monitor due dates and for work planning purposes.
 
 
FINDINGS AND RECOMMENDATIONS
 
The accounting system of BRAC Education Program is well planned and contemporary and it is highly eulogize by the donors. It assists the internal control, cash control, internal auditing process, budget formulation and execution, facilities or property management, financial operations and analysis, grants management and information resources management. But there are some weaknesses in this financial Accounting system. Like:
  1. The project grassroots links are not efficient enough so the generation of information in that level is weak and some times not supported by documents
  2. The filed based development expertise some times fails to develop innovative measures to support modern financial Management
  3. The project doesn’t give more emphasis on long-term commitment and sustainability; which could assist the progress and accountability of the project.
  4. The cost effectiveness of the project is not used uniformly in every outlets
  5. For generation of accounting information and reporting the project authority don’t have modern process oriented approach and they failed to increase institutional capacity.
 
Recommendations and Conclusions:
In order to make the project accounting process modern some recommendations could be considered: The project could hire more expertise and modern management technique; it could be more participative and transparent; the information could be modernized by use of internal network and of process oriented approach and value based management approach could make the accounting process efficient. BRAC Education Program is one of the largest projects in Bangladesh which is financed by the foreign donors; the accounting system of this project is well organized and transparent. The processes of presenting the financial statements are unique and very systematic. BEP after all these limitations; could give the other NGOs some guidelines for preparing and installing accounting systems, making assumptions about accounting principles and lastly but not the list to prepare and present financial statements and submit financial reports.
 
 
 
  1.  Ananda Pagaria. CA. 2006. NGO’s-Accounting and Legal Intricacies, The Chartered Accountant, June2006: 1716-1723.
 
  1.  ADAB. (1998). Directory of PVD0s1NGD0s in Bangladesh (Ready Reference). Dhaka: ADAB.
 
  1.  Ahmad Mokbul Morshed. 2005. “The State, Laws and Non-Governmental Organizations (NGOs) inBangladesh”. International Journal of Not-for-Profit Law. Vol. 3. Issue. 3
 
  1.  BBS. (1998). Statistical Pocketbook of Bangladesh. Dhaka: BBS
 
  1.  Bird, P., Morgan-Jones, P. (1981), Financial Reporting by Charities, Institute of Chartered Accountantsin England and Wales, London.
 
  1.  www,BRAC.net.com
 
  1.  NGO Affairs Bureau. 1998. Flow of Foreign Grant Fund Through NGO Affairs Bureau at a Glance.Dhaka: NGO Affairs Bureau, PM's Office/GOB.
 
  1.  Report of the NAB for the Prime Minister. ""There are several complaints of irregularity and corruptionagainst the NGOs"", Bhorer Kagoj. 29 July, 1992 (Daily Newspaper in Bangla).
" 62,"

BUSINESS ENVIRONMENT

","

Business Environment

A business environment is the social, technological, economic and political environment in which a business functions. The business environment affects organizational decisions, strategies, processes and performance.
The internal business environment consists of customers, suppliers, employees, board of directors, creditors. The external environment consists of factors and forces which are beyond the control of the organization, such as the economic environment, technical environment, legal environment, political environment and cultural environment.
Technology
The application of science and engineering skills and knowledge to solve production and organizational problems is called technology. Technology has now become a part and parcel of our everyday activities. No one can just ignore its necessity in our lives.
Technological environmentTechnological environment hold new technological innovation, new products, the state of technology, the utilization of technology for maximum inputs and outputs, the obsolescence of technology and the dynamic changes that frequently occur in technologies which enable firms to get a competitive advantage.
When planning technological change in an organization some basic questions may be analyzed which are as follows –

What are the company’s overall objectives?
What problems does the company want to solve?
How can technology help meet those goals and solve the problems
What are the company’s priorities both short and long term.
Which technologies meet the company’s requirements?
Will they integrate with the company’s existing systems?
Most dramatic force shaping the marketing environment
New technologies create new markets and opportunities. However every new technology replaces an older technology. Transistors hurt the vacuum-tube industry, the auto hurt the railroads and compact disk hurt phonograph records.
When old industries ignored new technologies their business declined. Thus marketers should watch the technological environment closely. Companies that do not keep up technological change soon will find their products outdebated. They will miss new product and market opportunities.

The marketer should watch for four major trends –
The rapid pace of technological change
High R&D budgets
The concentration by companies on minor products improvement
Increased government regulation
How Technological Environment Effects on Business
For Manufacturing Organizations:

Cost effectiveness – Every firms desired goal is to achieve maximum profit by minimizing it’s production cost. Upgraded technology creates the opportunity to increase the production and decrease the per unit cost.

Time effectiveness – Because of modern technology all kinds of business activities can be done in a shutter speed. For the businessmen time means money. The more time one can save the more money one can make.

Transportation – A great change has come to the transportation system because of modern technology. Goods can now be transported through jet air lines instead of ships. It has made transportation of goods easier and secured.
For Non Manufacturing Organizations:
Manufacturers are not the only businesses benefiting from technology, non-manufacturing firms are also using automation to improve customer service and productivity.
Nowadays –
Banks offer services to customers through ATM, via automated telephone system, over the internet.Example: Brac Bank, Standard Chartered Bank, Dutch-Bangla Banks, these banks are providing ATM facilities to their customers.
Retail stores of all kind use point of sale terminals that track inventories, identify items that need to be recorded and tell which products are selling well.Example: Wal-Mart, the leader in retailing automation, has its own satellite system connecting POS terminals directly to its distribution centers and head quarters.
In restaurant business, fast food shops are also maintaining their records, placing orders through technological process.
Telecommunicating & Home based business

Office automation systems also make telecommunicating and home based business possible. An estimated 8 million people work at home, using micro computers and other high-tech equipment to keep in touch with the office. In stead of spending time on the road twice a day, telecommuters work at home two or more days a week.

Office automation system

Today’s office automation system makes good use of the computer networks in most of the companies – both manufacturing and non manufacturing – to improve communications. It assists all levels of employees and enables managers to handle most of their own communication. The key elements include –

Work processing systems for producing written messages
E-mail systems for communicating directly with other employees and customers and transferring computer files
Departmental scheduling systems for planning meetings and other activities
Cellular phones for providing telephone service away from the office, as in cars.
Pagers that notify employees of phone calls
Voice mail systems for recording, storing and forwarding phone messages
Fax system for delivering messages on paper within minutes
Electronic bulletin boards and computer conferencing systems for discussing issues with others who are not present
Increased regulation of technological change

As products become more complex, the public needs to be assured of their safety. Consequently, government agencies’ powers to investigate and ban potentially unsafe products have been expanded. In Bangladesh, the BSTI must approve all drugs before they can be sold. Safety and health regulation have also increased in the areas of food, automobiles, clothing, electrical appliances and construction. Marketers must be aware of these regulations when proposing, developing and launching new products.

all these are happening because technology gives some special features to them like –
Competitive Market – For Homogenous products technology has created a good competitive market. New inventions and development of existing facilities are now quite essential for the organizations for operating their activities.
Research & Development – A huge amount of money is invested for research and development of new inventions. For example – The United States leads the world in research and development spending. Scientists today are researching a wide range of promising new products and services, ranging from practical solar energy, electric cars and cancer cures to voice-controlled computers and genetically engineered food crops. So organizations are eager to get the result.
Buying Behavior – Nowadays the buying behavior of consumers have changed. They are now very cautious and want to try for new services and products. To capture the consumer’s use of new technology is very important.
International Trade – In case of export and import from knowing the catalog price, order receipt to the end of the deed all are inevitable. Technology gives the business people the opportunity to operate all this activities within a click of the mouse.
Globalization – After achieving success in the local market every business man wants to be successful globally. For global reorganization technological development has now become the most important factor. The one who is detouched from technology can never be successful globally. Technology is the major driver of globalization and it can be considered by analyzing the following questions –

Does technology allow for products and services to be made more cheaply and to a better standard of quality?
Do the technologies offer consumers and businesses more innovative products and services such as internet banking, new generation mobile telephones etc?
How is distribution changed by new technologies such as books via the internet, flight tickets, auction etc?
Does technology offer companies a new way to communicate with consumers e.g. banners, customer relationship management?
Unlimited opportunities for innovation – scientists today are working on a startling range of new technologies that will revolutionize products and production processes. Some of the most exciting work is being done in bio-technology, solid state, electronics, robotics, materials science. Researchers are working on AIDS cure, pain-killers etc. in addition scientists also work on fantasy products; such as – small flying cars, 3D, TV, space colonies. The challenge in each case is not only technical but also commercial – to develop affordable versions of these products. Companies are already harnessing the power of virtual reality, the combination of technologies that allows users to experience 3D, computer generated environment through sound, site and touch. Virtual reality has already been applied to gathering consumers reactions to automobile designs, kitchen lay outs, exterior home designs and other potential offerings.
Technological Environment In Respect of Bangladesh
[*] People’s lifestyle is now changed. They are now more dependent on electronic appliances for even the house hold chores like. Especially the young generation is now more focused to electronic equipments. All these things are quite available because of technology.
[*] Banking sector in Bangladesh has experienced probably the greatest change because of technology. E-banking, ATM, Credit Card, Phone-banking are examples of this.
[*] A great deal of changes has come to the telecommunication system also. Number of users of mobile has increased and demand for land phone has decreased. Internet has become quite available.
[*] Media has now become very powerful. Lots of TV channels are now being broadcast. Even newspapers are now being available in electronic version.
[*] Agricultural production has increased as a result of new inventions and use of machinery.
[*] In manufacturing sector the labour incentive system has now been changed to machine incentive system. In lieu of hand made tools electronic and mechanical tools are being used.
[*] Publication sector also has a great deal of improvement. Computer composing has given the readers more satisfaction.

However some misuse of technology also takes place. Some mischiefs are being made by some of the people with the help of technology. Moreover, substandard or below standard tools sometimes cause death or deadly accidents. But in Bangladesh the use of technology is very important. It can play a significant role in the economical and social development of our country.

Wonders and curses
Technology has released such wonders as antibiotics, organ transplants, laptop and the internet. It also has released such horrors as nuclear missiles, chemical weapons and assault rifles. It has released such mixed blessings as the automobile, television and credit cards. Office automation system has been developed to make the office works easier and faster. But due to computer crimes large companies have to face a loss of thousands of dollars every year. There are several major categories of computer crimes –

Unauthorized access and use of computer systems
Security breaches and unauthorized access
Software piracy
Deliberate damage to information
Computer viruses

Our attitude towards technology depends on whether we are more impressed with its wonders or its blunders.

Conclusion

No single business is large or powerful enough to create major changes in the external environment. Thus managers are basically adopter rather than agents of change. Technological environment is basically an uncountable element in the external environment. Any change in the Technological Environment forces the business to reshape, to sustain its growth. If a business fails to adopt the technological changes or opportunities it might collapse. This section examines trends in the business environment that reshapes today’s business landscape.

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BUSINESS ENVIRONMENT OF CYBER CAFE AND ITS IMPACT ON SOCIETY IN DHAKA CITY (A SOCIOLOGICAL STUDY) BUSINESS ENVIRONMENT OF CYBER CAFE AND ITS IMPACT ON SOCIETY IN DHAKA CITY INTRODUCTION THIS REPORT HAS BEEN PREPARED FOR THE COURSE-403 (QUA

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Business Environment of Cyber cafe and its impact on society in Dhaka city (A Sociological study)

Business Environment of Cyber Cafe
and its impact on society in Dhaka City

Introduction
This report has been prepared for the Course-403 (Qualitative analysis of social data) Department of sociology University of Dhaka. as assigned by course Instructor Prof. Dr. Mahbuba Nasrin. The report would definitely enhance knowledge of students and facilitate understanding of the subject matter.

Objectives of the Report
The objective of the report is to analyze the external environmental factors affecting the Cyber Café industry of Bangladesh, and its impact on society in Bangladesh. The objectives are listed bellow:
To analyze the External environment (Both market and Non-market) of the industry
To identify Issues, Interest, Institution and Information regarding the industry
To identify opportunities that Cyber Café industry can exploit
To identify threats this could minimize the profitability of the industry
Various impact on society

Scope of the Report
The scope of the study of Cyber Café of Bangladesh was very limited due to time constant and lack of resources (lack of sufficient data). We have taken only five respondents from five different Cyber Cafés for our study and all are from Dhaka city.

Methodology
Type of Research:
In this study, exploratory research was undertaken to gain insights and understanding of the overall Cyber Cafe industry and also to determine the environmental factors surrounding it. After the analysis, a conclusive research was undertaken to fulfill the main purpose of the study.
Sources of Information
We have collected primary information by interviewing employees, managers by making a questionnaire and also by observing various organizational procedures, structures, and directly communicating with the customers. We have elaborated different types of secondary data in our research from various external sources. Among the sources that we have used, there are different sources of Internet, different books and periodicals related to the subject.

Data Collecting Instruments
In-depth interview: During the exploratory research, in-depth interviews were conducted with various managers, employees & customers of Cyber Café.
Questionnaire: We have prepared a questionnaire which leads us to a systematic way of data collecting. We had visited few cyber café in Dhaka city and asked questions from our questionnaire.

Limitations
Time frame for the research was very limited. The actual survey was done within two months.
Large-scale research was not possible due to political instability, monetary constraints and transportation inconvenience.
The research only covers the customers of Dhaka city. Due to cost and infrastructure limitations Chittagong and other major area was not physically covered.
Part of industry characteristics was written from individual’s perception and may vary from person to person.
In many cases, up to date information is not published and therefore not incorporated in this report
To get and to acquaint information regarding the competitors was difficult and was also very limited in scope.
The topic of the report was related to the technology which we have less exposure and we had difficulties to explain all the technological terms.

Chapter II: Background
Dramatic changes have taken place in our lives after the invention of computers and improvement in digital technology and communication systems. The business community and individuals to creating, transmitting and storing information in the electronic form instead of traditional paper documents .Information stored in electronic form is easier, cheaper, much less time-consuming and less cumbersome than storage in paper documents. Information stored in electronic form is also easier to retrieve and speedier to communicate. As the blessings of technology is not yet within the reach of common people, Cyber Café can deliver cutting edge technical solutions for clients and thereby can bridges the gap between technology and the common people.

What a Cyber café is?
The first Cafeteria was found in the Egyptian city of Cairo in the 11th century. People have likings for café from very early days. They like to spend some times gossiping with friends with a cup of tea or coffee. The world has changed and people have become busier and remain on the move most of the time. But being informed and maintaining communication is still needed. Cyber Café’s is a place or network of computers with broadband internet connection for the purpose of satisfying customers need for communication and information with the exchange of money. Internet cafés, or cyber cafés, have created a popular and affordable way to access the Internet and to send and receive e-mails. It is very popular with travelers and people on the move; they also provide opportunities for relaxing and socializing.

The introduction of cyber café has enabled us to go online even though we have no internet connection and telephone line. More interestingly, we even don’t need to have a computer of our own. Cyber café has initiated a new culture and injected some new value to our culture. It has been rightly said that “drink, surf and be marry”. One can enjoy of talking or communicating his or her friend with a cup of coffee in hand in a cyber café. The philosophy of cyber café is to create an atmosphere where user will feel homely, have privacy and feel free.

Facilities / Service
The facilities provided by the Cyber Café can be divided into two parts: Facility based service and Field based service.
Facility Based Service
Browsing Facilities – Most of the Cyber Cafés provide browsing facility from 8am-10pm in the evening. Moreover, they provide home connection for even 24 hours.
Mailing – Traditional letter has been replaced by Electronic Mail (E-mail). From our visit to the cyber café, we have found that most of the user goes to cyber café to be in touch with their friends, relatives and beloved one.
Chatting – Popularity of cyber café has been enhanced with the introduction of chat. Especially, young peoples love it. They find their match through the chat and could make friendship to a person from any part of the world.
Printing – Printing is another facility, which brings revenue for the cyber café. Cyber café situated in the academic arena does printing jobs most.
Scanning – Scanning is getting popularity in recent times. Cyber café provide scanning facilities to the customer
Uploading and downloading file – Those who need to download and upload file from the web are also welcome. Though the cyber cafés do not provide floppy disk drive in every workstation, anyone can use floppy through the network.
Field Based Service:
Home Connection – All the above-mentioned services are facilities based. They also provide field based service to the customers’ environment. Various cyber café provides home connection to their locality.

Service Process Flow Chart
As Bangladesh is not connected to the submarine cable, we get Internet connection through satellite link. Moreover, Bangladesh has no communication satellite of its own. We need to get bandwidth from other countries such as Thailand, Singapore and Hong Kong through VSAT.

Satellite Ground Station/HUB
(Hong Kong/Singapore/Thailand)

Cyber Cafe
Field Based Customers
Facility Based Customers

After getting bandwidth from the overseas vendors; local ISP sell it to their clients like Corporate, Cyber Café and Individual Subscribers. Cyber Café buys bandwidth from ISP with a cost of Tk.1, 100 per PC per month (As of 2004). They charge Tk.0.50-2.00 per minutes to the customers depending on the environment and service they provide.

History of Cyber Café in Bangladesh
Internet came late in Bangladesh, with UUCP e-mail beginning in 1993 and IP (Internet Protocol) connectivity in 1996. By July 1997, there were an estimated 5,500 IP and UUCP accounts (Press, L., 1999) in the country and by the end of 2000 it has been forecasted that the account holder could reach more than 50,000 through different Internet Service Providers (ISP), who are offering Internet services with bandwidth ranging between 64Kbps and 2Mbps through VSAT, Broadband and Zacknet downlink. Cyber Café industry in Bangladesh is relatively new. The industry has started its journey during the last few years of the 20th century. The first cyber café in Bangladesh is Blupla.net, Dhanmondi Plaza (3rd floor) Road No.06 Dhanmondi, Dhaka 1205. It has been established in the year 1996 and has two more branches in Uttara and Baily Road. As of now, total number of cyber café in Dhaka city is around 270 and altogether 600 in the country.

Non-market Issues
Few non-market issues rocked the cyber café industry over the year. These issues have multiplier effect in deciding the fate of the industry. Industry has defended few of them successfully and rests were attended poorly. Some of the burning issues are as follows;
Privacy: Privacy issue came forth with the allegation that few cyber café interrupt privacy of the customers. Some of the young customers browse porno web sites along with their partners and involve in objectionable behavior. One periodicals “Shaptahic 2000” reported in 2002, March issue that some of the cyber café is equipped with candid camera and record proceedings of their customers. Allegedly they market those in CDs. Shaptahic 2000 came up with photograph and interview of few victims. This has generated panic in the customers mind and has shown reservation about cyber café’s.
Security: Security is another issue which the cyber café failed to attend timely. Women specially feel unsecured to go to cyber café in the evening. Cyber café owner failed to bost the confidence of the people. This is partly due to the deteriorating national law and order.
Speed: Speed of the internet connection has ruined the future of the cyber café industry. Most of the interviewee of our study has agreed that customer’s suffered severely while browsing in the cyber café and feel cheated. This is mainly due to the national technological environment and connectivity of more machines.

Environment Analysis
An environment consists of those factors that directly or indirectly influences the operation of the business and thereby determine the attractiveness of the industry. Environment has two dimensions: Market and Non-market.
Market Environment consists of those factors, which directly influences the operation of an individual firm. The objective of market environment analysis is to find out strengths and weaknesses of an organization to combat best against issues and threats generated from both the market and Non-market environment.

The objective of Non-market environment analysis is to identify strategic opportunities and threats in the industry’s operating environment. Three interrelated environments should be examined at this stage:
The Immediate or Industry Environment in which the Organization Operates
The National Environment, and
The wider Macro-environment/LE PEST C Analysis.

Industry Environment
Industry environment requires an assessment of the competitive structure of the organization’s industry, including the competitive position of the focal organizations and its major rivals, as well as the stage of industry development. Moreover, porters five forces model analysis would provide a better insight about the nature and structure of the industry. Before going in-depth, we have a graphical representation of porter’s model:

Figure 3: Porter’s Five Forces Model
Bargaining Power of Supplier: Suppliers of the Cyber Café industry includes ISP’s, Governments, Creditors, and Public Utility Providers and so on. All of the above mentioned suppliers enjoyed tremendous power in this industry. Here we have discussed each of them in brief;
ISP’s: Cyber café depends on the ISP’s for their bandwidth. AS Bangladesh is not yet connected with the submarine cable connection, thereby the ISP’s fix charges for bandwidth as their will, sometimes with no concerns to the cyber café’s. Moreover, ISP’s don’t provide promised bandwidth all the time and the internet connection get slow. This is one of the reasons of declining the prospects of the industry.
Government: Though Bangladesh has entered in to the free market arena, still the government intervenes in to the business in many forms. Government is the sole provider of safety and security to the business which they have spectacularly failed to do.
Creditors and Banks: As the industry is showing no sign of improving, the financial institution and banks are showing no interest in this industry. Initially, Janata Bank had a special loan package for cyber café business; but now they have repealed that opportunity. Moreover, a person needed to be an IT educated to get that loan facilities. At present there is no special financial package for the cyber café industry. Other then this, corruption is another problem, which made it difficult for the investors to get access that loan. Red-tapeism is another problem in the way to easy access to the loan.

Bargaining power of Buyer’s: Buyer’s are the least powerful similar to other industries of this country. Both the government and the owners of the cyber café’s are not aware of the buyer’s need. The environment and the service quality are so poor that the parents do not want to send their kids to the cyber café. Moreover, the staffs are so poorly trained and ill mannered that people do not feel comfortable to spend time out there.

Threats of Substitute Products: Over the year, home connection has increased and people start coming into cyber café’s in a small number. This reduction is due to many reasons. Mainly the reduced cost of broadband connection and lowering cost of computer and other communication tools are poising serious threats to the cyber café business. Last generation mobile phone and Lap top and Palm top computers are increasing in number and serving peoples communication needs in a better and convenient way.

Potential New Entrants: Potential new entrants in this industry are limited in number. The reason is the less profit and dull future of this industry. There are lots of telecenters in the Dhaka city which can turn into a cyber café with less or little effort.

Rivalry among Established Firms: Rivalry among established firms in this industry is intense. As we have said earlier that the profit margin is reducing and many firms have left the industry. Those who remain in the industry are fighting for the remaining market share which is shrinking day by day. The competition is creating cost pressure among the contestants.

Industry Structure
The investment required for this industry is not huge and thereby numbers of firms are also large in this industry. The entry barrier is low and there are no such obstacles that can prevent an entrepreneur to enter into this industry. If someone has required capital and willingness to do business is welcome. Moreover, the technological know-how is also little to run a cyber café. If a person knows how to operate a computer and log on to the Internet is sufficient to run a cyber café. At best, they only need to know the simple trouble shooting techniques to best operate the firm. So, the human resources required for this industry not necessarily required to be highly skilled and technologically educated.

There is also no dominance of one or two firms in this industry. Products are all similar and no or little scope of product differentiation. Price is also same to all firms. Moreover, the industry is locally concentrated to some areas and products are also localized as per the customer’s needs and wants. Adding some features with the existing products or extending the product line can only differentiate the product. There is little or no room for price increasing and decreasing.
Characteristics of Cyber Café Industry
Low barriers to Entry and Exit
Semi-skilled human resource
Small-scale industry and Low capital requirement
Locally concentrated firms
Fragmented industry and no supremacy of any single buyer
Private ownership
Less government restriction

Industry Life Cycle
Cyber café industry right now is at the declining stage in the industry life cycle. The attractiveness of this industry is less and the numbers of customers are reducing in a great number. The trend of declining customer has started in the early 2000 with the government relaxing tax on VSAT and on other computer accessories. The industry had started its journey with lot of expectation and enthusiasm in the mid 90’s. It has experienced bomb within 2 years of its introduction and then star declining during early 2000. Here we present the industry life cycle, which give a graphical representation of the industry:
1998 1999-’00 2001-

1997

Figure 3: Cyber Café Industry Life Cycle

LE PEST C Analysis:
Macro environment analysis consists of examining the macroeconomic, Social, Political, Legal and Technological factors that might affect the organization.

Legal Competitive

Ecological Technological

Political Social
Economic

Legal Environment:
There need to have only a trade license from the city corporation to establish a cyber café. Otherwise, the legal requirement is less. Initially, the legal requirement was not favorable to the business. The government has realized that the IT and ICT sector can become the torch bearer of the development of the country and has taken initiative to make some laws regarding to the development of the IT and ICT sector of Bangladesh. Though, we have responded late to the quest of the IT development; gradually our legal environment is being amended in the channel of the development of IT industry. Government of Bangladesh constituted on 16 May 1983, a centrally institutionalized mechanism called the National Committee on Science and Technology (NCST) to perform the following functions:
Special IT Policy of Bangladesh Government
IT (Information Technology) declared a thrust sector
Government speedily implementing the 45 recommendations of JRC high powered committee for IT industry
Waiver of all taxes and duties from import of computer hardware and software thus increasing affordability and proliferation of PC use in general, a prerequisite for the IT powerhouse that Bangladesh of 140 million people with more than 30 million Science graduates wishes to become
Tax holiday for Software and IT services companies
Export over internet or other electronic media recognized under sales contract or agreement without any need for LCs
Simplified tax free export earning remittance procedures with 40% retention in foreign currency
Special funds allocated by government for extending collateral free loans to IT entrepreneurs
Deregulation of process of acquisition and use of VSAT to facilitate faster, cheaper and higher bandwidth connection and to encourage more widespread internet use than that being provided currently by 60 or so Internet Service Providers (ISPs)
Intellectual Property Rights law approved by President and has been enacted in the Parliament.
Ecological Environment:
Ecological environment is not important in this industry. As the industry is in the service industry, not poising any threats to the environment.
Political Environment:
The number one threat to any business in Bangladesh is the political instability and deteriorating law and order situation. There is no certainty that whether there will be a strike or not in the next day. Peoples have no security of their life and lack of trust on the law-enforcing agency due to high corruption and lack of resources. People need to come out of the home to take service from the cyber café, which is not risk free even in the daylight. Recent bomb blast has worsened the situation and exposed the cyber café industry one more time in to the hostile criticism.
The political norm of Bangladesh is that the opposition would boycott parliament session and government would have no initiative to bring them into the house. In the last 12-13 years we are observing more then 35-40 Hartal per year. As per the cyber café owner, Hartal is the number one criminal and they want immediately to stop this hartal culture. During Hartal, people don’t come to cyber café and prefer to stay at home. This has reduced the subscriber and thereby the profitability of the cyber café’s.
Economic Environment
The state of macroeconomic environment determines the general health and well being of the economy. This in turn, affects industry’s ability to earn an adequate rate of return. State of four most important factors in the macro economy is as follows;

Growth Rate of Economy (GDP): The GDP of Bangladesh is dancing around 4.5%-5.5% in the last few years. Thereby, the growth of the Cyber Café industry is also not visible.
Interest Rate: Recently, the government has reduced the interest rate from 11% to 6%. This decrease in the interest rate will generate more money and thereby create opportunities for investment in the cyber café industry.
Currency Exchange Rate: In the cyber café industry currency exchange rate is of significance. The cyber café purchase their bandwidth from a local ISP who purchases it from overseas supplier, mainly from Thailand. This involve foreign currency exchange and thereby if the dollar goes high then the cost of bandwidth will also go high and thereby the cost of browsing in a cyber café will also increase.
Inflation Rate: Inflation can destabilize the economy, producing slower economic growth, higher interest rate and volatile currency movement. If inflation keeps increasing investment planning becomes hazardous. The key characteristic of inflation is that it makes the future less predictable. Inflation rate is moderate hence not threatening cyber café business.

Social Environment
Social changes create opportunity and threats for the business. The composition of social class largely determines the fate of the business of an Industry. If the society is composed of more high social class people, then there might have the fewer prospects for the cyber café business. The upper class might not be willing to go to a cyber café instead; they will have their own connection and stay home. The extent to which the middle class is extended in a society is a critical factor for the success of the Cyber Café business. With globalization and open market economy in action, middle class is shrinking in Bangladesh. They are promoting to the upper class or lowering to the lower class. Important thing is that both the upper and lower class has less attractiveness for the cyber café. The cost of broadband connection is within the reach of the upper class and need not to go to cyber café. On the other hand, lower class has less demand for the internet and thereby for the cyber café. This silent but crucial change has changed the lucrative ness of the cyber café industry.
The chemistry of social changes largely determines the success and failure of a business. Social awareness among the people regarding Internet use and increased need for communication has increased the attractiveness of this industry. Moreover, increased number of expatriate Bangladeshi national has also increased the attractiveness of the cyber café industry. People go to cyber café to talk to their friends, fiancés and relative at a lowered cost.
Furthermore, the opening of the society has also enabled people to go to cyber cafe and enjoy the wonder of technology. On the other hand, the social stigma of law and order situation has created an atmosphere of insecurity in the mind of the consumer or people. Therefore, people are reluctant to stay longer period in the outside environment.
The social evils we have are all playing a role in determining the fate of the cyber café industry. Eve teasing is a major barrier for women not going to the cyber café. Women feel embarrassed when they find that a person sitting besides her is browsing some objectionable sites. This has been strengthening by the fact that children’s (Below 18 years) entry is restricted to most of the cyber café. Moreover, the image of the cyber café to the society is hampered in the recent past with few incidents. The latest one is the suspected e-mail sent from a cyber café, threatening leader of the opposition. This has frightened prospective users of cyber café of being harassed by the law enforcing agency.

Technological Environment:
Technological environment is one of the most significant environmental forces which can make established products obsolete overnight and at the same time it can create a host of new product possibilities. What is the best technology today might be found out of date in the next morning. Thus technological change is both creative and destructive -both an opportunity and a threat. One of the most important impacts of technological change is that it can affect the height of barriers to entry and as a result radically reshape the industry structure. Technological environment is more volatile then any other environmental force. Over the year, technology, especially in the IT and ICT sectors has experienced a tremendous growth. The world is now within the reach of the common man. The impact of technological environment in the development of cyber café industry is huge. Technological environment of Cyber Café largely depends on the following factors:
Internet Scenario of the country
Telecom Infrastructure in Bangladesh
ISP Situation
Computer
Current Situation of Internet and Cyber Cafés of Bangladesh
While, over half of UK households are online; only 0.1% of homes in Bangladesh are online. These could have been a huge opportunity for the Cyber café industry. But to our surprise, the cyber café industry of Bangladesh is currently experiencing huge downturn. Over the last few years, lot of cyber cafes’ have shutdown or reduced their investments in this industry. This is due to some environmental factors that we have analyzed in the environment analysis part. In brief, we can say that this downturn is mainly due to some external threats as well as some internal weaknesses. The cyber cafe industry has experienced tremendous growth during the late 90s’.Now the industry has lost its shine and attractiveness. Present situation in Bangladesh as of September 30th 2002 is as follows:

Subject Statistics
Registered Dial-Up user accounts 120,000
Broadband (Radio, Cable, xDSL) accounts 5,000
Cyber Café Users 6,000 (Per Day)
BTTB – Dial-Up user accounts 8,500
BTTB Coverage (District) 50
Internet Service Provider
Operational
Registered
Total
60
50
130
Highest Bandwidth available 4 mbps
Internet Access Charge:
Bandwidth Cost
ACPC
Broadband-64kbs
Broadband-128kbs
Broadband-256kbs
DBB
Broadband-64kbs to 128kbs
Broadband-128kbs to 256kbs Tk 0.20 per min

Tk.30,000 – 40,000
Tk. 60,000 – 70,000
Tk. 1,00,000 – 1,10,000

Tk. 20,000 – 25,000
Tk. 30,000 – 35,000
Table 1: Communication infrastructure of Bangladesh
After the withdrawal of imposition on VSAT in April 2000 the Internet scenario of the country has changed drastically. An entrepreneur has only need to obtain a simple permission from the government run BTTB with an annual mandatory fee of USD3500 and can choose any globally available transponder services. Breaking of this monopoly has increased competition in the market with rapid reduction of equipment cost and cost of satellite services, reflecting abrupt reduction of Internet usage fee.
Costs of VSAT equipment are nearly USD 40,000 and annual lease fee to the Internet provider costs around USD24, 000 with the mandatory annual fee to BTTB. Legal framework now also permits ISPs to float public share in the stock exchange (Rahman, H., 2000).
Initially there were only a few UUCP (Unix-to-Unix Copy Protocol) accounts in the country and then they were replaced by IP (Internet Protocol) accounts. At a later stage low bandwidth 64Kbps VSAT (Very Small Aperture Terminal) link became the main Internet backbone of the country with 120 million people. Demand did not inclined high compared to the huge population base, because most of them live in rural areas where minimum tale-communication infrastructure is missing and at the same time purchasing power of the general communities limiting Internet connectivity with prevailing socio-economic conditions. The slow speed of access provided by VSATs (max. 128.8 kbps) is a major constraint. A number of Cyber cafes providing e-mail and Internet browsing facilities have been opened in Dhaka city; these are quite popular among the young generation. Public kiosks with Internet facilities are also being planned.
Bangladesh Telegraph and Telephone Board (BTTB) have already established a network for high bandwidth Internet connectivity through offering commercial services. BTTB is establishing a fiber optics backbone throughout the country and also has a plan to offer ISDN (Integrated Services Digital Network) service using the facilities of the already installed digital exchanges in Dhaka and Chittagong cities. They have opened X25 and X28 services in eight cities of the country and established Digital Data Network (DDN) at Dhaka and four other cities. Through DDN they are going to offer IPLC (International Private Leased Line Circuits), National (Point to Point High Speed data Circuits), Local (Point to Point High Speed Data Circuits) and E1 Access from PSTN (Public Switched telephone Network) to ISPs.
An Information Technology village is going to be set up very close to Dhaka. The government has already made 18 acres of land available for setting up this IT village. This would be similar to the Software Technology Parks in India. The entire infrastructure, including high-speed telecommunication facilities (2Mbps link) would be provided. These would enable the small companies to move into buildings with readily available facilities. Since this is going to take at least two years, a decision has been taken to initially set it up in an existing building in Dhaka (Chowdhury, J.R., 1999).
Due to the failure of the government the country could not able to obtain a link to the sub-marine cable in 1991 and also due to negligence in government policies the country domain .bd is still not functioning properly. In the absence of a ccTLD (country-code Top Level Domain), the email and Internet users are suffering from bandwidth wastage and in this way cost of the browsing is increasing and speed of email communication is decreasing. Hopefully, the matters would be resolved in the shortest time through pertinent measures from appropriate authorities.
ISP Situation
In June 1996, the government decided to allow private entrepreneurs to act as ISPs using VSATs (Very Small Aperture Terminal). In 1999, there were about 22,000 account holders with 10 ISPs (8 in Dhaka and 2 in Chittagong) and the total number of users ranges around 100,000, while in 2000, there are about 60 ISPs providing Internet services to more than 250,000 Internet users. The growing demand of the society and the congenial global atmosphere towards Internet has pressurized the entrepreneurs to re-think their policies and strategies to accommodate the newly emerged rapidly enlarging target group.
Situations have been improved lately due to the withdrawal of the imposition on VSAT by the government and at present there are about 60 Independent (private) ISP companies, including the government owned BTTB. Concentration of ISP is the most in Dhaka city, where more than 80% of them are located. Only three has been established in Sylhet, three in Chittagong and one each in Rajshahi, Khulna and Bogra. There are about 5 large ISPs and among them Grameen Communications has a customer base of more than 6000. Two of the ISPs are offering their Internet services through 2Mbps full-duplex VSAT link, while highest peak time Internet usage rate ranges from Taka 1.50 to lowest Taka 0.20 (2.00 to 6.00 am for one ISP).
Anyone can install a VSAT with a simple permission from BTTB. Cost of VSAT equipment is nearly USD 40,000 and annual monthly lease fee to the Internet provider costs around USD 24,000 with an additional mandatory annual fee of USD 3500 to BTTB. Legal framework now also permits ISPs to float Public share in the stock exchange.
The highest peak time charge (Internet usage fees) now is about Taka 1.50 paisa (6: am to 6: PM) and the lowest – off peak time charges is around 00.20 Paisa (2: 00pm to 6:00am) depending on the ISP.
Grameen Cyber net (an ISP) has the largest number of subscriber base (about 6000) and the current bandwidth available now – what local ISP’s are providing, ranges from 64kbs to 2mbs (BOL Online Ltd. and Proshikha are providing 2mbs access).

Figure 4: Growth of ISP and Internet users
Current bandwidth of Internet backbone ranges between 64Kbps and 2Mbps through full-duplex VSAT links. There are a few companies, who are trying to make popularize their Broadband connectivity sharing an allocated bandwidth. Zacknet seemed to lost popularity because of its one-way communication. There were a few ISPs who were using Zacknet for downloading during rush hours, but cost of the service has been restricting its popular use.
It has created lot of threats in the form of latest generation mobile phone through which a mobile owner will be able to browse Internet in the street or on the move. Many of the mobile set and service providers are already providing WAP and E-mail service to their client. Grameen has recently launched its e-mail facilities for its subscriber. Though it’s not in action till to date but in near future it will start functioning in full swing.
Moreover, the ever-changing computer technology is also playing an important role in the development of the cyber café industry of Bangladesh.
Telegraph and Telephone Department’s implementation of DDN (Digital Data Network) as in country high speed (up to 2 Mbps) surface link in Dhaka and four other major cities of Bangladesh.
Decision to link to global highway through submarine cable link by next two years.
Telecom Infrastructure in Bangladesh
There are 750, 000 fixed lines Operated by BTTB (Government monopoly) and in the next five yrs demand for fixed lines will be 3.5 million. In four companies 950,000 Mobile Phones are in operation. Grameen has current subscriber base of GP is 7, 30,000 while it has coverage in 44 districts including all six divisional headquarters. Grameen’s target is to expand 1 million by Dec-02- came to market 1997. Grameen Phone connections would stand at 2 million by 2004. Aktel’s target is to expand 150,000 by Dec-02. City Cell, Sheba 20,000 Village phones are in operation in 18,581 villages of 324 Upzillas, 50,000 Bangladeshi women making living as Grameen phone ladies.

Name of the Company BTTB Grameen Aktel City Cell Sheba Village Phone
No of Subscriber 800,000 2,400,000 850,000 350,000 50,000 20,000

Table 2: Break down of telecommunication facilities by different company

Figure 5: Share of subscriber by different company

Computer
Computer is a very sophisticated technology and the computer industry is characterized by high uncertainty. The technological change is rapid and to some extent disruptive. Both hardware and software industry come with new technology almost in every year. This has also made the Cyber Café industry uncertain. The recent trend shows that the government has decided to spread computer technology throughout the country. Moreover, different government agencies and ministries are also going through computerization. A joint survey by the Bangladesh Computer Council and Bangladesh Bureau of Statistics, published in April 1999 has found that there were more than 78,000 PCs in Bangladesh by the end of 1998, with more than 120,000 licensed software marketed (Report on Survey of IT Resources of Bangladesh and Identification of Y2K Problem Areas, 1999). The highest concentration is in Dhaka with more than 72% of the computers involved in IT related activities. However, it is expected that the number of PC user would be increased by at least 50% within a year after withdrawal of government imposed import taxes from computer and computer related accessories in 1999.

Competitive Environment
As the industry is facing downturn Competition in this industry is intense. Existing firms are mainly competing in-terms of price to be remaining competitive. The price varied in-terms of place and the environment cyber cafe provides.
Impact on society
There are various impact of cyber cafe in our society. Through the cyber cafe our life style have made very fast. Through the cyber cafe we can communicate easily one country another country. We can send various Message, E-mail, wishing to our friends, relatives. There are negative impact of cyber cafe in our society as like as our young generation can watch various pornography for this reason they fall various problem mental and physical.
Opportunities and Threats
Opportunities
Bangladesh government has declared IT and Agro-based industries along with the RMG as the thrust sector and allocated special fund for Joint Venture projects. These provide huge opportunity for IT entrepreneur (Cyber Café, Software and hardware) to launch new and innovative projects.
Bangladesh is a country of approximately 130 million people. NGOs like are bringing the remotest villages into the worldwide communication systems and opening up huge possibility of bringing all into worldwide partnership. This has created huge opportunity for the cyber café industry to expand in to the rural areas of the country.
Substantial talented and educated but unemployed youth is ready to be mobilized into the soldiers of the technological revolution. This huge unemployed educated young are therefore the prospective customers of the cyber café.
The recent trend shows that the government has decided to spread computer technology throughout the country. Moreover, different government agencies and ministries are also going through computerization.
Integration of computer in to the learning process is increasing. Students need to go online to prepare their Assignment, Project, Case Analysis and preparing for the final examination. A research done by the MBA student of BRAC University has revealed that, Blending Mode (Blending Internet with Traditional Learning method) is the most suitable method of learning. Some of the students might not have sufficient internet facilities and hence would go to cyber café for additional support.
The number of expatriate Bangladeshi has been increased in the recent past, which has created an opportunity for the cyber café industry to provide net phone facilities to the relatives of expatriate Bangladeshi nationals.
Government has reduced the tax on VSAT and other computer accessories, which increased the number of PC users in the country. This increased computer users will thereby create demand for the service of the cyber café. ISP would be pressurized by both the government and the customers to reduce their connection charge.
By 2005, Bangladesh will be connected to Submarine Cable that will reduce the bandwidth cost and thereby the Internet charge. This would ensure high speed and uninterrupted Internet connection.
Scope of amusement is diminishing with the huge urbanization and thereby cyber café can provide some sorts of amusement as well as Internet facilities.
Threats
Establishing VSAT link at the root level may seem expensive at the primary stage. There may be possibilities of using locally designed long distant Micro wave through multiple wireless routers and these links are readily available locally at very reasonable rate for accessing remote area users. It has been found that straight line of path (60Km range with 3Mbps access speed), each tower unit cost approximately USD2400 (Chowdhury, T., 2000).
Introduction of private university has largely affected the Cyber Café industry and took away many subscribers. Most of the private university provides 6-12 hours Internet facility to their students along with printing facilities. Now, there are more then 55 private universities with broadband Internet connection. If we see the rate of decline of cyber café industry we will see that during the early 2000, decline starts. That is the time when many of the private universities start functioning.
Government has reduced the tax on VSAT, which enables ISP to import VSAT in a lower cost. This will in turn lead to a decrease in the Internet connection charge and would increase the home connection. Increasing number of home connection has poised the biggest threat to the cyber café industry. A person can get broadband Internet connection approximately with tk.1000 in the Dhaka city.
As most of the people goes to cyber café to better communicate with their friends. Introduction of TNT mobile phone will certainly have huge impact on the cyber café. People will have easy access to the communication channel and thereby will reduce the customer number.
One person through e-mail has claimed the responsibility of the recent bomb blast in the Awami League rally and threatened the leader of the opposition. One person from a cyber café has sent this e-mail, which destroys the image of the cyber café. The irony is that the alleged person might be innocent as the chance of manipulating e-mail is high. This has apprehended cyber café users and is scared of police harassment.
Government has reduced tax on computer and computer accessories that enabled more people to buy computer and thereby decrease the reliance on the cyber café.
Recently, government has legalized VOIP, which create business opportunities and increases the number of competitors. Many Tele-centers and Calling card companies are utilizing this VOIP facility and posing threat to the cyber café business as they are also in the net 2-phone business.

Conclusion
Internet has changed the way of living in many ways. The world has become closure and information is easily accessible through internet. Peoples of this age are information overloaded. Cyber café is one of the important channels to meet the growing customers need for information and communication. Internet first came in Bangladesh in the year 1993 and the first cyber café of Bangladesh was introduced in 1997. It has taken only 7-8 years to start this industry declining. From the above mentioned analysis of the external environment of the cyber café industry, we have identified some reasons for this too early downturn of this industry. We also have identified few opportunities and threats relevant to this industry. It has been found that the industry is fragmented and there are no barriers to entry and little barriers to exit. The strategy to sustain profitability and to remain in the industry could be the Chaining Strategy. Bluepla.net is already following this strategy and doing well. They have three Cyber Café in Dhaka city which enables them to gain economies of scale and reduce operating costs. Moreover, Cyber café alone would be able to sustain in the long run and thereby there need to have diversification of the business. It would reduce the business risk. There could be drinks and fast food business in a small scale side by side to the cyber café. Furthermore, there is no government policy for this industry. Cyber café is neither considered an IT industry nor an SME (Small and Medium Enterprise). Along side, government must maintain law and order and ensure safety. Finally, cyber cafes need to provide less privacy to improve its image in the society. There is a popular feeling that misuses the privacy of cyber café and browse objectionable sites.

References
David P. Baron, Business and Its Environment, Third Edition, 2000.
Janet Morrison, the International Business Environment: Diversity and the Global Economy, 2002.
Hill, Charles W.L and Jones, Carter R., Strategic Management-An integrated Approach: Text and Cases, 5th edition, 2002.
Thompson and Strickland, Strategic Management: Concepts and Cases, 11th edition, 2003, Chicago: Irwin.
Encarta® Encyclopedia 2003. © 1993-2002 Microsoft Corporation.
Chowdhury, J.R. (1999), “Information Technology in Bangladesh”, A paper on IT policy in Bangladesh, April 1999, http://som.csudh.edu/fac/lpress/devnat/nations/Bangladesh/jrc.html
Chowdhury, T. (2000), Current Scenario (after VSAT deregulation by the government in April 2000), a report on EB2000IT egroups, October, 2000, eb2000it@egroups.com.
Press, L. (1999), “Against All Odds, The Internet in Bangladesh”, A Report on IT in developing countries, The MOSAIC Group, Fairfax, VA, March 1999,
http://som.csudh.edu/fac/lpress/devnat/nations/Bangladesh/bdmosaic.html
Rahman, H. (2000), “IT in Bangladesh”, A report submitted to UNDP-FACID-JBIC Mission, November 2000.
Report on Survey of IT Resources of Bangladesh and Identification of Y2K Problem Areas, (1999), Bangladesh Computer Council and Bangladesh Bureau of Statistics, April 1999.
Surman, M. (1999(1)), making the Internet Work for Civil Society: A Product and Service manifesto for APC, Mission-Driven Business Planning Toolkit, APC, 1999.

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BUSINESS ENVIRONMENT

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Business environment
A business environment is the social, technological, economic and political environment in which a business functions. The business environment affects organizational decisions, strategies, processes and performance.
The internal business environment consists of customers, suppliers, employees, board of directors, creditors. The external environment consists of factors and forces which are beyond the control of the organization, such as the economic environment, technical environment, legal environment, political environment and cultural environment.

Technology

The application of science and engineering skills and knowledge to solve production and organizational problems is called technology. Technology has now become a part and parcel of our everyday activities. No one can just ignore its necessity in our lives.

TECHNOLOGICAL ENVIRONMENT

Technological environment hold new technological innovation, new products, the state of technology, the utilization of technology for maximum inputs and outputs, the obsolescence of technology and the dynamic changes that frequently occur in technologies which enable firms to get a competitive advantage.
When planning technological change in an organization some basic questions may be analyzed which are as follows-

What are the company’s oveall objectives?
What problems does the company want to solve?
How can technology help meet those goals and solve the problems.
What are the company’s priorities both short and long term.
Which technologies meet the company’s requirements?
Will they intigrate with the company’s existing systems?

Most dramatic force shaping the marketing environment

New technologies create new markets and opportunities. However every new technoloty replaes an older technology. Transistors hurt the vacuum-tube industry, the auto hurt the railroads and compact disk hurt phonograph records.
When old industries ignored new technologies their business declined. Thus marketers should watch the technological envrionment closely. Companies that do not keep up technological change soon will find their products outdebted. They will miss new product and market opportunities.

The marketer should watch for four major trends –
The rapid pace of technological change
High R&D budgets
The concentration by companies on minor products improvement
Increased government regulation
How Technological Environment Effects on Business
For Manufacturing Organizations:

Cost effectiveness – Every firms desired goal is to achieve maximum profit by minimizing it’s production cost. Upgraded technology creates the opportunity to increase the production and decrease the per unit cost.

Time effectiveness – Because of modern technology all kinds of business activities can be done in a shutter speed. For the businessmen time means money. The more time one can save the more money one can make.

Transportation – A great change has come to the transportation system because of modern technology. Goods can now be transported through jetlines instead of ships. It has made transportation of goods easier and secured.

For Non Manufacturing Organizations:

.Manufacturers are not the only businesses benefiting from technology, non-manufacturing firms are also using automation to improve customer service and productivity.
Nowadays –
Banks offer services to customers through ATM, via automated telephone system, over the internet.
Example: Brac Bank, Standard Chartered Bank, Dutch-Bangla Bank ar providing ATM facilities to their customers.
Retail stores of all kind use point of sale terminals that track inventories, identify items that need to be recorded and tell which products are selling well.
Example: Wal-Mart, the leader in retailing automation, has its own satelite system connecting POS terminals directly to its distribution centres and head quarters.
In restaurant business, fast food shops are also maintaining their records, placing orders through technological process.

Telecommunicating & Home based business

Office automation systems also make telecommunicating and home based business possible. An estimated 8 million people work at home, using micro computers and other high-tech equipment to keep in touch with the office. In stead of spending time on the road twice a day, telecommuters work at home two or more days a week.

Office automation system

Today’s office automation system makes good use of the computer networks in most of the companies – both manufacturing and non manufacturing – to improve communications. It assists all levels of employees and enable managers to handle most of their own communication. The key elements include –
Work processing systems for producing written messages
E-mail systems for communicating directly with other employees and customers and transfering computer files
Departmental scheduling systems for planning meetings and other activities
Cellular phones for providing telephone service away from the office, as in cars.
Pagers that notify employees of phone calls
Voice mail systems for recording, storing and forwarding phone messages
Fax system for delivering messages on paper withing minutes
Electronic bulletin boards and computer conferencing systems for discussing issues with others who are not present

Increased regulation of technological change

As products become more complex, the public needs to be assured of their safety. Consequently, government agencies’ powers to investigate and ban potentially unsafe products have been expanded. In bangladesh, the BSTI must approve all drugs before they can be sold. Safety and health regulation have also increased in the areas of food, automobiles, clothing, electrical appliances and construction. Marketers must be aware of these regulations when proposing, developing and lauching new products.

all these are happening because technology gives some special features to them like –

Competetive Market – For Homogenous products technology has created a good competetive market. New invetions and development of existing facilities are now quite essential for the organizations for operating their activities.

Research & Development – A huge amount of money is invested for research and development of new invetions. For example – The United States leads the world in reserch and development spending. Scientists today are researching a wide range of promising new products and services, ranging from practical solar energy, electric cars and cancer cures to voice-controlled computers and genetically engineered food crops. So organizations are eager to get the result.

Buying Behavior – Nowadays the buying behavior of consumers have changed. They are now very cautious and want to try for new services and products. To capture the consumers use of new technology is very important.

International Trade – In case of export and import from knowing the catalog price, order receipt to the end of the deed all are inevitable. Technology gives the business people the opportunity to operate all this activities within a click of the mouse.

Globalisation – After achieveing success in the local market every business man wants to be successful globally. For global recognization technological development has now become the most important factor. The one who is detouched from technology can never be successful globally. Technology is the major driver of globalization and it can be considered by analyzing the following questions –
Does technology allow for products and services to be made more cheaply and to a better standard of quality?
Do the technologies offer consumers and businesses more innovative products and services such as internet banking, new generation mobile telephones etc?
How is distribution changed by new technologies such as books via the internet, flight tickets, auction etc?
Does technology offer companies a new way to communicate with consumers e.g. banners, customer relationship management?

Unlimited opportunities for innovation – scientists today are working on a startling range of new technologies that will revolutionize products and production processes. Some of the most exciting work is being done in bio-technology, solid state, electronics, robotics, materials science. Researchers are working on AIDS cure, pain-killers etc. in addition scientists also work on fantacy products; such as – small flying cars, 3D, TV, space colonies. The chalange in each case is not only technical but also commercial – to develop affordable versions of these products . companies are already harnessing the power of virtual reality, the combination of technologies that allows users to experience 3D, computer generated environment through sound, site and touch. Virtual reality has already been applied to gathering consumers reactions to automobile designs, kitchen lay outs, exterior home designs and other potential offerings.

Technological Environment In Respect of Bangladesh
People’s lifestyle is now changed. They are now moredependent on eletronic appliances for even the house hold chores like. Specially the young generation are now more focused to electronic equipments. All these things are quite available because of technology.
Banking sector in bangladesh has experienced probably the greatest change because of technology. E-banking, ATM, Credit Card, Phone-banking are examples of this.
A great deal of changes has come to the telecommunication system also. Number of users of mobile has increased and demand for land phone has decreased. Internet has become quite available.
Media has now become very powerful. Lots of TV channels are now being broadcast. Even newspapers are now being available in electronic version.
Agricultural production has increased as a result of new inventions and use of machinary.
In manufacturing sector the labour incentive system has now been changed to machine incentive system. In lieu of hand made tools electronic and mechanical tools are being used.
Publication sector has also have a great deal of improvement. Computer composing has given the readers more satisfaction.
However some misuse of technology also takes place. Some fradulent and mischief are being made by some of the people with the help of technology. Moreover, substandard or below standard tools sometimes cause death or deadly accidents. But in Bangladesh the use of technology is very important. It can play a significant role in the economical and social development of our country.
Wonders and curses

Technology has released such wonders as anibiotics, organ transplants, laptop and the internet. It also has released such horrors as neuclear missiles, chemicla weapons and assault rifles. It has released such mixed blessings as the automobile, television and credit cards. Office automation system has been developed to make the office works easier and faster. But due to computer crimes large companies have to face a loss of thousands of dollars every year. There are several major catagories of computer crimes –
Unauthorized access and use of computer systems
Security breaches and unauthorized access
Software piracy
Deleberate damage to information
Computer viruses

Our attitude towards technology depends on whether we are more impressed with its wonders or its blunders.

Conclusion

No single business cis large or poweful enough to create major changes in he external environment. Thus managers are basicaly adopter rather than agents of change. Technological environment is basically an uncountable elements in the external environment. Any change in the Technological Environment forces the business to reshape, to sustain its growth. If a business fails to adopt the technological changes or opportunities it might collaps. This section examines trends in the business environment that reshapes today’s business landscape.

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BUSINESS MODELS OF E-GOVERNMENT: RESEARCH ON DYNAMIC E-GOVERNMENT BASED ON WEB SERVICES

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Li Yan1,2, Jiumin Yang3

Abstract. Government transcends all sectors in a society. It provides not only the legal, political and economic infrastructure to support other sectors, but also exerts significant influence on the social factors that contribute to their development. With its maturity of technologies and management, e-government will eventually enter into the time of ‘one-stop’ services. Among others, the technology of Web services is the major contributor to this achievement. Web services provides a new way of standard-based software technology, letting programmers combine existing computer system in new ways over the Internet within one business or across many, and would thereby bring about profound and far-reaching impacts on e-government. This paper introduced the business modes of e- govemment, architecture of dynamic e-government and its key technologies. Finally future prospect of dynamic e-government was also briefly discussed.

In the past several years, improvement and modernization of services demanded by the public, the need for increased resource efficiency and the supply of advanced information and communication technologies have formed major agencies to drive contemporary governments to transform to electronic government (e-govemment). The e-government initially defined as the delivery and administration of government products and services over an information technology infrastructure, aiming at efficiency savings and a more effective administration and seeking to achieve an e- commerce styled public sector model. After that, more people realized the need for

Please use the following formal when citing this chapter:

Yan, Li., Yang, J., 2007, in IFIP International Federation for Information Processing, Volume 252, Integration and Innovation Orient to H-Soeiety Volume 2, eds. Wang, W., (Boston: Springer), pp. 421-428. greater citizen participation in government. Since then, the democracy element was introduced into the concept of e-govemment, whereas the impacts of governance and government itself are equally emphasized. The informatization practice of countries all over the world has shown that the level of a government’s informatization is one main factor that can affect its international competitive power [I], Therefore, based on its maturity levels and transformation processes, e-govemment can be generally divided into three stages: information, transaction and transformation [2],

A typical web services architecture consists of three entities: service providers, service brokers and service requesters. They provide the three fundamental operations – publish, find and bind – respectively [3].

UDDl

Repository

 

• Requesting a web service • Registering a web service as
1 The requestor sends a request to the   available
producer A. A producer registers its web service
2 The producer responds to the   with a broker
consumer’s request B. A requester finds the producer via the broker
  C. The broker identifies a producer for

fhf rrniiMtnr
Fig.l. Interaction between service brokers, providers and requests

The interaction between these three entities is shown in Figure 1.

Web Services Description Language (WSDL), Universal Description, Discovery and Integration (UDDI) and the Simple Object Access Protocol (SOAP) form the core technologies of web services. The roles of each technology in web services will be illustrated in turn [3,4].

The WSCL is an XML language used to describe the web services interfaces that are accessible from a wide variety of platforms and programming languages. The description includes such details as data type definitions, the operations supported by the services, input/output message formats, network address and protocol bindings. This means WSDL not only describes message contents, but also defines where the service is available and what communication protocol is used to talk to the service. In other words, WSDL file defines everything required to write a program to work with web services.

The UDDI specifies a mechanism to register and locate web services. It lets WS register their characteristics with a registry so that other applications can discover and integrate with them. Users can search for a company that offers the services needed, read about the services offered and contact the company for further information.

In web services, the description of a business and the services it offers are presented by UDDI directory entry. Typically an entry in the UDDI consists of three parts. The ‘Yellow Pages’ describes the companies offering the services. The information covers names, addresses, contacts, etc. The ‘White Pages’ includes industrial categories based on standard taxonomies. The ‘Green Pages’ describes the interface to the service in enough detail for users to write an application to use the web services.

Meanwhile, the UDDI directory provides several ways to let users search for the services they need to build their own applications. For instance, the search can be based on a specified geographic location or on business of a specified type. The UDDI directory will present information, contacts, links and technical data of each service to allow users to evaluate and choose from. Needless to say, such a function makes the search more flexible and efficient.

The SOAP lets a program working in one operating system communicate with a program working in another by using HTTP and XML as information-exchange

mechanisms. It is therefore provides the means for communication between web services and client applications.

Taken them together, while WSDL defines how web services are described, UDDL describes how to find web services, and SOAP describes how to talk to web services. These technologies constitute a set of baseline specifications that provide the foundation for application integration and aggregation.

Business model is an overall architecture reflecting the core business of an organization. Unlike the traditional governments, an e-govemment takes on a new look with its framework and operation mode more suitable for the contemporary era [1] Since e-commerce and e-govemment are the two comprehensive guiding visions of e-business, e-govemment is akin to e-commerce in many aspects of business model. In efforts to use information and communication technologies for the civil and political conduct of government, many countries have begun supporting e- govemment initiatives. The ultimate goal is to improve government-citizen interactions through an infrastructure built around the “life experience” of citizens [5]-

Based on the entities involved, e-govemment can be classified as G2C, G2B, G2G and G2E [6,7],

Based on its scope, e-govemment’s architecture involves public network access to facilitate government-citizen interaction, intranets to support intra-govemmental processes and extranets to support interactions between government and non­government organizations [7], Figure 2 illustrates a general architectural model for e- govemment.

Access

E-business

Interoperability

Web services produce significant benefits, mainly involving interoperability, flexibility, automatic integration and cost-effectiveness.

As presented, the significant feature of web services is language-, platform- and location-independent. It provides a means for different organizations with different applications and platform to conduct dynamic e-govemment across a network, and in turn offering a new range of possibilities for organizations and their partners to develop business solutions.

Using the traditional approaches to build business applications like in-house custom development software solution and electronic data interchange (EDI) software mentioned above, companies had to know the information such as who was using the applications, how, when, where and why. With WS, companies can build applications without having to know this information. More importantly, each company can have choices of becoming a provider or consumer of services. New revenue streams and new business models would be generated by using existing software assets and integrating them with other businesses.

Fig.3. Benefits of dynamic e-govemment to key stakeholders

 

Since applications are written to the new standards, WS enable the applications to be automatically integrated regardless where they originate. This provides large potential benefits to the achievement of dynamic e-govemment.

The flexibility of WS also benefits companies to switch to a different preferred supplier more swiftly and smoothly than has ever been possible without disrupting processes or requiring new investments. For this reason, web services are cost- effective.

From the standpoint of key stakeholders, the benefits generated by dynamic e- govemment are displayed in the Figure 3.

E-govemment is facing a number of exceptional challenges because of its strict and commitment natures of relationships of G2C, G2G, G2B and G2E [4,8]. In spite of the considerable literature on e-govemment, we still do not have a comprehensive, holistic framework in place that assesses the potential of e-government by taking into consideration all the critical dimensions [4]. The major technological challenges include two aspects [9].

5.1 Equality of access

Productive, meaningful e-govemment means citizens must be able to access critical information and services through a variety of devices at their convenience. However, there is an obvious risk that government services and democratic processes will be more accessible to some than to others due to the problem of ‘digital divide’ of different kinds, between rich and poor countries or regions, between groups within one country differing on social or economic status, age, education level or cultural background and between urban and rural areas [7],

From managerial perspective, to mitigate the digital divide at local or national level is relatively easy to achieve. However, to achieve this goal at international level is a hardship task. Many issues, such as democracy, national development, international aid, local and international business, as well as binational and multinational cooperation program are on the table. With no intention to discuss the social policies that the government should boost to overcome the risk of digital divide, this paper introduces so-called ‘Avatars’ technology, which can diminish the digital divide to some degrees.

Avatars are animated humanlike characters in knowledge-based presentation systems. They are intelligent interface agents with varying degrees of conversational ability. Technically, they have modules for language processing, interaction management, manipulation interface output animation and so on. Avatars can be helpful in diminishing digital divide because users do not need to be trained in usage of the communication protocols. Every citizen has the skill to use them.

The issues of security and privacy in e-govemment are vital to maintain the public trusts. Old government systems were difficult to access and often provided little in the way of useable data. But they were usually very secure. Only a handful of individuals could access them and security procedures were relatively easy to set and carry out. This situation is not so with web-based e-govemment systems. Given the reason that the technical solutions to security in e-commerce are transferable to and applicable in e-govemment, this section focuses on privacy issue.

Privacy is defined as ‘the right of individuals to control the collection, use and dissemination of their person information that is held by others’. Also, it is widely understood as the ethical obligations associated with the collection and use of personal information. Its principles include transparency, fairness, access and security. However, recent surveys have found that while small percentage of government entities have accepted the practices for wide spread use, the evolving technologies (such as click streams, web bugs and cookies) have created a dramatic increase in the collection, use and movement of information and have in turn eroded the perception of personal privacy [4], Thus it is not surprising that consumers and citizens rank the lack of privacy protection as the foremost deterrent for conducting online transactions.

In addition, some privacy experts contend that a privacy divide, much like the digital divide is developing. The contention is that lower income households have to face more risk of privacy exposure than the middle and upper income households, because they often have no privacy choice when receiving benefits from government or when they attain free services from a company. Certainly privacy divide is not directly related to e-govemment. However, if this issue does not well addressed, it will effect e-govemment development in the future.

Developing appropriate security and privacy policies while balance the demands of open public access is a great challenge. The ‘holistic view’ approach is often recommended, in which security and privacy requirements have to be specified and implemented for each lay of the strategy, process, interaction and data and information.

Nowadays, a majority of the world’s government has Web sites that offer citizens basic information about government organizations, processes and programs, and the quality of these sites is improving at a rapid pace. Although for obvious reasons, e- govemment within the most economically developed nations (such as the US, UK, EU, Canada and Australia) has progressed faster than within developing countries, developing countries have started to apply new technologies to build their e- govemments. At present, e-govemment construction is regarded as one of the most important tasks for the national economy and society informatization in China [1]. In our country, strategies and initiatives of e-govemment are underway. The national E- Government project is currently undertaking by the State Information Center [1],

With its maturity of technologies and management, e-govemment is moving towards and will eventually enter into the time of ‘one-stop’ services. Among others, the technology of Web service will be the major contributor to this achievement [11], In conclusion, e-govemment gives rise to new kind of government model, which offers a remarkable set of opportunities to increase the transparency of government operations, improve access to government services and enhance efficiency of government administration [4], Nevertheless, e-govemment is still in its evolution and is facing various technical and managerial challenges. It needs to be realized that success of e-govemment relies on three fundamental factors: business, technology and human.

References

  1. J. Ning, “E-government in China: current status, strategies and practice, E-Commerce Technology for Dynamic E-Business”, IEEE International Conference^2004) .
  2. Mao, E-Government Guide .Peking University Press, Beijing (2003).
  3. Medjahed, A. Rezgui, A. Bouguettaya and M. Ouzzani, “Infrastructure for e-govemment Web services”, Internet Computing, IEEE, V 7, II, 58-65 (2003).
  4. A. Usman, M. Nadeem, M. Z. A. Ansari, and S. Raza, “Multi-agent Based Semantic E- government Web Service Architecture Using Extended WSDL”, Web Intelligence and International Agent Technology Workshops, WI-IAT 2006 Workshops. 2006IEEE/WIC/ACM International Conference on Dec. 2006 ,599- 604.
  5. Medjahed, A. Rezgui, A. Bouguettaya.and M. Ouzzani, “Infrastructure for e-government Web services”, Internet Computing, IEEE, Volume 7, Issue 1, 58 – 65(2003).
  6. Ramaswamy,and A. N. Selian, “e-Govemment in Transition Countries: Prospects and Challenges System Sciences”, HICSS, Annual Hawaii International Conference (Jan. 2007), 92(2006).
  7. Salhofer and D. Ferbas, “A Business Process Engine Based E-Government Platform Internet and Web Applications and Services”, ICIW ’07. Second International Conference on 13-19, 54[2007-5],
  8. L. Liu, Z. J. Zhang and Z. F. Peng, E-Government System Outline, Posts&Telecom Press, Beijing (2005).
  9. N. Su Xinning, E-Government Technologies , National Defense Industry Press (2003).
  10. B. Ma and D.Y.Ye, Software Platform and Middleware Technologies, Xiamen University Press (2005).
  11. Meneklis, A. Kaliontzoglou, C. Douligeris and D. Polemi, “Engineering and technology aspects of an e-government architecture based on Web services”, Third IEEE European Conference ,2[2005-12],
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Call Centre (CityCell)

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Call Centre (City Cell)

1. Introducing the Company:

1.1 The Company: Com

Pacific Bangladesh Telecom Limited (PBTL) is the first mobile phone service provider in the Indian subcontinent and started their business in 1993. The address of the Head office is: “Pacific Centre” 14, Mohakhali C/A Dhaka 1212. PBTL was founded by Pacific Group Limited and Hutchison Whampoa Limited. CityCell is the brand name under which Pacific Bangladesh Telecom provides wireless telecom or mobile phone service and products to the general and other customers.

Pacific Bangladesh Telecom Ltd., PBTL in short, is one of the companies of Pacific Group. The Pacific group indulges in diversified businesses including:

Pacific Group of Companies (since 1967)

Fisheries

Banking

Automobiles

Tea

Pharmaceuticals etc

Pacific Bangladesh Telecom Limited (since 1993), and first mobile service provider in the sub-continent as well only operator in Bangladesh supporting two mobile technologies – AMPS, CDMA and provides Cellular and Fixed wireless services.

1.2 Pacific Group Ltd:

The Pacific Group is a group of companies under common ownership. The group has interests in automobile service (Pacific Motors Ltd.), consumer electronics (Pacific Industries Ltd.), fisheries (Bengal Fisheries Ltd.), tea (Noyapara Tea Company Ltd.) and telecommunications (Pacific Bangladesh Telecom Ltd.). This group of industries was founded by renowned industrialist and current honorable foreign minister – Mr. M. Morshed Khan.

1.3 Hutchison Whampoa Ltd:

Hutchison Whampoa Limited (HWL) is a Hong Kong-based diversified, multinational company with its origins dating back to the 1800s. As part of the Li Ka-Shing group of companies, HWL’s ultimate shareholder is Cheung Kong (Holdings) Limited, which has a 49.9 % interest in the Company. In terms of market capitalization, HWL is one of the largest companies listed on the Hong Kong stock exchange. With over 150,000 employees worldwide, the Group operates five core businesses in 41 countries.

1.4 The Company History:

In October 1990, Hutchison Bangladesh Telecom Limited (HBTL) was formed as a joint venture between Bangladesh Telecom Limited (BTL)

and Hutchison Whampoa Limited of Hong Kong. In March of that year BTL had been issued a license by Bangladesh Telegraph and Telephone Board (BTTB) for operating cellular, paging and other wireless communication networks. The joint venture agreement with Hutchison gave HBTL the right to use BTL’s cellular license while Hutchison would provide financial support to BTL.

However, soon there was legal dispute between BTTB and BTL regarding the refusal of BTTB to provide Public Switch Telecommunication Network (PSTN) channels, which ensured connectivity to the BTTB network. The Supreme Court then ruled in April 1993 that BTTB would have to provide PSTN connections to HBTL, and that BTL would have to transfer the cellular portion to the license of HBTL. BTTB gave HBTL the PSTN connections in August 1993 and HBTL began commercial operation of the first cellular telephone service in Bangladesh in the same month. The owners of HBTL decided to sell their stakes in the company due to the legal war. HBTL’s shares were divided into two parts: Type A, which was held by BTL and Type B, held by Hutchison. Each type of share represented 50% title of HBTL. Pacific Motors Limited bought the type A shares while Hong Kong based financial investors Far East Telecom Limited bought the Type B shares.

On 12th February 1996, HBTL was renamed Pacific Bangladesh Telecom Limited. PBTL uses the brand name CityCell to market its cellular products. In order to boost the financial and also the managerial strength of PBTL, the shareholders of PBTL has completed the transaction under the agreements in which Fujitsu Limited, Japan and Asian Infrastructure Development Company (AIDEC), established in Cayman Islands, would acquire 10% and 20% equity shares in PBTL, respectively on June 2000.With this acquisition of 10% shares in PBTL by Fujitsu Limited, a Global Fortune 500 company, they have further strengthened their presence in Bangladesh and also have demonstrated confidence as well as their commitment to the Bangladesh market. Fujitsu has long been supplying Microwave links and telecommunications equipment to BTTB and is clearly a leading market player in providing telecommunication solutions in Bangladesh. Being 10% equity shareholder of the company Fujitsu is in a position to nominate 1 (one) Director to the Board of PBTL.

1.5 History in Brief:

In 1993 August 8, first launched mobile phone service with BTTB Connectivity using AMPS.

In 1997 March 26, first Covered Chittagong.

In 1999 March 26, first introduced CDMA technology in the subcontinent.

In 2001 January 15, first to set-up a communications backbone to Chittagong

In 2001 May 15, first to extend coverage to Cox’s Bazar

In 2001 December 27, first to set-up a communications backbone to Sylhet

In 2002, first introduced Super off peak hours.

In 2002 July 17, first to launch ‘Aalap’ prepaid service with BTTB incoming facility

In 2003, first to launch ‘Aalap’ prepaid service with BTTB outgoing and NWD and ISD outgoing facility from 8:00 pm to 8:00 am.

In 2003, first to launch ‘Sabar Phone’ postpaid package with T&T connectivity.

In 2004 January 1, first to launch ‘Aalap’ prepaid service with both ways BTTB connectivity and NWD and ISD outgoing facility for 24 hours.

In 2004, first to launch ‘Amar phone’ postpaid mobile-to-mobile package.

In 2004, first to launch ‘Cash Card’ facility to pay the bill less than a minute for the postpaid subscribers.

In 2004, first start to ‘know the bill status anytime with CityCell Online Self Care’ for the postpaid subscribers.

In 2004, first to introduce ‘mail@mobile’ e-mail over SMS from CityCell.

1.6 Mission, Vision, Objectives, Goals, Strategies, & Workforce:

1.6.1 Mission:

PBTL’s mission statement is “The most successful cellular, paging and other wireless service provider in Bangladesh by virtue of having greater operating expertise.” This mission statement puts into perspective about a few points about CityCell. Their inherent emphasis is on quality, not cheapness of service. The first priority is to provide a high-end service that can be used for both commercial and personal use.

1.6.2 Vision:

The Vision of the company is “To continue to be the leader in the Telecom industry in the region and provide a complete communication solution to our customers with a smile.”It may be noted that there is an emphasis on strong customer relations. This is important to CityCell especially as, until recently, they positioned their packages as high-end packages. This means that they need to promote their packages especially to corporate and business users. Such customers will require strong support for brand loyalty to develop.

1.6.3 Objectives:

The business strategy of City Cell is focused around two objectives:

1.6.3.1 Qualitative Objectives:

Ø Increasing service offerings.

Ø Expanding the network.

Ø Creating innovative, unique, and cost-effective various products to customers.

Ø Increasing loyalty by focused customer retention program.

Ø Develop operational procedure for the fast deployment of service.

1.6.3.2 Quantifiable objectives:

Ø Increase subscriber base over 1 million on the network by Dec 31,2003 with 99.8% overall network availability.

1.6.4 Goals:

The current strategic goal of the company is to occupy a unique position in Bangladesh in the telecom sector. One way to achieve this is to develop a strong subscriber base to be able to penetrate in the markets with other attractive products.

The ways to ensure a strong subscriber base is to:

ü Meet customer requirements

ü Establish technological leadership trough choice of appropriate technology

ü Establish service leadership through quality manpower

ü Expand the footprint of cellular coverage

ü Expand the customer base

1.6.5 Strategies:

1.6.7.1 Functional Level Strategy:

ü PBTL’s focus is on efficiency, quality, innovation, and customer responsiveness.

1.6.7.2 Business Level Strategy:

ü PBTL applies both the cost leadership and differentiation strategies as their business level strategies.

ü To increase market share by expanding the network

ü Least call rate than any other mobile companies

1.6.7.3 Corporate Level Strategy:

ü PBTL follows related diversification as their corporate level strategies.

1.6.6 Workforce:

CityCell has currently 445 employees, including drivers and peons under direct payroll of CityCell. There is one advisor and 11 interns and part timers working for them currently. The CCD is the biggest department in CityCell at this moment with 112 employees and the HRD is the smallest with currently one VP and three executives only.

2. Organizational Structures:

CityCell has just recently introduced the post of the CEO and established the Human Resource Department (HRD). The name of the new CEO is Mr. Chris Maloy, an Australian with vast international experience in telecom business. The CEO has taken over the activities that the MD used to perform and he happens to be the son of the owner of the Pacific Group of Industries Mr. Faisal Murshed Khan.

The Vice President (VP) of the Human Resource Department (HRD) has joined in the March of this year. The activities of the HRD have been defined. No Assistant Vice President (AVP) has yet been hired for this department.

The marketing and sales department makes up the office of the CMO that is the Chief Marketing Officer. And he is the VP of this department. The office of the CMO decides down into four sub departments with an AVP in charge of each.

A senior VP is in the charge of the whole engineering department and there are three VPs are assigned for Switch, Base Transceiver Station and Planning & Development. There are AVPs for each section of the engineering department except Power, which is directly under the charge of Senior VP.

It has to be mentioned that there are two other posts after the AVP and those are of the post senior executives and the executives who have managerial authority. There are also advisors assigned for various departments who are not direct employees and they happen to have directorial level status above the VPs and below the CEO. There are currently two advisors working in the Engineering and Marketing & Sales department. There are other levels of employees too who are under the executives. They are officers and senior officers. There are also the rank of drivers and peons. The Charts below represents the organogram of the company:

2.1 UPPER ORGANIZATIONAL HIERARCHY
Chairman
2.2 Marketing Department
2.3 Customer Care Department
AVP Fund Management
AVP Commercial LC
2.4 Engineering Department
2.5 Administration
2.6 Human Resource Department

3. Customer Care

In CityCell, we are always trying to deliver a level of service that meets your expectation. In order to avail Customer Service, you may choose any of the following options –

Call Centre

CityCell Call Centre operates 24 hours a day, 7 days a week. You can dial 121 from your CityCell phone and 01199121121 from any other phone to get connected to our Customer Care representatives.

Access to the Call Centre from any CityCell Post-Paid number is free of charge. Call charge of Tk. 2 per minute plus VAT with 12 second pulse is applicable for CityCell Pre-Paid numbers.

Call Back Service

If you prefer to be contacted instead of calling into our Call Centre, you may send an SMS to 2255 and allow us to call you back.

Customer Care Center

All our Customer Care Centers remain open from 9:00am to 5:30pm, 365 days a year including all government holidays. We welcome you to walk-in any of our six conveniently located in Dhaka, Chittagong, Sylhet, Khulna and Rajshahi.

Dhaka

Pacific Centre (Ground Floor)

14, Mohakhali C/A, Dhaka-1212

Fax: 02-8823575

81, Kakrail, Dhaka – 1000

Fax: 02-9338331 -2

Chittagong

BCIC Sadan (2nd Floor)

26 Agrabad C/A

Chittagong – 4202

Fax: 031 -711142

Sylhet

Garden Tower (Ground Floor)

Shahjalal Bridge Link Road

Uposhohor Point, Sylhet

Fax: 0821-812754

Khulna

Tayamun Center (1st Floor)

181, Khan A. Sabur Road

Khulna- 9100

Fax: 041-81 3296

Rajshahi

House # 263 (Ground Floor), Sector # 02

Uposhahor Housing Estate, Rajshahi – 6202

Fax: 0721-861143

4. Customer Care Point

CityCell is rolling out Customer Care Points (CCP) throughout the country in order to take our service closer to our Customers. CCP ensures that our Customers no longer require traveling all the way to distant Customer Care Centers (CCC) located outside their district / divisional towns. These points are open from Sunday to Thursday from 9:00am to 5:30pm and are equipped to provide all types of Customer Services including RIM replacement, reactivation of connection etc. These points facilitate more efficient service from CityCell.

5. Online Self Care

Online Self Care enables postpaid Customers to manage a number of services online, such as viewing bill status, billing history, payment details and lodging service related queries/complaints.

6. Total employee in call center

Their total employess in call center is 1100

Regular employees 750

Par time is 350.

7. Call incoming and outgoing in daily

Near about 6000 to 7000 daily.

8. Welcome to CityCell Online Self Care

As a CityCell postpaid customer, CityCell Online Self Care service gives you the opportunity to view bill history, current bill status, and payment record.

CityCell is committed to providing you with the highest level of customer service and we hope you will enjoy the convenience of the Online Self Care service.

Please note that Online Self Care is available only for registered customers to ensure privacy.

If you have any problems logging in, please contact our 24-Hour Call Center at the following numbers: 121 form CityCell mobiles or 01199 121121 from any other phone.

Pacific Bangladesh Telecom reaches new heights in Customer Service through the state-of-the-art Call Center Solution

Industries:

  • Telecommunications

Offering Groups:

  • Telecommunications

Solution Areas:

  • Enterprise Resource Planning

Regions:

  • Philippines

Challenges:

  • As PBTL aims to maintain its lead in Bangladesh’s telecom industry through quality service, it required a call center solution that is easily manageable to ensure its smooth and efficient operation.

Benefits:

  • Fujitsu Philippines through its wholly-owned communications and networking subsidiary, WeSolv Open Computing, Inc., proposed a solution that includes Nortel Meridian PABX, the Symposium Call Center Server (SCCS) MIS application for the PABX, and the Periphonics Interactive Voice Response System for an automated call center service facility.
  • The call center solution offered PBTL call center supervisors and administrators valuable statistical and historical data. PBTL agents get the pertinent information about the callers even before the calls are answered. PBTL customers can access their billing information without the need for operator intervention.

Pacific Bangladesh Telecom

Pacific Bangladesh Telecom reaches new heights in Customer Service through the state-of-the-art Call Center Solution

Redefining the telecommunication business through innovative marketing, continuous technological improvements, and highest standard customer service is no easy feat for Pacific Bangladesh Telecom Limited (PBTL). But what value for money the leading carrier in Bangladesh gets when it does achieve it – winning the confidence of customers and gaining long-term customer relationships.

PBTL has consistently set the benchmark of the telecom industry in Bangladesh when it was the first to launch mobile phones in the sub-continent and to adopt Code Division Multiple Access (CDMA) technology, a radically new concept in wireless communications, in the sub-continent. The carrier was also the first telecom company to have a private wireless network in Bangladesh, constantly setting the standard for other service providers in the country. Today, it can boast of the SDH microwave network connecting areas between Dhaka and Chittagong and Dhaka and Sylhet.

Its innovation and continuous upgrade in its network has resulted in the lowest fault rate in the country. The company’s sales and customer service teams have strengthened customer service through their efficiency, skill, and customer focus attitude.

9. Call Center Solution:

As PBTL aims to maintain its lead in the Bangladesh telecom market through quality service, it implemented a call center solution that is easily manageable to ensure its smooth and efficient operation.

Fujitsu Philippines, Inc., through its wholly-owned communications and networking subsidiary, WeSolv Open Computing, Inc., proposed a solution based on best-of-breed products from highly reputable companies, and on its extensive experience in Call Center project implementations.

The foundation of the solution for Phase 1 of the project begins with Nortel Meridian Option 11C PABX, providing the basic telephony functions as well as the advanced call center agent capabilities. In addition to the Meridian Option 11C, the proposed Symposium Call Center Server (SCCS) acts as the Management Information System of the entire Call Center Application of the PABX.

Through the use of the SCCS, the call center supervisors and administrators are furnished with valuable statistical and historical data analysis that no call center can live without. The Option 11C is also equipped with MIRAN, which takes care of playing announcements to the callers on queue.

The call center solution is enhanced further with the inclusion of a Periphonics Interactive Voice Response System. Equipped to handle 20 simultaneous callers, the VPS/is 7000 effectively augments PBTL’s 16 call center agents, providing automated service facilities to the valued subscribers of PBTL at the press of a button.

With the help of this IVR system, callers can access their billing information without the need for operator intervention, 24 hours a day. Aside from this fully automated self-help services, the VPS/is 7000 also provides the option of connecting the caller to an available customer service representative should the need arise.

Capping the solution, the Nortel CTI (Computer Telephony Integration) solution suite helps PBTL agents get the pertinent information about the callers even before the calls are answered, enabling the agents to provide quality service.

10. Consulting

Our services are broadly categorized into two parts: those connected with the delivery and maintenance of application software solutions, and those connected with the implementation and on-going support of technology platforms. On the software solution side, FPI has several subsidiaries, which focus on software-related services.

Our commitment is to deliver software services, within your project cost and time schedules, and meeting your specifications. Technical excellence, superior project management, leading-edge methodologies, service oriented work ethics: all of these are just means to achieve an end. The bottom line is that FPI delivers software applications that work!

Whether you require new program code from predefined specifications, or you need to convert existing programs from one language/platform to another, FPI offers high-quality programming services. Our programming pool has the expertise in non-legacy languages such as Visual Basic, Visual C++, Java, Powerbuilder, Pro-IV, and the Oracle development environments, typically running on non-proprietary platforms such as Windows NT, Solaris, other UNIX variants, and OS/2.

a) Application Development

FPI provides total application systems development services from requirement definition, through design, to construction, until turnover and/or implementation. We bring our industry expertise in telecoms, banking, retail, and manufacturing, together with cross-industry applications such as accounting. Our software expertise is on the client-server environments, especially on Windows/NT and UNIX with relational databases such as Oracle, SQL/Server, Informix, or Sybase at the server side.

b) Application Maintenance

FPI can provide services to perform maintenance for either bespoke or packaged application solutions. Maintenance services cover the entire range of functional enhancements, technology platform enhancements, production error resolution, corrective fixes, preventive fixes, and optimization.

c) Package Implementation

Instead of developing applications, a customer may choose to use a proven application package. FPI can provide the services to implement this chosen solution. Services can start from requirement definition, package procurement, solution customization, and/or implementation. Aside from our industry know-how, we bring the familiarity with proven global packaged solutions.

d) Technology Consulting

To support the implementation of its application solutions, FPI provides expertise in technology planning and systems management, whether for small office environments or for large enterprise systems. We recommend systems management practices in conjunction with the back-room infrastructure for software solution projects, using popular tools from the likes of Fujitsu, Computer Associates, Cisco, and similar names.

e) Technology Support & Training Services

FPI provides fee-based training and technical support programs for the various popular technologies used in software solution projects, such as operating systems (Windows NT, Solaris), data base management systems (Oracle, Informix, SQL-Server, Jasmine), teleprocessing systems (Tuxedo), groupware (TeamWARE, Lotus Notes), and other popular technology components.

11. CITYCELL TERMS AND CONDITIONS

These are terms and conditions concerning your use of the CityCell Website for Online Self Care. By accessing and using this site, you agree to be bound by the following terms and conditions in addition to and subject to the terms and conditions of your current CELLULAR SERVICE AGREEMENT AND YOUR PRICE PLANS with CityCell WHICH ARE INCORPORATED HEREIN BY REFERENCE AGREEMENT.) PLEASE READ YOUR CELLULAR SERVICE AGREEMENT, PRICE PLAN AND THESE TERMS AND CONDITIONS.

If you do not agree to these terms and conditions, you may not complete the registration process. Clicking on the button marked “Accept” and your proceeding to use CityCell Online Billing, indicates your acknowledgment that you have read and accepted these terms and conditions.

1. Online Services

To the extent you utilize CityCell’s online services, you acknowledge that there may be system failure that may limit your ability to use the online services. You agree to assume all risk and liability arising from your use of CityCell’s online services, including the risk of breach in the security of the communications or transactions you conduct with CityCell online.

3. Site Use and Content

You may view, copy or print pages from this site solely for personal, noncommercial purposes. You may not otherwise use, modify, copy, print, display, reproduce, distribute or publish any information from this site without the express permission of CityCell. At any time CityCell may without notice make changes to this site or to the online services or products described in this site.

4. Links to Other Sites

The CityCell site may include hyperlinks to Websites maintained or controlled by others. CityCell is not responsible for and does not endorse the contents of, use of, or any of the products or services offered in those sites.

6. Disclaimers

THE USER OF THIS WEBSITE AND SERVICES ASSUMES ALL RESPONSIBILITY AND RISK FOR THE USE OF THIS SERVICE AND THE INTERNET GENERALLY. IN NO EVENT SHALL CITYCELL BE LIABLE FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES OR ANY

DAMAGES WHATSOEVER RESULTING FROM LOSS OR USE,DATA,OR PROFITS,WHETHER IN AN ACTION OF CONTRACT,NEGLIGENCE OR OTHER TORTUOUS ACTION,ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE PERFORMANCE OF THE INFORMATION ON THIS SERVER OR THE INTERNET GENERALLY.

7. No Warranties

Any CityCell material on this server may include technical inaccuracies or typographical errors. CityCell is not responsible for any damages incurred, consequential or otherwise. CityCell has the right to make changes and updates to any information contained within this server without prior notice.

THE INFORMATION PROVIDED ON THIS SERVER AND WEBSITE IS PROVIDED ON AN “AS IS” AND “AS AVAILABLE” BASIS WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF TITLE, NONINFRINGEMENT OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO ADVICE OR INFORMATION GIVEN BY CITYCELL, ITS AFFILIATES OR THEIR RESPECTIVE EMPLOYEES SHALL CREATE ANY WARRANTY. NEITHER CITYCELL NOR ITS AFFILIATES WARRANT THAT THE INFORMATION ON THIS SERVER OR ON THE INTERNET GENERALLY WILL BE UNINTERRUPTABLE OR ERROR FREE OR THAT ANY INFORMATION, SOFTWARE OR OTHER MATERIAL ACCESSIBLE FROM THIS SERVER IS FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS.

8. Modifications

These terms and conditions may not be changed or supplemented in individual instances except in a writing which is signed by an authorized representative of CityCell.

12. Site MapHome

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13. Value Added Services:

10.4.1 Dial *120 for Billing Status

10.4.2 Dial *121 for 24 hour Call Center

10.4.3 Dial *122 for Local & International News

10.4.4 Dial *123 for Sports News

10.4.5 Dial *124 for Flight Schedule

10.4.6 Dial *125 for Train Schedule

10.4.7 Dial *786 for Prayer Timings

10.4.8 Dial *999 for Police Defense

10.4.9 Dial *505 for Hospital and Ambulance Services

10.4.10 Dial *911 for Fire Brigade Service

10.4.11 Dial *101 Home Delivery Food Service

10.4.12 Dial *800 for Pre-Paid Service

10.4.13 Dial *888 to Recharge Pre-Paid Cards

10.4.14 Dial *811 to know the Pre-Paid Balance

10.4.15 Dial *222 to Recharge Cash Cards

10.4.16 Dial *101 to the Restaurant nearest to your current location

10.4.17 Dial 4444 to send an Email

10.4.18 Dial *404 to Flower Delivery

10.4.19 Dial 2525 to get the latest score via return SMS instantly

10.4.20 Dail *2222 to hear the update NTV news

14. FAQ

+01. How can I contact CityCell, when Call Centre number remains busy?

Please send an SMS to 2255 from your CityCell mobile and we will call you back instead.

+02. How can I know my bill amount?

Call 121 or *120 or log on to <www.citycell.com/onlineselfcare>. Or type BILL and send an SMS to 2255, we will inform you the bill amount through return SMS.

+03. How can I reactivate my temporarily disconnected postpaid number without going to CityCell office?

You may call 121 or *120 or log on to <www.citycell.com/onlineselfcare> to know your total payable amount and then recharge cash card equivalent or more than your total payable amount. Your line will be automatically reconnected within an hour.

+04. I have enough balance in my prepaid account, but I cannot make any outgoing call, what is the problem?

Validity of your recharged Aalap card may have expired. Please check and recharge another card, if required.

+05. My set displays ’emergency mode’ though I can receive calls and there is no outgoing. What is the problem?

This may have happened due to the damaging of your RIM card. Please visit your nearest CityCell Customer Care Center / Point with that RIM and your agreement copy. If the RIM is found damaged, a duplicate RIM will be issued. The charge applicable is Tk. 150.

+06. I cannot recharge my Aalap Card / Cash Card, what should I do now?

Please visit your nearest CityCell Customer Care Center / Point along with your agreement copy, handset and the Aalap / Cash card.

+07. I am not using my number for some months. How can I reactivate my number?

Please visit your nearest CityCell Customer Care Center / Point with your agreement paper and handset. For reactivation of your number, reconnection fee of Tk. 150 will be applicable. During reactivation of you number, it will be also required to re-register. For re-registration. You will need two passport sized photographs, a valid photo ID (passport/driving license/any kind of valid photo ID). If photo ID is not available, you will require to submit properly attested BTRC Form: 2006(A). BTRC Form: 2006(A) is available at all of our Customer Care Centers / Points.

+08. I am using a non-RIM set, will I be able to convert this to RIM?

Yes. Please visit your nearest CityCell Customer Care Center / Point with your agreement paper. For conversion to RIM, the charge applicable is Tk. 150 and you will require a RIM based CDMA handset to use that RIM.

+09. I am having problem with my set, what should I do?

Please check your warranty card for the addresses of service centers, where you can show your set for service / repair.

+10. My sales and service agreement copy is lost. What should I do?

Please lodge a General Diary notifying the incident in your nearest police station and then visit your nearest CityCell Customer Care Center / Point with that copy. Also bring two passport sized photographs, a valid photo ID (passport / driving license/ any kind of valid photo ID) for re-registration. If you do not have any photo ID, you need to submit properly attested BTRC Form: 2006(A). BTRC Form: 2006(A) is available at all of our Customer Care Centers / Points.

+11. How can I change my package from Classic to PCO? Is there any charge?

At present it is not possible to change from Classic to PCO package.

+12. How can I activate hello tunes and what are the charges involved?

a) You can register through any of the following:

i) IVR – call *007

ii) SMS – type REG and send SMS to 9999

iii) Web – log on to www.mycitycell.com

The charge for each registration is Tk. 34.50

b) You can download your desired hello tunes through any of the following:

i) IVR – call *007

ii) SMS – type DOWNtune code and send SMS to 9999

iii) Web – log on to www.mycitycell.com

iv) 121 – Call us and provide your preferred tune name and singer name. We will download and set it for you as soon as possible.

The charge for download of each tune is Tk. 14.95 and the tunes once downloaded remain in your library for three months. Prepaid subscribers need to maintain the minimum balance for processing their download request

c) Set your desired tune through any of the following:

+ 13. When sending SMS for hello tune download or setting I always get ‘system busy’. How can I download / set my hello tune?

If you find ‘system busy’ when sending SMS to 9999, please call 121 and we will download and set your tune for you.

+ 14. How can I activate Super Friends & Family (SFNF)?

SFNF is possible with CityCell numbers only. Please type SFNF<space><011XXXXXXXX> and send SMS to 1111.

+ 15. How many FnF numbers can I have against my current package?

Number of Sfnf and Fnf varies according to packages. Please see the table for details:

+ 16. How can I activate my SFnF / FnF number/s?

You can activate your FnF numbers through SMS or by calling our Call Centre (dial 121 from your CityCell phone and 01199121121 from any other phone).

To activate your SFnf or FnF numbers through SMS please go to your SMS option and type:

For SFnF numbers

SFNF<space>01xxxxxxxxx<space>01xxxxxxxxx and send it to 1111. Your SFnF numbers will be activated within 48 hours.

For FnF numbers:

FNF<space>01xxxxxxxxx<space>01xxxxxxxxx and send it to 1111. Your FNF numbers will be activated within 48 hours.

+17. How can I change my SFnF / FnF number/s?

To change your SFnf or FnF numbers through SMS please go to your SMS option and type:

CHANGE<space>present SFnf or FnF number<space>new SFnf or FnF number and send it to 1111. Your SFnf or FnF number will be changed within 48 hours.

+18. How can I view my SFnF / FnF numbers?

To view your SFnf or FnF number/s through SMS please go to your SMS option and type:

VIEW and send it to 1111. You will receive a return SMS with your SFnf and Fnf number/s.

+19. How much will it cost to activate / view / change SFnf and FnF numbers in prepaid packages?

·New activation and viewing of SFnF and FnF numbers are free of charge. Standard SMS charge is applicable for sending activation or viewing request.

·SFnF and FnF numbers can be changed at any time with a charge of Tk. 10 for each change request. Standard SMS charge is applicable for sending change request.

+20. What is the validity period of Prepaid Aalap Cards?

+21. What do I have to do if I want to change my current prepaid package?

You will be able to change your current package to another package through SMS and will be charged Tk. 115.00 as conversion fee (including 15%VAT) and Tk. 2.30 for each SMS request. You will be required to maintain a minimum balance of that amount in your prepaid account for your change request to take place.

To convert from Hello Tomake to Aalap Classic type:

‘classic’ and send it to 1111. Your package will be changed within 48 hours.

To convert from Aalap Classic to Hello Tomake type:

‘tomake’ and send it to 1111. Your package will be changed within 48 hours.

+22. What do I have to do if I want to convert to any existing prepaid package from prepaid PCO?

You have to visit your nearest CityCell Customer Care Center or Customer Care Point along with your original agreement paper. You will be charged Tk. 115 as conversion fee.

15. SWOT Analysis:

SWOT stands for Strength, Weakness, Opportunity, and Threat. This is a very important tool for a company for a company to analyze its internal external environment. Now, we will see a SWOT analysis of CityCell.

Strengths:

Capital: CityCell has a huge amount of capital. As mentioned before, that the Pacific Group, which is a well-established local organization of $1000 million, owns 90% shares of PBTL, it was never required to borrow loans from outside or other investors.

Competitive price: Price is a big competitive advantage for CityCell. CityCell is the only organization, which is selling CDMA mobile phones with both way T&T facilities at the lowest rate. For example, lowest package rate of CityCell is Tk 6,999/= with T&T facilities. With T&T facilities the other competitors are no where near CityCell.

No ‘Busy Network’: Because of enormous number of channels, excess to CityCell mobile phones is very easy. The rate of call drops is very low.

Advanced technology: CDMA technology is the best technology for telecommunication. World-class mobile operators and world-class mobile phone manufacturers are advancing to this new technology. CityCell is one of the few mobile service providers, which are using CDMA technology. Whereas other GSM mobile service provider has to make huge invest or will need time for transformation.

Centralization: Pacific Bangladesh Telecom Limited is a centralized organization that helps in easier coordination of business activities.

Dedicated Staff: Dedicated core staffs who are willing to provide significant labor hours to accomplish targets.

Weakness:

Fewer staff: The number of staffs working for CityCell is not enough at all. Far fewer staff than actually required in terms of tasks to be completed.

New technology: CDMA is the latest technology but it is not widely used. Still most popular option is GSM. CityCell cannot give international roaming because of few number of CDMA operator.

Low network coverage: Though CityCell started to provide mobile telecommunication ten years back, it is still in behind the other operators from the point of nationwide coverage. Grameen phone was able to use the optical fiber network of Bangladesh Railway trough strong lobbing with past government for next twenty five years. That’s why Grameen phone’s expansion was huge. Where as PBTL has decided to cover fifty-two districts within June, of which eighty five percent was has been done.

Lack of education: The subscribers are not educated enough to handle sophisticated CDMA mobile handsets effectively. That’s why proper knowledge is essential to handle these mobile sets.

Opportunities:

Advanced technology: Since CDMA technology is the latest in the wireless telecommunication industry and most effective one, it is yet to find new potential in the short future.

Secured data transfer: Secured data transfer means CityCell has the potential to be the leading player once m-commerce took off.

Threats:

New companies: If ‘SingTell’ of Singapore and ‘Airtell’ of India enter the market with full coverage and low price, ten not only CityCell but also other mobile operators would be in great trouble.

Global companies: In India global companies like ‘AT&T’ of the United States and in Eastern Asia ‘Vodaphone’ of the United Kingdom is working well. They might think to enter Bangladesh with higher capital. If so it will be a huge threat for CityCell.

BTTB mobile phone: BTTB may enter the mobile telecommunication industry. It might come to the business with unfair Government advantages and cause severe problems to all other mobile phone operators.

" 67,"

Case Study on UNESCO and Its Activity

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View With Charts And Images

Appraisal of UNESCO’s Program

Organization Overview
 
5.   Origin of the Organization of Internship:
For completing the report as an appraisal of UNESCO’s program a short description of UNESCO and its activity is needed. Because all the programs, that I have observed are based on these basic activities. First I will give the core concept about UNESCO and then I will give a short description of UNESCO, Dhaka.
 
5.1 UNESCO:
UNESCO-the United Nations Educational, Scientific and Cultural Organizational (UNESCO) was founded on 16 November 1945. Headquarter of UNESCO is situated in Paris. The main predecessors of UNESCO were:

5.2 UNESCO Dhaka Office:
UNESCO Dhaka Office started operation from January 1996.
 
5.2.1 Mission:
The main mission of UNESCO Dhaka office is to contribute to sustainable human Development in a culture of peace, tolerance, democracy and human rights through programs and projects.
 
5.2.2 Major Program Area of UNESCO Dhaka Office:
UNESCO Dhaka office operates programmes mainly in education, culture and communication sectors.
            -Financial and technical support for strengthening for EFA
            -Early childhood care and education (ECCE)
            -Formal primary education
            -Inclusive education
            -Multilingual education
            -Education for sustainable development
            -Literacy/Skill training for adolescent girls, boys and marginalized
            -Use of ICT in basic education through CRCs
            -Support for technical and vocational education (TVE) policy reform
            -Support for teachers training
            -Music conference in the theme of “music for Humanity”
           -Access of street and working children to art and music
           -Music festival on bangle rural music
           -Music festival on “Songs of Hundred mystic Poets”
           -Training workshop on conservation of tangible heritages
                 -Organization of world press freedom day
                -Training for secondary school teacher on media and ICT
                -National consultation on community radio in cooperation with UNDP,UNICEF   
                 and local NGOs
I) Education for All (EFA):
The quest to achieve Education for All (EFA) is fundamentally about assuring that children, youth and adults gain the knowledge and skills they need to better their lives and to play a role in building more peaceful and equitable societies. This is why focusing on quality is an imperative for achieving EFA. As many societies strive to universalize basic education, they face the momentous challenge of providing conditions where genuine learning can take place for each and every learner.
 

 
Countesy: UNESCO Dhaka
The six goals adopted at the World Education Forum in Dakar, Senegal, in April 2000, implicitly or explicitly integrate a quality dimension.
 
Goal – 1
 Early childhood care and education: Progress towards wider access remains slow, with children from disadvantaged backgrounds more likely to be excluded from ECCE. In many developing countries, ECCE programs are staffed by teachers with low qualifications.
Goal – 2
Universal primary education: The number of out-of-school children is declining. While progress has been made globally, over the past decade, in getting more children into school, the remains too slow to achieve UPE by 2015. So completion of primary schooling remains a major concern.
Goal – 3
Youth and adult learning: Efforts to raise the level of skills among youths and adults are marginal in the few developing countries that have conducted evaluations of skills development programs. Progress remains difficult to assess on a global basis.
Goal – 4
Literacy: About 800 million adults were illiterate in 2002 (EFA Global Report) and 70% of them live in nine countries belonging mostly to East and South Asia, notably China, India, Bangladesh and Pakistan.
Goal – 5
Gender: Although many countries around the world have made significant progress towards gender parity at primary and secondary levels over the past decade, large gaps remain, particularly in the South and West Asia. Gender disparities become more extreme at secondary level and in higher education. Of eighty-three developing countries with data, half have achieved gender parity at primary level, less than one-fifth at secondary and only four at tertiary. Almost two-thirds of the world’s adult illiterates are women.
Goal – 6
Quality: In the many countries that are striving to guarantee all children the right to education, the focus on access often overshadows the issue of quality. Yet quality stands at the heart of Education for All. It determines how well students learn, and the extend to which they achieve a range of personal, social and development goals. In many low- income countries, teachers do not meet even the minimum standards for entry into teaching and many have not fully mastered the curriculum. The HIV/AIDS pandemic is severally undermining the provision of good education and contributing significantly to teacher absenteeism. Data from national and international test scores show that low achievement is widespread in most developing regions.
 
II) Preservation and promotion of cultural heritage of Bangladesh:
The national history and identity of Bangladesh is mirrored in both tangible and intangible heritages. In the context of intangible heritage though the music of Bengal dominated by regional music style, but has its own identity. In tangible culture, Bangladesh is very rich with 355 national heritage sites. In Bangladesh, culture both tangible and intangible is now considered with less priority, as reflected by the present status of the national heritage monuments fighting for survival against natural death, lack pf attention and patronage, encroachment etc. These natural treasures should be preserved as one of the most important contribution to cultural heritage in south Asia.
 
5.2.3 Activities in the program of EFA:
The following activities have done by UNESCO under the program of education for all.
  1. Support for Preparation of the EFA National Plan of Action (NPA):
On 19 September 2000, UNESCO Dhaka signed an agreement with ministry of Primary and Mass Education (MOPME) with the aim of strengthening the EFA NPA. Seven thematic papers, based on the Dakar Goals, were prepared and presented in national workshops. Focus of the NPA is mainly on organizational development and capacity building, improvement in schools and classrooms, infrastructure development, equitable access, and systematic monitoring and evaluation. UNESCO is providing policy advice and support, on a case-by-case basis, in selected areas, which are given below.
 
National capacity building was recognized by the Ministers of the South Asia EFA Forum as the most promising strategy to improve the quality of planning and delivery of EFA programs. A training workshop on planning and monitoring of EFA in Bangladesh was held in Dhaka from 7-11 July 2002. It was organized by UNESCO Dhaka and the MOPME, in collaboration with IIEP, Paris and NIEPA, India.
 
As proposed by the Ministers of the South Asia EFA Forum,
The first Sub-Regional Training Workshop on literacy and NFE were held from 27 December 2001 to 9 January 2002. It was organized by UNESCO Dhaka in collaboration with MOPME and Dhaka Ahsania Mission (DAM). The main purpose of the workshop was to strengthen capacity of countries through the training of Master Trainers to plan and conduct training programs on literacy/NFE.
The second Sub-Regional Training Workshop on Planning and Organizing of Literacy/NFE was held from 5-14 July 2002.The workshop was organized by UNESCO Dhaka in collaboration with MOPME and DAM. The main purpose of the workshop was to strengthen of the capacity of the participating countries in planning and development of literacy/NFE materials.
The third Sub-Regional Training Workshop on post-literacy material development was conducted from 6-15 December 2003. The workshop participants acquired skills and prepared need based post-literacy supplementary learning materials.
 
This study was completed in November 2002 as part of the preparation for the expert meeting on the Delivery of Early Childhood Services for the E-9 Ministerial Meeting in Egypt in December 2003. The findings of the study afforded UNESCO the opportunity to pursue policy advice and support for ECCE to the government of Bangladesh.
 
This study carried out an in depth analysis of the prevailing situation of delivery of primary education by different providers. The main thrust of the study centred around,
 
In order to help the Government to develop a mechanism to allow a transfer of students between formal primary education and NFE, a joint UNESCU-UNICEF study was initiated in the biennium 2000-2001 to develop a framework for deciding equivalence of formal primary education and NFE competencies in Bangladesh.
 
Based on the Dakar commitment to improve the quality of primary education, a study was initiated for an in-depth assessment of the achievement in the year 2003 of primary school entrants of along with a number of countries. They demonstrate that there has been improvement of quality of primary education in Bangladesh, but these are linked to policies initiated before 2000.
In collaboration with the Bangladesh Forum for Educational Development (BAFED), a Researchers Forum is organized at least twice a year with a view to providing a platform for disseminating recent educational research findings. This enhances the status of educational research and researchers among education stakeholders and policy makers. UNESCO DHAKA provides both technical and financial support for this activity.  The first Researchers’ Forum was held on 16 November 2002.and the second was held on 21 December 2003, and the third one was on 5th January 2004. This is a continuing UNESCO activity over the next few years.
 
5.2.4 Non-Formal Education
The main focus of the study was to examine the existing monitoring and evaluation system and flow of information in the NFE and formal primary educations of Bangladesh. A specific concern of the study was to identify the monitoring indicators used in both the systems in country. Through this study, a number of monitoring and evaluation indicators have been identified and an effective M&E system has been suggested to assess the progress and achievement of NFE in Bangladesh.
 
The development of literacy of ethnic minorities of Bangladesh is a neglected area of intervention. There is added reality that a majority of the ethnic groups have no symbolic system or alphabets in their language, which presents a formidable challenge. The Oraon, an indigenous community of northwest Bangladesh was selected for an in-depth study by a local NGO ASHRAI. The objective of the study was to develop educational materials in Sadri language for primary level as well as field test and review the materials. The project also included training programs for the trainers and teachers who would be using the materials in classroom instruction.
 
The main purpose of the study was to assess the situation of the out-of-school adolescents from the perspective of education and their psycho-social well being with particular emphasis on girls. The study made an in depth assessment of the situation of adolescents with reference to,
The study findings presented significant insights for future direction and policy planning guidelines for the adolescents.
 
Based on experience of the study of literacy in mother tongue, UNESCO is providing support to a full study on Ethno Linguistic situation in the Chittagong Hill Tracts (CHTs). Focus of this is on mapping of linguistic distribution among a dozen of the major ethnic groups, development of learning materials and training of trainers. The objective of the study is to provide education in mother tongue but with the use of the Bangla alphabet. This activity is part of a multi-UN agency program for the CHTs.
 
A community-based science centre has been constructed at Modhupur upazila in Tangail district. The center has been planned to promote community development through lifelong learning in the community and to provide adolescent girls access to non-formal science education and increase community awareness on natural science. The centre has provision to provide NFE science education and training on
to 700 adolescent girls after completion of basic literacy courses. Further, it provides facilities for coordinating and sharing experiences of the 10 community learning centres (CLCs) in that upazila.
 
Popularization of Science: A sub-regional training workshop on network of NF science education and popularization of science was organizwd from 27-29 July 2002 through the BNCU. The objective of this training workshop was to exchange information on existing resources in non-formal science education and popularization of science through curriculum, manuals, training kits, audio-visual materials, TV and radio programs.
 
A Vocational Training Institute for Working Children (VTIWC) has been established through UNESCO support by Dhaka Ahsania Mission (DAM). A needs assessment study of Street and Working Children, and their Employment Market was conducted in February 2002. Based on the findings of this study DAM implemented a UNESCO supported vocational skill training project for 300 street and working children in the VITWC and arranged job placement for trained children.
 
UNESCO Dhaka conducted a study of the rickshaw pullers in a limited and selected area of the Dhaka city covering their socio-economic status and demographic aspects in 2004. This study identified 500 rickshaw pullers interested to acquire literacy and other selected skills for alternative employment. Based on the findings of the study UNESCO Dhaka in collaboration with DAM has been implementing a pilot project of literacy and vocational skills training in six areas for 140 rickshaw pullers from March-October 2005.
 
As part of campaign to ensure wide dissemination, enhanced visibility and recognition to educational research and research findings, UNESCO Dhaka has published in a summarized form 8 (eight) selected basic education studies. The eight reports have been published in one volume and are being disseminated to educators, education policy planners and others interested in basic education and development. The of the studies are,
 
5.2.5 Inclusive Education
To highlight the issue of inclusive education in the context of Bangladesh, a project was undertaken by UNESCO Dhaka. With the overall purpose of promoting inclusive approaches to education at the primary level, a study has been conducted for identifying opportunities and challenges in the existing primary education. The findings of the study was presented and disseminated through a national seminar in December 2003. Based on the findings of the study apposition paper on inclusive education has been prepared for the consideration of the Government. The UNESCO Inclusive Education Teachers Guide has been translated into Bangla for using as a guide in selected schools.
 
A pilot project with support from UNESCO Dhaka has been implemented in a regular school of Underprivileged Children Education Program (UCEP) in Chittagong in order to develop an appropriate inclusive approach. In this pilot project, 200 children with special educational needs have been provided general education up to grade IV.
 
 
5.2.6 TVET Policy Reform:
TVET is a large underdeveloped area in the national education policy of Bangladesh. The enrolment in TVET is only 2% of the total students in the secondary and tertiary level of education. UNESCO enlisted two short-term TVET consultants to provide technical support in planning and organizing a National Consultative Meeting which was held on 11-12 January 2003. The recommendations of the meeting have since been submitted to the Ministry of Education for their consideration in reforming the TVET policy. A project proposal submitted by Ministry of Education funded by JFIT for the training of TVET teachers has been approved by UNESCO for providing skill training to 600 TVET teachers. The project will be implemented by UNESCO Dhaka in the biennium 2004-2005.
 
In recent years, the incidence of drug use and trafficking has been increasing both in volume and frequently in Bangladesh. Recognizing the urgent need for drug awareness, treatment and rehabilitation, UNESCO with support from AGFUND, is establishing a 50-bed multidisciplinary centre. Dhaka Ahsania Mission is responsible for the construction and running of the centre. The centre will publish information, education and communication materials on drug awareness, as well as train master trainers, volunteers and students, and sensitize schoolteachers, parents and community leaders about the growing problems.
 
5.2.7 HIV/AIDS Preventive Education
The Director General of UNESCO stated that preventive education against HIV/AIDS is a key part of the drive for EFA. UNESCO Dhaka through Bangladesh National Commission for UNESCO organized three training workshops on HIV/AIDS preventive education in Dhaka, Chittagong and Rajshahi division. A total of 150 teachers and education officers from government department, institutions and NGOs were trained in HIV/AIDS prevention education.
 
A project has been undertaken to train Imams (mosque-based religious leaders) to inform their followers about prevention of HIV/AIDS. Mosques are important institutions in the religious and social fabric of daily life in Bangladesh. Young and old gather for prayer where HIV/AIDS issues were included in Imams’ religious speeches. The purpose of the project is to motivate and educate Imams on HIV/AIDS issues in a culturally and religiously acceptable way to educate rural youth about the disease and its prevention was very successfully achieved. A national NGO implemented this project. Based on the good experience and success of this project UNESCO Dhaka signed a second project with this NGO, for implementation through the Mosque Imams covering new rural areas.
 
5.2.8 Cross-Cutting Theme
The objective of this project was to empower the marginalized and vulnerable adolescent girls to become the agent of social transformation through providing education, skill training, micro-finance facilities, science education and communication information services. The project addressed the needs of 1000 poor adolescent girls and young women through 30 Community Learning Centers in Tangail and Norshingdi district. Two national NGOs – Dhaka Ahsania Mission (DAM) and Nari Maitree (NM) implemented the project. The project had three components,
 

Countesy: UNESCO Dhaka
Under Education and Micro-finance facilities, targeted adolescent girls were providing with literacy and non-formal education, skill training, micro-credit, basic and reproductive health education and services, family life, legal and gender education
 
Two Community Science Centers have been established for providing science education and activity based training to the adolescent girls on solar panel, arsenic test, improved oven, solar dryers and water filtering.
Under Communication Information, computers with provision of Internet connectivity have been installed in the two community Science Centers to educate the adolescent girls in communication information and its use in their daily lives.
 
5.2.9 International Day Observation
The Ministry of primary and Mass Education celebrated the International Literacy Day 2002. Begum Khaleda Zia, the Honorable Primary Minister of the Government of People’s Republic of Bangladesh inaugurated the International Literacy Day2002. Ministry of Primary and Mass Education organized rally with about 6000 children including boy’s scout, girls guide and students from different educational institutions and a seminar on 8 September 2002. An exhibition was organized from 5-8 September on literacy materials with 26 Government and NGO stalls at Bangladesh National Museum. Newspapers published supplements on 8yh September. Discussion programs were organized about the importance of literacy and basic education and there were Radio and TV programs.
 
Ministry of Primary and Mass Education, Dhaka Ahsania Mission and Campaign for Popular Education organized different activities including EFA Fair and “World’s Biggest Lesson”. Posters for social mobilization in favor of girls’ education were launched and programs broadcasted in National Radio and Television. Ministry of Primary and Mass Education and NGOs organized rallies, discussion meetings, seminars and debates throughout the country. Special EFA supplements were published in daily newspapers.
Begum Khaleda Zia, the Honorable Prime Minister of Government of the People’s Republic of Bangladesh inaugurated the international literacy day 2003 and launch the UN literacy decade 2003-2012 on 8september 2003. The ministry of primary and mass education organized these events. The events organized by the ministry of primary and mass education from 8 to 10 September 2003 were,
NGOs also organized different events at the national and district levels on different aspects relating to literacy and non-formal education.
 
Ministry of Education observed the International Women’s Day on 8th march 2003. Bangladesh National Commission for UNESCO organized various activities like workshops, seminars with the participants from all levels including GOs and NGOs. The theme of that year’s International Women’s Day celebration was Maternal Health of Women.
 
UNESCO Dhaka and Bangladesh national commission for UNESCO (BNCU) jointly celebrated the World Teacher’s Day 2003. The main focus of that was the importance of teachers in contemporary society. To mark this day BNCU organized different activities- a seminar followed by round table discussion and at the end, a musical events focusing the importance of the teachers in this society.
 
5.2.10 Natural Science
The objective of that pilot project implemented by a local NGO was documentation and application of indigenous knowledge and practices for inclusion in development initiatives, education and research. The activities of the project included steps to identify and document indigenous knowledge and practices in Charan (Tangail districts) and to highlight the need for appropriate research technique in the collection of indigenous knowledge.
 
5.2.11 Communication and Information
To observe the World of Press Freedom Day, Mass-line Media Center organized a day long program on 3 may 2003. The Mass-line Media Center with the support of UNESCO published posters and stickers reflecting the significant of the World Press freedom Day as campaign material and circulated all over the country through the local journalists and civil societies. The poster contained a chronological data on killing of journalists from the year 1998 to 2003. Six types of stickers were published with slogans like,
5.2.12 Culture Sector Activities
(a) Intangible Heritage
Under the participation program, Bangladesh National Commission UNESCO (BNCU), UNESCO Dhaka, and Government Collage of Music organized the first National Music conference from 21-25 September 2002. The slogan of the conference was “Music for Humanity”. A brochure was published on the occasion featuring remarkable scholarly writings on music and diversified cultural heritage of Bangladesh. The conference mainly focused on four special categories of music,
Prominent music scholars from all over the country discussed selected themes on music in a panel discussion each day before starting the musical events
 
UNESCO Dhaka organized a music event on 10 June 2003 with Bangladesh Lok Sangeet Kendro for the street and working children. The event was arranged in the context of basic education on arts and music. The prime objective of the event was to ensure access for street and working children to the field of arts and music with a view to enlarging and enriching their cultural education.
 
Bangladesh is very rich in traditional rural music as well as regional tradition for verities of rural songs. Bangle Rural music with its vivacious presentation has a much appeal on the people over the centuries and continues to do so. To promote this music culture, UNESCO Dhaka office in collaboration with Bangladesh Shilpakala Academy organized a 4 day long rural music festival from 25028 June 2003 at the Shilpakala premises. Mrs Selima Rahmabn,the Hon’ble State Minister for Cultural Affairs, inaugurated the festival on 25 June 2003. About 90 Baul singers performed in front of 1000 of enthusiastic listeners in different events of rural music festival.

Countesy: UNESCO Dhaka
A music festival and title “Songs of Hundred Mystic Poets” was organized with the support of UNESCO by Bangladesh Lok Sangeet Porishad from 6-8 December 2003. A good collection of songs of 100 mystic poets of Bengal were presented in that program. The main objective of the program was collection, preservation, research, practice and expansion of a specific type of rural music based on mystical poetry.
 
UNESCO in collaboration with international center for study of Bengal art (ICSBA) has published a book on recent development in the history of Bangle art. The book consist of article of scholars of Bangladesh on various topics like, painting , sculpture, motifs and symbols, bangle inscription, architecture, rituals and few excavation reports.
 
To develop special documentary in the field of historical and culture related activities the following two research projects are carried out-
                                        –The history of East India Company in Bangle and
                                        -The three Bangle poets: Abbassidin, Jshimuddin and
                                          Zainul Abedin
The first project is examining the early and formative phase of the East India Company and it collects extensive source material.The second project will identify, collect and catalogue the source materials such as original word, monographs and essays, paintings, reproductions, recording of poetic recitation and rural songs of the poets.
(b) Tangible Heritage
Two UNESCO Reactive monitoring missions took place to examine the present status of the Paharpur Vihara World Heritage Site. First mission was carried out in October 2002 and the second reactive monitoring mission in February 2003. The prime objectives of these missions were to examine the present status and determine the future policy needed for the protection and preservation of the World Heritage site.

Countesy: UNESCO Dhaka
An UNESCO monitoring mission took place in May 2003 to examine the present status of the Bagerhat City of Mosques World Heritage Site. The mission mainly focused on- present status of the Mosque in Bagerhat and examined the state of conservation and maintenance, availability of tourism facilities in and around the World Heritage Site. The mission also examined the Kodla Math and its future possibility to include this unique architecture among the group of monuments in Bagerhat Worlsd Heritage Site.
 
A mission from UNESCO Dhaka went to Dinajpur in June 2003 to examine the present status of the Kantaji Mandir, a Navaratna Style Temple in Dinajpur.
 

Countesy: UNESCO Dhaka
 
The temple is a National Cultural Heritage Site of Bangladesh. Over the centuries, the local Hindu community has not only been using the temple for religious purposes, but also taking care of the temple. Recent surveys have shown that the site has deteriorated due to environmental reasons, as well as for continuous human impact.
 
I. Traditional & rural music of Bangladesh: Bangladesh is also known for its individual music style in the region like Gomvhira in Chapinobabgonj, Bhawaiya from greater Rangpur, Palagan from Lalmonirhat etc. This pilot project focused on local varieties of traditional music, identified and describes local forms of traditional song, collection of lyrics, documentation; collect the name of popular local artist etc.
 
II. Music festival on indigenous people’s in traditional music2004: With a view of safeguarding and promoting intangible cultural heritage of Bangladesh, UNESCO, arranged music festival on indigenous people’s traditional music as part of digital documentation and save garden campaigned of traditional music of indigenous peoples of Bangladesh.
 
III. Baul festival 2004: With a view to safeguarding and promoting intangible cultural heritage of Bangladesh, UNESCO organized one Baul festival in 2004.
 
IV. Baul festival 2005: In continuation of UNESCO mended for promotion, renewal of traditional folk songs and forms of Bangladesh, UNESCO has arranged another Baul festival in join collaboration with Shilpocola Academy in April 2005.
 
I. Classical music night: As part of the promotional music forms and practice in Bangladesh, a music night on classical music is scheduled on 4th October 2004.
II. Classical music conference focusing on intercultural and inter-religious dialogs: As part of inter cultural dialogues on region, this office organized a music conference on inter-religious dialogues.
Bangladesh is known for various traditional classical, rural and indigenous dances. To protect and promote these living arts and their contribution to human developments and social cohesion UNESCO Dhaka organized a program on various dance styles.
 
In 2004 the indigenous people decade 1995-2004 ended. To mark this year, UNESCO arranged extensive field work base research study on music instruments of indigenous peoples of hill tracks region of Bangladesh. It was held on July 2004- March 2005.
 
 
 
5.2.13 Cross-Cutting Theme
The main objective of project“Craft as a window for job opportunity for poorest youth” was revival and preservation of traditional crafts. Two NGOs implemented the project and conducted the training. The main areas of the training were on- raw material processing, dying, finishing, costing, and marketing, fabric painting and bamboo and cane goods making and wax production in Sylhet ands traditional handloom in Sherpur district. This project included theoretical instruction, practical training, fields visits ands an exhibition of items produced by the students during the training period for public information and awareness of policy makers.
 
CHAPTER-THREE: Analysis ands Findings of the Report
 
6. My Activities and Findings from UNESCO
In my three month internship period I was involved with the activities of UNESCO, Dhaka which are based on education and culture. In educational sector different projects are going on from which I was involved with some of them and in culture also so. I have done the task of data compile about the educational status of Bangladesh from the study of UNESCO at different time. Sometimes I also visited some project areas of UNESCO and have observed the impact of those projects in society. In cultural side my involvement was to collect the information about cultural organization that are attached with the preservation of Bengali Music and culture and also have given a follow up in the overall cultural activities of UNESCO. Some basic concepts are needed to describe before describing my activities.
 
6. (a) CLC: The Community Learning Center (CLC) project undertaken by Dhaka Ahsania Mission (DAM) with support from UNESCO PROAP for the period 1998-2002 within the framework of APPEAL with financial assistance of Japan and Norway covered 18 countries including Bangladesh. CLC is conceived primarily as a local educational institution (outside the formal education system) set up and managed by local people to provide various learning opportunities for community development and improvement of quality of life of the people in operation areas. CLC, the new type of institution for continuing education, is also supposed to create opportunities for empowerment of the poor people, especially the disadvantaged women, and promotion of their social transformation.

Countesy: UNESCO Dhaka
CLCs are locally managed institutions and are designed to meet the local needs and expectations. They render services to both their members and non-members and provide basic education for the illiterates, continuing education for the neo-literates and skill training for all. They offer ad hoc need-based training activities, in cooperation with other government or non-government agencies. A major function of the CLCs is to bring people of a community together for enabling them as a community network with NGOs and government and organizing access to services that are available to them. CLCs also operate as information resource centers and library (stocked with easy-to-read materials, newspapers and magazines) and recreation centers for the poor segments of the local population. Theoretically, CLCs follow six basic ideas of APPEAL, the Asia Pacific Program of Education for All, which are:
  1. post literacy;
  2. balancing general and technical education;
  3. income generating activities;
  4. improvement of the standard of living;
  5. promotion of personal qualities and talents; and
  6. Development of new skills and knowledge to match future requirements.
 
The CLC activities can be classified into five groups, such as (a) basic literacy, (b) post-literacy and continuing education, (c) skill development related to employment and IGA, (d) social mobilization, and (e) cultural development. The literacy program is exclusively for illiterates while the others are for all groups.
 
CLCs are usually multipurpose centers for their members, as well as for the local community as a whole. The different uses of the centers (according to some revealed priority) are: meeting place for savings and credit activities, education center/school, recreation area, library and reading place, place for socializing, venue for skill training, place for religious ceremonies, emergency shelter, venue for workshops and training, place to discuss problems and settle conflicts, occasional health center, and venue for weeding ceremony.
 
The UNESCO supported APPEAL CLC project in Bangladesh “Organization of Community Learning Centers for Lifelong Learning and Community Development” has been implemented by DAM, an NGO and member of the APPEAL Training and Research Consortium. The project provided support for establishment of 45 Ganokendras (literally, community centers, which are in fact, centers for literacy and continuing education, the field operation unit of DAM) in Narsinghdi district as post literacy centers and lifelong learning centers, focusing particularly on income generating activities and improvement of quality of life through various programs, including especially those relating to healthcare and nutrition.
The main objectives of GK activities are to:
 
6.(b) TVET: Technical Vocational Education Training is a kind of non-formal education. Bangladesh is striving hard to emphasize TVET for empowering its burgeoning population, especially the girls and females, by providing them life skills and know-how. Bangladesh is thus trying to raise its national productivity and competitiveness through the currently relevant traditional as well as newly emerging knowledge skills. One of the major objectives of the proposed Regional Centre for TVE is to make an extensive use of the pooling and sharing of expertise and experiences from the region together with best practices for enabling the countries in the region to benefit from regional/sub-regional cooperation in TVET.
Now I will elucidate my activities and findings. As I worked in two different areas I will try to describe activities and findings of each area separately.
 
Education Sector
  1. Visit to CLCs:
From 16-20 July 2005 I have visited some CLCs with five NGO representatives from Pakistan. The visit purpose, objective and finding have been stated below.
  1. Purpose of the visit:
 
CLCs (Gonokendra) programme run by Dhaka Ahsania Mission (DAM) and Nari Maitree (NM) with the financial and technical support of UNESCO-Dhaka was visited by five NGO representatives from Pakistan. They visited the CLCs and CRCs from 16th to 20th July; 2005.I was involved with the team as a UNESCO representative on 16th, 17th and 20th July, 2005. The main purpose of the visit of Pakistani team was to see and learn about planning, processes, implementation and sustainability of the CLCs and CRCs in Bangladesh. Identifying the complex situations and problems in implementing the CLC project was the concern matter of my visit. The impact analysis of the CLCs on the life of the beneficiaries was also a notable obsession to me. Except these I was also involved in interpreting. It was within my job to make the Pakistani team understand what the people were saying and also to make the people clear about Pakistani team.
 
6.1.2 Objective of the visit:
 
The main objective of the visit was to go through the CLC and CRC project to identify the following matter-
 
 
 
Ajoy Ganokendra,Modhoshilmandi,Norsingdi:
Activities-
Strengths –
     -Basic Education
     -Computer Training
     -Making of special cooker
     -Training on poultry firm
     -Awareness programme on health and care
Weakness
Shilmandi Papri CRC, Shilmandi, Norsingdi:
 
Activity
Strength
Weakness
Prodeep Ganokendra, Kandapara, Madhobdi:
Activity
 
Strength
Weakness
 
Dhalpur Adolescent Development Programme of NM:
This program is concerned with the integrated education, health and capacity building for adolescent girls in Bangladesh.
Goal of the project: 
To improve the overall situation and quality of life of the adolescent girls through an integrated program of education, health and capacity building.
 

Countesy: UNESCO Dhaka
Objective of the project
The project objectives are as follows:
Project Activities:
Strength
Weakness
 
Vocational Training Institute for working children of DAM, Mirpur, Dhaka
In the big cities particularly in the capital city of Dhaka many children of the poor families are to take up arduous jobs under compelling circumstances to support themselves ands their families. These poor children are to do strenuous jobs for years together to learn a trade with no prospects for improvement of their situation and subsequently in their adult life, their suffering continues. If some trade training could be imparted to them, they could learn the trade within a short time and improve their situation with better prospects for their future life. Science due to economic pressure the children of the poor family are to engage in some sort of work for survival, it is difficult to uproot them from their present occupation for any sort of training programme. In such a situation, it is necessary to make provision for a system of training, which the working children may take up while continuing in their present work, may it be a wage employment or self-employment. On the above background SDAM has established the Vocational Training Institute for working children (VTIWC) with the initial assistance from UNESCO.
 

Countesy: UNESCO Dhaka
Objective
The objectives of the VTIWC, among others, are the following:
Activities:
They provide training on-
Strength
Weakness
 
6.1.3 Outcome of the Visit:
The visit was a gateway to know about culture, lifestyle, norms, values; economic condition of the village people. And on the basis of that, the CLC as well as CRC project is going on. From the overall visit I have been informed about the following things-
 
                                         -importance of education
                                         -necessity for acquiring life skill
                                         -health and sanitation etc.
 
                 -becoming aware about their rights
                 -learning various need-base works
                 -getting support to become self-sufficient
                 -becoming alert about marriage registration, family
                   planning, pregnancy etc.
 
The CLC programme of DAM and NM supported by UNESCO Dhaka is a successful initiative with innovative and operational approach to facilitate the learning opportunities at grassroots community level. It is an appreciable step to improve the overall situation and quality of life of the adolescent boys and girls through an integrated programme of education, wealth, capacity building etc.
  1.  Preparing Working Material for NFE
This task is a part of NFWE programme. The purpose of the programme is “Strategic Capacity Building of NGO ands GO Mid-level Staffs in Literacy/Skills Programmes with Special Focus on Illiterate Women in Rural Area”. The expected quality of training provided to a large number of mid-level literacy managers, specially the reorientation of projects on improved access for women to literacy and skills training will have immediate and long term results at the grass root level.
 6.2.1 Outcome:
Outcome of implementation of this project will be a total of 30 core trainers with appropriate competencies in the five key areas of,
  1. Planning and Management
  2. Materials Development
  3. Monitoring and Evaluation
  4. Post-literacy and
  5. Role of Teachers/ Facilitators
 
6.2.2 Working Materials:
I. Assessment of Achievement of the Divisional Workshop on Planning and      Management of Literacy/NFE.                        
                                                                                                                                                                      
The main purpose of the assessment is to find out the strength and weakness in the planning and organization, presentation of the facilitators, scope and extent of participation, and learning outcome of the workshop.(Give your rating using X on the 5-point scale, starting 1 with highest value and 5 lowest for items 1-3 below).
 
1.
 
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Analysis of planning processes by SWOT          
B planning processes of the organization          
C steps in planning          
D NFE planning structure          
E needs assessment          
F analysis of the needs assessment data          
G planning NFE programme/project          
H Assessment of the quality of NFE programme/project          
 
 
 
2.
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Analysis of planning processes by SWOT          
B planning processes of the organization          
C steps in planning          
D NFE planning structure          
E needs assessment          
F analysis of the needs assessment data          
G planning NFE programme/project          
H Assessment of quality of NFE programme          
 
 
3.
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Analysis of planning processes by SWOT          
B planning processes of the organization          
C steps in planning          
D NFE planning structure          
E needs assessment          
F analysis of the needs assessment data          
G planning NFE programme/project          
H Assessment of the quality of NFE programme/project          
 
 
4.
 
Serial Strong  points Weak points Remarks
1      
2      
 
 
II. Assessment of Achievement of the Divisional Workshop on Development of Learning Material of Literacy/NFE.
 
The main purpose of the assessment is to find out the strength and weakness in the planning and organization, presentation of the facilitators, scope and extent of participation, and learning outcome of the workshop. (Give your rating using X on the 5-point scale, starting 1 with highest value and 5 lowest for items 1-3 below).
1. Rate the planning, delivery and the art of ensuring participation of the participants in the process of presentation and facilitation about the learning materials:
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Identification of need for learning material          
B Types of learning materiel          
C Steps in learning material development          
D Needs assessment for learning material          
E Preparation of curricular unit          
F Development of learning material          
G Finalization and printing of learning material          
H Evaluation of learning material          
 
 
2. Give your opinion on the level of your participation during the delivery by facilitator, and in group work monitoring and analysis of the learning materials:
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Identification of need for learning material          
B Types of learning materiel          
C Steps in learning material development          
D Needs assessment for learning material          
E Preparation of curricular unit          
F Development and of learning material          
G Finalization and printing of learning material          
H Evaluation of learning material          
 
3. Present the level of learning achievement in the main areas of deliberation of the workshop
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Identification of need for learning material          
B Types of learning materiel          
C Steps in learning material development          
D Needs assessment for learning material          
E Preparation of curricular unit          
F Development and of learning material          
G Finalization and printing of learning material          
H Evaluation of learning material          
 
 
 
4. Write briefly your opinion, comments and suggestions about the planning and organization of the workshop, methodology used available facilities and others you find appropriate either in Bangla or in English.
Serial Strong  points Weak points Remarks
1      
2      
 
 
III. Assessment of Achievement of the Divisional Workshop on Monitoring and Evaluation of Literacy/NFE.  
The main purpose of the assessment is to find out the strength and weakness in the planning and organization, presentation of the facilitators, scope and extent of participation, and learning outcome of the workshop. (Give your rating using X on the 5-point scale, starting 1 with highest value and 5 lowest for items 1-3 below).
1. Rate the planning, delivery and the art of ensuring participation of the participants in the process of presentation and facilitation of the learning processes:
Sl. No. Assessment Area Scale
1 2 3 4 5
A Organizations monitoring process          
B Monitoring and evaluation          
C Preparation of monitoring plan          
D Preparation of monitoring report          
E Monitoring indicators          
F Monitoring tools          
G Needs assessment          
H Data analysis and preparation of                                                                          monitoring report          
 
 
2. Give your opinion on the level of your participation during the delivery by facilitator, and in group work, data collection and analysis, and preparation of the monitoring report:
 
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Organizations monitoring process          
B Monitoring and evaluation          
C Preparation of monitoring plan          
D Preparation of monitoring report          
E Monitoring indicators          
F Monitoring tools          
G Needs assessment          
H Data analysis and preparation of                                                                          monitoring report          
 
 
3. Present the level of learning achievement in the main areas of deliberation of the workshop
 
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Organizations monitoring process          
B Monitoring and evaluation          
C Preparation of monitoring plan          
D Preparation of monitoring report          
E Monitoring indicators          
F Monitoring tools          
G Needs assessment          
H Data analysis and preparation of                                                                          monitoring report          
 
 
4. Write briefly your opinion, comments and suggestions about the planning and organization of the workshop, methodology used available facilities and others you find appropriate either in Bangla or in English.
Serial Strong  points Weak points Remarks
1      
2      
 
 
 
IV. Assessment of Achievement of the Divisional Workshop on Planning and Management of post-literacy programme.
                                                                                                                                            
The main purpose of the assessment is the find out the strength and weakness in the planning and organization, presentation of the facilitators, scope and extent of participation, and learning outcome of the workshop. (Give your rating using X on the 5-point scale, starting 1 with highest value and 5 lowest for items 1-3 below).
1. Rate the planning, delivery and the art of ensuring participation of the participants in the process of presentation and facilitation of the post-literacy programme:
 
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Post literacy programme          
B Post literacy and development          
C Needs assessment for post literacy          
D Post literacy planning          
E Post literacy material development          
F Management of post literacy centre          
G Supervision and monitoring of post literacy programme          
H Post literacy programme evaluation          
 
 
2. Give your opinion on the level of your participation during the delivery by facilitator, and in group work, data collection and analysis, and preparation of post-literacy project:
 
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Post literacy programme          
B Post literacy and development          
C Needs assessment for post literacy          
D Post literacy planning          
E Post literacy material development          
F Management of post literacy centre          
G Supervision and monitoring of post literacy programme          
H Post literacy programme evaluation          
 
 
 
3. Present the level of learning achievement in the main areas of deliberation of the workshop
 
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A Post literacy programme          
B Post literacy and development          
C Needs assessment for post literacy          
D Post literacy planning          
E Post literacy material development          
F Management of post literacy centre          
G Supervision and monitoring of post literacy programme          
H Post literacy programme evaluation          
 
 
4. Write briefly your opinion, comments and suggestions about the planning and organization of the workshop, methodology used available facilities and others you find appropriate either in Bangla or in English.
Serial Strong  points Weak points Remarks
1      
2      
 
 
 
V. Assessment of Achievement of the Divisional Workshop on Role of Facilitator
 
The main purpose of the assessment is to find out the strength and weakness in the planning and organization, presentation of the facilitators, scope and extent of participation and learning outcome of the workshop.(Give your rating using X on the 5-point scale, starting 1 with highest value and 5 lowest for items 1-3 below)
1. Rate the planning, delivery and the art of ensuring participation of the participants in the process of presentation and facilitation of the learning processes:
 
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A FE and NFE          
B Need for Facilitator          
C Planning Lesson for Delivery          
D Learning Strategy          
E Use of learning Material          
F Achievement Assessment          
G Remedial Learning Strategy                                                
H Evaluation of Training Programme                                                        
 
 
2. Give your opinion on the level of your participation during the delivery   by Facilitator, and in group work, data collection and analysis, and preparation of the monitoring report:
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A FE and NFE          
B Need for Facilitator          
C Planning Lesson for Delivery          
D Learning Strategy          
E Use of learning Material          
F Achievement Assessment          
G Remedial Learning Strategy                                                
H Evaluation of Training Programme                                                        
 
 
 
3. Present the level of learning achievement in the main areas of deliberation the   Workshop
 
Sl.
No.		 Assessment Area Scale
1 2 3 4 5
A FE and NFE          
B Need for Facilitator          
C Planning Lesson for Delivery          
D Learning Strategy          
E Use of learning Material          
F Achievement Assessment          
G Remedial Learning Strategy                                                
H Evaluation of Training Programme                                                        
 
     
 
4.  Write briefly your opinion, comments and suggestion about the planning and of the workshops either in Bangle or English:
Serial Strong points Weak points Remarks
1      
2      
 
 
6.3 Data Compiling
I have done some work on data compiling. UNESCO has some own documents about the educational scenario of Bangladesh and also have governmental estimate. By using all these documents I have prepared an assessment of the literacy rate according to level of education, sex, area etc. I also have made a review of the educational status of Bangladesh at University level-both Government and Private. These are the followings:
 
Table 1: Population Completed Different Levels of Education in Bangladesh
                                                                                                                                  (In 000)
  Class (I-V) Class (VI-IX) S.S.C &H.S.C Degree &Above
Number Percent Number Percent Number Percent Number Percent
Both sexes 33902          54.72 17968          29.00    8277        13.36     1812          2.92
Male 17891         52.19  9529           27.80    5429        15.84   1426          4.16
Female 16011          57.83  8439           30.48    2848        10.29    387           1.40
                 
 

Fig.1: Population Completed Different Levels of Education in Bangladesh
 
The table and figure represents persons completed different levels of education both numerical and percentage in accordance with their sex. The percentage of male in primary and secondary level which is 52.19% and 27.80% is less than the percentage of female. But in higher secondary the percentage of female has declined and it has become 10.29%. And finally in degree & above the percentage has drastically declined to 1.40%.
 
 
Table 2: Population Completed Different Levels of Education in Bangladesh  
                                                               (UrbanArea)
 
                                                                                                                      (In 000)
  Class (I-V) Class (VI-IX) S.S.C &H.S.C Degree &Above
Number Percent Number Percent Number Percent Number Percent
Both sexes    437           42.06   5280          29.86   3724           21.06   1239            7.01
Male   4006         39.42   2860          28.15   2349           23.11     947            9.32
Female   3431          45.64   2420          32.19   1375           18.29     292            3.90
                 
 

Fig. 2: Population Completed Different Levels of Education in Bangladesh (UrbanArea)
 
This figure represents the total number of people by sex who have completed different levels of education. In urban area the condition is similar to the total Bangladesh. Here also female education rate is higher than male in primary and secondary level. In primary level male is 39.42% and female is 45.64%; and in secondary level male is 28.15%, female is 32.19%.But in higher secondary and degree level the percentage of female has extensively declined.
 
Table 3: Population Completed Different Levels of Education in Bangladesh
(Rural Area)
 
                                                                                                                      (In 000)
  Class (I-V) Class (VI-IX) S.S.C &H.S.C Degree &Above
Number Percent Number Percent Number Percent Number Percent
Both sexes   26465       59.77   12688        28.65   4553          10.28     573           1.30
Male   13885      57.59    6668         27.65   3080          12.77     479           1.99
Female   12580       62.38    6020         29.85   1473           7.30      94            0.47
                 
 
 
 

Fig.3: Population Completed Different Levels of Education in Bangladesh
(Rural Area)
 
 
The above figure shows the condition of the rural population in completion of different levels of education in terms of their sex. It is seen from the figure that the percentage of both male and female in primary and secondary level is almost similar, even the height of the female indicating bar is high. But in advance level of education it has declined in a very rapid way and in degree & above level is has gone near to zero which is just 0.47%.
 
Fig.4: Urban and Rural Situation in Completion of Different Levels of Education in Bangladesh (Male)
 
 

 
Fig. 5: Urban and Rural Situation in Completion of Different Levels of Education in Bangladesh (Female)
 
 

 
 
From the above two figure it is seen that for both male and female primary level completion is higher in rural area than that of urban area. No such variation is observed in for secondary level. On the other hand it is also noticed that S.S.C & H.S.C completion rate is higher in urban area (almost double) and for degree and above a significant difference is observed between rural and urban area for both male and female.
Table 4: Literacy Rate of Different Ages in Different Years (Both sex)
 
 
Year Ages
All ages 5 and above 7 and above 15 and above
1974 20.2 24.3 26.83 25.8
1981 19.7 23.8 25.99 29.2
1991 24.9 29.8 32.40 35.3
2001 37.0 42.5 45.32 60.5
 
 

Fig.6: Literacy Rate of Different Ages in Different Years (Both sex)
 
 
This table and figure presents the literacy rate for different ages from 1974 to 2001. It is seen that the literacy rate for different ages before 15 & above were lower in 1981 as compared to 1974. But it is clear that the literacy level has increased remarkably both in 1991 and 2001 censuses.
 
 
Table 5: Literacy Rate of Different Ages in Different Years (Male)
 
Year Ages
All ages 5 and above 7 and above 15 and above
1974 27.6 32.9 36.62 37.2
1981 25.8 31.0 33.84 39.7
1991 30.0 35.8 38.90 44.3
2001 40.3 46.4 49.56 53.9
 
 
 

Fig.7: Literacy Rate of Different Ages in Different Years (Male)
 
This is the figure where the literacy rate of different ages in different year for only man has depicted. Here the scenario is almost similar to the situation of previous figure. The rate of literacy in 1981 up to age 14 has decreased as compare to 1974 and again has increased in 1991 and 2001.
 
Table 6: Literacy Rate of Different Ages in Different Years (Female)
 
Year Ages
All ages 5 and above 7 and above 15 and above
1974 12.2 14.8 16.43 13.2
1981 13.2 16.0 17.52 18.0
1991 19.5 23.4 25.45 25.8
2001 33.4 38.3 40.83 40.8
 
 

Fig.8: Literacy Rate of Different Ages in Different Years (Female)
 
 
The scenario of the above figure which represents the literacy rate of female for different ages is totally different from male. Here the literacy rate has increased gradually year by year. It is need to highly mention that the literacy rate has increased by more than double in 2001 as against to 1974. According to 2001 census for all ages it was 40.8 % which was only 12.2% in 1974. 
Table 7: Literate Persons in Bangladesh
 
  Both sexes Male Female
Bangladesh 45772940 25757760 20015180
Urban 14655180 8556280 6098900
Rural 31117760 17201480 13916280
 
 
In this table the total literate persons of all ages by sex and locality have been presented. The table also shows that, in total population the percentage of male is 56% and female is 44%. And the urban literacy rate is also greater than the rural.
 
Table 8: Literacy Rate
 
  Both sexes Male Female
Bangladesh 45.32 49.56 40.83
Urban 60.25 64.86 54.77
Rural 40.59 44.45 36.74
 
 
 
 
 
                                    Fig.9: Literacy Rate in Bangladesh
 
In this figure the literacy rate of total, urban and rural population have been presented by sex. The figure shows that literacy rate of total Bangladesh for both sexes, male and female have been affected by the rural rate.
 
Table 9: Student Enrolment
(UGC-2003)
 
  Subject
 Type       Arts Social Science Science Agricult-ure
 		 Engine-ering Medical Business Others Total
Government (21) 308,118 189,672 117,877 5,634 532,7 594* 134,515 314,129 1,075,866**
Private (52) 1,974 1,202 398 30 13,411 1,906 23,704 3,455 46,080
Total 310,092 190,874 118,275 5,664 18,738 7,233 158,219 317,584 1,121,946
                       
 
                                   
                                      *Students from medical university, and undergraduate students are not included
 
                                   **Of which 561,866in the national university and 409,264 in the open university
 
 
This table shows the number of students studying in different subjects both in Private and Government University. In all subjects the number of students is greater in Government University. But in engineering and business the number of students in Government University is smaller than the number of students in Private University.
 
 
Table 10: Students and their Results
(UGC-2003)
 
Type Number of students Result
Male Female Total Appeared Passed
Government (21) 686,268 389,698 1,075,866 189,061 147,939
Private (52) 35,513 10,567 46,080 – –
Total 721,781 400,265 1,121,946 – –
             
 
 
This table specifies the total number of students studying in government and private university according to their sex and result. In the table it is also seen that from the total number of government university student, 63% is male student and 37% is female student and in private university the percentage of male and female student is 77%and 33%.And in the government and private university perspective the percentage of female students in private university is very few.
 
6.4 Cultural Sector
 
Cultural Sector of UNESCO is based on two sides-Intangible and tangible heritages. In both side UNESCO, Dhaka has done a lots of works. In Bangladesh there are different tangible heritage from which World heritage site is also available and the music of Bengal is the part of intangible heritage. UNESCO is trying to preserve and amend this cultural heritage with a great attention. In the tangible heritage I have followed up the running projects ands also was engaged in future plan. As a part of intangible heritage, I have prepared a list of the cultural organizations who are involved in preservation and presentation of our Bengali culture. So I needed to communicate with people of different organization and sometimes have to try to influence them to take more initiatives on the perpetuation of our own music and culture. The list of the organization that I have prepared is presented here.
List of the cultural organization and their address
 
 
Name Address Contact  Person
For Culture		 Phone No.
 
Alliance Francaise Alliance Francaise
House No.26,
Mirpur Road(Road No-3)
Dhaka 1209		 Shekh Uzzol Mahmood
Cultural Organizer		 Tell.8611557
Fax:8616462
Email:media@asdacca.com
Web:wwwafdacca.com
American Center American Center
House No.110,
Road No.27 Momenshahi House, Dhaka
 		 Samina Chowdhury
Cultural Organizer		 Tell.8813440-4
Fax:9881677
Bangladesh Loko Songeet Parishod   Indra Mohon Rajbongshi
President,BLSP		 Tell. 8315780,93356240(Res.)
Mob.0171-354836
Bulbul Lalitakala
Academy
 		 7, Waizghat, Dhaka-1100 Amanulla Chowdhury
Secretary
Phone-7315451
Mob.0171-634488		 Tell.7391838,7212720
Mob.0189224011
Bangla Academy Bangla Academy
Bardhaman House, Dhaka
 		 Syeda Begum
Deputy Director
Cultural Sub Section		 Tell.8619577
Fax.880-2-8612352
Email:bacademy@citechco.net
Bengal Shilpaloy 275F,Road-27,
Dhanmondi, Dhaka		 Subir Chowdhury
Director
 
 		 Tell.8123115, 9113115,
Mob. 011811855
E-mail:bgallery@citech.net
Bishwa Shahitya Kendra Bishwa Shahitya Kendra
14, Kazi Nazrul Islam Avenue
 		 Mr. Abdullah Abu Sayeed
Charmen
 		 Tell.8618567, 9660812
E-mail:tentro@bangla.net
Name Address Contact  Person
For Culture		 Phone No.
 
British Council House No.5,
Fuller Road,
GPO Box-27,Dhaka
 		 Mr. Masud Hossain
Culture and Science Project Manager
 		 Tell.8618905-7,8618867-8
Fax-8613255,8613375
Email: culture.science@bd.
           britishcouncil.org
Banglee Shamagra Khoyar Manshion
235/2 Alifent Road
Dhaka-1205		 Tariq Rahman
Executive Director		 Tell.8623346
Mob:0189-227892
Email:
shouravbd2002@yahoo.com
Chhayanaut
 		 House-72,Road-15/A,
Dhanmondi R/A,
Dhaka-1209		 Sangida Khatun,
President
Khairul Anam,
General Secretary		 Mob.0189215204
Tel:9335537
Email
chayanot@aitlbd.net
Web: www.chhayanaut.org
 
Drik Gallery House No.58,       
Road No.15/A (new) Dhanmondi R/A, Dhaka
 		 Tanvir Murad
Coordinator
Galary exibition		 8123412,9120125,8112954
Fax-9115044
E-mail:office@drik.net
Dhaka Theatre 12/1 KHA,
Purana Paltan Line
Dhaka 1000		 Nasiruddin Yusuff
Artistic Director		 Tel. 2-8315357
Embassy of The Democratic Republic of Korea House No.6, Road No.7, Baridhara,Dhaka-1212
 		 The First Secretary
Embassy of The Democratic Republic of Korea
 		 Tell. 8811893
Fax: 8810813
Email:namnam@bangla.net
Embassy of Japan Plot No. 5&7
Dutabash Road,
Baridhara, Dhaka-1212
 		 Mr. Yasuharu Shinto
Head
Information & Cultural
Division		 Tell. 8810087
Fax: 8824469
E-mail: information@embjp.accesstel.net
Embassy of the Republic of Indonesia House No.14,
Road No.63/53
Gulshan-2,Dhaka
 		 The Second Secretary
The Embassy of the Republic of Indonesia
 
 		 Tell. 98881640-41,8812260
Fax: 8825391, 8810993
Email: indhaka@bangla.net
Name Address Contact  Person
For Culture		 Phone No.
 
Goethe-Institute House No. 10, Road No.9 Dhanmondi R/A, Dhaka
 		 Torsden Oertel
Director		 Tell. 9126525-6
Fax-8110712
Email: progr@dhaka.goethe.org
Gallery Chitrak House No. 21, Road No.4
Dhanmondi R/A,
Dhaka1205		 MD. Monirujjaman
Executive Director
 		 Tell. 8620345
Guide House
Auditorium
 		 Baily Road, Dhaka    
Indian High Commission To FSINC
Cultural Wing
Indian High Commission House No.2,
Road No.142
Gulshan-1,Dhaka
 		   Tell. 9888789-91, 8820243-7
Fax: 9893050
Email: hoc@hcidhaka.org
Iranian Cultural Centre Iranian Cultural Centre
House No.54, Road No. 8/A Dhanmondi, Dhaka
 		 Dr.Hashemi
Cultural Councilor		 Tell. 9114000,9135155
Fax: 8113435
Email: info@ccirandd.org
Khanjahan Welfare Foundation 77/A Purana Palton Line(2nd Floor)
Dhaka-1000		 Ariful Islam
Executive Director		 9343595
Email:
khanjahan_3294@yahoo.com.in
Web:www.khanjahan.org
 
 
Mattra
Afzal Hossain		 Flat A-6 Aziz Co-operative Housing Complex,
72 Purana Palton Line,
Dhaka 1000
 		   Tell. 9331057,8317456
Email: mattra@bdcom.com
 
                                   
Mohila Shamiti Auditorium
 		 Guide House
New Baily Road, Dhaka		   Tel.8315501
Fax: 8315592
 
 
 
Name Address Contact  Person
For Culture		 Phone No.
 
Malaysian High Commission To The First Secretary
Malaysian High Commission
House No.19, Road No.6 Baridhara, Dhaka 1212
 		   Tell. 8827759/60
Fax: 8823115,8827761
Telex: 642309MAJBJnil
Email:
mwdhaka@citechco-bd.com
Matirmoina B-2 Siza Court, 152 Monipuri Para,
Dhaka		 Catherine Masud
Founder		 Tel: 8124225
Fax: 880-2-911-9159
Email:ctmasud@citechco.net
Website:www.matirmoina.com
Nazrul Instititute House 330-B,
Road 28(old)
Dhanmondi R/A,
Dhaka-1209		 Jahangir Alam
Secretary
 		 Tel : 9114602,9114500
Fax: 9118051
Email:nazrulin@citecho.net
National Museum To The Director General
National Museum
Shahbag, Dhaka-1000
 		   Tel.8619396-9,8619400
Fax:880-2-8615585
Web:
www.bangladeshmuseum.org
Nazrul Academy To The Secretary
Nazrul Bhaban, Belalabad Moghbazar, Dhaka-1000
 		   416029
Natmandal Arts Faculty
University of Dhaka		    
Orchestra 123/5 IDB Bhaban,
3rd floor
Agargaon, Dhaka-1207		 Khandaker Nazir
Manager		 Tel.8151389,9125148
Mob.0189405999
Fax:88-02-8118298
E-mail:orchestra@agni.com
Public Library Shahbag, Dhaka   Tel.8626002,8624713
Russian Cultural
Centre		 Programme Officer
Russian Cultural Centre
House No.150, Road No.7 Dhanmondi R/A, Dhaka-1205
 		   Tel:9116314, 9118531, 9117639
Name Address Contact  Person
For Culture		 Phone No.
 
Royal Thai Embassy To The First Secretary
House No.NE(D)-4,Road No.58/62
Gulshan Model Town
Dhaka-1212
 		   Tel: 8813260-1,8812795
Shilpakala Academy To The Director
Shilpakala Academy
Shegun Bagicha, Ramna, Dhaka
 		   9562801-4
Shishu Academy To The Director
Shishu Academy
Old High Court Area,
Dhaka-1000
 		   9550317
Shilparag Gallery House No.15, Road No.16
Dhanmondi R/A
Dhaka-1209
 		   8117085
Shilpangan Gallery House No.25, Road No.5
Dhanmondi R/A
Dhaka
 		   8614246
Shaju Art Gallery To Mr. Ramiz Ahmed Choudhury
Shaju Art Gallery
F-28-40-41,
North D.M.C Market
Gulshan-2, Dhaka
 		   602513
Society for Environment and Human Development
(SEHD)		 4/4/1(B)(3rd Floor),Block-A,
Lalmatia,Dhaka-1207		 Philip Gain
Director		 Tel:9121385
Fax:9125764
Email:sehd@citechco.net
 
 
 
 
Name Address Contact  Person
For Culture		 Phone No.
 
Theatre School To The Secretary
Theatre School
University Laboratory School
Dhaka University		   Mob.0189214765
Wrishijo Shilpo
Goshthi
Fakir Alomgir		 259/B Khilga, Chowpara
Anar Koli Bhaban
Dhaka-1219
 		   7213166,7218800
Mob.0189-225740
 
CHAPTER-FOUR: Policy Suggestion and Conclusion
 
7. Policy Suggestion
With the mission of sustainable human development in a culture of peace, tolerance, democracy and human rights ands priorities of the Government of Bangladesh, UNESCO is performing in a very systematic way. All the programs are monitored and evaluated by the program officers on a regular basis. And the NGOs who make the projects running on the support of UNESCO are very prominent and doing the works very successfully. But if some improvement take place in those programs it will be able to gain a glorious success.
 
7.1 CLC
CLC is a successful project in the sense that the people in the CLC operation areas accept the CLC as a special type of institution for non-formal education and life skills training. This institution is generally recognized as a useful meeting place for the neo-literate CLCs members, as well as for the interested members of the local public, where they can read newspapers, discuss matters relating to various issues family and community life, develop their awareness about human rights, family planning, health care and environment, get some training on skills required for income generating activities and receive inoculation and agriculture extension services. So if some little modification is taken the success of the CLC as well as CRC will be advanced. Like as,                                              
                       -Strengthening CRC as well as CLC
                       -Widening the size of the both CRC and CLC
                       -Attention is needed on expenditure, budget and revenue for CLC
                       -Establishing new CLCs in new area
                       -Modern equipment and training person for CRC
                       -Taking initiative to manage volunteer services by the students of different
                        University for computer and science related training
 
7.2 TVET
This project is also a successful one and it is also accepted by people. These projects run by providing technical knowledge to the children who need to be employed somewhere for fulfilling their family needs. So if some trade training can be imparted to them, they could learn the trade within a short time and improve their situation with better prospects for their future life. That’s why it has a better impact to the society because it is trying to raise the national productivity and competitiveness through the currently relevant traditional as well as newly emerging knowledge skills. Within all the running projects of the TVET if the following additional things are emerged it will be able to carry better result.
 
7.3 Culture
Every country has it’s own culture and this is the milieu of that country. So to develop a country, its culture and cultural behavior need to be developed. UNESCO is trying to preserve and amend the cultural heritage with a great attention. Within this tangible and intangible heritage both are included. The activities of UNESCO, Dhaka in the cultural sector are providing a substantial support to the preservation of the cultural heritage of Bangladesh. All the activities of UNESCO will bear an unbeaten result if some addition is taken.
-Giving the cultural NGOs a strong back support to make them able to carry  
 on the cultural activities and preparing a way for them to continue it
-UNESCO publications on culture need to be more familiar to the people
Education and cultural sector of UNESCO is a vast program.  So within this three months time it is impossible for me to get a clear decision about that. But on the basis of my three month learning and finding I may say that if some adjustments it will bring some additional success.
8. Conclusion
The performance of UNESCO in the context of Bangladesh is very supportive. As the performing sector of UNESCO is education and culture it has a greater impact on the development and empowerment of society.
 
Education is the backbone of any nation as it enriches national socio-economic and political development. It is essential for all citizens of a country so that they can understand their problems, can make decisions and have the capacity to implement them. The principle architect of any development plans and activities and the implementers of these are the men and women of the country. Education provides enormous support to enable peoples to perform these responsibilities through flourishing their inherent capabilities and qualities. So in this perspective the programs of UNESCO play a major role to help the people of this country to utilize fully country’s resources and their own potentialities.
 
UNESCO gives emphasize on the human right. Human rights of the people in any society are directly related to and dependent on their level of socio-economic development and are a prerequisite to any development process. As the part of human rights UNESCO does literacy programs, adolescent development program etc. through DAM and NM. They consider illiteracy as the root cause of poverty, underdevelopment and many of the social vices of the society. So they views education as the basic input in human resource development and for that matter in all development efforts. Therefore the development program begins with education, proceeds with skills training, flourishes with income generation and continuing education and ultimately results in environmentally sustainable programs absorbing the disadvantaged children and adolescents in the process and rolls on its own wheel to move to higher and higher levels.
 
They have also taken the adolescent development program as a means of social development. Adolescence is a critical phase in human development. After infancy, adolescence witnesses the most dramatic growth period in the human life cycle. The second decade of life is marked by physical growth, sexual maturation and profound cognitive changes, which define the transition from childhood to adulthood. It is a sensitive period for learning in much the way the pre-school years are. It is during these years that patterns of interpersonal, social and civic behavior are shaped and solidified. The environment, the opportunities and the human interactions available during this period are a critical opportunity for shaping the adult identity of a child. So in a poverty-stricken country like Bangladesh, the adolescent girls should be taken care of so that they do not become liability of the family as well as society. Thus the program aimed at breaking the cycle of poverty and empowering the adolescent girls to make them the agent of social transformation.
 
In the cultural sector the performance of UNESCO is very nice. They are trying to preserve both the tangible and intangible heritage of Bangladesh. For keeping the originality of any country it is much important to prevent the missing of cultural pattern of that country. The national history of Bangladesh is mirrored in both tangible and intangible heritages. The tangible heritages show the basic infrastructure of any country and these infrastructures are also the representative of the historical lifestyle, social status, religious status etc. Beside these intangible heritages of Bangladesh indicates how close music performance and style are linked to daily, religious, social and even agricultural activities of rural Bangladesh. As for example, through Jatra-pala people can know about the history of the country or certain personalities. So now-a-days different NGOs and also GO are using folk music to convey different messages-need to sent children to go to school, reproductive health, agricultural matters, politics etc.  That’s why as a means of social transformation the programs of UNESCO on culture are appreciable.
 
This report has given me practical experience about the programs of UNESCO. Not only that I have got the opportunity to pass my working periods with the program officers and other officials who have boosted my knowledge about analyzing, decision making etc.
 
Finally I hope that UNESCO will be benefited from my works on different programs of education and culture through which I myself gained practical knowledge about job first time in my life at UNESCO. I predict long life success of UNESCO Dhaka for its great contribution in our country development and for its social responsibility accomplishment. 
 
ANNEXES
 
Tables
 
Table 1: Population Completed Different Levels of Education in Bangladesh             58
Table 2: Population Completed Different Levels of Education in Bangladesh
  (Urban Area)                                                                                                             59
Table 3: Population Completed Different Levels of Education in Bangladesh
              (Rural Area)                                                                                                               60
Table 4: Literacy Rate of Different Ages in Different Years (Both sex)                                  62
Table 5: Literacy Rate of Different Ages in Different Years (Male)                            63
Table 6: Literacy Rate of Different Ages in Different Years (Female)                         64
Table 7: Literate Persons in Bangladesh                                                                                   65
Table 8: Literacy Rate                                                                                                  65
Table 9: Student Enrolment                                                                                                     66
Table 10: Students and their Results                                                                                        67
 
Figures
Figure 1: Population Completed Different Levels of Education in Bangladesh                        58
Figure 2: Population Completed Different Levels of Education in Bangladesh
  (Urban Area)                                                                                                             59
Figure 3: Population Completed Different Levels of Education in Bangladesh
              (Rural Area)                                                                                                               60
Figure 4: Urban and Rural Situation in Completion of Different Levels of Education in
               Bangladesh (Male)                                                                                                    61
 
Figure 5: Urban and Rural Situation in Completion of Different Levels of Education in
               Bangladesh (Female)                                                                                                61
 
Figure 6: Literacy Rate of Different Ages in Different Years (Both sex)                                 62
Figure 7: Literacy Rate of Different Ages in Different Years (Male)                                       63
Figure 8: Literacy Rate of Different Ages in Different Years (Female)                                    64
Figure 9: Literacy Rate                                                                                                             65
 
ACRONYMS
 
 
UNESCO ─ United Nations Educational, Scientific and Cultural Organization
NFE ─ Non Formal Education
MOPME ─ Ministry of Primary and Mass Education
DAM ─ Dhaka Ahsania Mission
ECCE ─ Early Childhood Care Education
FPE ─ Formal Primary Education
BAFED ─ Bangladesh Forum for Educational Division
VTIWC ─ Vocational Training Institute for Working Children
UCEP ─ Underprivileged Childhood Education Program
TVET ─ Technical Vocational Education Training
NGO ─ Non Government Organization
GO ─ Government Organization
CLC ─ Community Learning Centre
NM ─ Nari Moitree
LINK ─ Local and Indigenous Knowledge
CICI ─ International Committee of Intellectual Cooperation
VTIWC ─ Vocational Training Institute for Working Children
APPEAL ─ Asia Pacific Program of Education for All
UGC ─ University Grand Commission
 
BIBLIOGRAPHY

1. C.R. Kothari “Research Methodology (Methods & Techniques)”,
    Second edition, Pp12-25
      2. Activity Report 2002-2003
      3. “Assessment of learning achievement”-Publication of Institute of Education & 
            Research, Panjab University, Lahore in collaboration with UNESCO, Islamabad
      4. Samanta Bhadra Barua, Education Specialist,
“Literacy Research”
      (December 12, 2001)
      5. “Training Manual on Participatory Education Planning”
    Published by UNESCO Dhaka
      6. Project paper on “Integrated Education Health and Capacity Building for Adolescent  
         Girls in Bangladesh”
      7. Project Paper on “Women in Bangladesh: Their role as educator”-by UNESCO Dkaka
      8. Project Paper on “Empowering Adolescent Girls to Become the Agent of Social 
          Transformation”- by DAM & NM
       9. “Intangible Heritage and Life Long Learning in Bangladesh”- UNESCO publication
      10. “Bangladesh Bureau of Statistics”, Planning Division Ministry of Planning,
 Population Census 2001, July 2003
      11. Website: www.unesco.org          

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CHARACTER OF DOWER

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From Advocatespedia, ASSN: 127998

According to Muslim Law, Mehr (dower) means money or property which the wife must receive from husband in consideration of the marriage but this is not same as the civil contract. The major object of the dower is to provide wife her subsistence after dissolution of marriage so that she may not become helpless and fulfill her needs after the death or termination of marriage by divorce. Dower is a sum that becomes payable by the husband to the wife on marriage either by agreement between the parties or by the operation of law. If may either prompt or deferred. . If the dower is not paid to the wife she can refuse herself to husband and even can sue her husband for the recovery of the dower in a court. Dower is the only right of women that no one can snatch. It is totally women’s will that she utilizes it. The husband has no right to even ask about it from his wife. The term Dower is defined under section 285 as a sum or property which the wife is authorized to receive from her husband in consideration of the marriage. The word consideration is not use in the same as it is used under Contract Act. Mahmood J., in Abdul Kadir v. Salima said that it had been compared to price in a contract of sale because it is civil contract. The amount of dower may be fixed either before or after the marriage and also can be increased after the marriage. A contract by a father on behalf of his minor son is binding on the son. Such contract may be made even after marriage, provided the son was then a minor. Among Sunnis the father does not, by entering into such a contract, become personally liable for the dower debt, nor is he liable for it merely because he consents to the marriage. The husband may settle any amount he likes by the way of dower upon his wife, though it may be beyond his means, and though nothing may be left to his heirs after payment of the amount. Muslim marriage is like a contract where wife is property and Mehr is a price for the property. If Mehr is not paid that doesn’t mean that the marriage will become void, Mehr is not purely a consideration. In pre-Islamic Arabia sadqqua was a gift and Mehr was price given to wife’s fathers as a sale price. But after Islam Mehr was paid to wife to fulfill her own necessity and no longer regarded as sale price. The Mahr (Dower) belongs to wife and she can deal with it in the manner she likes it and neither her husband nor husband’s relations nor even her relations can dictate her in matter of using the Mahr money or property. No doubt, Mahr was originally analogous to sale price, but since the inception of Islam, it is hardly correct to regard it as the price of sexual intercourse. If you divorce them before you have touched them, and you’ve fixed for them the dower, pay half of of what you have fixed. According to wolson, “Dower” is a consideration for the surrender of man or woman through the wife. It is the technical Anglo- Mohammedan time period for its equivalent “Mahr” in Arabic. According to Ameer Ali, “Dower” is a consideration which belongs virtually to the wife. According to Dr. Jung defines, “Dower” as the assets or its equivalent, incumbent at the husband either with the aid of cause of being agreed within the settlement of marriage or through virtue of a separated settlement, as special consideration of Buza, the proper of enjoyment itself. There are two types of Dower Specified dower and Customary dower and specified dower is divided into two parts, prompt dower and deferred dower. In many states, a widow is entitled to a statutory proportion in her husband’s estate. This is often known as elective percentage due to the fact the surviving spouse can pick out to accept the provisions made for her in the decedent’s will or accept the share of the property specified by using regulation of Descent and Distribution or the particular law governing the elective percentage. In many jurisdictions, dower has been abolished and replaced by means of the elective percentage. In others, statutes expressly provide that a spouse select some of the elective proportion, the dower, or the provisions of the will.

MAHR AMOUNT

• Hanafi Law, 10 Dirhams

• Malaki Law, 3 dirhams

• Shafi law, No fixed amount

• Shariya Law, No fixed amount.

The Mahr fixed by using Prophet of Islam for his preferred daughter Fatima, spouse of Ali turned into 500 Dirhams. A dirham (derived from the Greek) is the name of Silver coin of 2.97 grams in weight. However, it would be a unhappy mistake to put too high-quality strain upon the financial price of the Mahr amount. It is said that within the case of an exceptionally poor man, the Prophet asked him to teach the Quran to his spouse. It is said in one Hedaya that the fee of Mahr is enjoined by the law simply as a token of recognize for the woman.

RIGHT AND REMEDIES OF WIFE ON NON PAYMENT OF DOWER

The proper to dower is an inherent proper of each Muslim spouse. But, except this proper is efficiently enforced, it is of no use to her. Under Muslim law, following method of enforcement of the right to dower is to be had to a wife (or widow):

1.Refusal of Conjugal Right

Before consummation of the wedding, the spouse is entitled to deny cohabitation to the husband till he offers her Prompt Dower on demand. It is to be mentioned that below Muslim regulation a husband has right to cohabit together with his wife and she can’t refuse the identical with none reasonable excuse.

But non-payment of Prompt Dower earlier than consummation is a lawful justification for the wife to refuse cohabitation. A Muslim-wife can refuse to live together with her husband and refuse to him the sexual sex as long as the Prompt Dower isn’t paid to her.

Case: Nasra Begam v. Rizwan Ali

The Allahabad High Court held that the proper to dower comes into existence before cohabitation and Prompt Dower can be demanded even before the cohabitation.

Where the wife is minor or insane, her parent can refuse to allow the husband to take his wife with him till the Prompt Dower has been paid. If the minor spouse is already within the custody of her husband, such parent can take her back on the ground of non¬payment of Prompt Dower. But, in which the consummation has taken location even once, the wife’s proper to refuse consummation is lost. If the marriage has already been consummated, the husband’s suit for restitution of conjugal right will not fail on the floor of non-payment of Prompt Dower.

However, the courtroom has discretion, even in this sort of case, to skip a decree for restitution of conjugal rights difficulty to the situation of price of Prompt Dower.

Case: Anis Begum v. Muhammad Istafa Wali Khan

The records had been that within the marriage of Anis Begum and Md. Istafa, the Prompt Dower was Rs. 15,000. The husband and wife lived together for some time and a daughter turned into born to them. Later on, Anis Begum left the house of her husband and refused to come lower back until her Prompt Dower turned into satisfied. Md. Istafa, the husband, filed a fit for the restitution of conjugal rights. It changed into held through Sulaiman, C.J., that there was no absolute right in a husband to assert conjugal rights unconditionally. The courts have discretion to make the decree of restitution of conjugal rights conditional on charge of spouse’s unpaid Prompt Dower even where the wedding has already been consummated. Accordingly, the decree for restitution of conjugal right changed into exceeded in favour of the husband problem to his payment of Rs, 15,000/-.

2. Enforcement of Dower as debt:

Where the wedding has been consummated, the wife can’t implement her claim by refusing conjugal rights to the husband. In this kind of state of affairs the spouse can recover her unpaid dower by using keeping a motion in a court of regulation. She may recognize it from husband in the identical manner as a creditor recovers his loan.

If the husband dies, the widow is entitled to recover the amount with the aid of submitting a suit in opposition to the legal heirs of the deceased husband. But the legal heirs of the husband aren’t personally susceptible to pay the dower. The dower is a debt towards the property of the deceased husband that’s inherited by heirs.

3. Widows Right of Retention

After the dying of husband the best method of enforcement of dower is the workout of right of retention. A widow, whose dower stays unpaid, has a right to retain the properties of the husband until her dower debt is satisfied. This proper is called as the right of retention in lieu of unpaid dower and it is available to a widow, whether there is any agreement among the parties for this right or not.

Under this right if a wife has taken possession of her husband’s residences lawfully (with unfastened consent of the husband) in lieu of unpaid dower, then she is entitled to maintain that possession after the loss of life of her husband, until her dower is paid out of the residences retained via her. This proper is exercised in opposition to the creditors, if any, of her deceased husband, and his criminal heirs. The prison heirs of the husband can’t get possession (and benefit) of the residences of the deceased till they make payments in the direction of unpaid dower in share in their respective shares. Thus, this may be said to be a coercive approach of healing of unpaid dower from husband’s legal heirs.

DIFFERENCE BETWEEN SHIA AND SUNNI LAWS

Sunni Law

• Minimum limit of 10 dirhams.

• No limit to proper dower.

• If the marriage is dissolved by death and dower has not been specified, or it is agreed that no dower shall be payable, proper dower would be due whether the marriage was consummated or not.

Shia law

• No minimum limit is prescribed.

• Proper dower cannot exceed 500 drihams.

• In such case no dower would be due if marriage was not consummated.

CONCLUSION

The following are the legal importance of Dower in Muslim law-

1. The reason of its significance lies in the protection that it imparts to the spouse towards the arbitrary exercising of the power of divorce by the husband.

2. Dower is a right of the spouse is fundamental feature of marriage contract and has a pivotal place within the domestic relation affecting the mutual rights.

3. According to Muslim Law at the dissolution of marriage the wife can declare her dower money. It can be better or it could be low depends upon at the supply of income of the husband.

4. Legislature has given the electricity to make law imparting that, the court docket will now not be bound to award the quantity of dower in step with marriage deed (Sec. Of Oudh Law Act.1876). But simplest such sum as shall be reasonable on the subject of the method of husband and the Iddat of the wife as held in a case of Adul Rehman v/s Inayati Bibi-1931.

5. Another Significance of Dower is to place a test on the capricious use of divorce on the part of husband.

6. To impose responsibilities at the husband as a mark of appreciate of the spouse.

REFERENCE

• Mahomedan law 19th edition

• Paras Diwan Family law 4th edition

• Nasra Begam v. Rizwan Ali

• Anis Begum v. Muhammad Istafa Wali Khan

• Adul Rehman v/s Inayati Bibi-1931

• Abdul Kadir v. Salima

• AIR 1980 All 119

• AIR 1933 All 634

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CHILD ADOPTION IN ENGLAND AND FINLAND

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While both England and Finland are states within the European Union (EU), they demonstrate distinct and differing approaches to the adoption of children. In Finland along with other countries in Scandinavia, child adoption and the permanent transfer of parental rights is less of a central a concern, or worry than currently so in England where child adoption is featured prominently across a range of professional, political and popular discourses. In terms of social work practice the involvement of children and families, coupled with certain factors of the adoption process have been handled in a distinctly different way between the two countries. This can be seen where in Finland adult adoptees were allowed to gain access to records regarding their adoption or their birth parents far earlier than their English counterparts where this was not permissible until much later earlier through the Children Act 1975 (Triseliotis, 1973, p. 1).

According to Lowe (2000) in the late-nineteenth century attempts were made to introduce adoption, but it was not until 1927, subsequent to the Adoption of Children Act 1926, that child adoption became legally recognised in England. Since then many factors including; reports, legislation and case law have all had an impact, this has resulted in refined policy and changes in social work practice. More recently media attention has illustrated social workers’ alleged shortcomings in relation to child adoption processes.

In recent years, adoption policy has been influenced by a number of socio-cultural and political factors. During the Conservative government of the 1990s politicians and policy makers made attempts ineffectively to restructure what were viewed as unsatisfactory adoption procedures (see PIU, 2000, p. 31). These services were impaired because social workers were driven by ‘political correctness’ (Hopton, 1997). The white paper Adoption: The Future was published In November 1993, representing a ‘common sense’ approach to adoption (Department of Health, 1993). In 1996, the DoH published a Draft Bill with an emphasis placed on child adoption as an alternative to single parenthood during the consultation period. The Bill failed to progress any further due to the General Election in May 1997. With a change in government, the then Prime Minister’s (Tony Blair) Review of Adoption was published in 2000 (PIU, 2000). Followed by a White Paper, Adoption: A New Approach (Department of Health, 2000), which was followed by the publication of the Adoption and Children Bill in 2001. The Bill failed to materialise due to the General Election later in the same year. It was however re-introduced in October 2001 and the Adoption and Children Act received royal assent in November 2002.

The first Adoption of Children Act in Finland was in 1925, a year earlier than the English equivalent. The present Finnish Adoption Act stems from 1985 followed by an additional Adoption ruling in 1997 which dealt specifically with adoption counselling and inter-country adoptions. Specific to Finnish adoption system is the role of Save the Children originally created in 1945 following the merging of two previous organisations (Homes for Homeless Children which were practicing adoption since 1922 and Save Finland’s Children, which was set up after the Second World War in an attempt to help orphaned children). This organisation is now part of the International Save the Children. Save the Children has had an influential position as a provider of adoption services in Finland. In addition to civic welfare bodies, Save the Children is still the only private child welfare organisation in Finland licensed to provide adoption counselling (Pylkkanen 1995)

In Finland, adoptions have dramatically changed during the last 30 years, in 1970, 243 Finnish children were adopted through ‘Save the Children’. Over the last few years this has decreased to less than fifty. Partly as abortion became more freely available following the Abortion Act of 1970; the number of unplanned children born to young single mothers fell. (Garrett, 2003 p.21). England too has seen a decrease in adoptions, (PIU, 2000, p.10) This may be attributed to the rise in use of the contraceptive pill and the acceptance of single mothers. According to Lowe (2000) The largest decline is in respect of babies (children under the age of 12 months) put up for adoption; in 1968, 12,641 babies were adopted (51% of all adoptions), but only 195 babies were adopted in 1998 (only 4% of all adoptions) According to Bennett (2009)” Only 4,637 children were adopted in 2007, the lowest number since 1999.”

In both states, adoption is far more likely to involve children in public care-or ‘looked after’ children (In England under the Children Act 1989) who are older, are child protection concerns, or have disabilities (DoH, 1998). This is in part due to the fact that there are very few ‘healthy’ babies ‘available’ for adoption. In England there are approximately 60,000 children ‘looked after’. (Department for Children, Schools and Families (DCSF), 2007). 62% of these children were removed, on a compulsory basis, from their family. Approximately 1% of all children under 18 years live in foster care, with about 48% in family foster care, 40% are in ‘children’s’ homes’, and the remaining 12% in new formats of family professional care (Kalland & Sinkkonen, 2001). In July of this year these statistics were even worse according to sources obtained by Bennett (2009) who claimed that this figure was now almost three quarters of all adoptions, she agrees with the reasoning behind the removal of children form their families stating “The increase in alcohol and drug abuse among parents is also a growing factor in care proceedings, with parents often being given several chances to break their habit before children are removed.”

It may possibly be argued that many of those children in long-term placements should and probably could be adopted, but this is not the overriding view of Finnish society, indeed the dominant view is that of family preservation. Several contributors share the opinion that children’s best interests are met when every effort is made to keep the family together. If foster care is needed, it should always be of limited duration (Garrett, 2003). These views echo FOX HARDING CHECK WHICH PERSPECTIVE AND MENTION

Many of these Finnish children in long-term foster care could have been adopted if they lived in England. Evidently, foster care makes it possible for children to keep some contact with their birth family. Unfortunately, this is not always advantageous for the child because of the severe difficulties including both psychological and behavioural of some parents (Quinton et al., 1997). The placement faces the risk of breakdown where the birth parents have sufficiently dealt or recovered from their difficulties, and desire to be a complete family with the return of their child. This may be successful, but may also be short-lived resulting in endless short-term placements. This will have an adverse effect destroying the child’s ability to form any meaningful attachments in adulthood. Adoption would offer the child an opportunity to form a stable relationship but this would cut the connections with the birth family. In Finland adoption against the will of the natural parents is far from the norm. As a result, there are very few ‘contested’ adoptions. According to the Finnish Adoption Act, the consent of both biological parents is needed before the adoption can take place. It should be noted that there are two exceptions to this; firstly, adoption can be granted if it is believed that the adoption is definitely in the best interests of the child and the refusal of consent of the parents is not suitably justified, secondly, the parents cannot logically express their will due to illness or disability, or if their whereabouts are unknown. Additionally the mother’s consent is only accepted after she has recovered from the birth (no earlier than eight weeks). In Finland the feelings and desires of the child are taken into account, this is according to the age and level of maturity. If the child is 12 or older, their opinions must be taken into account.

In recent years England has evolved a degree of openness in the adoption process (DoH, 1999, Ch. 5). This is because traditionally in England, the adoption of children resulted in the ‘cutting off’ of the relationship with the birth mother and birth family. The developments in this area have been provoked through professionals whose opinion that ‘openness’ is important for the mental health and ‘identity needs of adoptees’ (Kirton, 2000, p. 108). The ability for English adoptees and their family to gain access to records is relatively recent, in fact as recent as 1973 Scotland and Finland were “the only countries in the Western world where an adopted person could obtain information from official records that could help them trace their original parents” Triseliotis (1973, p. 1). The move away from high levels of secrecy can also be attributed to adoptees who wanted to find birth relatives (Campbell et al., 1991), birth mothers also campaigned for larger levels of openness in adoption in England (Logan, 1996). These actions coupled with the ‘Natural Parents Support Group’, an organisation of birth mothers, who lobbied the UK parliament for a public inquiry into the injustices which occurred through the mass adoption in the 1950s and 1960s (Rickford, 2000, Fink, 2000). The Children Act 1975 gave adopted people over the age of 18 years the right to apply for access to their original birth certificates. The recent ‘openness’ has enabled in some instances, ‘contact arrangements’ between the child and birth family after the adoption has taken place (Lowe, 2000, p. 326-329). The Adoption Act 1976 amended by the Children Act 1989, made it compulsory for the Registrar General to set up an ‘Adoption Contact Register’ in an attempt to make it possible for adopted people to contact their birth parents and other birth relatives. It the opinion of Hughes & Logan (1995) that these measures are in part due to the increasing awareness of the importance of post-adoption services. The view in Finland however has been far more open indeed; Save the Children has mediated between the adopted child and biological parents since the 1960s. It should be mentioned that large proportions of adopted people in Finland still do not wish to seek contact with their original families, usually those that felt disappointment about being adopted inn the first instance (Garrett 2003). This all means that while the recent drive toward adoption being more ‘open’ is obviously important, it must be recognised that ‘openness’ is not simple or straightforward.

Kalland et al. (2001) shows that mortality rates in Finland for both sexes on the ‘child welfare registry’ are in excess compared with the general population. Another Finnish study showed aggressive behaviour, delinquency and attention problems were associated with children and adolescents in children’s homes and that children may also be at risk of sexual abuse in these homes with the person responsible for the act often being an older adolescent (Hukkanen et al., 1999). What is important though is, none of these negative instances can be entirely attributed to poor quality or damaging care that children get whilst in public care. Numerous children arrive in these institutions already suffering from been highly traumatised in some cases due to parental addictions. In short, it is not simply the ‘looked-after’ experience which leads to poor outcomes.

Whereas in contrast concerns about the ‘poor outcomes’ of children who are ‘looked after’ (Parker et al., 1991) in England such as; ineffective health provision available for ‘looked after’ children (Butler & Payne, 1997), poor levels of educational achievement (Aldgate et al., 1993, Fletcher-Campbell, 1998), the bullying that takes place in ‘care’ settings, the high pregnancy rates amongst teenagers in ‘care’ in 2007 there were 360 mothers aged 12 and over who were ‘looked after’, an increase of 15 per cent from the previous year, (Corlyn & McGuire, 1998, DCSF, 2007), the disappointingly high number of moves from ‘care’ environment to ‘care’ environment (Sone, 1997), and the lack of preparation for those ‘leaving care’, and poor after-care support (Biehal et al. , 1995) has led to the English adoption system making wholesale reform

In July 2000 the then Prime Minister, Tony Blair published the governments ‘Review of Adoption’ which contained over 80 recommendations. Four of these recommendations focused on plans to; develop and implement a “National Adoption Register”, drawing up of new “National Standards” for local authorities to follow, the setting up of an “Adoption and Permanency Taskforce” to promote best practice and challenge poor performance, and conducting a “rapid scrutiny” of the ‘backlog’ of children that were waiting to be adopted (PIU, 2000, p.4).This was followed in December 2000, with the White Paper, ‘Adoption-A New Approach’. The aim of establishing a National Adoption Register and an Adoption and Permanency Taskforce were again set out. A national target was to be set with the aim of increasing the number of ‘looked after’ children adopted. Other processes highlighted in the consultation paper integrated within the plan were to introduce new National Standards for councils and adoption agencies. To enforce these standards, powers were put in place ’emergency inspections’ and ‘special measures’ to deal with problematic service providers. Other plans included, timescales for children enabling a ‘sound plan’ for their permanent future, this would be made within six months of their starting to be continuously ‘looked after. When the decision was made that adoption was to take place, a ‘new family’ should be found within a further six months. In an attempt to aid adoptive parents new plans to support them were briefly set out. Other significant measures included: a new legislative option, called ‘special guardianship’, this would provide a sense of stability for the child, but fall short of legal separation from their birth parents.

Unlike England there is no National Adoption Register and there are no plans to develop and implement one in Finland, a National Register however, could possibly help in advancing research and practice in a Finnish framework. Likewise an Adoption and Permanency Taskforce similar to that of England would be welcomed by many in Finland.

Finland’s parliament however, have this year voted to give people in same-sex couples who are registered in an official partnership the legal right to adopt the naturally-born child of their partner.(Finnsson, 2009) No further plans to speed up adoptions of ‘looked after’ children are planned. This is, perhaps, because as suggested earlier of the dominant position Fox Harding again which places an emphasis on family preservation services. There are very few Finnish waiting to be adopted. There are however in contrast, hundreds of couples waiting to adopt a child. There has been some discussion in the media about the intense frustration of these couples. It may take four or five years to have a child adopted. This has raised the notion of an adoption industry which is fed by the child protection system, “Regrettably, in many cases, the emphasis has changed from the desire to provide a needy child with a home to that of providing a needy parent with a child. As a result, a whole industry has grown, generating millions of dollars of revenues each year, seeking babies for adoption and charging prospective parents enormous fees to process paperwork.”(Pragnell, 2008) It is also his view that the interests of the child are now the cause of “atrocities committed against children and parents by well-meaning and well-intentioned employees of state and related agencies but whose acts are leading to immense suffering for children.”

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CHILD LABOUR AND ITS PREVENTION

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Child labour is when a child under the legal age (fifteen) are made to do work that is physically and mentally harmful and which interrupts their education or social development.1 Child labour is a serious problem in many countries. Africa and Asia has the most child employment with both making up 90% of total child employment.

They are everywhere but invisible, toiling as domestic servants in homes, labouring behind the walls of workshops, hidden from view in plantations.

The International Labour Organization (ILO) estimates that there are more than 200 million children today which are involved in child labour. Some of these children are as young as 5. Child labourers are involved in all type of jobs – agriculture, the sex industry, carpet and textile industry, brick making, construction work, quarrying and prostitution. The children that are working in a dangerous or hazardous environment usually don’t wear any type of protective clothing or equipment – this exposes them to toxic fumes and dangerous chemicals. Child labour should be prevented as it is taking away the children’s childhood, education and it is harmful to their health.
There are many reasons why a child is working as a labourer. Most work because of poverty, lack of education and also to support themselves and their families. 1 in 7 children worldwide are working as a child labourer. In Africa, it is 1 in 3 children. 166 million of the children are under the age of 14. 74 million are risking their lives because they are working in a dangerous environment such as mining and construction – there are no safety standards, no one has protective equipment, they are all working with bare hands and feet and only earning less than US $1.00 a day. 2

Child labourers that are working in match factories will suffer from phossy jaw. Phossy jaw is caused by accidently ingesting chemicals to make matches. Sometimes the chemicals used to make the matches causes the gums and jaw to become so infected that the jaw bones have to be removed. 3

Child labourers work almost every single day. They work for up to 16 hours a day for 6 days a week. This leaves them to have no time for an education which is important for a child’s future. Parents are sometimes responsible for child labour. They force their kids to go to work rather than getting an education. This happens because there are many people who are graduated but still are not able to get a job.

Young boys are put into work such as agricultural as soon as they are old enough to do the work. This is from the age as young as 5. Young girls also have to work at a young age but the works they do are not as heavy as the boys. Young girls do household and domestic work. These children have to keep working and are just exhausted at the end of the day which leaves them with no play time with other kids at all.

The children who are going to work every day don’t get to spend much time with their own family. They don’t even get time to play with other children in the same age. The only other children they are with are the ones that they are working with. The children who are suffering from physical and mental job stress will face several health problems in their childhood and later in their life.

Child labour is a must for many countries in Africa and Asia, without child labour, it would be even more difficult to survive. But, efforts should also be made to eliminate it. The effort made should be done in a proper manner which will not worsen the problem for those who are already affected. For the unemployed, programs should be introduced which provide an adequate salary. For the poor and the orphan centres, education should be provided for free.

Efforts should also be made to change the way parents view child labour. Many poor parents consider child labour as a good though they do not realise how it endangers their children’s health and development. Parents should be made to realize that it is in their best interest to not let their child work at a very young age as this will affect their health, development and self esteem.

In general, poverty is the problem that is causing child labour, eliminating poverty would solve most of the problems in Africa and Asia. The world would be a better place for everyone especially the children that are working as a child labour. Without child labour, the children would be enjoying their childhood with friends instead of working every day.

There are several other steps that could be taken to prevent child labour. many children left their homes in a way to avoid the abuse that they are victims of from their parents. To prevent this bad treatment, the government could help give conferences to the parents about child labor and the consequences that it brings. In this way, we can help prevent other children running away from home and living as homeless children.

Another option could be to build homes for those children that are living in the streets. They will be sent to these homes and they would not have to live outside. In this way we can help prevent children from any abuse that they can suffer in the streets. In these homes, children are not supposed to work; they can study and learn a career, and they will get a better job and a future.

Child labor is a very serious problem. Politicians should make laws to prevent child labor and find solutions. Children are our future and we have to take care of them if we want a better future.

Bibliography

1 Child Labour – Definition. (n.d.). Retrieved September 26, 2009, from http://www.redgoldfish.co.uk/viewglossary.asp?gid=45

2 YouTube – Child Labour. (n.d.). Retrieved September 26, 2009, from http://www.youtube.com/watch?v=ruh0O_mj1v0

3 Child Labour and Disease – V&A Museum of Childhood. (n.d.). Retrieved September 26, 2009, from http://www.vam.ac.uk/moc/childrens_lives/health_&_work/health/index.html

Child labour – Wikipedia, the free encyclopedia. (n.d.). Retrieved September 27, 2009, from http://en.wikipedia.org/wiki/Child_labour

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CIVIL JUSTICE SYSTEM IN BANGLADESH

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Disputes are a fact of life. A. D. R. means Alternative Dispute Resolution, mostly applied to civil cases. When a civil case is instituted in a court of competent jurisdiction, the scenario usually is, that a long time is taken to serve the process, the defendants beat the law and submit their written statement/s after a long delay beyond the permissible statutory period of two months, lawyers and judges do not take any interest in screening out a false and frivolous case at the first hearing of the case under Order X CPC (in fact no such first hearing takes place), they seldom try to shorten the disputed questions of fact and law by application of Orders XI and XII of the CPC and mostly ignore the elaborate procedure of discovery, interrogatories, notice to produce etc. contained in those Orders, the issues of a case are seldom framed following the Code of Civil Procedure, the case takes several years to reach a settlement date and on the date of positive hearing half a dozen or more ready cases are fixed for hearing, resulting in the hearing of none. It delivers formal justice and it is oblivious of the sufferings and woos of litigants, of their waste of money, time and energy and of their engagement in unproductive activities, sometimes for decades.

Most of us who are or were in the judiciary and were or are practicing in the Bar think that nothing can be done about it, or, at least, we have no role to play in the matter, either individually or collectively. We are drifting into a stage of aimlessness, inertia, inaction and helplessness. Many conscientious judges and lawyers have done what they could under the circumstances, but their sincerity has been drowned into the general morass of malfunctioning of the court system.

What is Alternative Dispute Resolution (ADR?)

Alternative Dispute Resolution refers to the means of settling disputes without going through legal procedures. Through ADR settlement of disputes can be done in many formal and informal ways but here ADR emphasis is mainly on the settlement of disputes by local community initiatives. It is an age-old tradition of society through which disputes are resolved amicably and which concerned parties accept. Normally authority does not challenge it. It is not institutionalized, but both the community members and the disputants accept it. There are different ways to resolve disputes. Some are resolved formally, others informally, and some are resolved as time passes by.

 Objectives of ADR

In the recent past the alternative dispute resolution system (ADR) has been developed in the USA and the rate of success of ADR is significantly high, as the parties have been able to come forward to sit together to talk together and finally resolving their disputes. The prime aim of alternative dispute resolution system in civil justice delivery system in Bangladesh is closing the hostility between the disputing parties and restoration of harmony. In this system a high degree of public participation and co-ordination is badly needed. A general sense of satisfaction develops which helps in enforcement of the decision, when people’s participation is ensured as to tending evidence, asking questions and making opinions. Thus the reconciliation can be eased, which is the fundamental objective of ADR system.

 Different forms of ADR and their application in civil justice system:

Negotiation, mediation and arbitration are the most common features of ADR techniques in Bangladesh. Let us discuss the three important ways of dispute resolution.

Mediation” is voluntary process where a natural mediator attempts to help the disputing parties to reach an agreement that is acceptable to both sides and that will bring the dispute to an early conclusion without having to go to Court.[1]

Arbitration” means a process of adjudication of a dispute or controversy on fact or law or both outside the ordinary civil courts, by one or more persons to whom the parties who are at issue refer the matter for decision.[2]

“Negotiation” is a non-binding procedure in which discussions between the parties are initiated without the intervention of any third party with the object of arriving at a negotiated settlement of the dispute.[3]

“Med-Arb” is a procedure which combines, sequentially, conciliation/mediation and where the dispute is not settled through conciliation/mediation within a period of time agreed in advance by the parties, arbitration.[4]

Laws pertaining to ADR in Bangladesh:

a) Code of Civil Procedure,1908

For the first time in our legal system the provision with regard to ADR has been introduced by amending the Code of Civil Procedure. In chapter V of Artha Rin Adalat Ain, the provisions of ADR have also been incorporated. Surely, this concept is a denovo in our civil justice delivery system. Now ADR has come within the domain of civil procedure code.
By the recently enacted sections 89A/89B of CPC, the ADR system (mediation and arbitration) has been introduced, the two terms ‘mediation’ and ‘arbitration’. Section 89A lays down that except in a suit under the Artha Rin Adalat Ain, 1990 (Act. no 4 of 1990)

after filing of written statement, if all the contesting parties are in attendance in the court in person or by their respective pleaders, the court many by adjourning the hearing, mediate in order to settle the dispute or disputes in the suit or refer the dispute or disputes in the suit to the engaged pleaders of the parties, or the party or parties, where no pleader or pleaders have been engaged, or to a mediator form the panel as may be prepared by the District Judge under subsection 10, for undertaking efforts for settlement through mediation. Similarly, the term ‘settlement conference’ has been used to denote mediation process in the part V of Artha Rin Adalat. The provisions have been made in this regard that the court can mediate the suit matter after filing the written statement by the defendant or defendants, by adjourning the subsequent procedures of the suit

The government by amending the Code of Civil Procedure expands the avenue for shalishi. By The Code of Civil Procedure (Amendment) Act, 2003 two new sections were incorporated (section 89A, 89B) in the code. It empowers the court to solve the matter through mediation or conciliation before the beginning of the trial except case under Artha Rin Adalat Ain. However there remain some limitations too, it will not exempt the disputant parties from the appearance before the court. This law is only relating to the pending cases,

The Civil Procedure Code (Amendment) Act, 2002 has been enacted to introduce Alternative Dispute Resolution (ADR) system for early and consensual disposal of civil suits. Section 89A and 89B have been inserted to allow parties to settle their disputes in suits, through mediation or arbitration. In the mediation procedure, the court may take initiative to settle the dispute in the suit by itself or by making reference to independent mediators. Under section 89B parties will be allowed to withdraw pending suits and have those settled through arbitration. The provisions have been made effective from 1st July 2003.

ADR system is gaining popularity. This procedure will help to reduce the huge backlogs of civil cases in courts. Public confidence in the judiciary will thereby increase. Access to justice will be expanded. The provisions will also help develop a new culture of consensual settlement of disputes doing away with the existing adversarial procedure. It will help protect and preserve cohesion and fraternity in society. Of the mediator here the advocate or any other person may be hired for mediation.

b) Artha Rin Adalat Ain, 2003

In our legal system, money lent by financial institutions/banks to individuals, private limited companies, public limited companies, corporations, partnership firms, societies, co-operatives, proprietorship firms etc. when due for default, is realised through money suits, suits for foreclosure, mortgage by instituting the same to competent civil courts. The civil courts were burdened with other businesses and such suits of banks consumed time for disposing of. The delay caused made the bank sector suffer for non-realisation of dues in time and the bankers gathered bitter experience in realising the same. To remove this difficulty, the government enacted a special piece of legislation named “The Artha Rin Adalat Ain, 1990” which had gone under some changes by way of amendments since its inception. The law brought changes to a great extent in the administration of justice delivery system for regulating those suits but it failed to fulfil the expectation of the legislators/bankers to recover the dues expeditiously from the defaulters. The thinkers on the subject gave second thoughts to frame a new law and ultimately the legislature passed “The Artha Rin Adalat Ain, 2003” (hereinafter Adalat) by repealing the earlier one.

The law came into force on 1st May 2003 except sections 46/47 which came into operation on 1st May 2004. Within a short span of time, the law has gone under an amendment by the Artha Rin Adalat (Amendment) Ain, 2004 which reflects weak draft of the law.

I have been working as a Judge of the Adalat for more than two years. I have taken no pain to apply the laws during my business hours but at the same time I have seen that some provisions of the laws are acting as barriers in discharging my responsibilities. I shall make an endeavour to focus on those and other allied subjects in this writing.

There is no such legal provision in the Environment Court Act, 2000 like the present one. Therefore section 4 (4) and section 4 (10) should be omitted, and the provisions if so omitted, there would be no practical difficulty to appoint the Joint District Judges to the Adalat like the Environmental Courts.

Section 19 has provided provisions for setting aside the ex parte decree but it does not make any provision for notifying the plaintiff bank like Order 9 Rule 13 of the Code of Civil Procedure 1908. As a result, the plaintiff remains ignorant about restoration of the suit. This anomaly should be removed by inserting appropriate provision. Section 20 of the law has given finality to the order, judgment and decree of the Adalat. In spite of that the defaulter(s)/borrower(s) is/are challenging the same in the writ jurisdiction of the High Court Division under Article 102 of the Constitution of the People’s Republic of Bangladesh and obtaining stay orders from the High Court Division.

In a recent discussion on “Money Loan Court Act 2003” organized by the Association of Bankers, Bangladesh (ABB), the Governor of Bangladesh Bank asked the banks to take special measures to recover bad loans as the defaulters filed 1,768 writ petitions in the High Court for such loans amounting to Tk 6445 core. He told that the banks cannot recover the loans due to stay orders from the court, and asked the monitoring cells of banks to take up these issues seriously and hire efficient lawyers to move the cases of loan default.The Daily Star dated June 2, 2006). It is observed from regular business of court that the banks have been refraining from taking any step against the stay orders in writ petitions. It is seen that the banks let them (the defaulters) do the same with consent. This attitude of the bank should be changed and effective steps should be taken to face the legal battle with the defaulters.

Apart from the aforementioned barriers, the law has been playing a very vital role in realising the loan from the defaulter(s). Its achievement in loan recovery has been so immense that the scenario of defaulting loan has improved significantly with number of pending Artha Rin Suits reducing with expectancy rate. The loan defaulting culture would further be reduced if the barriers can be removed as soon as possible.

c) Family Courts Ordinance, 1985:

Generally disputes relating to property, family matter i.e. distribution of property, dissolution of marriage, maintenance, guardianship could be dealt by shalish. The Family Courts Ordinance, 1985 speaks for the settlement of dispute through conciliation inside the Court before the formal proceeding of the trial started. The court may initiate a pre trial hearing to settle the disputes relating to dissolution of marriage, maintenance, and dower, restitution of conjugal rights as well as guardianship and custody of children. Besides, the Muslim Family Laws Ordinance 1961 empowers the Union Parishad to form an Arbitration Council for reconciliation between the parties wishing to dissolve their marital tie through Talaq and to deal with the polygamy.

“ADR in family court”

If ye fear a breach between them twain, appoint (two) arbiters, one from his family, and the other from hers; if they wish for peace, Allah will cause their reconciliation: for Allah hath full knowledge, and is acquainted with all things.[5]

Settlement of Dispute through Mediation in family court is started in Dhaka Jugde Court from 2000. Then, it was expanded in different cities and districts. Family Court Ordinance 1985 in its section 10 and 13 is said about the Mediation process. The procedure provides in family court is-

i) When the written statement is filed, the Family Court shall fix a date ordinarily of not more than thirty days for a pre-trial hearing of the suit.[6]

ii) On the date fixed for pre-trial hearing, the Court shall examine the plaint, the written statement and documents filed by the parties and shall also, if it so deems fit, hear the parties.[7]

iii) At the pre-trial hearing, the Court shall ascertain the points at issue between the parties and attempt to affect a compromise or reconciliation between the parties, if this be possible.[8]

iv) Then, where a dispute is settled by compromise or conciliation, the Court shall pass a decree or give decision in the suit in terms of the compromise or conciliation agreed to between the parties.[9]

v) If no compromise or reconciliation is possible, the Court shall frame the issues in the suit and fix a date ordinarily of not more that thirty days for recording evidence.[10]

vi) After the close of evidence of all parties, the Family Court shall make another effort to effect a compromise or reconciliation between the parties.[11]

vii) If such compromise or reconciliation is not possible, the Court shall

pronounce judgment and, on such judgment either at once or on some future day not beyond seven days of which due notice shall be given to the parties or their agents or advocates, a decree shall follow.[12]

Arbitration Act 2001.

Arbitration Law in Bangladesh

Bangladesh has enacted the Arbitration Act 2001 (the Act). It came into force on 10 April 2001, repealing the Arbitration (Protocol and Convention) Act 1937 and the Arbitration Act 1940, legacies of the British Raj in India. The new Act was again amended in 2004 in certain respects. Such legislative steps were urgent in the face of increasing foreign investment in Bangladesh in various sectors, especially in natural gas and power, and the ever-growing export trade with the rest of the world. The Act consolidates the law relating to both domestic and international commercial arbitration. It thus creates a single and unified legal regime for arbitration in Bangladesh. Although the new Act is principally based on the UNCITRAL Model Law, it is a patchwork quilt as some unique provisions are derived from the Indian Arbitration and Conciliation Act 1996 and some from the English Arbitration Act 1996.

In Bangladesh, the present law of arbitration is contained mainly in the Arbitration Act, 1940, there being separate Acts dealing with the enforcement of foreign awards.  There are also stray provisions as to arbitration, scattered in special Acts.  Three types of arbitration are contemplated by the Arbitration Act of 1940, namely (i) Arbitration in the course of a suit, (ii) Arbitration with the intervention of the court, and (iii) Arbitration otherwise than in the course of a suit and without the intervention of the court in practice, the last category attracts the maximum number of cases.

Under the Act of 1940, an arbitration agreement must be in writing, though it need not be registered.This also amounts to an “arbitration agreement” for the purposes of the Arbitration Act, 1940. Once an arbitration agreement is entered into for submitting future differences to arbitration, it is not, necessary to obtain the fresh consent of all the parties for a reference to arbitration at the time when the dispute actually arises.

Concluding Recommendation:

The key to success of A.D.R. in Bangladesh lies in the manner of its introduction. A.D.R. is no longer an unheard of concept of dispute resolution among judges, litigants and lawyers of Bangladesh. The Family Courts all over Bangladesh are actively engaged in A.D.R. The pilot family courts are only exclusively engaged in mediation, but other Assistant Judges, who received training in mediation, are also mediating apart from trying cases. The mediation output of all the Assistant Judges, taken together, is something to be proud of. The Ministry of Law only needs to collect maintain and update all relevant statistics in this regard. To make ADR more effective, extensive, and pro-active, coordination is needed among different agencies. Other initiatives are given below:

1)      Creating awareness about ADR

2)      Spreading the success story of ADR

3)      Encouraging NGOs to become involved in ADR

4)      Involving the Bar Associations in ADR

5)      Providing training for mediators

6)      Matching Government and NGO efforts.

7)      A. D. R. will have a-smooth transition if it is introduced on a pilot court basis. The performances, results, reactions among pilot court judges, practicing lawyers and the litigants should be carefully monitored and recorded and suitable adjustments in the A. D. R. project should be made at each stage of extension after an exhaustive study of the experiences gained.

[1] Hazel Genn, Mediation in Action: Resolving

[2] SK Golam Mahbub, Alternative Dispute Resolution in Commercial Disputes: The UK and Bangladesh Perspective 2005, at p. 21.

[3] P. C Rao, Alternative to Litigation in India, 1997, p.26

[4] ibid

[5]  found in http://www.guidedways.com/chapter_display.php?chapter=4&translator=2, last accessed on 18.04.2010

[6] Section 10  of the Family Court Ordinance 1985

[7] ibid

[8] ibid

[9] Section 14 (1 of the Family Court Ordinance 1985

[10] Section 14 (2) of the Family Court Ordinance 1985

[11] Section 13 (1) of the Family Court Ordinance 1985

[12] Section 13 (2) of the Family Court Ordinance 1985

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CLIENT COUNSELING FOR LAWYERS

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Introduction

Professional Legal Education should necessarily focus on the lawyering skills. Client counseling is a vital skill in which the students of law should be trained. One of the significant functions of a lawyer is to advise the people who seek assistance in knowing the legal implications of their actions. The lawyer is looked upon to facilitate decision making in certain critical legal matters. This function of the lawyer influencing and facilitating decisions is called counseling. Bar Council of India, the highest professional body of lawyers, has a key role in Professional Legal Education.1 It has drawn up a detailed scheme on practical training consisting of professional ethics, bar bench relations, contempt of court, moot court, pre-trial procedures, negotiations, interviewing and counseling, drafting of conveyances and pleadings, legal aid, public interest lawyering etc.

The word ‘Counsel’ has its origin in the Latin word ‘consilium’ which means advice.2 According to Blacks’ Law Dictionary, counsel means advice and assistance given by one person to another in regard to a legal matter, proposed line of conduct, claim or contention. As a matter of fact lawyers are also legal counsels. Counselor is an attorney; lawyer; member of the legal profession who gives legal advice and handles the legal affairs of client, including if necessary appearing on his or her behalf in civil, criminal or administrative action and proceedings. The process of counseling has two functions:

1. To help the person talk about, explore and understand his or her thoughts and feelings and workout that what he or she might do before taking action.

2. To help the person decide on his or her own solutions.

Lawyers counsel the client in deciding how his problem can be sorted out under the laws. Legal counseling is the process by which a lawyer communicates advice to a client.

A client is a person, natural or legal who approaches the lawyer for legal assistance. The word client has its roots in the Latin word ‘clients’. Client is a person using the services of a professional person or organization. Counseling is the activity in which one person seeks and in one way or another, pays for help from another person. It is characterized by need on one side of the relationship, by willingness to help on the other, and by and inter personal contract based on mutual attraction. Counseling as a professional activity will involve competence and expertise in addition to mere willingness. Legal counseling is fairly considered a ‘service’ under the Consumer Protection Act, 1986 making the lawyer accountable for deficiency.

In a counseling relationship the client has to open himself to help and the lawyer has to protect the best interests of his client. Legal interviewing and counseling is what lawyers do in an office where they see clients one or two at a time, with the door closed. Lawyers elicit information from their clients, which information forms the basis for their advice. Legal counselling can be for litigation or for planning. Clients may seek advice as to proper legal course of action before Courts or as to estate, tax or business planning.

Client Interviewing for Client Counseling

In a lawyer – client meeting, the client opens up and talks his problem and concerns and expresses his expectations. The lawyer listens, notes down and questions the client for necessary information. There is a sharing of information, views and needs through verbal communication. This communication which is the life blood for effective counseling is called ‘interviewing’. Client interviewing is a prominent part of legal profession. Giving options, suggesting alternatives, effective client representation, drafting of documents, pre-trial preparations etc. are all dependent on this client interviewing.

Purpose of Client interviewing

The lawyers require to know the factual dimensions of their client’s situation. Factual matrices are the conditions for laws to operate. “Neat packages of fact are a predicate for professional activity by lawyers”. One fundamental purpose of interviewing is to know the facts story. The responsibility of gathering the facts is that of the lawyer. The fact that the client has approached a lawyer itself conveys that he or she has identified some legal problems. But the client may not know what matters, facts, instances and documents are significant and relevant. The lawyer will have to extract the necessary information and identify the legally sensitive facts. Expression of feelings like disillusionment, digestion, pain etc can also constitute important facts. Identification of witnesses, documents etc, are also done by interviewing.

The second significant purpose of interviewing is building the professional relationship with the client. The lawyer shall ensure to the client that his interests will be well taken care of and he and his feelings will be genuinely respected. Mutual trust is the characteristic feature of the professional relationship. If the client does not trust he may not divulge certain secrets and may find uneasy to discuss certain delicate matters. It is pertinent to note that the duty to maintain confidentiality is implicit in the lawyers duty to give priority to the interests of the client. Bar Council standards of professional conduct and etiquette mandates that the advocates shall not directly or indirectly, commit a breach of the obligations imposed by Section 126 of the Indian Evidence Act.

In establishing the professional relationship the lawyer will be necessarily interested in knowing certain personal details about the client, his background, credibility etc. If the lawyer has certain reasons to disbelieve the client he shall openly discuss with the client the factors inhibiting the trust relationship. Finally it is the preference of the lawyers to decide whether to take up the case of the client. In the professional relationship mutual obligations will be discussed and agreed upon. One interesting and important aspect is that of fees. Quoting the fees is an art best learnt by experience. Lawyer shall be guided by his stand at the bar, nature of the case13 and affordability of the client. Free legal assistance to the needy is a noble duty. An Advocate shall not stipulate for a fee contingent on the results of litigation or agree to share the proceeds thereof.The third notable function of interviewing understands the expectations of the client. What are the interests, expectations and concerns of the client? Unless these are understood and seriously considered, the efforts to satisfy the client will go in vain. It should be remembered that it is the satisfied client who while advertise for that lawyer.

Initial and Subsequent Interviewing

Interviewing the client may be a continuous process as the matter proceeds. There may be cases of a single interview and counseling. But generally when the client seeks counseling and assistance in deciding from alternatives available and also representation in the Courts or other means of implementation of the decisions, interview will be an on going process. The first/initial interviewing shall be carefully attended to.

“But the initial interview is essential to cementing the foundation for the lawyer-client relationship. If the job is poorly done, the foundation will be unable to support the construction of the complex professional relationship needed to conduct a long or emotionally difficult case.”

The client may be very nervous or skeptical. It may be nerve wracking for the client. Lawyers shall develop the ability to spot nervousness and the capability to tackle such clients. An informal friendly enquiry, offering refreshments, changing environment may be required to make such clients comfortable. The law office shall be properly ventilated and illuminated. Orderly arrangement and aesthetic look of the office shall be given due attention. Office atmosphere should keep the clients comfortable. Meetings with clients should be in privacy where ever desirable otherwise clients will not open up. They shall be assured that their secrets would be safe in the lawyers hands.

Interviewing Techniques

Interviewing is a very purposeful activity and attending to small things in a meticulous manner can provide fruitful results. Counselors should be patient and careful listeners. That the client has approached a particular lawyer shows that he/she trusts the lawyer and a patient hearing will only enhance the trust. Moreover the client fears that his property, life or liberty would be at stake and his feeling should be respected. Lawyer should listen with interest and ensure uninterrupted hearing. Office staff should be instructed accordingly. Physically responding to what is said, commenting and questioning on certain significant matters will assure comfort. Lawyer shall mind the manner and tone of their questions. Silences will have to be tolerated, unwarranted interruption can block important information. An atmosphere that encourages expressions of feelings should be ensured. But the lawyer shall be dispassionate and objective lest his logical, critical and analytical skills will be impaired.

Before Counseling

Client Counseling is a professional activity anchored on the special knowledge of the counselor. The client in most cases absolutely surrenders his matter to the lawyer and accepts his suggestion in toto. The lawyer is duty bound to uphold the best interests of his clients by all fair and honorable means. An advocate shall not do anything whereby he abuses or takes advantage of the confidence reposed in him by his client.18 There can be disciplinary action by Bar Council for breach of code of ethics.19 Lawyer shall also bear in mind his accountability under consumer law and common law,

During Counseling

Lawyer shall act responsibly while communicating legal advice to the client. Care shall be taken to speak in client’s language. A lay man cannot appreciate legal terminology. It shall be the duty of the lawyer to assist the client in understanding his rights and duties. The lawyer shall explain all options in the situation with consequences and costs. Assistance in making choice from available options shall be rendered. No option shall be forced upon the client. An advocate shall not, at any time, be a party to fomenting of litigation.20 The lawyer shall be objective and honest and explain the weakness of the case as well.

Effective Counseling

Effective presentation of a legal opinion/advice depends on several important requirements. Substantial thoroughness in the knowledge of law and procedure is a must. Logical and critical thinking will enhance appreciation of the objective dimensions of the client’s situation. Good inter personal skills will help in interviewing the client properly and broadening the information base. Sharp comprehension skills will be required to appreciate the expectation and concerns of the client. Liberal education about developments and happenings around is also important. We have to be alive to the fast changing would around us. Updation of knowledge by keeping abreast of changes in codified law and of latest decisions of Courts and tribunals is indispensable. Clarity of thought and good communication skills are essential to send the message across to the client.

Learning Counseling Skills

Learning to apply law in a given situation can mark the beginning. This will help students to identify the problem, formulate the issues and seek solution under law. We cannot conceive of a lawyer who cannot talk. Communication skills can be learnt by interacting in the class room discussions. Raising questions should be encouraged. The opportunity to answer questions raised in the classroom can be offered to students with the teacher’s concluding remarks. Classroom presentations on small topics should be compulsory for students. Such presentations should be at least five for each student in every term. Group discussions and seminars for students will open more gates for student participation.

Counseling can be taught to students by stimulation exercises. The lawyer’s role and the client’s role can be enacted for the observation of students on hypothetical problems. Sufficient pre-planning is required. A variety of problems will have to be chosen. The students can be given mock counseling exercises where they will interview and counsel. The students can pick up counseling skills by observing real interviews and counseling in an advocate’s office. This requires cooperation on the part of advocates and also the consent of the clients. Legal aid clinics and legal aid camps can offer great opportunity to law students in learning counseling techniques.

Conclution

Counseling can be taught to students by stimulation exercises. The lawyer’s role and the client’s role can be enacted for the observation of students on hypothetical problems. Sufficient pre-planning is required. A variety of problems will have to be chosen. The students can be given mock counseling exercises where they will interview and counsel. The students can pick up counseling skills by observing real interviews and counseling in an advocate’s office. This requires cooperation on the part of advocates and also the consent of the clients. Legal aid clinics and legal aid camps can offer great opportunity to law students in learning counseling techniques.

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Cold War and its Impact on World Politics International Politics Since World War II

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Introduction:

Cold war is one of the most discussed and important chapters in the international politics. Cold war is the story of the half-century since the end of the Second World War. Cold war was started and stayed for some decades. At that time world politics was revolved by it. Directly or indirectly. Cold war influenced on other every thing. If was and ideological conflict come said between capitalism and communism. It was a story of cries and conflicts and communism. It was a story of crises and conflicts on a global scale.

2nd word war:

In 1945, the United States and Soviet Union were allies, jointly triumphant in world war II. Which ended with total victory for soviet and American forces over adolf Hitler’s Nazi empire in Europe, within just a few years, however, war time allies became mortal enemies locked in a global straggle. Military, political. Economic ideological – to prevail in a new “Cold war”.

World system:

· Before the cold war: World system was multipolar system before the cold ware.

· At time of cold war- That time world system was Bipolar.

· Post cold war- This time world system was unipolar.

· At present: At present world system going to be multipolar.

Cold war:

The cold war was a period of tension and subdued hostility which gripped most of the world between the 1940’s and the early 1990’s. The primary actions in the cold war were the United States and its allies, countered by Russia and countries aligned with that nation. The cold war was to dominate international affairs for decades and many major crises occurred the Cuban missile crisis, Vietnam, Hungary, the Berlin wall and Korea crisis being just some for many the growth in weapons of mass destination was the most worrying issue and its impact on world politics.

 

Ideology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marxism USSR and alliance

· Autocrat: c/dictatorship

· Every body helps everybody

· Poor economic base

· Target: Establish class less society 

Capitalism USA and alliance

· Democratic

· Survival of the fittest

· Richest world power

· Target: Establish capitalism.

Cold war was basically ideological war.

 

 

 

 

 

 

 

 

Major crisis:

The Cuban missile crisis:

In October 1962 the USA learned the USSR had secretly installed missiles and missile bases in Cuba about 90 miles from Florida, president Kenedy demanded the USSR remove them. He set up a naval “quarantine” of Cuba. The USSR Offered to remove the missiles if USA world dismantle its military bases in turkey. The USA refused after a week of extreme tension khrusehev a grad to remove the missiles. This war the prominent issues about cold war.

Korean war:

One of the more significant impacts of containment was the out break of the Korean war in June 1950. Among other effects the Korean War galvanized NATO to develop a military structure.

Berlin blockade and airlift:

Stalin instituted the Berlin-blockade. One of the first major crises of the cold war preventing food, materials and supplies from arriving in West Berlin. The united states, Britain, France, Canada, Australia, Newzealand and Several other countries began the massive ‘Berlin airlift’ supplying west Berlin with food and other provisions.

Major military axis:

· NATO by U.S.A

· WARSAW by USSR

· Another new Alliance-NAM

This major military axis impact on cold war and world politics.

Impact on world politics:

The cold war was a war over establishing ideological hegemony in the international politics on world politics. World system going to be unipolar.

 

Capitalism

Rise Industrial base capitalism 

· Basically developing country 

Rise commercial base capitalism 

· Basically L.D.C country

Rise Financial base capitalism 

· Basically USA

Established capitalism by USA

 

 

 

 

 

 

 

 

 

 

End of cold war. Its impact on some country:

· U.S.S.R Broke in -1991.

· Most of the country change their economic ideology.

Some country like Cuba, North Korea, Venezuela only hold the socialism.

· Even Russia got the capitalism system.

· China is non a capitalist country.

 

Rising of hegemony:

· Iraq Attack by USA

· Afghan Attack by Nato

Major change in international relations :

The end of the cold war denotes a major change in international relations.

· Changes are made in soviet/Russian foreign policy with withdrawal from Afghanistan and Angola in the late 1980s as monitored by the U.N.

· Iraqi invasion of Kuwait in 1990 and the Multilateral response unites the former cold war adversaries.

· Glasnest and percstroika continued in Russia, as recognized in 1992-93.

· The former Yugoslavia disintegrated into independent states; civil war ensured in Bosnia leading to UN and NATO action.

Impact on Middle East:

Middle East is significant to cold war diplomacy for various reasons like political matters, their resources like oil and transportation routes. Both Arab and non Arab states of Middle East like Iran, Iraq. Syria, Cyprus Lebanon, Palestine, Afganistan, Saudi Arabia are involved in cold war.

Conclusion:

The Present cold war is both more intensive and more extensive than that of the past. The methods of fighting are more diverse and generally speaking, they are more injurious. Conflict covers the surface of the world, although it is usually more critical at certain spots than others. No nation can be indifferent to its battles and it trends for all in one way or another are implicated in conclusion. It can be said that the methods of cold war has been changed but cold war has never been declared. It still persists today. 

References:

· Hill, N.L. International Politics. New York: Harper and Row publishers. 1963, p.143.

· “The sources of soviet conduct”. Foreign Affairs XV: 575-576.

· The end of the cold war: Its meaning and implication-michael J.Hogan: 1953:21-25.

· “Special message to the congress on Greece and Turkey: The Truman Doctrine”. Truman library public papers, 12 march 1947.

· Patterson, T.S.: Soviet American, Confrontation: Post-war Reconstruction and the origins of the cold war. 1973.

· Fleming, D.S: The cold war and its origins.   

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Commercial Banking Operations with Special Reference to Foreign Exchange Business of Southeast Bank Limited

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Commercial Banking Operations with Special Reference to Foreign Exchange Business of Southeast Bank Limited

Chapter 01

1. Profile of the Southeast Bank

1.1 Historical Background:

Southeast Bank Limited is a scheduled Bank under private sector established under the ambit of bank Company Act, 1991 and Incorporated as a Public Limited Company under Companies Act, 1994 on March 12, 1995. The Bank started commercial banking operations effective from May 25, 1995 during this short span of time the Bank had been successful to position itself as a progressive and dynamic financial institution in the country. The Bank had been widely acclaimed by the business community, from small entrepreneur to large traders and industrial conglomerates, including the top rated corporate borrowers for forward-looking business outlook and innovative financing solutions Thus within this very short period of time it has been able to create an image for itself and has earned significant reputation in the country’s banking sector as a Bank with vision. Presently it has sixty three branches in operation.

The emergence of Southeast Bank Limited at the function of liberation of global economic activities, after URUGUAY ROUND has been an important event in the financial sector of Bangladesh. The experience of the prosperous economies of Asian Vision has been preciously the essence of the legend of bank’s success. Southeast Bank Limited has been awarded license by the Government of Bangladesh as a Scheduled Bank in the private sector in pursuance of the policy of liberalization of banking and financial services and facilities in Bangladesh.

Commercial Banks are one of the key contributors to die economy of Bangladesh. The allocate die capital resources to the proper development agencies. People and the government itself are very much dependent on the services provided by these banks in the financial market for the process of economic development to function properly. Commercial banks act as financial intermediaries by performing the function of mobilization the funds from one group and lending the same to another while making a reasonable amount of profit after meeting the cost of funding. Lending is said to be the clients. There are various types of loans and advances through which the bank exercises the function of Lending.

It is well recognized that there is an urgent need for better-qualified management and better-trained staff in the dynamic global financial market and Bangladesh is no excepting of this trend Banking sector. Though Bangladesh is facing challenges from different angles its prospect is bright in the future. Money and Banking is the center around which all-economic science clusters. So this report is carried out to find the problems faced by Southeast Bank and recommends some measures to overcome these problems for economic development of Bangladesh.

1.2 SEBL’s Vision:

The vision is to be a premier banking institution in Bangladesh and contribute significantly to the national economy.

1.3 SEBL’s mission:

· High quality financial services with state of the art technology.

· Fast & accurate customer service.

· Sustainable growth strategy.

· Follow ethical standards in business.

· Steady return on shareholders’ equity.

· Innovative banking at a competitive price.

· Attract and retain quality human resource.

· Commitment to corporate social responsibility.

1.4 SEBL’s Core Values:

· Integrity

· Respect

· Fairness

· Harmony

· Team spirit

· Courtesy

· Commitment

· Service Excellence

· Insight and Spirit

· Enthusiasm for Work

· Business Ethics

1.5 SEBL’s Core Strengths:

1.6 SEBL’s Client Commitments:

Our customer is focused on modern banking institution in Bangladesh. Our business motives center on the emerging needs of the market. Our commitments to the clients are as following:

1.7 SEBL’s corporate culture:

Southeast Bank is one of the most disciplined Banks with a distinctive corporate culture. The people of bank can see and understand events, activities, objects and situation in a distinctive way They mould their manners and etiquette, character individually to suit the purpose of the Bank and the needs of the customers who are of paramount importance to them The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture they belong has not been imposed; it has rather been achieved through their corporate culture.

1.8 Business Objectives of Southeast Bank:

1.9 Corporate Slogan: A bank with vision

Chapter 02

2. Foreign Exchange Operations of Southeast bank:

The foreign exchange has played a vital role in the last decade or so in guiding the purchase and Sales of goods, services and raw materials globally. Every country has certain natural advantages and disadvantages in producing certain commodities. As a result, we find that some countries need to import certain commodities while others need to export their surpluses .Foreign trade brings the fruits of the earth to the homes of the humblest among the countries .These transactions are the basis upon which international trade is made.

Foreign exchange, like foreign trade, is a part of economic science. It deals with the means and methods by which rights to wealth in one country’s currency are converted into those of another country. By the same token, it covers the methods used for conversion, the forms in which such conversions take place and the causes which render this conversion necessary. Foreign Exchange means exchange foreign currency between two countries. If we consider “Foreign Exchange” as a subject, then it means all kind of transactions related to foreign currency. In other words foreign exchange deals with foreign financial transactions.

2.1 Objective of the Study

(a) Primary objectives:

The primary objective of this report is to familiar with the working environment of present institutions. And also fulfill the requirement of BBA theoretical knowledge gained from the coursework of the BBA program in a specific field.

(b) Secondary Objectives:

2.2 Scope of the study:

The Report mainly focuses on the following areas:

· The kinds of foreign exchange facilities extended by Southeast Bank Limited.

· General procedures for getting those foreign exchange facilities.

· What kinds of standard documents are required for getting those international trade facilities

· How different kinds of projects are appraised and financed at southeast Bank Limited.

· Present scenario of recovery rate and classified transactions of Southeast Bank.

2.3 Limitation of the Study:

· All the time of preparing this report tried to gather every details of process but the major limitation is lack of adequate information,

· Lack of opportunity to visit more than one branch

· Sufficient records, publications were not available as per that requirement.

· Time constraint.

· Non-cooperative behavior of some officials of the bank.

· 3 months are very short time to prepare this.

2.4 Methodology of the study:

To make the Report more meaningful and presentable, two sources of data and information’s have been used widely.

Both primary and secondary data sources were used to generate the report.

(a) Primary Data sources:

(b) Secondary Data sources

And carefully developed, disguised queries, trend and growth rate analysis, ratio analysis, graphical presentation such as pie chart, bar, graphs have been used. Raw data collected from various sources required to be processed, edited for the purpose of the study.

For this study mainly secondary source of data had been relied on, because secondary data can be an immediate and cost effective means to gaining valuable insight into research issues, provided that the information comes from reliable and timely sources. Its sample was small and no representative. The research has been started with secondary data and preceded to primary data only when the secondary data sources have been exhausted or yield marginal returns. An analytical approach has been followed to conclude the decisions.

2.5 Performance Analysis and Findings:

The capital and reserve of the bank as on 31st December,2010 are append below:

2.5.1 Capital and reserves:

(a) Core Capital(tier-I Capital): Taka in million

Paid up capital 6930.84

Statutory reserve 3265.60

General reserve 337.65

Retained earnings 2078.87

Total capital 12612.96

(Supplementary capital was 17095.90)

Financial Stability (Taka in million)
Authorized Capital December, 2010 10,000.00
Paid – up Capital December, 2010 6930.84
Total Capital (Tier I + Tier II) December, 2010 17,095.90
Deposit December, 2010 107,729.58
Advances December, 2010 92,452.62
Investments December, 2010 18,327.65
Operating Profit December, 2010 6,754.94
* Initial public offering of shares of Tk. 150.00 million was completed in 1999

 

 

 

 

 

2.5.2 Resources and Capabilities:

SOUTHEAST Bank Limited is well prepared to and capable of meeting the demand for a broad range of banking services. It has got adequate resources, both human and physical, to provide the customers with the best possible services.

2.5.3 Physical and Technological Resources:

A great deal of investment for developing the physical resource base of the Bank has been made. The Bank has its presence in all the major industrial and commercial hubs of Bangladesh in order to cater to the needs of industry and trade. At present, there are sixty-three conveniently located branches throughout Bangladesh. There are most of the branches in the capital city of Dhaka, each and every division there are one more branches and almost every district there have at least one branch.

Major features of these branches are:

· Fully computerized accounts maintenance.

· Well decorated air conditioned facilities.

· A fully operational computer network which is currently being implemented. The work of Local Area Network (LAN) and Wide Area Network (WAN) installation having reliable and secured communication between the branches and the Head Office is in progress to facilitate any Branch Banking and ATM Services.

· Money counting machine for making cash transactions easy and prompt.

· Forty six out of sixty three branches are authorized dealers of foreign exchange. This facilitates speedy disposal of transaction of export and import trade.

Like any other financial intermediaries, SOUTHEAST Bank Limited is no exception in performing its core functions, mobilization of fund and utilizing such mobilized fund for profitable purposes.

2.5.4.Mobilization of fund:

The main sources of fund for the Bank are:

(i) Deposit, and

(ii) Borrowing

2.5.4.1 Deposit:

Deposit is the mainstay of the Bank’s sources of funds. Following usual practices, it collects deposit through:

a. Current Deposit

b. Savings Deposit

c. Term Deposit

2.5.4.2 Borrowing:

Apart from deposit, SOUTHEAST Bank Limited received funds from:

Bangladesh Bank

Asian Development Bank (ADB)

A German development bank. All of these funding sources are for relatively longer period. Receiving the credit lines from ADB has been a recognizing of the Bank’s highly satisfactory performance.

Five years performance at a glance: (2005-2009) (million in taka):

Particulars 2009 2008 2007 2006 2010
Authorized Capital 10,000.00 3,500.00 3,500.00 3,500.00 10,000.00
Paid up Capital 3,422.64 2,852.20 2,281.76 2,112.74 6930.84
Reserve Fund / Others 6,504.62 4,804.81 4,186.60 2,828.18 10,165.06
Deposit 96,669.05 68,714.67 55,474.05 46,056.18 107,729.58
Advance 77,497.57 60,281.26 48,164.60 41,147.28 32,551.09
Investment 21,350.23 12,299.61 8,462.86 6,265.55 18,327.65
Import Business 69,582.92 58,019.77 38,470.34 35,125.12 103,726.70
Export Business 46,724.47 42,178.60 28,771.36 25,874.61 58,158.06
Guarantee Business 11,916.74 15,078.99 9,008.32 8,656.80 22,781.19
Remittance Business 23,800.00 15,221.87 11,040.17 13,479.83 28,082.25
Total Income 13,702.25 10,250.13 8,670.47 6,766.11 16,071.33
Total Expenditure 9,087.79 7,237.55 5,754.27 4,703.45 9,316.39
Operating Profit 4,614.66 3,012.58 2,916.20 2,062.66 6,754.94
Net Profit after Tax and Provision 1,870.19 887.24 1,222.97 909.88 2,763.13
Fixed Assets 4,338.35 2,685.56 1,708.11 1,300.39 4463.08
Total Assets 112,676.98 81,181.53 64,370.69 53,706.12 131,943.48

Total Income:

Amount in Total Taka

Year 2002 2003 2004 2005 2006
Income 1936.52 2772.52 3043.49 4689.55 6766.11

Source: Annual Repot 2006

Total Expenditure:

Figure2: Total Expenditure

Amount Million in Taka

Year 2002 2003 2004 2005 2006
Expenditure 1.443.98 2,107.36 2,234.83 3,216.11 4.70345

Source: Annual Report 2006

Reserve and Funds:

Figure 3: Reserve fund /other

Amount Million in Taka

Year 2002 2003 2004 2005 2006
Reserve 571 .68 522.98 769.13 1880.47 2828.18

Deposit:

Figure 4: Deposit

Amount Million in Taka

Year 2002 2003 2004 2005 2006
Deposit 1534345 19618.82 27930.84 38258.15 46056.18

Source: Annual Repot 2006

 Total Capital:

Figure 5: Total Capital

Amount Million in Taka

Year 2002 2003 2004 2005 2006
Capital 970.96 1300.14 1649.44 2236.B4 4940.92

Source: Annual Report

Opening Profit:

Figure 6: Opening Profit

Amount Million in Taka

Year 2002 2003 2004 2005 2006
Capital 492.56 665.16 808.66 1473.44 2062.66

2.5.5 SWOT Analysis for SEBL:

SWOT is a short form that is used to describe the particular strengths, weakness, opportunities and threats that are strategies factors for a specific company. For the Southeast Bank Limited I found it as follows:

Strengths:

· Efficient management.

· Leading Retail loan providers

· Better employee relations.

· Better location of the branch.

· Better financial standing.

· Interesting consumer schemes.

· Quick delivery of foreign exchange.

· On line Banking

· ATM facility

· Simultaneously Islamic Banking

 Opportunities:

.Market leadership.

· Growth of the banking sector.

· Different consumer service scheme of the SEBL.

· Make the goodwill.

· Perform more quickly services.

· Go beyond the national boundaries.

· SMS banking.
Weakness:

· Inadequate work force.

· Conservative loan facility.

· Profit rate is less than others.

· Lack of sufficient own ATM booths

 Threats:

· Political instability.

· Intense competition.

· Government rules and regulation.

· Economical variation.

· Policy of competitive banks.

Terms used in Foreign Exchange Operations:

(a) Activities of Foreign Exchange:

There are three kinds of foreign exchange transactions:

· Import

· Export

· Remittance

Under the import policy of Bangladesh the Importer has got the valid Import Registration Certificate (IRC) from the Chief Controller of Import & Export (CCI&E).

(i) Letter of credit (L/C)

Letter of credit means any arrangement whereby a Bank (the issuing Bank) is committed (on behalf of the buyer/applicant) to pay certain amount at the seller’s disposal under some agreed conditions.

(b) Types of documentary credit:

Documentary credit may be of three types

· Recoverable credit

· Irrecoverable credit

· Add confirmed credit

(i) Recoverable credit:

This type of credit can be cancelled or amended at any time by the issuing Bank without prior notice to the seller. It is not in use.

(ii) Irrecoverable credit:

This type of credit can’t be cancelled or amended by the issuing Bank without agreement of parties concerned thereto. All the credits issued in our country are of recoverable nature.

(iii) Add confirmed credit:

When a third Bank provides guarantee to the beneficiary to make payment, if issuing Bank fail to make payment, the L/C is called confirmed L/C. In case of a conformed L/C a third Bank adds their confirmation to the beneficiary, to make payment, in addition to that of issuing Bank. Confirmed L/C gives the beneficiary a double assurance of payment.

(iv) Special documentary letters of credit:

The following five major steps are involved in the operation of a documentary letter of credit:

· Opening

· Advising

· Amendment

· Presentation

· Settlement

(c) Import Financing:

The post import finance extends the import credit in the following forms:

· PAD (Payment against documents)

· LTR (Loan against trust receipt)

· LIM (Loan against imported merchandise

Under the export policy of Bangladesh, the exporter has to get the valid export registration certificate (ERC) from chief controller of import & export (CCI&E). The ERC is required to renew every year. The ERC number is to be incorporated on export Form & other paper connected with exports.

(i) Receiving the Letter of Credit:

After getting contract for sale, exporter should ask the buyer for L/C clearly starting terms & condition of export & payment.

(ii) Procuring the materials:

After knowing that the L/C has opened in his favor, the next step for the exporter is to set about the task of procuring or manufacturing the contracted merchandise. If the exporter has to procure the raw materials from another supplier (local or abroad) he has to open Back-to-Back L/C.

(iii) Back-to-Back L/C:

Back-to-Back L/C is one type of L/C, which is opened against lien on a valid export L/C. It is opened for inland & abroad as well. Bank will supply the following papers/documents for opening a Back-to-Back L/C.

· L/C application form

· LCA form

· IMP form

· Charge document papers

The above papers must be completed, filled & signed by the party there to. The party will submit the entire filled document along with application in printed form of the designated Bank which is also an agreement between application & the Bank.

(d) Export Financing:

An export is who exports the goods to another customer whether in domestic country or in abroad. In exporting the stipulated goods he may require financing. So export financing may be required at two stages.

· Pre shipment credit

· Post shipment credit

(i) Pre shipment credit:

Pre shipment credit is the credit, which is given to finance the export activities of an exporter for the actual shipment of goods. The purpose of each credit is to meet the working capital needs from the procuring of raw materials to the transportation of goods for the export the foreign country. Before sanctioning of that credit the Bank takes into consideration the credit worthiness, export performance of the exporter’s together worthiness all other information required for sanctioning the credit in accordance with the existing rules & regulations.

(ii) Post shipment credit:

There is a time gap between export of the goods and realization of the proceeds. So exporter may require finance in that period to continue his business. So Bank may finance against export documents ensuring the following:

· Export documents comply with the credit terms

· Party’s past performance is satisfactory

· Any other security in case of exporting under contract

Foreign remittance means remittance of foreign currencies from one place/person to another place/person. In broad sense, foreign remittance includes all sale and purchase of foreign currencies on account of Import Export, Travel and other purposes. However, especially foreign remittance means sale & purpose of foreign currencies for the purposes other than export and import. SOUTHEAST Bank Limited performs the remittance function with different countries. It maintains the foreign remittance in the following form:

· Foreign Demand Draft

· Inward Remittance

· Outward Remittance

.Foreign Demand Draft (FDD):

A foreign demand draft is a negotiable instrument issued by a Bank drawn on other Bank with another country the instruction to pay a certain amount to the beneficiary on demand. Remittance through demand draft may be inward or outward.

.Inward Remittance:

Inward remittance refers to the extent where the bank makes payment to the client against foreign demand draft. Bank will make payment to the client by verifying the, test number, and signature of the authorized officer.

.Outward Remittance:

It refers to the extent where by the bank issues foreign demand draft. The bank charges TK.300 per Demand Draft.

Two forms are used for Outward Remittance of foreign currency such as:

IMP Form: All outward remittance on account of Imports is done by from IMP.

TM Form: For all other outward remittance from TM is used.

.Western Union Money Transfer Services:

Western Union, a global leader in money transfer service, helps to send money to loved ones quickly and reliably with convenience and control through more than 245,000 Western Union Agent locations in over 200 countries and territories. Western Union money transfer service is ideal for transferring money virtually at any time, anywhere, providing a high level of security, flexibility and reach with the fastest, easiest money transfer solutions. With the signing of the Representation Agreement between Western Union Financial Services, Inc., U.S.A. and Southeast Bank Ltd., Bangladeshi Wage Earners abroad can now send their hard – earned money through Western Union and their families and friends can receive the money in minutes by visiting any of the 53 branches and 10 SME locations of Southeast Bank Ltd. all over Bangladesh. The Beneficiary does not have to pay any fee to receive the money transfer.

With Western Union and Southeast Bank Ltd., money transfer has never been so easy; it is a 3 step process:

Money transfers can be received from 10:00 A.M. to 4:00 PM on Sunday through Thursday and from 10:00 A.M. to 12:00 PM on Saturday in 17 Authorized Dealer branches.

From the above discussion we can detail the term foreign exchange operations:

2.5.6 Foreign Trade Finance:

So far the bank has established correspondence relationships with as many as 22 foreign banks in order to facilitate foreign trade. The Bank handled total export business of Taka 46,724.47 million and import business of Taka 69582.92 million in 2009.

The Bank’s export and import business grew by 8.61 percent and 19.45 percent respectively. Major items of exports were ready made knit & woven garments, sweater, jute products, leather and leather goods, handicrafts etc. Items of import included mainly industrial raw materials, garments accessories, and capital machinery, raw cotton, electronic consumer goods, chemicals, tires and tubes, reconditioned vehicles, bicycle spare parts, food items such as rice, wheat, garlic, onion, sugar, chilly and other essential commodities.

In case of export business finance is perceived as one of the important elements. It is linked to nearly all the stages of conversion cycle- procurement of raw materials, processing of goods, packing storage, transportation to the port, shipment to the buyer, assembling of shipping documents & finally, collection of payments. The term Export Finance should therefore mean moneys needed by an exporting farm at each stage of the conversion cycles.

2.5.6.1 Export financing sectors of SOUHEAST Bank Limited:

Export financing can play a vital role in the development process of Bangladesh. With earning on export we can meet our import bills. The export trade is always encouraged because the major portion of foreign exchange earning is derived from export. Because of shortage of adequate capital exporters have to come in contact with commercial bank and financial institution to get finance from them. SOUTHEAST bank Limited as a state-owned scheduled bank provides certain facilities to the exporters to boost up export earnings.

The traditional & non-traditional sectors in which SOUTHEAST Bank Limited provides export-financing facilities are as follows:

· Ready Made Garments in all sorts.

· Jute manufactures

· Jute – raw

· Fish & Prawns.

· Hides, Skins & Leather.

· Tea

· Fertilizer etc.

(a) Export financing system of SOUTHEAST Bank Limited:

Bangladesh as a developing country depends mainly on foreign exchange earning for its development activities. The major portion of foreign exchange earnings is derived from export obviously, to boost export, government provide certain incentives to the exporters namely:

· Export Financing

· Development Financing

· Export Credit Guarantee Scheme

· Export performance benefits

· Duty draw back

· Rebate on duty & tax

· Income tax rebate

· Insurance premium rebate

· Conditional cash subsidy to Garments Industry , vegetables, handicrafts etc

(b) Pre-Shipment & Post-Shipment:

In Southeast Bank Limited export finance is required by the exports at two stages namely

Pre-shipment & Post-shipment stages:

(i) Pre-shipment: It is required to purchase of raw materials, to meet cost of production, procurement of exportable goods, packing, transport, payment of insurance premium, inspection fee, freight charges, ware housing etc.

(ii) Post-shipment: It is required by the exporters after actual shipment of goods in order to bridge the period between shipment of the goods and receipts of sales proceeds from abroad.

An exporter owns resource may not be adequate to meet all such expenses. So he / she have to come in contact with commercial bank and financial institutions to get finance from them. As a state owned scheduled bank Southeast Bank Limited provides credits to exporters at a consideration rate of interest as an export promotion measure as per government directive.

(c) Export Form:

The customer, now issued by the authorized dealers, must declare all export of which the requirement of declaration of exchange control manual of Bangladesh Bank applies on the Export Forms.

Disposal of Export Forms:

Original: From custom authority to Bangladesh Bank (ECD) after shipment goods.

Duplicate From negotiating bank to Bangladesh Bank after negotiation.

Triplicate From negotiating bank to Bangladesh Bank after realization of the proceeds of the export bill.

Quadruplicate Retained by the negotiating bank as office copy.

(d) Export Development Fund:

The main objective of creating an export development fund at the Bangladesh Bank is to assure a continued availability of foreign exchange to meet the import requirement of non-traditional manufactured items. This facility is available to the non-traditional exporters, particularly newer exporters, exporters diversify into higher value export and exporters diversify into new markets. An exporter identified above is eligible on the basis of the conditionally stated below: –

· One must be an exporter of non-traditional manufacturing items.

· The loan should be utilized in the case of importing raw materials for manufacturing the exportable products.

· The exporter must have an export letter of credit.

· One must create a back-to-back for importing raw materials.

· The period of loan is 180 days.

(i) Scrutiny of Export Document:

After the shipment of goods the exporters submit export documents to authorized dealer for negotiation of the same. As bankers deal with documents only, not with commodity they are required to be very much careful about the genuineness and correctness of the documents evidencing shipment of the respective commodities. The bankers are to ascertain that the documents are strictly as per the terms of letter of credit. Before negotiation of the export bill, the bankers are to scrutinize and examine each & every document with great care. Negligence in the part of the bankers may result in non-repatriation or delay in realization of proceeds as incorrect documents may put the importers abroad into unnecessary troubles. The scrutiny procedure is as follows:

(ii) Scrutiny of Draft or Draft of Exchange:

· The draft should be drawn by the party indicated as the beneficiary of the credit i.e. the exporter; drawer must be in accordance with the terms of the credit.

· The tenor and amount of the draft be in conformity with the credit terms.

· The bill of exchange should be properly stamped if necessary with the requisite value and the cost must be recovered from the drawers unless it is provided otherwise in the letter of credit.

· The draft or bill must bear the correct date and must be drawn or endorsed to the order of the bank.

· The drawer’s signature must be verified.

(iii) Scrutiny of invoice:

. The physical description of the goods: price, quantity, quality, markings etc. in the invoice must correspond with the specifications in the credit.

. If the credit stipulates a consular invoice, the requisite invoice should be furnished.

. All copies must be signed and certified as correct shipper.

. If the credit stipulate for any other particulars to be stated in the invoice these must complied with. It should not include charges such as postage; cable etc. unless specifically authorized under the credit.

(iv) Scrutiny of shipping bill:

· The bill of lading should be a full set clean on board ocean bill of lading, unless the credit stipulates otherwise. ‘Received for shipment’ bills of lading must not be accepted unless permitted by the credit.

· It must agree with the invoice as regards quantity and description of goods as well as in respect of ports of shipment and destination.

· The bill of lading must also indicate where it is ‘freight paid’ (C & F, GIF) or freight payable at destination (FOB transaction).

· Transshipment and port shipment clauses in the shipping bill should be in accordance with credit terms and the provisions of the uniform custom and practice.

· Credit frequently stipulates for shipment not letter than a specified date. Bill of lading must be examined to ensure that these are dated not later than the date mentioned.

· Must be properly signed by or behalf of the carries, must be properly stamped

and must be endorsed, expect when the relative credit stipulate for bill of lading to order of a named firm.

· Dock shipment not permitted unless specifically authorized and covers by insurance.

· Bill of lading must not be a stale one.

(v) Scrutiny of Insurance:

Where insurance is to be effected by the beneficiary for GIF consignment, the policy accompanying the documents should be examined to ensure:

· That the insurance covers the merchandise for the value stipulated in the credit.

· That the document is of the class stipulated in the credit.

· That the insurance documents describe the merchandise covered and mention the name of the carrying steamer. In case where ‘on board’ bill of lading are not presented the following clause or words of similar indent must follow the name of the steamer’ or ‘following steamer’.

· That all risk stipulate in the credit is properly covered in the insurance documents. When the credit stipulates that ‘all risk’ are be covered, it is not sufficient that various risks are mentioned but a clause to the credit that ‘all risk’ are covered, is required.

· That the policy is in the name of the bank and the importer.

· That the party designed in the documents to perform such act properly countersigns the insurance document.

· That the insurance document complies with the conditions of the letter of credit is in negotiable form that it is endorsed by the party to when the loss payable, unless the credit stipulates that the insurance must be issued ‘loss payable to a specified party in the country of destination’.

· That the date appearing on the insurance document is not later than the date appearing on the bill of lading.

· That the insurance document covers transshipment when the bill of lading indicates that transshipment would take place.

· That the insurance claims are payable at the port of destination, that insurance certificate / policy acknowledges the payment of the premium.

(vi) Scrutiny of other documents:

The other documents such as certificate of origin, packing list, weight / measurement certificate, inspection certificate, survey report, quality control certificate etc. should be issued or signed by the proper authorized and description of ‘export – order’ given in these documents not be in contradiction to the credit terms.

(e) Risk of Export Financing:

In the trade – there are so many risk factors involved. In banking sector – the bank face risk basically from loans & advances and foreign exchange. In this section I discuss the risk of Export Financing While there are many advantages to exporting it is not without risk. In deed there are often factors present in international market, which make foreign exchange substantially more risky than domestic ones, including the credit risk of non-payment or non-acceptance of the merchandise by the buyer. For international sales, these risks are far more pronounced than they are domestically. For these reasons Southeast Bank Ltd also accompanied with elements of uncertainty some which are as follows:

(i) Commercial risk:

(ii) Political risk:

(iii) Informational risk:

(iv) Pre-shipment export credit risk:

All over the world there is no country, which can meet its requirements from its own sources. Some imports raw materials, some finished goods & some food products or other commodities. As it is export & import are invariably conducted through commercial banks. BASIC Bank Limited is engaged to extend the facilities to the importers.

After getting the completed registration, application for opening letter of credit is made through a bank where applicant has a current account. An importer is required to fill up import application form & letter of credit authorization form (LCAF) & importer has to deposit margin money to the bank from 5% to 40% of the import value, depending on the credibility of the importer. After the letter of credit is established the exporter after executing the export, submits the negotiable document through its bankers and in terms of exporter’s bank submit the documents to the corresponding bank of the importer’s bank in the country. If the documents are found correctly fulfilling all the terms & conditions stipulated in the letter of credit the corresponding bank of import’s bank will realize payment that will be debited to the importer’s account. In banking term this is known as PAD and the importer has to pay the PAD amount in 30 days with the bank interest rate. After 30 days when importer is unable to pay the PAD amount, he can take documents but the PAD turns into Loan against Trust Receipts (LTR)

2.5.6.2 Import financing sectors of SOUTHEAST Bank Ltd:

SOUTHEAST Bank Limited is one of the financers of import business in our country. In extend credit, grant and other facilities SOUTHEAST Bank Ltd finance to the following sectors:

· Machinery & transport equipment.

· Petroleum & petroleum products

· Textile, yarn, fabrics, article & related products

· Chemicals

· Bicycle parts

· Iron & steels

· Cereal & cereal preparations

· Dairy products & eggs

· Other including loans & grants.

(a) Import financing system of SOUTHEAST Bank Limited:

. Registration of import

. Income tax registration certificate

· Partnership deed in the cases of partnership concern

· Certificate of registration with the register of joint stock companies

· Articles & Memorandum of association in the case of limited companies.

· Nationality certificate & Bank certificate

· Ownership documents in place of business

· Trade license from the relevant authority.

· Survey clearance from the relevant authority

· Other documents prescribed in the import policy.

(b) Import Registration Certificate (IRC):

In case of import, IRC is the first necessity for the importer. The IRC is not required for import goods by government departments, Local authorities, statutory bodies, recognized educational institutes, Hospitals. In addition, registration is not required for import goods, which do not involved remittance of foreign exchange like -medicine, reading materials etc. can be imported without IRC by the users within monetary limit

(c) Import Procedure:

Imports & Exports (control) Act 1950 regulates the import & export trade of the country. There are a number of formalities, which on importer has to fulfill before import goods. The importer follows the following steps:

· The buyer & the seller conclude a sales contract provided for payment by documentary credit.

· The buyer instructs his / her bank i.e. issuing bank to issue a credit in favor of the seller i.e. beneficiary.

· The issuing bank asks another bank usually in the country of the seller, the advice or confirms the credit.

· The advising or confirming bank informs the seller that the credit has been issued.

· As soon as the seller receives the credit and is satisfied that he / she can meet its terms & conditions,he/she are in a position to load the goods & dispatch them.

· The seller then sends the documents evidencing the shipment to the bank where the credit is available to the nominated bank. This may be the issuing bank, or the confirming bank, bank named in the credit as the paying,accepting or negotiating bank.

· The bank if other than the issuing bank, sends the documents to the issuing bank.

· The issuing bank checks the documents and if they meet the credit requirement either

. Affect payment in accordance with the terms of the credit either to the seller if s/he has sent the documents directly to the issuing bank or to the bank that has made funds available to him/her in anticipation.

.Reimburses in the pre-agreed manner the confirming bank or any bank that has paid, accepted or negotiated under the credit.

· The bank checks the documents against the credit. If the documents meet the requirements of the credit, the bank then pay, accept or negotiate accordingly to terms of credit. In case of a credit available by negotiation, issuing bank or the confirming bank will negotiate with recourse; another bank including the advising bank has not confirmed the credit, which will negotiates with recourse.

· When the documents have been checked by the issuing bank and found to meet the credit requirements, they are released to the buyer upon payment of the amount due or upon other terms agreed between importer & the issuing bank.

· The buyer sends transport documents to the carrier who will then proceed to deliver the goods.

(d) Import Scrutiny:

The import bills consist of the following documents & the order of their scrutiny should be as below:

· Forwarding schedule of negotiating bank.

· Bill of exchange.

· Commercial Invoice (Before shipment).

· Bill of lading

· Insurance cover note

· Certificate of origin

· Packing List

· PSI Report (CRF- Clean Report of findings)

· Pro-forma Invoice (After shipment)

· Any other documents.

(e) Risk of Import Financing:

In the trade there are so many risk factors involved. In banking sector the bank face risk basically from loans & advances and foreign exchange. In this section I discuss the risk of import financing. In international trade transaction takes place between buyers and sellers living in different socio-economic and political environments. There may be abrupt changes in socio-economic or political situation in the buyer’s country or in the seller’s country. Even the exchange value of currencies of the two countries had gone so much down that they were not acceptable or exchangeable in international market. More over the importer or the exporter may not be able to comply with the terms of credit for some reasons. Therefore, risk inherent in all credits. The bank has to consider following risk in financing the import procedure:-

(i) Commercial risk:

I. Violation of the requirement of letter of credit authorization or letter of credit:

Shipment effected before authentication of the letter of credit authorization from by the nominated bank and registration with the Bangladesh bank, whenever necessary and before opening of letter of credit or after expiry of the validity of the letter of credit authorization or letter of credit shall be treated as import in contravention of this order. Letter of credit authorization obtained in the basis of false or incorrect particulars or by adopting any fraudulent means shall be treated as invalid and void.

II. Import against indent and Performa invoice: Letter of credit may be opened against and indent issued by a local registered indenter or against a Performa invoice issued by a foreign manufacturer or seller or supplier.

(ii) Political risk:

In addition to the credit and commercial risk we have outlined, international transaction such as import financing take on the whole new dimensions of political risk. They are as follows:

· Sudden outbreak of war, revolution, coups or civil disobedience in the seller’s country.

· Imposition of restriction on remittance.

· Imposition of trade embargo or blockade.

· New import restriction on the buyer or cancellation of the license.

· Additional handing transport or issuance charges due to interruption or diversion of voyage, which can’t be recovered from the buyer.

(iii) Informational risk:

There may be informational risk inherent in import financing on the importer because of shortage of required information. So it is much harder to judge the financial strength, reputation and integrity of a seller or buyer who is thousands of miles away and belongs to a different culture.

(f) Documents Used in Foreign Exchange:

a) Letter of Credit (L/C):

It is the most important and commonly used in connection with foreign trade.

Letter of Credit is an undertaking by a banker of the importer to the exporter, to the effect that the amount of the L/C will be duly paid. The banker on behalf of the importer issues the L/C in favor of the exporter (beneficiary) and forwards the same to the exporter to the effect that the bill drawn by him shall be duly accepted and paid. It creates confidence in the mind of the exporter so far as payment of the bill is concerned. It is also facilitate the exporter to get the benefit of discounting the bill before the date if maturity.

b) Bill of exchange:

A Bill of Exchange

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COMMUNITY EXCHANGE SYSTEM

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The Community Exchange System (CES) is a community-based exchange system that provides the means for communities to trade and exchange their goods and services, both locally and remotely. It is an internet-based global trading network that allows participants to buy and sell goods and services without using a national currency. It could also be described as a global complementary trading network that operates without money as it is commonly understood. It may be described as a type of local exchange trading system (LETS) network based on free software. It also provides communities with a network that permits them to trade with other communities, wherever they are in the world. While it can be used as an alternative to traditional currencies such as the Australian dollar or Euro or South African rand, the Community Exchange System is a complementary currency in the sense that it functions alongside established currencies. CES exchanges compile and distribute a directory of goods and services offered by the users registered with them, as well as a list of their ‘wants’ or requirements.

The idea for an internet-based Community Exchange System arose in the 1990s, when a LETS system operating in Johannesburg, South Africa, started failing. The CES name was coined by an online web service that started in 2003 in Cape Town, South Africa, as the Cape Town Talent Exchange (CTTE). From there it spread to 99 countries, with the biggest take-up in Australia, where CES Australia was founded in 2011. This original CES takes the idea of LETS and similar systems a step further by providing the means for inter-community trading; it is a global network of communities using non-monetary exchange systems. The idea that such a currency is necessary before any trading can take place is an ancient one and increasingly irrelevant in this day and age of computers and the Internet. The main object of the CES is to facilitate trade and exchange by providing a range of non-monetary exchange tools.

The CES is international in scope. It is the first and only global complementary exchange system. It does not have printed money or coins but uses computer technology to serve as an “online money and banking system” or alternative exchange system and as a marketplace. It is community-based but provides the means for its users to exchange goods and services both locally and remotely without using national currencies. Community cooperation, using internally-driven, asset-based development is the key to solving the myriad of problems faced by communities not only in the third world but everywhere. It is an advance from an arrangement in which either one good or service is exchanged for another good or service, or commonly called barter since it uses a digital unit of value (not the same as digital currency). This helps to build community by connecting people and providing a local support network.

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Company Overview On NOKIA

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View With Charts And Images

Fredrik Idestam, founder of Nokia. Leo Mechelin

The Nokia House, Nokia’s head office located by the Gulf of Finland in Keilaniemi, Espoo, was constructed between 1995 and 1997. It is the workplace of more than 1,000 Nokia employees.

Type : Public – Oyj (OMX: NOK1V,NYSE: NOK, FWB:NOA3)

Founded: Tampere, Finland (1865) incorporated in Nokia (1871)

Founder Fredrik Idestam

Headquarters Espoo, Finland

Area served Worldwide

Industry Telecommunications

Internet

Computer software

About the company

Nokia Corporation (NYSE: NOK) is one of the world’s largest telecommunications equipment manufacturers. It has since established a leading brand presence in many local markets, and business has expanded considerably in all areas to support customer needs and the growth of the telecommunications industry. Nokia also produces mobile phone infrastructure and other telecommunications equipment for applications such as traditional voice telephony, ISDN, broadband access, professional mobile radio, voice over IP, wireless LAN and a line of satellite receivers. Nokia provides mobile communication equipment for every major market and protocol, including GSM, CDMA, and WCDMA. Nokia is engaged in the manufacturing of mobile devices and in converging Internet and communications industries, with 128,445 employees in 120 countries, sales in more than 150 countries and global annual revenue of EUR 50.7 billion and operating profit of 5.0 billion as of 2008.It is the world’s largest manufacturer of mobile telephones: its global device market share was about 37% in Q1 2009, down from 39% in Q1 2008 and unchanged from Q4 2008.Nokia produces mobile devices for every major market segment and protocol, including, CDMA, and W-CDMA (UMTS). Nokia offers Internet services that enable people to experience music, maps, media, messaging and games. Nokia’s subsidiary Nokia Siemens Networks produces telecommunications network equipment, solutions and services. The company is also engaged in providing digital map information through its wholly-owned subsidiary Navteq.

Nokia has sites for research and development, manufacture and sales in many countries throughout the world. As of December 2008, Nokia had R&D presence in 16 countries and employed 39,350 people in research and development, representing approximately 31% of the group’s total workforce. The Nokia Research Center, founded in 1986, is Nokia’s industrial research unit consisting of about 500 researchers, engineers and scientists. It has sites in seven countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United States. Besides its research centers, in 2001 Nokia founded (and owns) INdT – Nokia Institute of Technology, a R&D institute located in Brazil. Nokia operates a total of 15 manufacturing facilities located at Espoo, Oulu and Sal, Finland;Manaus, Brazil; Beijing, Dongguan and Suzhou, China; Farnborough, England; Komárom, Hungary; Chennai, India;Reynosa, Mexico; Jucu, Romania and Masan, South Korea. Nokia’s Design Department remains in Salo, Finland.

Nokia’s history starts in 1865 when mining engineer Fredrik Idestam established a groundwood pulp million the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland, and started manufacturing paper.In 1868, Idestam built a second mill near the town of Nokia, fifteen kilometers (nine miles) west of Tampere by the Nokianvirta river, which had better resources for hydropower production. In 1871, Idestam, with the help of his close friend statesman Leo Mechelin, renamed and transformed his firm into a share company, thereby founding the Nokia Company, the name it is still known by today.

The name of the town, Nokia, originated from the river which flowed through the town. The river itself, Nokianvirta, was named after the archaic Finnish word originally meaning a small, dark-furred animal that lived on the banks of the Nokianvirta river. In modern Finnish, noki means soot and nokia is its inflected plural, although this form of the word is rarely if ever used. The old word, nois (pl. nokia) or nokinäätä (“soot marten”), meant sable. After sable was hunted to extinction in Finland, the word was applied to any dark-furred animal of the genus Martes, such as the pine marten, which are found in the area to this day.

Mission:

Vision and strategy

Our promise is to help people feel close to what is important to them

Nokia is a consumer led company. There is a progressive and continuous increase in consumer involvement with technology and communications globally. People are broadening their modes of communication to include the web and, social networks are becoming central to how people communicate.

People want to be truly connected, independent of time and place, in a way that is very personal to them. And, Nokia’s promise is to connect people in new and better ways.

Nokia’s strategy is to build trusted consumer relationships by offering compelling and valued consumer solutions that combine beautiful devices with context enriched services.

Objectives:

• To set up a new brand image for Nokia’s mobile phone: Creative and Trendy

• To meet the needs of the niche: Young and Rich customers who are pursuing stylish lifestyle

• To maximize current profit

• To lead the mobile phone market with innovative and modern new products

Group Executive Board

Olli-Pekka Kallasvuo

President and CEO of Nokia Corporation

Esko Aho

Executive Vice President, Corporate Relations and Responsibility

Robert Andersson

Executive Vice President, Devices Finance, Strategy and Sourcing

Simon Beresford-Wylie

Chief Executive Officer, Nokia Siemens Networks

Timo Ihamuotila

Executive Vice President, Sales

Hallstein Moerk

Executive Vice President, Human Resources

Richard A. Simonson

Executive Vice President, Chief Financial Officer

Anssi Vanjoki

Executive Vice President, Markets

Dr. Kai Öistämö

Executive Vice President, Devices

Production units

Networks technology Mobile devices and technology

China Brazil

Finland China

Finland

Germany Great Britain

India Hungary

India

Mexico

Romania

South Korea

Nokia’s Financial Conditions:

The History of

How it all began – the birth of Nokia

n Nokia started by making paper – the original communications technology

n The history of Nokia goes back to 1865. That was when Fredrik Idestam built a wood pulp mill on the banks of the Tammerkoski rapids, in southern Finland. A few years later, he built a second mill by the Nokianvirta River – the place that gave Nokia its name.

n A mining engineer by trade, Idestam brought a new, cheaper paper manufacturing process to Finland from Germany.

n Nokia Ab added electricity generation to its business activities in 1902

Who was Fredrik Idestam?

A mining engineer by trade, Idestam brought a new, cheaper paper manufacturing process to Finland from Germany. It was a great success. Idestam’s invention won a bronze medal at the Paris World Exposition in 1867, and he is considered to the father of Finland’s paper industry.

1898: Finnish Rubber Works founded

Arvid Wickström founds Finnish Rubber Works, which will later become Nokia’s rubber business.

1912: Finnish Cable Works founded

Eduard Polón starts Finnish Cable Works, the foundation of Nokia’s cable and electronics businesse India, Mexico, Romania, South Korea.

1960: Firstin electronics department

Cable Works establishes its first electronics department, selling and operating computers.

1962: First in-house electrical device

The Cable Works electronics department produces its first in-house electrical device – a pulse analyzer for nuclear power plants.

1967: The merger

Nokia Ab, Finnish Rubber Works and Finnish Cable works formally merge to create Nokia Corporation.

From paper mill to mobile phones

The Move to mobile 1968-1991

The newly formed Nokia Corporation was ideally positioned for a pioneering role in the early evolution of mobile communications. As European telecommunications markets were deregulated and mobile networks became global, Nokia led the way with some iconic products…

1981: The mobile era begins

Nordic Mobile Telephone (NMT), the first international mobile phone network, is built.

1982: Nokia makes its first digital telephone switch

The Nokia DX200, the company’s first digital telephone switch, goes into operation.

1984: Mobira Talkman launched

Nokia launches the Mobira Talkman portable phone.

1994: Nokia Tune is launched

Nokia launches the 2100, the first phone to feature the Nokia Tune.

1994: World’s first satellite call

The world’s first satellite call is made, using a Nokia GSM handset.

1997: Snake – a classic mobile game

The Nokia 6110 is the first phone to feature Nokia’s Snake game.

1998: Nokia leads the world

Nokia becomes the world leader in mobile phones

Nokia’s story continues

With 3G, mobile multiplayer gaming, multimedia devices…

2002: First 3G phone

Nokia launches its first 3G phone, the Nokia 6650.

2003: Nokia launches the N-Gage

Mobile gaming goes multiplayer with the N-Gage.

2005: The Nokia Nseries is born

Nokia introduces the next generation of multimedia devices, the Nokia Nseries.

2005: The billionth Nokia phone is sold

Nokia sells its billionth phone – a Nokia 1100 – in Nigeria. Global mobile phone subscriptions pass 2 billion.

2006: A new President and CEO –Nokia today

Olli-Pekka Kallasvuo becomes Nokia’s President and CEO; Jorma Ollila becomes Chairman of Nokia’s board. Nokia and Siemens announce plans for Nokia Siemens Networks.

2007

Nokia recognized as 5th most valued brand in the world. Nokia Siemens Networks commences operations. Nokia launches Ovi, its new internet services brand.

2008

Nokia’s three mobile device business groups and the supporting horizontal groups are replaced by an integrated business segment, Devices & Services.

Number of employees

Sales

WHY NOKIA?

The largest market share ever gained by Nokia is in Peshawar 88% more than allover Middle East and Africa

? Largely available

? Greater network coverage

? Easily repaired

? Changeable body casing

? Updating software

? Use of Carl Zeiss lens

? Only dealing in mobiles

? Nokia is world third richest company”

MISSION STATEMENT

Everyone has a need to communicate and share. Nokia helps people to fulfill this need and we help people feel close to what matters to them. We focus on providing consumers with very human technology – technology that is intuitive, a joy to use, and beautiful. We are living in an era where connectivity is becoming truly ubiquitous. The communications industry continues to change and the internet is at the center of this transformation. Today, the internet is Nokia’s quest. Strategy: Nokia’s strategy relies on growing, transforming, and building the Nokia business to ensure its future success.

BRAND PERSONALITY

Nokia focused on building customer relationship and trust. Building friendship and trust is the heart of Nokia brand. Logo shows their brand personality.

Marketing principles of NOKIA

There are many priorities within a business, but in a marketing orientated company like Nokia, many of the following principles will be high on the agenda:

1. Customer satisfaction: Market research must be used to find out whether customers’ expectations are being met by current products or services.

2. Customer perception: this is based on the images consumers have

of the organization and its products, this can be based on; value

for money, product quality, fashion and product reliability.

3. Customer needs and expectations: This is anticipating future

trends and forecasting for future sales. This is vital to any organization if they wish to keep their entire current market share and develop more.

4. Generating income or profit: This principle clearly states that the need of the organization is to be profitable enough to generate income for growth and to satisfy stakeholders in the business. Although satisfying the customer is a big part of a companies plans they also need to take into account their own needs, such as:

5. Making satisfactory progress: Organizations need to make sure that their product is developing along with the market, if a product is developing well, then income should increase, if not then the marketing strategy should be revised.

6. Be aware of the environment: An organization should always know what is happening within their designated market, if it is changing, saturation, technological advances, slowing down or rapidly growing, being up to date on this is essential for companies to survive.

Marketing Mix of Nokia

Products

<href=”#Mobile_phones> Mobile phones

<href=”#Classic_series_.E2.80.93_The_Mobira_series> Classic series – The Mobira series

<href=”#Original_series>Original series

ü <href=”#1000.E2.80.939000_series> 1000–9000 series

ü <href=”#Nokia_2000_series_.E2.80.93_Basic_series>Nokia 2000 series – Basic series

ü <href=”#Nokia_3000_series_.E2.80.93_Expression_series> Nokia 3000 series – Expression series

ü <href=”#Nokia_5000_series_.E2.80.93_Active_series>Nokia 5000 series – Active series

ü <href=”#Nokia_6000_series_.E2.80.93_Classic_Business_series>Nokia 6000 series – Classic Business series

ü <href=”#Nokia_7000_series_.E2.80.93_Fashion_and_Experimental_series>Nokia 7000 series – Fashion and Experimental series

ü <href=”#Nokia_8000_series_.E2.80.93_Premium_series>Nokia 8000 series – Premium series

ü <href=”#Nokia_9000_series_.E2.80.93_Communicator_series_.28discontinued.29> Nokia 9000 series – Communicator series (discontinued)

<href=”#Special_function_phones> Special function phones

ü <href=”#Nokia_Eseries_.E2.80.93_Enterprise_series>Nokia Eseries – Enterprise series

ü <href=”#Nokia_Nseries_.E2.80.93_Multimedia_Computer_series>Nokia Nseries – Multimedia Computer series

ü <href=”#Nokia_N-Gage_.E2.80.93_Mobile_gaming_devices_.28discontinued.29>Nokia N-Gage – Mobile gaming devices (discontinued)

ü <href=”#Vertu_.E2.80.93_Luxury_phones>Vertu – Luxury phones

ü <href=”#Cardphones_.28PCMCIA.29>Cardphones (PCMCIA)

ü <href=”#Concept_phones>Concept phones

<href=”#Other_products> Other products

Ø <href=”#Digital_television>Digital television

Ø <href=”#ADSL_modems>ADSL modems

Ø <href=”#WLAN_products>WLAN products

Ø <href=”#Telephone_switches>Telephone switches

Ø <href=”#GPS_products>GPS products

Ø <href=”#TETRA>TETRA

Ø <href=”#Internet_tablets>Internet tablets

Price

Psychological pricing

v Consider the psychological approach rather than economic approach

v LV is a high-end brand

v Therefore, people are willing to spend on one a “LV-branded” mobile phone

Market-Skimming Pricing

v Set a high price

v Skim the maximum revenue

v Decrease the price gradually

v Intiailly we will set a high price around $1200, gradually decrease and replaced by a newer model

v Maintain a high profit margin

Promotion

v Printed advertisement

v Goal: to create a new reason to buy our new cell phone

v Focus on masculine and feminine magazine, etc

Ø Car

Ø Audio/Video products

Ø Cosmetics

Ø Fashion

v Online – Advertisement

v Bid on cell-phone before the launch of our product

v TV advertisement

v Demonstrate its outlook and style

v Encourage people to bid our product online

• Road show advertisement.

• Objective: raise awareness of mass people

• Large banner and poster in shopping district

• Urge people to experience new product at place of selling.

Place-

Nokia products are available in whole over the world. This refers to the chosen outlets for a product or service, for a product to be very successful it must be easy to access, Mobile phones are very easy to access nowadays, they are sold in supermarkets, specialized outlets (either by network or brand) and all major department stores.

Competitors

v Many Competitors in this area

Ø Motorola

Ø Sony Ericsson

Ø Samsung

Ø LG

Ø Sharp

Ø Panasonic

Ø Nokia 37.2%

Ø Motorola 17.3%

Ø Samsung 9.8%

Ø Siemens 8.5%

Ø Sony-Ericsson 5.2%

SWOT Analysis of the Company: Nokia

Strengths:

Nokia has largest network of distribution and selling as compared to other mobile phone company in the world. It is backed with the high quality and professional team in the HRD Dept. The financial aspect is very strong in case of Nokia as it has many more profitable business. The product being user friendly and have all the accessories one want that is why is in great demand making it No-1 selling mobile phones in the world. Wide range of products for all class. The re-sell value of Nokia phones are high compared to other company’s product.

Weakness:

Nokia has many strengths and some weakness. Some of the weakness includes the price of the product offered by the company. Some of the products are not user friendly. Not concern about the lower class f the society people. Not targeting promotion toward them. The price of the product is the main issue. The service centers in India are very few and scare. So after sales service is not good.

Opportunity:

Nokia has ample of opportunity to expand its business. With the wide range in products, features and different price range for different people, it has an advantage over the competitors around. With the opportunity like ‘Telecom penetration in India’ being at the peak time, Nokia has an opportunity to increase its sales as well as the market share. As the standard of living in India has increased the purchasing power of the people as increased as well, so Nokia has to target right customer at right time to gain the most out of the situation.

Threats:

Nokia has many threats to tackle to maintain its position as market leader. The threats like emerging of other mobile companies in the market. The companies like Motorola, Sony Eriksson, Cingular (U.S) etc. these companies have come to the stand of tough competition with Nokia in the field of Mobile Phones. Threats can be like providing cheap phones, new features, new style and type, good after sales service etc. So, Nokia has to keep in mind the growing competition around. Nokia has to make strategies to tackle problems in the present and the near future. The growing demand of WLL network can cause drop in sales for Nokia, as Nokia provides many less CDMA phones to the customer.

NOKIA’s performance over a year

Once NOKIA’s closest rival, Samsung has been losing its market share since October’05 when it had an overall market share (in terms of units) of 1.2, to 7.8% I March’06. The drop is much steeper in value terms where its market share has fallen to 9.8% in March’06 from 21.2% in October’05.

Sony Ericsson’s market share (in terms of units) has improved marginally from 7.1% October’05 to 7.6% in March’06, although in value terms it has increased from 8.7% in October’05 t 10.2% in March’06. The color segment, where Samsung used to rue once, has seen its market share falling both in terms of units and value. The market share (units) has dropped to 16.3% in March’06 from 34.9% in October’05 ad in terms of value, has dropped to 14% in March’06 from 32.5% in October’05. Sony Ericsson’s market share in the color segment is marginally more than the Samsung’s at 16.7% (unit) and 15.9% (value) in March’06 and is an improvement over its October’4 figures of 15.6% (units) and 14% (value). The total handset units sold in the top 10 towns in the month of March is 5, 06,493 units, from 4, 68,621 units inOctober’05. The total value of the handset s sold is Rs.245.6 crore as of March’06 from Rs.236.1 crore in October’06. The number of color phones jumped to 2, 11,779 units in March’06 from 1, 66,210 units in October’05. The value of the color phone market increased to Rs.15, 208 lakhs in March’06 from Rs13, 023 lakhs in October’05.

Social Analysis:

For electronics companies, take back and recycling add value. They support brand value and customer loyalty and inspire customer insights. They also demonstrate environmental responsibility. Manufacturers like Nokia are generally in a disadvantaged position for take back, due to the costs involved and the lack of many consumer touch points. Stakeholders in the take back and recycling process include governments, retailers, customers, consumers and products. Other stakeholders include recyclers, refurbishes and NGOs. The responsibility for bringing used devices back for recycling lies ultimately with the consumers. The challenge for Nokia in take back programs is how to make mobile phone users do their share and return the used products for recycling. By bringing the used mobile to a take back point the customers make sure that used phones will not end up in landfills in their own or other countries. Instead, the recyclable raw materials can

be used again in new products.

In a typical consumer scenario, such as when a mobile phone user is renewing a service contract with a mobile phone provider, in the US and Europe an estimated 60% to 70% retain their old devices because of their perceived value.

Successful take back is also driven to a great extent by economics and market factors, which in turn place large quantities of used devices in refurbishment scenarios. This causes concern for the quality and safety of products repaired or altered outside of the intense controls fundamental to a Nokia production process. The optimum outcome from Nokia’s environmental efforts in the product lifecycle is to minimize adverse effects to the environment, to our customers and consumers and to our business. As the Nokia lifecycle philosophy applies to take back, the power to manage take back and direct the disposal of a mobile device at the end of its life is largely controlled by: customers, consumers, retailers, and by governments. There are various take back channels and Nokia has limited control over the actual flows. Despite the challenges posed by the logistics of recovery, Nokia has for years had programs in place and continues to move ahead with new programs to recover mobile devices at the end of their useful lives

These include take back:

Ø Via our authorized service centers and flagship stores

Ø Through our web site, only limited in certain countries

Ø As part of eBay Rethink, only in the US

Nokia is also piloting different forms of cooperation with operators and distributors, such as installing collection bins at point of sales and mail service return, as well as in various industry level schemes and in public awareness building campaigns.

Environment Analysis:

NOKIA aims to be a leading company in environmental performance. By working to reduce the adverse environmental impacts of our products and activities, our customers can use our products with confidence and good conscience. Combining environmental issues into daily work makes business sense for Nokia. By working to reduce the adverse environmental impacts of our products and activities, we minimize risk, ensure legal compliance, gain stakeholder acceptance, and help advance the long-term success of our company

Our customers can also use our products with confidence and good conscience. Through our environmental strategy, we work to ensure that our products are safe for personal use and that they do not overly tax the environment. Nokia is a trusted brand and we take that trust seriously.

Nokia environmental strategy:

Nokia is a leading company in environmental performance. Nokia’s environmental strategy is based on lifecycle thinking, beginning with the extraction of raw materials and ending with recycling and disposal of as well as the reintroduction of recovered materials into the economic system. Our goal is to develop advanced mobile technology, products and services, which have no undue environmental impact, consume energy efficiently, and that can be appropriately reused, recycled or disposed of. Nokia’s environmental strategy is integrated with our business strategy. Our four business groups have set environmental targets for their own activities to implement our corporate level environmental strategy.

Main Issues in Focus:

Three important global issues remain at the forefront of much of Nokia’s environmental work. They are substance management, arrangements for the take back and recycling of end-of-life products, and energy efficiency.

Substance management

During the planning and design of our products, one of our main focus areas is their material content. We are continuously analyzing the materials used in our products with the aim of reducing the amount of potentially hazardous or harmful content.

Take back and recycling

In take back and recycling, we have for years had in place our own arrangements for mobile devices and accessories, as well as for mobile network and IP network security equipment. All Nokia products are also covered by the European Union’s new Waste Electrical and Electronic Equipment (WEEE) directive. Nokia is assuming product responsibility as defined by the directive as it is implemented throughout Europe. In addition, take back of Nokia mobile devices will also continue at authorized Nokia Service Centers and Flagship stores in all markets where we do business.

Energy efficiency

In our product creation as well as our own operational activities, an important area for continuous performance improvement is in energy efficiency. We have consistently been able to reduce the energy intensity of our products.

We launch a new product (N 96)

NOKIA N-96

N-96 has created a distinct position in customer mind by:

Ø Nokia logo…..>

Ø Slogan……> “Know our past. Create the future”

Ø Latest Ring Tone

Ø New Messages Tunes

Ø The specific message that is conveyed to the customers in every advertisement.

About Nokia N-96

NOKIA N96 is the most expensive and powerful model in the whole Nokia portfolio. It can’t stand up to the level of popularity that N95 once enjoyed, though, but still serves a formidable expansion of the model range upwards. The device looks interesting in terms of the availability of DVB-H digital TV and strikingly high specifications. It comes with an astonishing 16 Gb of onboard and 8 Gb of replaceable flash storage, and has a pronounced focus on the video aspect. Even the form factor and bundled kick-stand suggest this model being a TV-phone, let alone the numerous hardware specifications specially fitted to this cause. The STMicroelectronics chipset offers its video-relevant powers at a cost, though: it doesn’t do as well in the rest of performance tests. We can’t say N96 lags in the menus, yet a certain delay can be felt, it’s a bit slower than N78 and N85. A high audio quality, a large screen and a spacious storage make N96 a perfect multimedia player and a possible replacement for a number of Nokia N96 users. The price is going to be comparable to the starting price of N95 8GB, namely around 550 Euros. N95 will slowly phase out of the market, making way for the new flagship (it’s currently out of production). That’s how the company divided the niche originally occupied by N95 8GB in two: one model sticks to the same price bar, the other (N85) sells at a lower price and plays a big part on the mass market, nominally featuring slightly lower specifications.

Nokia N96 is the company’s video flagship. That means that all the optimizations introduced into the model support solely that cause, the accent on mobile TV and video. N85 is more versatile and thus is going to win more popularity, but it can’t beat N96 in terms of video recording and playback, as well as in the musical department. Next comes a DVB-H digital TV module, so we get the best multimedia handset on the whole market which is going to stay so for quite a while on.

Product Life Cycle

A large untapped potential exists among the present base of non-users: the 10% of existing customers who use services infrequently or do not use services at all, even though they have the right mobile handset. In general, these mainstream users are more loyal to their existing service provider,

making them a group to reward for their loyalty. Ease-of-use is one of the key factors when increasing customer loyalty, which, in turn, will lower churn and eventually lead to a decrease in marketing expenditures. Differentiation by ease-of-use experience will also have an effect on increasing ARPU, because it speeds up the adoption of new services.

The more mainstream the target users, the more they value ease-of-use and customer intimacy and seek practical uses for new services. The fact that ease-of-use is particularly relevant to mainstream users makes it such an important consideration. Making a service successful in the mainstream market has the challenge for most existing services. Creating ease-of-use in services will help a service provider to “cross the chasm” from the early market of innovators and trendsetters to the mainstream market of average users.

Product life cycle of Nokia

Conclusion

After thorough research, we come to the conclusion that the marketing strategy of NOKIA is working for them and the is gaining popularity among youth day by day.

Nokia is a mobile telecommunications company, and offers far more than just mobile phones for everyday use. They offer networking solutions for businesses that help businesses stay connected and communicate with each other at all times and places. For them, Nokia also offers special mobile phones with exquisite and unique functions and options. In this project, we can overview on NOKIA. N 96 is the most expensive and powerful model in the whole Nokia portfolio. It can’t stand up to the level of popularity that N95 once enjoyed, though, but still serves a formidable expansion of the model range upwards. The device looks interesting in terms of the availability of DVB-H digital TV and strikingly high specifications. It comes with an astonishing 16 Gb of onboard and 8 Gb of replaceable flash storage, and has a pronounced focus on the video aspect. Even the form factor and bundled kick-stand suggest this model being a TV-phone, let alone the numerous hardware specifications specially fitted to this cause. The STM microelectronics chipset offers its video-relevant powers at a cost, though: it doesn’t do as well in the rest of performance tests. We can’t say lags in the menus, yet a certain delay can be felt; it’s a bit slower than N78 and N85. A high audio quality, a large screen and a spacious storage make N96 a perfect multimedia player and a possible replacement for a number of Nokia N96 users. The price is going to be comparable to the starting price of N95 8GB, namely around 550 Euros. N95 will slowly phase out of the market, making way for the new flagship (it’s currently out of production).

Bibliography

1. University library

2. Nokia Outlets

3. www.nokia.com

4. http://www.realkarachi.com/nokia-mobile-prices-karachi.php

5. http://europe.nokia.com/A41466357

6. http://www.gsmarena.com/nokia_n96-2253.php

7.http://www.pressreleasepoint.com/nokia-n96well-known-its-awesome-design-and-specifications

8. http://www.the-infoshop.com/study/kt32528-nokia.html

" 78,"

COMPLIANCE GOVERNMENT POLICY BY READYMADE GARMENTS OF BANGLADESH

","

 Background of Kims Corporation Ltd:

Kims Corporation is a Knit printing and swing, Woven dyeing, and garments – under ONE roof Equipped with top-of-the-line production facilities. Our painstaking efforts to reengineer each steps of Kims value chain—procurement, production process & planning, workforce productivity & efficiency, technologies—and turned them into core.

The Company is well reputed in both the sectors for the efficient management, high standard of performance and attaining the satisfaction of its principal and clients. The group started its journey in 2005, immediately after the foundation of the Republic of Bangladesh and nearly for three decades, it grew steadily and the Company diversified its scope of work, encompassing more and more areas within its business and trade activities.

The Director of the company. The executive and staff of the companies are highly professional and motivated to the work they are assigned with and under the supervision of respective Director; they work in a team to accomplish the job. The experiences of three decades and adoption of modern outlook and technological advantages, the Company has been able to mark its presence effectively felt in the business circle of the country.

The above factors were responsible for our business connections around the globe. We have developed business relationship with different companies spreading over almost all continents.

The Chairman and CEO of the company is Mr. Han Jin Kim, who brings with him the experiences of three decades in the fields of trade and external commerce. He is a versatile man with vision and is the driving force of the company.

The operation department of the company is headed by Executive Director Mr. Kanchan Kumar Barua. He has with him years of experience and expertise to market such product in Bangladesh. He has excellent public relations and business contacts.

a) Company Name:

Kims Corporation Ltd.

Kims Official Address:

Plot No- 16, sutar Noardda, Arapara, Savar,

Dhaka-1340, Bangladesh.

Phone: +88-02- 7741775-6

Fax: + 880-2-7710726

E-mail: info@kims-co.com

Year of Establishment:   2005

b) Product range

Product Fabrication Gender
Shirts Woven Male, Female, Children
Tops Woven Female
Skirts Woven Female
Jackets Woven & Fleece Male, Female, Children
Pants Woven Male, Female, Children
Capri woven Female, Children

 

c) Terms & Condition

d) Kims is Approved from:

Bossini, Corona, Celio, Benitton, Old Navy.

e) Factory space:

48000 sqf. Kims Corporation Ltd.

16, sutar Noardda, Arapara, Savar, Dhaka-1340, Bangladesh.

Mission

To be the trendsetter for innovative production on garments related products with excellence & perfection”

Vision

“To be the best performing garments in the country”

Objectives

The overall program objective is to improve its competitiveness in the RMG industry in Bangladesh in a sustainable manner. Sub-objectives of the four priority measures or packages are to:

Program concept and implementation approach:

The program has three thematic areas:

(i)          Social compliance,

(ii)        Productivity improvement and

(iii)       Ethical buying practices.

These three areas are interlinked and thus are addressed simultaneously. The bulk of the available resources are used to improve social compliance and productivity level. The plan is to categorize all factories in four groups, according to their current social compliance and productivity status, and upgrade them as quickly as possible starting with the worst cases and those who are most interested in the cooperation.

Another priority area is to support the government in implementing the national labor law through awareness raising, advocacy and monitoring activities. The program will strengthen the performance of main stakeholders involved in the development of the RMG sector including workers, professionals, managers, suppliers and buyers. Through technical and social skill enhancement activities, such as trainings, individuals will be enabled to better perform their work and exercise their social duties. Parallel, the program will strengthen and support all relevant RMG organizations such as NGOs, trade unions, entrepreneurs’ associations (BGMEA and BKMEA), training institutes and relevant government ministries. Developing these organizations means improving their service capacity but also their organizational and leadership culture. For this purpose, physical and personnel upgrading measures will be implemented according to needs. The program’s implementation approach, in principle, builds upon projects which are currently being implemented successfully by various development partners e.g. GTZ, SEDF, UNDP, UNIDO, Oxfam, etc. The activities of these projects will be up-scaled in order to have a much wider area and factory coverage. MFB’s main task is to monitor and evaluate program activities and implement program components in absence of competent partners and if administratively and financially justified.

A more detailed overview regarding program objectives and indicators is shown in the attached log frame.

The simplest definition of compliance is observance, conformity, and obedience. In business, compliance generally designates the requirement to adhere to certain rules/laws, meet certain standards, and follow certain practices. Compliance standards can originate from external as well as internal sources. A compliance requirement may be mandatory or optional. Understanding the origin of compliance requirements enables appropriate prioritization and risk management. Compliance requirements that your organization must adhere to may be based on your ownership structure, management practices, locations, and the markets in which you wish to participate, as well as your specific industry, customer, and vendor affiliations. Later in this document we will explore the sources of compliance requirements and provide public domain references to assist you in researching their specific requirements. If you look at your business practices, you will see that many standard operating procedures exist to satisfy the compliance requirements of all the entities, internal and external, with which the organization interacts.

Today the majority of compliance requirements focus is around Government-imposed regulations, and perhaps rightfully so because of the real possibility of civil and criminal penalties directed to top level management in the case of breach of compliance. But in the rush to comply with government regulations, management must not lose sight of the compliance standards that the organization is already complying with and why they are complying with them. Questions that ownership and management must continually consider:

Definition of Compliance

The state of being in accordance with the relevant Federal or regional authorities and their requirements. In the context of financial services, the most important compliance rules come from the Securities and Exchange Commission. Most large financial services companies have compliance teams whose role is to take an independent stance in making sure that the company is following all the necessary rules and regulations.

Bangladesh is a priority partner country for German Development Cooperation; cooperation between the two countries began more than three decades ago. Technical cooperation concentrates largely on the Bangladeshi economy and social structure which, despite unfavorable framework conditions and problems, give hope for the long-term development of the country and an improvement in the economic situation for large parts of the population.

The main problems in Bangladesh are scarce resources, natural disasters, a rigid and to some extent arbitrary bureaucracy, over-population and the poverty which this causes. Around 50 percent of the population lives below the poverty line.

Against this background, the activities of the GTZ focus on the following three priority areas:

The Ready-Made Garments (RMG) Of Bangladesh

The Ready-Made Garments (RMG) industry occupies a unique position in the Bangladesh economy. It is the largest exporting industry in Bangladesh, which experienced phenomenal growth during the last 20 years. By taking advantage of an insulated market under the provision of Multi Fiber Agreement (MFA) of GATT, it attained a high profile in terms of foreign exchange earnings, exports, industrialization and contribution to GDP within a short span of time. The industry plays a key role in employment generation and in the provision of income to the poor. Nearly two million workers are directly and more than ten million inhabitants are indirectly associated with the industry. Over the past twenty years, the number of manufacturing units has grown from 180 to over 3600. The sector has also played a significant role in the socio-economic development of the country.

The Agreement on Textile and Clothing (ATC) introduced in 1994, aimed at bringing textiles and clothing within the domain of WTO rules by abolishing all quotas by the end of 2004. It provides an adjustment period of 10 years, so that countries affected by the MFA could take the necessary steps to adjust to the new trading environment. Liberalization of trade following the Uruguay Round agreement presents opportunities as well as challenges for a developing country like Bangladesh in RMG sector. In the Post-Uruguay Round period, traditional instruments of trade policy such as tariffs, quotas, and subsidies will become less feasible and less relevant. In a liberalized trade regime, competition among textiles and clothing exporting countries is likely to become intense. The objective of this paper is to identify the prospects of RMG industry after the MFA phase out by analyzing the current scenario along with different policy measures and the available options in order to be more competitive in the new regime.

Contribution of the RMG Industry

RMG business started in the late 70s as a negligible non-traditional sector with a narrow export base and by the year 1983 it emerged as a promising export earning sector; presently it contributes around 75 percent of the total export earnings. Over the past one and half decade, RMG export earnings have increased by more than 8 times with an exceptional growth rate of 16.5 percent per annum. In terms of GDP, RMG’s contribution is highly remarkable; it reaches 13 percent of GDP which was only about 3 percent in FY91. This is a clear indication of the industry’s contribution to the overall economy. It also plays a pivotal role to promote the development of other key sectors of the economy like banking, insurance, shipping, hotel, tourism, road transportation, railway container services, etc. One of the key advantages of the RMG industry is its cheap labour force, which provides a competitive edge over its competitors. The sector has created jobs for about two million people of which 70 percent are women who mostly come from rural areas. The sector opened up employment opportunities for many more individuals through direct and indirect economic activities, which eventually helps the country’s social development, woman empowerment and poverty alleviation.

Prospects of the RMG Industry

Despite many difficulties faced by the RMG industry over the past years, it continued to show its robust performance and competitive strength. The resilience and bold trend in this MFA phase-out period partly reflects the imposition of ‘safeguard quotas’ by US and similar restrictions by EU administration on China up to 2008, which has been the largest supplier of textiles and apparel to USA. Other factors like price competitiveness, enhanced GSP facility, market and product diversification, cheap labour, increased backward integration, high level of investment, and government support are among the key factors that helped the country to continue the momentum in export earnings in the apparel sector. Some of these elements are reviewed below.

Market Diversification

Bangladeshi RMG products are mainly destined to the US and EU. Back in 1996-97, Bangladesh was the 7th and 5th largest apparel exporter to the USA and European Union respectively. The industry was successful in exploring the opportunities in markets away from EU and US. In FY06, a successful turnaround was observed in exports to third countries, which having a negative growth in FY05 rose three-fold in FY06, which helped to record 23.1 percent overall export growth in the RMG sector. It is anticipated that the trend of market diversification will continue and this will help to maintain the growth momentum of export earnings. At the same time a recent WTO review points out that Bangladesh has not been able to exploit fully the duty free access to EU that it enjoys. While this is pointed out to be due to stringent rules of origin (ROO) criteria, the relative stagnation in exports to EU requires further analysis.

Table: Region-wise Share of RMG Export

Table 1: Region-wise Share of RMG Export Year Export Share to USA Export Share to European Countries Combined Share of USA & EU (%) Export Share of Other Countries (%)
2001-2002 42.67 55.43 98.10 1.90
2002-2003 38.02 57.12 95.14 4.86
2003-2004 28.64 65.42 94.06 5.94
2004-2005 30.64 64.24 94.88 5.12
2005-2006 33.67 49.77 83.43 16.57

Social Codes of Conduct in the RMG Industry

Social codes of conduct are rules and guidelines imposed by buyers upon themselves and along their supply chains, both in response to consumer pressure and as part of comprehensive marketing

Strategies aimed at improving their image.  Social and environmental standards as outlined in the Bangladesh Labor Law and Environmental Act set out minimum standards to which manufacturers

in Bangladesh must adhere. In contrast, compliance with general codes of conducts, which usually

contain standards slightly higher than those defined by the Bangladesh laws, is voluntary. The social compliance status of the Bangladesh RMG industry refers to the extent to which the industry meets the requirements of the labor law and/or any other buyer-specific code of conduct or voluntary certification scheme. The current social compliance status of the industry is not satisfactory; there is an urgent need to improve the situation

Voluntary Codes of Conduct

The voluntary codes of conduct most widely used by the RMG sector include those of:

Only WRAP and SAI have certifications for factories, whereas FLA certifies brands, not factories. The other above-mentioned codes of conduct do not have any certification options.

Generally, adherence by a particular manufacturer to a given standard or code of conduct is verified

through periodic audits/ inspections.  These inspections are carried out by buyers and/or third party auditors nominated by the buyers.

Ensuring Proper Application of Codes of Conduct

Bangladesh Labor Law 2006 (BLL 2006) Implementation of the BLL 2006 is monitored primarily by Ministry of Labor and Employment (MoLE) factory inspectors and BGMEA and BKMEA social compliance monitors. Besides inspecting and monitoring the status of the factories, BGMEA and

BKMEA monitors provide advisory support to factory personnel so that they are able to implement the required, correct measures as stated in BLL 2006.

Analysis

Analysis is included with questioner, compliance tools and steps.

Sources of Compliance Requirements

Compliance requirements are nothing new to business. Customers, vendors, and governments have always provided businesses with standards for interaction. From tax reporting forms to how you place a label on a box for a customer, compliance requirements drive businesses to accomplish things in very specific ways. So, to really understand compliance requirements for your business you need only look around at the ways you accomplish tasks (especially repetitive tasks), communicate, and keep information, and then ask “Why?” The answers will point you to the source of a compliance requirement. Compliance requirement sources are not only external, for example from the government, customers, and vendors, but internal as well, from owners/management, investors, and other departments. Although the internal compliance requirements may not seem as pressing, they often provide the greatest business optimization opportunities. For example, management may require that along with recording a customer product return, a reason for the return must be recorded.

This additional data capture adds additional steps for the receiving department initially, but in the long run, knowing why an item was returned assists management in making adjustments to marketing, sales, production, quality control, purchasing, shipping, and so forth, helping reduce any further returns. In the long run, this reporting and corrective action process obviously has significant positive financial impacts for the organization. As you examine internal compliance measures, consider using compliance requirements to more closely manage things that represent high risk and/or high value to the organization, such as environmental impacts caused by operations or product spoilage or damage caused by equipment failure. To assist you in locating the sources of compliance in your organization, the following list outlines potential internal and external sources of compliance requirements:

External compliance requirement sources have the extra burden of often being mandatory, strict in implementation structure and reporting requirements, and typically have legal and financial implications. Recent focus on compliance has been with regard to external legal and financial compliance requirements originating from Government regulations. For example, by law, many public organizations had to rapidly implement Sarbanes-Oxley requirements. Within the private sector, pharmaceutical and food companies have long understood quality assurance and track and traceability requirements. The following information provides some direction to assist you in the finding, gathering, organizing, and documenting some of the government compliance requirements that are the most pressing and relevant to businesses today.

 HR Compliance Tools

Managing employees on a daily basis can be a difficult task for businesses of any size. This where HR Compliance Tools come in; typical tools can include:

Permanent Initiative:

a) Pre-requisite to obtain membership in :

Before giving the membership to any applied factory, investigation is done from the association to check the mentioned requirements and decision of membership is given accordingly:

    • No Child Labor.
    • Factories must have alternate stairs, basic fire equipments.
    • With respect to building construction no factory can obtain membership without giving approved layout plan from the concerned authority.
    • Mandatory Group Insurance for all workers & employees in each factory.

CSR Workshops for Factory Owners

Development of a Compliant Factory is largely dependent on the intention and capability of an owner. To convince owners and provide them updated information regarding world compliance scenario, Kims is going to arrange CSR seminars with the owners of the member factories. Nationally and Internationally reputed persons are being invited as guest speaker and open discussion sessions are being organized to encourage for making their factories socially compliant. The workshops will be organized in major zones where garments factories are mostly located. At first phase it will be held in Dhaka, Narayanganj and Chittagong.

Social Compliance Training for Factory Owners and Other Top Level Management

Kims is going to arrange trainings for owners and other top level management. The focus area of the training is social environmental compliance, productivity improvement included with work place safety. The training sessions will be both in Dhaka and Savar area where most of the factories are located.

Publication for Awareness Rising

To create awareness on Compliance Kims has published handbook in local language on compliance issues, a number of posters and stickers .All the published materials have been distributed already to the member factories.

Social Compliance Posters and Stickers

Kims has published a poster and a set of stickers on some core issues of compliance. The poster is on “How to use a fire extinguisher”. It is in Bengali for quick understanding of workers and other factory persons. The stickers have been published to ensure workers basic rights. The 4 stickers are on: child labor, weekly & other holidays, maternity leave & benefits and on time payment of wages. SEDF helped Defoin to publish the poster and stickers

Some other posters & Stickers on labor rights, responsibility of owner and environmental issue are going to be published soon. GTZ is helping the association to develop the upcoming awareness raising materials. Kims hopes that the publications on compliance will create awareness among the members and they will take serious initiatives to follow the rules mentioned here.

Hand Book on Social Compliance

The handbook has been titled as” Compliance & Relevant Laws: Guide Lines for Implementation”. The Book is in Easy Bengali for quick understanding of owners and labors.

Objectives of the Handbook are:

i       To provide basic compliance knowledge and implementation procedure to the owners of the RMG factories specially working in the knit sector.

ii     To give a handy reference on crucial and frequently required parts of labor and industrial law of Bangladesh.

iii   Disseminate the information to the workers and raise their awareness level on social compliance, labor and industrial law through workshops, seminars and TV advertisements.

iv    Basic guide line for making a socially complaint factory.

v     Frequently required Factory and Labor laws.

vi    Guide to Construct a Safe Factory Building on the basis of Bangladesh National Building Code

vii  Guideline to make an environmentally sustainable knitwear factory.

viiiThe work for publishing of ‘Revised Handbook including Labor Law 2006’ is going on and it will also be distributed to members soon.

Kims Corporation Ltd has a mission to fulfill by surpassing all the requirements of Humanitarian Management & to make its working environment a role model for others as “A BETTER WORKING PLACE” and unique in its field. Kims Corporation Ltd. does and will continue to operate the factory in FULL COMPLIANCE with all the applicable rules and regulations of native land as well as international standard. For improving the working conditions and setting a better working place; KCL is maintaining the following COC issues:

  1. Prohibition of Child Labour
  2. Prohibition of Forced labour.
  3. No Discrimination.
  4. Occupational Health & Safety (OHS).
  5. Disciplinary Practices/ Harassment.
  6. Freedom of association and right to collective bargaining.
  7. Welfare facilities.
  8. Compensation & Benefits.
  9. Working Hours.
  10. Grievance procedure.
  11. Environmental Protection.
  12. Custom compliance.
  13. Security compliance.

Prohibition of Forced Labour

The company does not practice any type of forced labour and also does not support such practices.

Prohibition of Child Labour:

As per company policy, no individual below 18 years of age is recruited.

 No Discrimination:

KCL employ and pay workers and provides benefits without regard to race, color, nationality, religion, age, maternity or marital status. Kims Corporation Ltd. Ensures equal treatment for all workers in all matters.

OHS Management: 

Kims Corporation Ltd treats all workers with respect and dignity and provides them with a safe and healthy environment. Factory complies with all applicable laws and international standard and RMG industry standards of safety measurement to ensure a safe working environment. It developed a complete trained safety team supervised by MR to ensure the secured safe and healthy working environment in factory premises. Company directly mandates the provision of safe working conditions. It ensures that working place is free from hazards and risks that may cause any type of physical harm.

 Disciplinary Practices/ Harassment:

As a company policy the environment must be free of harassment, abuse or corporal punishment.

Freedom of association and right to collective bargaining.

KCL recognizes and respects the right of employees to exercise their lawful rights of free association, including joining or not joining any association. Workers are free to join associations of their own choosing. There is a Workers Welfare Committee (WWC) in KCL to look after the various benefits and problems both the workers and the management. Different floors employees are included in this committee.

Welfare Facilities: Kims Corporation Ltd.

KCL is very much keen about the workers related welfare issues. By keeping these issues strongly in mind KCL provided the following welfare facilities for its employees:

Health Care Center: 

To provide the health care facility and instant emergency service the company has established a health care center. An M.B.B.S doctor along with two assistants including a nurse is available there. Workers are given here free service treatment including medicine facility.

Day Care Center: 

The Company has provided a suitable room for the use of children under the age of six of working women. There are two trained Care Mothers is available there. Noted here that PHULKI, an NGO is providing all kinds consulting support regarding day care center issue (Photo of day care centre).

Festival Bonus: 

Two festival bonuses are given in two EID. The employee who is working at least six months is given to the bonus.

Annual Picnic: 

An amusing program is held each year to give entertainment of the workers name “Anondo Ayojon”. Employers and workers enjoy the program together.

5.18 Lunch Room: 

Lunch room has been provided for workers. The room is for launch purposes only and the employees are requested to use the room accordingly and maintain the cleanliness of the room. Also rest room, drinking water and latrine facilities are available.

Compensation & benefits:

As a company policy KCL is paying at least minimum compensation required by national law.

Working Hour:

 Regarding working hour,KCL strictly maintains the national law.

Grievance Procedure: 

There are suggestion / complain box in each floor where workers may drop their vital suggestions or complaint which may enhance the company development.

Other than the complain boxes the workers may also submit their written complaint directly to the HR department or may verbally inform. More over WWC members are actively involve regarding Complaint issues. All matters regarding complaint issues are handling with confidentially.

Environmental Protection: 

Kims Corporation Limited is very much concerned about preventing pollution of environment. A complete trained team has been developed in Kims Corporation Limited supervised by Dyeing KCL to ensure pollution free environment. To make pollution free environment Kims Corporation Limited is obeying the following policies:

  1. Already established Effluent Treatment Plant (ETP).
  2. Identifying significance of Environmental aspects and associated Impact Analysis.
  3. Reduce of waste disposal.
  4. Commitment to meet all regulatory and legislative requirements. Prevent pollution and continuously improve environmental management

Custom Compliance:

Kims Corporation Ltd. always complies with custom compliance according to the customs act 1996.

Security compliance:

Kims Corporation always tries to maintain the rules and regulations in security compliance as per the national rules and buyers’ requirement.

Environment

In order to emphasize our social and ecological responsibility and solidarity as a contribution to improve the social and environmental conditions in the interests, primarily, of the employees. We are always well equipped and committed to uplifting our HRM department

Maintaining the code of conduct for improving the conditions of the factory as stated below:

Treatment of the employees with respect and dignity

Kims Corporation Limited is collaborated with Marie Stops Clinic Society to ensure regular health care of all its employee & labour. 

 Environmental safety

Kims Corporation Limited is an extremely eco-conscious organization. The company ensures that only Azo-free dyes are used in the dying processes. The company stringently adheres to all pollution controlling norms and procedure. 

Fire safety

Kims Corporation Limited always promised to keep secure its member safety. And so here the management takes the highest effort in this subject. Fire Defense System is one of the key things among them. Here in Kims Corporation Limited. All the floor & compound are equipped with latest fire fighting equipment such as fire extinguisher, hose pipe, blanket etc. All the electricity cable is FRLS & XLPE insulated to avoid accidental electrical fire hazard. Regular fire evacuation drill provided to the employee to boost their confidence in handling fire.

Social Activities

Kims Corporation Limited is involved directly & indirectly in much public welfare activates. Various mosques around the country run by its donation. Kims Corporation Limited. Establishes & run many educational institutes by its own finance. As an example we can name Pachrukih Madrasa. Besides serving official responsibilities Kims Corporation Limited also serve the social responsibilities to its members. In much case Kims Corporation Limited. Management help its employee in various activities like medical expenses, marriage ceremony, education etc by granting donation. Sometimes KCL attend in tree plantation activities to keep this world green.

Entertainment

Every year Kims Corporation Limited arranges a cultural program for its entire employee to keep them happy and cheer up in all state, which make a bridge of friendship among all. “Anondo Aiojon 2003” is one of them.

 Future action plans 

There were challenges in the past, and challenges will remain in future. However, they focus at least on sustaining the existing growth rate, if not targeting more. To become a $25 billion export country by 2013 the prime agenda.

Addressing safety and security issues

The reason behind labour unrest is not only the low wage structure, but also the hazardous working conditions, insufficient safety and security measures, inadequate break time, irregular payment, forceful overtime, and many other factors.KCL is speaking about enhancing labor productivity, but also recognize that productivity in our country’s apparel sector is low compared to neighboring countries. However, productivity will not increase if the garments do not take any aggressive measures to address the safety and security issues.

Improving supervisor-worker relationship

The relationship between supervisors and workers plays a key role in terms of productivity enhancement and maintaining overall discipline in the work place. While the “boss and subordinate” relationship is important in every industry, in the apparel sector it plays a major role and sometimes influences negatively.

Incidents of exploitation and harassment of the workers by supervisors are common phenomena in the apparel sector, and this is more applicable to the female workers. The reason behind this is that there is always a gap between the owners and the workers. Supervisors play a “middle man” role, and owners are influenced by them. The absence of job description, accountability and corporate governance hamper the worker-owner relationship. In KCL the relationship between is very good.

Developing second-tier management

In most cases, the management control of the factories is limited within the family members of the owners, and in many cases it is just a one-man show. As a result, the overall business suffers from key man risk as well as capacity constraints. The owners of the KCL try to make and develop a second-tier management team, especially in the large apparel corporate.

Given the global dynamics, it is high time to implement corporate culture and practices in the apparel sector, which requires developing human resources, enhancing corporate governance, decentralizing decision making authority and empowering people. This will translate into enhancement of accountability and time saving and, more importantly, the second-tier management team can bridge the gap between the workers and owners, which will help further in improving industrial relationships and relieving the workers from harassment to a great extent. The problems in the industry pre-date the riots which took place just over a month ago and which were attended by deaths, injuries and the destruction of property. Over the years, hazardous working conditions have resulted in the deaths of many workers through factory fires and collapses. The Spectrum Factory building collapse of April 2005 killed 64 people, injured over 70 and left hundreds jobless. In February 2006 a fire destroyed the four-story KTS Textile Industries in Bangladesh’s port city of Chittagong again killing scores of mostly young and female workers. Workers, who are mostly young women, also face an acutely difficult working environment – wages are low, hours are long, forced labour is practiced, child labour exists, sexual harassment exists, freedom is curtailed, whether it be locked doors or rights of association, and there are a multisided of other practices which go against international labour standards and codes of conduct ( non-compliance). At the level of legislation and business dealings, lack of implementation of laws, restrictive laws and unfair buying practices by buyers compound the issue of non-compliance.

Questioner Analysis

Question No. of percentage. Performance
1. Does your organization provide benefit and wages at specific time? 0 Strongly Disagree=0%
2 Disagree               =9%
13 Neutral                 =45%
9 Agree                   =32%
4 Strongly Agree     =14%

Analysis:

This diagram shows that, 91% of the employees are agreed that there organization provide wages at a specific time which is comply with the government regulation of compliance.

Question No. of percentage. Performance
2. Are you satisfied with the working environment? 

 

 0 Strongly Disagree=0%
1 Disagree               =5%
13 Neutral                 =45%
10 Agree                   =36%
4 Strongly Agree     =14%

Analysis:

The major portion of the employee that means the 95% of the total employee is satisfied with the working environment.” And which is complying with Government policies.

Question No. of percentage. Performance
3. Does your company provide any health consultation? 0 Strongly Disagree=0%
0 Disagree               =0%
5 Neutral                 =18%
20 Agree                   =64%
5 Strongly Agree     =18%

Analysis:

This diagram shows that, the garments performance is agree (100%).So, It can be said that, “their health consultation facilities are good enough.” And which is complying with Government policies.

Question No. of percentage. Performance
4 Are you satisfying with the overtime wages? 1 Strongly Disagree=5%
5 Disagree               =18%
12 Neutral                 =41%
8 Agree                   =27%
4 Strongly Agree     =9%

Analysis:

The major portion of the employee and workers wants to say that, the garments salary structure is good, which is (77%). And it complies with Government rules.

Question No. of percentage Performance
5. Did they provide you any extra benefit? 

 

 1 Strongly Disagree=5%
10 Disagree               =33%
3 Neutral                 =13%
6 Agree                   =18%
10 Strongly Agree     =32%

 

Analysis:

This diagram shows that, the garments performance is disagree (33%). It can be said that, “they don’t gives everyone the extra facilities.” And which is complying with Government policies.

Question No. of percentage Performance
6. Is your company engaged with any social well-being activities? 0 Strongly Disagree=0%
1 Disagree               =5%
8 Neutral                 =27%
12 Agree                   =41%
8 Strongly Agree     =27%

Analysis:

The major portion of the employee and worker said that, the garments performance is agreed with (95%). And it complies with Government rules.

Question No. of percentage Performance
7. Do you think that the relationship between employee and workers is good enough? 

 

 0 Strongly Disagree=0%
0 Disagree               =0%
7 Neutral                 =23%
12 Agree                   =41%
11 Strongly Agree     =36%

Analysis:

This diagram shows that, the garments workers agreed with (100%). So, It can be said that, “the relationship between Employees and the workers is good.” And it complies with Government rules.

Question No. of percentage Performance
8. Did they provide you medical allowance monthly? 0 Strongly Disagree=0%
0 Disagree               =0%
12 Neutral                 =41%
3 Agree                   =9%
15 Strongly Agree     =50%

Analysis:

The 100% workers said that, the garments provided medical allowance monthly is strongly agree (50%). It can be said that, “Employee feels satisfied with the job.” And it complies with Government rules.

No. of percentage  

 
9. Do you get any house hold facility from your company? 

 

 6 Strongly Disagree=23%
3 Disagree               =9%
3 Neutral                 =9%
12 Agree                   =41%
6 Strongly Agree     =18%

Analysis:

This diagram shows that, the garments lobour is agreed (68%). So, It can be said that, “Employees gets household facilities.” And which is complying with Government policies.

Question   Performance
10. Did your company make insurance to the entire worker? 

 

 1 Strongly Disagree=5%
4 Disagree               =14%
4 Neutral                 =14%
10 Agree                   =32%
12 Strongly Agree     =36%

Analysis:

The major portion of the labour agreed (82%). It can be said that, “The garments authority is able to satisfy their employee and lobour.” And which is complying with Government policies. 

 

Major Findings

While working at Kims Corporation in Savar, Dhaka, I have attained to a newer kind of experience. After the collection of data, I have got some findings. These findings are completely from my personal point of view. Those are given below:

–          immediate fast-aid

–           food facilities to the workers

Recommendation

What has emerged quite emphatically is that for the Bangladesh industry to survive it has to take on board the issue of “compliance” with internationally recognized social, labor and environmental standards. There are many initiatives underway – buyers have their corporate social responsibility initiatives, the government has set up task forces and foray, there are the Memoranda of Understanding with the trade unions and the manufacturers’ and exporters’ associations. There needs to be the capacity and will amongst all the stakeholders, and particularly the government, to take forward and develop “compliance” and create an industry with an enhanced global image and global recognition of performance.

Compliance is a process. It’s a way of defining proper individual and group behaviors, and assuring that laws and policies are understood and followed. This means you must know the laws and develop appropriate policies in relation to these laws. Compliance also means you and your managers need to communicate these policies to the troops, along with your expectations for adherence and the consequences for non adherence. The latter requires specific investigative and punishment procedures.

Effective HR compliance programs need to be integrated into your business strategies and given more than just lip service. Compliance has to start at the top and trickle down to all levels, so everyone in the company knows that the workplace must be kept safe and discrimination won’t be tolerated.

Document all key decisions and employee evaluations, establish written policies, make sure everyone gets a copy of your written policies and signs them, keep a written record of critical communications, and maintain all personnel records. Documentation is critical.

Conclusion

I really enjoyed my internship period in Kims Corporation in Arapara, Savar, from the very first day. I am confident that this 3 three months internship program will definitely help me to understand real life situation which definitely will help in the job market.

Performance analysis of Garments within this short time of my internship period is very difficult. But it is a great opportunity for me to get used to with the operational environment of human resource compliance of Kims Corporation. I have tried by soul to incorporate the necessary relevant information in my report.

The Human Resource department should think newly about their compliance objectives and practices. As a developing Readymade Garments in Bangladesh, Kims Corporation shouldn’t allow their client to get dissatisfied with their product. They have their competitors who actively striving to take the advantages in every side.

During the course of my practical orientation I have tried to learn the practical garments compliances to relate it with my theoretical knowledge, what I have gathered and going to acquire from various courses.

" 79,"

CONCEPTS OF RETRIBUTION AND REVENGE

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Introduction

It is not necessarily ideal to begin a discussion paper with a direct challenge to the veracity of the statement under review, but that is exactly what is demanded here.

The first step in this analysis is easy to take:

Retribution:

noun recompense, usually for evil; vengeance.[1]

Revenge:

noun 1. (act of) retaliation 2. desire for this.

verb ((-ging) 1. Avenge 2. revenge oneself or in passive; often + on, upon) inflict retaliation.[2]

The statement for discussion concretes itself in absolute terms, but that, it is submitted, is no more than a façade. It is confidently submitted that retribution and revenge are far from “strictly distinguished one from the other” in 21st century Britain. The average man or woman on the street – on whose behalf the law is maintained and enforced – would struggle to put clear blue sky between the two concepts, even in the abstract.[3]

Once a factual scenario is added to the mix for context, once flesh and blood and sentiment are brought into the equation, the edges of these respective notions blur yet further. Indeed, the words retribution and revenge are so closely associated in the mind of the ordinary man that they are practically interchangeable. In the glossary to Oxford University Press’s Criminology textbook[4], retribution is defined as: the act of taking revenge upon a criminal perpetrator. Given the mutuality of this definition it would seem difficult to divide the two concepts quite as sharply as the statement under review suggests. From a cynical perspective, it could be argued that retribution is merely revenge with slightly better P.R.

In the auspicious words of Sir Francis Bacon in Of Revenge[5] the issues seem to be distinguished by the notion that, while revenge is essentially a private affair, retribution has more public, and perhaps publicly acceptable, application and connotations. Whereas retribution may be seen to exercise a positive social function, revenge is forbidden fruit – a sin perhaps – if not, a luxury dressed in vice.

‘Revenge is a kind of wild justice which, the more man’s nature runs to, the more ought law to weed it out. For as for the first wrong, it doth but offend the law; but the revenge of that wrong putteth the law out of office… Certainly, in taking revenge, a man is but even with his enemy; but in passing it over, he is superior; for it is a prince’s part to pardon. And Salomon, I am sure, saith, It is the glory of a man to pass by an offence. Some, when they take revenge, are desirous the party should know whence it cometh. This is more generous, for the delight seemeth to be not so much in doing the hurt as in making the party repent. But base and crafty cowards are like the arrow that flieth in the dark.’[6]

Contextual Analysis

It is submitted therefore, that retribution and revenge are in fact closely related concepts. Together they probably comprise the most basic, most deeply engrained and most pervasive elements of human social justice reactions and drivers. That said however, at least one mode of distinction should be clear in the mind. While academic comment on revenge and retribution has in the past tended to revolve around the issue of criminal justice,[7] it is a trite observation that retribution is of prime significance in steering the justification and rationale of other legal matters. For example, beyond the criminal arena, discrimination, medical negligence and malpractice, and a veritable constellation of other species of civil litigation can hinge around and be fostered by a base desire for retribution and retributive justice.[8] Retributive motivation can also burn at the heart of intractable personal, family or business disputes.

Retribution is a fascinating psychological and social phenomenon. It can be analysed from a variety of legal, philosophical and other social science perspectives. Discussion of the topic should address the full range of psychological, societal and sociological functions that punishment serves, embracing the cognitive, behavioural and emotional dynamics of retribution in context.[9]

Almost all of the world’s cultures operate an organised system of social regulation and conflict resolution. Among them, legal systems predominate as the most popular and widespread. Law is retribution and conflict resolution by public administration under the unchallengeable authority of the state. Retributive justice is that which is state sponsored.[10] It is possible to distinguish the concept from other forms of retribution and conflict resolution on several grounds. First, law can be said to be retribution or conflict resolution that is managed by a centralised authority or federal structure. Under this model, retribution for wrongdoing and conflict resolution should not be in jeopardy of escalation into a deleterious cycle of mutual and personal revenge.

There is of course always the danger of complimentary retribution: if I penalise you for hitting me, you’ll penalise me for punishing you – theoretically an unending cycle of reciprocal and ultimately destructive violence. A legal system, under the administration of a central body, removes responsibility for retribution from the hands of individuals and puts it at the discretion of the state.

Given that it is vast, impersonal and all-powerful, it is unlikely that those convicted and punished would attempt to revenge themselves in any direct or specific fashion against the state. The seductive revenge element of the law is manifest in notorious crimes – including for example the killing of Polly Klaas in California and the popular revulsion and controversy inspired as a consequence.[11] That case can be compared with the United Kingdom public reaction to the sentencing of the Jamie Bulger killers, themselves children.[12] One essential point of observation is that the respective families of the victims, no matter what punishment they aspired to visit on the killers, are not the ones who decide on the penalty and they are not the ones who administer the punishment.

Because most law is written and long established it can be argued that it assumes an independent and distinguished persona beyond the emanation of the state that is charged with its administration. This matrix conspires to derive a collective sociological fiction that it is the inalienable Law that governs those who implement the law, and that it is somehow the law that exacts retribution, not individual human beings or the servants of the state. This neat trick ensures that the law stands above and apart from the real world as something conceptually flawless in essence if not reality, something truly independent of human frailty, vicissitudes, fallibility and instability.[13]

There is a simple and thus cogent argument that Law is, at its beating heart, no more than a mechanism for revenge. This should not come as a surprise. It is submitted that the fundamental response, the base socio-cultural mechanism for addressing unacceptable activity and behaviour, is to exact revenge. Incompatible activities that fell outwith the sphere of revenge were not initially embraced within the world’s legal systems. Generally speaking it was only later – hundreds of years later in many cases – that retribution-neutral disputes were encompassed within legal regimes.[14]

The earliest-dated code of laws available for scrutiny is the Code of Hammurabi,[15] which sees it origins around 1780 BC. Significantly, the Babylonian King’s rules were obsessed with mechanisms for retribution. This early legal system assumes the form of a lex talionis – the law of retaliation – providing for exact retribution. The biblical mantra is:

“an eye for an eye, a tooth for a tooth, an arm for an arm, a life for a life.”[16]

Mankind’s very earliest systems of law were almost exclusively species of lex talionis. As can be seen from the aforementioned quote, in the tone of Hebrew Scripture the lex talionis is a law of equal and direct retribution. Revenge, in this context is arguably surplus to requirements. King Hammurabi’s legal code and the nascent Syro-Roman and Mahommedan systems that followed,[17] almost wholly founded on the explicit principle of equal and direct retribution. In so doing it reveals the origins of law and justice per se in the gore of retributive violence.

Concluding Comments

In light of the fact that something similar to the lex talionis is typically the foundation stone of every legal system, it is argued that we can deduce that the basic functions of law are those of revenge and retribution… and in no particular order. However, unlike systems of direct retribution (which are in one sense the fast food of societal sin), legal systems are implemented and enforced by the state and its human embodiment in dislocated fashion. The individuals responsible are normally insulated from the threat of reciprocal revenge in return. While revenge and retribution may jeopardise less well regulated societies as protagonists attempt to inflict reciprocal revenge on one another, retribution as it is embodied in established legal orders and controlled by the state entity in theory strives to prevent a deleterious circle of mutual revenge from undermining the fabrics and glues of society.

In a perfect world the concepts of revenge and retribution would indeed be distinguished uniquely and precisely, one from the other. Alas, this is far from a perfect world and the legal matrix in which these terms sit is an organic hotch-potch of socio-political compromise. Thus, both in respect of their common and legal meanings, it is likely these concepts will be employed interchangeably by journalists, judges and the world at large.

In closing, it is pertinent to note that, with a few notable exceptions, most countries, including the U.K., have abolished the death sentence. International war crime tribunals now award only life sentences for the most appalling crimes against humanity. It is submitted that this global shift in emphasis away from revenge-based sanctions has been driven by the emerging philosophy among criminologists that punishment in the form of revenge and retribution sits incongruously in a modern civilised society.[18]

The Bible has a great deal to say on the subject of revenge and retribution. Much of the sentiment expressed therein has coloured the legal systems of the Christian and Western worlds for hundreds of years, in the interpretation and application. It is a matter of regret and stifled consternation that even in that highest of resources contradiction, ambiguity and confusion is rife. Two quotes end this commentary, leaving objectivity in the eye, and at the disposal, of the reader.

“If the person strikes another and kills him, he must be put to death. Whoever strikes an animal and kills it is to make restitution, life for life. If anyone injures and disfigures a fellow countryman it must be done to him as he has done. Fracture for fracture, eye for eye, tooth for tooth.”

Book of Leviticus, Chapter 24:17-20

You have heard that it was said, `Eye for eye, and tooth for tooth.’ But I tell you, Do not resist an evil person. If someone strikes you on the right cheek, turn to him the other also. And if someone wants to sue you and take your tunic, let him have your cloak as well. If someone forces you to go one mile, go with him two miles. Give to the one who asks you, and do not turn away from the one who wants to borrow from you.

Matthew, Chapter 5:38-41

END

WORD COUNT 2122 (exclusive of footnotes)

This is the sole intellectual and creative work of the author.

Bibliography

English Legal System, Elliot, C. and Quinn, F., 3rd edition, Longman (2000)

Criminology, Hale et al., Oxford University Press, (2005).

Smith and Keenan’s English Law, Keenan, D., 13th edition, Pitman Publishing, (2001)

Sir Francis Bacon: The Essayes or Counsels, Civill and Morall, Kiernan M, (editor), Oxford University Press, (2000).

Clint Eastwood and Equity: The virtues of revenge and the Shortcomings of Law in

Popular Culture, Miller, W. I., Law in the Domains of Culture, University of Michigan Press, (1998).

Perceptions of Neighborhood Safety and Support for the Reintroduction of Capital Punishment, Keil T.J., et al, International Journal of Offender Therapy and Comparative Criminology, Vol. 43, No. 4, 514-534 (1999)

The Practice of Punishment: Towards a Theory of Restorative Justice, Cragg W, Routledge, New York (1992).

Restorative Justice and Civil Society, Braithwaite J, and Strang H, (editors), Cambridge: Cambridge University Press, (2001).

You can kill a burglar if you have to, but not if you want to, Gibb F, The Times, February 2 2005.

Babylonian Law –The Code of Hammurabi, Johns CHW, Encyclopaedia Britannica, (11th ed).

Restorative Justice: An Overview. Home Office, United Kingdom. Available at: http://www.homeoffice.gov.uk/rds/pdfs/occ-resjus.pdf

Restorative Justice: When Justice and Healing Go Together, Zehr H, http://ccrweb.ccr.uct.ac.za/archive/two/6_34/p20_restorative.html

Empowerment and Retribution in Criminal and Restorative Justice, Barton C, Victim Offender Mediation Program. (1999): http://www.voma.org/docs/barton_emp&re.pdf

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CONSIDERATION

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Consideration is an essential element in a contract. Subject to certain exceptions, an agreement is not enforceable unless each party to the agreement gets sometimes. This sometimes is called Consideration.

Section 2(d) of the contract Act 1872 defines consideration as when at the desire of the promisor, the promise or any other person has done or abstained form doing or does or abstains form doing, or promises to do or to abstain form doing something, such act or abstinence or promise is called a consideration for the promise.

In the English case currie vs. Misa (1875) defined consideration as some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility given suffered or undertake by the offer.

Example: A agrees to sell a horse to “B” for Tk.1000/=. Here the horse is the Consideration for the Tk.1000/= and the TK.1000/= is the Consideration for the horse.

Classification of Consideration

Consideration may be classified into three types as follows …..

  1. Past Consideration
  2. present Consideration
  3. Future Consideration

# Past Consideration: When the Consideration of one party was given before the date of the promise, it is said to be past Consideration.

# Present Consideration: Consideration which moves simultaneously with the promise, is called present Consideration.

# Future Consideration: When the Consideration is to move at a future date, it is called future Consideration or Executor Consideration.

Rules relating to Consideration:

v Consideration need not be adequate.

v It must be real.

v It must be paid according to the desire of the promisor.

v It may move either form the promise or form any other person.

v It may be for past, present, Future.

v Performance of public duty not to be deemed as Consideration.

v It must be lawful.

v It may not be opposite to public police.

Exception of the rule “No Consideration no contract”

" 81,"

Constitutional Amendment and Caretaker Government in Bangladesh

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Militancy in Bangladesh
 
Bangladesh is for from being a developed democracy at this point of time. Bangladesh has suffered in recent years from out burst of extremist Militancy. This new and Undesirable phenomenon appeared in the Country. So Military is Serious transcend national and regional dimensions in it has represents a global threat of Unprecedented nature. It is a threat to trade, economic and humanity Security.
 
Bangladesh is a Islamic Militant state. 30 Religious Militant Organization group have set up their net work Across the Country since 1989 with the control objective of establishing an Islamic state. Many of them have given armed training to their member of conduct jihad  (21/05/08 daily star)
 
Established the alleged Connection between Bangladesh. Alquran and the recruitment of Myanmar’s Muslims to fight in Afghanistan
 
Bangladesh is steeped in fundamentalism and bent on churning out Radicals in the mould of the Taliban in Afghanistan. The alleged objective was to established Islamic rules. So those fact It was Alleged that an Al Qaeda affiliate Called Harkatul Jihad al Islam (HUJI) was founded by Osama Bin Ladens.
 
The JMB is however learnt to be the youth front of the Al Mujahedeen the Organization that began working in the mid 1990 and still remains obscure
This is one of the issues of public debate on Militancy in Bangladesh. Some name of Militant Group such as.

  1. Jamatul Jihad
  2. Jamatul Mojahiden Bangladesh.
  3. Ahle Hadith Andolone
  4. Ahle Hadith Jubo shangho
  5. Jagrata Mustim Janata
  6. Harkatul Jihad
  7. Hizbut Towhid
  8. Tawhide Janata
  9. Islamic Jubo Shangho
  10. Islami Shangho
  11. Al Falah A.AM Unnayan Shanstha.
  12. Shadadat-e-Al-Himma
  13. Bangladesh Islami Biplobi Parishad
  14. Shadadat Al Hiqma
  15. Hizbut Tahrir
  16. Bushwa Islami front
  17. Jumaatul sadat
  18. Al Jomiatul Islamia
  19. Iraq Jote Allahr Dal
  20. Al Khidmal Bahine
  21. Al Mujahed
  22. Jamaati yahea
  23. Jihady party
  24. Al Harkat Al Islamia
  25. Al Mahfuz Al Islamia
  26. Shahadat e-Nabuwat
  27. Joish-e-Mostafa
  28. Tohfize Haramaine parished
  29. Hizbul Mojahideen
  30. Duranta Kafela
  31. Muslim Guerrilla. They are Belive to mission of the Mujahidden.
 
Bangladesh fights against Militancy. It is important to review that Militant was to established Islamic rule so some tens of thousands of Modrashas exist in Bangladesh many which are led by veterans of jihad against the soviets in Afghanistan (Bangladesh : Breeding Ground for Muslim terror and Religious Extremism and Nationalism). The alleged connection between Bangladesh and Al Qaeda to fight in Afghanistan.
 
Stores about alleged Bangladeshi involvement in Militancy incidents began grow exponentially especially in our neigh boring country
 
Wherefrom their funding comes and how and to whom it is disbursed and which are the financial institutions involved in their banking and other transactions. To get all the account numbers and also the nature and transaction particulars of the accounts. (According to a report published in The Daily Star, on Aug 31, some 31 foreign funded major Islamic NGOs are registered with the NGO affairs Bureau and 15 of them are getting over Tk. 200 Crore in donation every year from the donors, mostly in the middle east, mainly from Saudi Arabia, Kuwait and UAE Some of these NGOs also get fund from the US.UK. These NGOs include Islamic Foundation, Al Maghrib Eye Hospital, etc. There are several hundred local NGOs registered with Social welfare Department. These local NGOs also get foreign funds, But they do not have any accountability as they work as affiliate of the foreign funded ones. The Kuwait based BGO Revival for Islamic Heritage Society and Saudia Arabia Based NGO Al Barmain Islamic Foundation’ carried clandestine links to foster its ideologies till very recently. These Ngos get donations for construction of Mosques etc from the Middle Eastern patrons, but a big chunk of their funds are spent on secret missions.
 
According to one report submitted intelligence agencies a six-month hund has revealed that at least 10 Islami NGOs that are channeling funds to various Islamist outfits and fuelling Islamic militancy in country, These are
 
  1. Rabita Alam Al Islamj
  2. Al Mantade Al Islam
  3. Society of social Reform
  4. Kater Charitable society
  5. Islamic Relief Agency
  6. A frocun Foundation
  7. International Relief Organization
  8. Kuwait Joint Relief Committee
  9. Muslim Aid Bangladesh
  10. Towhid a noor
 
The report reveals that more than 100 foreigners, from different ME and A frican countries cultured Bangladesh on tourist visas and have been working without a work permit illegally in these organizations having a ‘deep rooted’ relation with JI, Islami Oikya Jote the two major components of the Government.
 
According to South Asia Intelligence Review, JMB spends about 20 million taka/year, out of which about 15 million goes to procure the explosive materials and devices and the rest for training and other expenses of the militant. A part of this money for JMB comes from the Islamic International NGOs, registered with the NGO Bureau gets foreign finance worth Tk 2000 million, giving Tk 50 million to Tk 700 million per local Islamic NGO The Second source is the ‘hundi’ from workers in the ME, Still a third source is the domestic investments.
 
As regards arms, the splinter militant groups and different Rohinga Organizations are reportedly acting as the main conduits, using the eastern hillyh border as well as by maritime routes through cox Bazaar, Teknaf, St. Martin, Moheskhali as well as the western routes using the Dublarchar of Bagerhat for bringing in weapons Combat materials from Mynamer and India. Further, the coming mont of holy Ramadan was to used for further orientation consolidation under cover of holding religious congregation for the final assault, preferably by the beginning of the next year The organization agreed to join the plan include, among others.
  1. Jamat-e-Yahya.
  2. AL Turag
  3. Hijbul Towhid,
  4. Al Marzakul al Islami
  5. Jamat ul Falaya,
  6. Jamat ul Mujahidin
  7. Shahdat e Hikma
  8. Al Hartak al Islamia
 
Bangladesh has suffered in recent years from out bursts of Militant group Attract despite its historical and Social dynamic that loaded against any form of Militancy based on Religious extremism. The major early incidence were.
 
One 6 March 1999 explosions at the Udichis (a secular Independent Cultural Organization) Cultural function in Jessore district Left 10 People dead and over 100 injured.
 
Same year on 8 October 8 People were killed and 30 others injured in a Bomb blast at Ahmedia Masjid in Khulna. It was followed by another bomb blast at alai pak Darbarsharif a carter for congregation of followers of sufi Muslim holy men in faridpur district, killing 4 people.
 
On 20 January 2001, 7 people were killed in Bomb blasts at the communist party Bangladesh rally at pattan Maidan and nearly Awami League office at Bangladesh Avenue Dhaka.
 
Two Months later on 14 April 2001, the first day of Bengali New year. 10 people were killed and some 50 wound deed in Bomb explosions at cultural function at Ramna park in Dhaka.
 
On 3 June 2001, 10 More People were killed and 30 others injured in a Bomb attack on a church at Baniarchang in Gopalganj district.
 
On 15 June 2001, a bomb attack on the awami league office in Narayanganj district left 22 people dead and many more injured
 
On 23 September 2001, 8 people were killed and over 100 injured in a Bomb attack on an AL public meeting at mollarhat in Outlying Bagerhat district.
 
On 26 September 2001, 4 people were killed in a Bomb blast near an Al rally in sunamganj district
 
On 28 September 2002 more than 100 people were injured in a series of blasts at movie house and circus arena in outlying satkhira district
 
On 6 December 2002, bomb blasts in four movie houses at mymensingh district town killed 27 and injured more than 200.
Seven people were killed and 20 others injured in a Bomb blast at a fair in tangail district on 17 January 2003.
 
Three people were killed and the British High Commission in Bangladesh Mr, Anwar choudhury was among the 70 injured in a powerful bomb blast at Hazrat Shahjalal Shrine in sylhet district On 21 May 2004. Grenade attacks on an Al rally in Dhaka left 22 people, including senior Al Leader Mrs. Lvy Rahman, dead and over 100 injured; AL President shikh Hasina narrowly escaped the attack.
 
A major grenade attack On an AL Rally in Habiganj district on 27 January 2005 left four people dead, including senior AL Leader shah AMS kibrea.
On 17 August 2005 nation wide bomb explosions at some 500 Spots across 63 districts within a span of 30 minutes left 2 per dead and several injured.
 
On 14 November 2005 in the southern district of Jhalakati bomb attacks on a vehicle left 7 people dead including two Judges of the district count
On 29 November 2005, first ever in Bangladesh suicide bomber exploded himself at the court house of the Gazipur district killing himself along with seven others.
 
On 29 November, 2005 on the court premises of the port city of chittagong suicide attacks on a police transport left 2 dead, including one policeman and 20 Injured.
 
A Bomb is a container filled with exposure mixture when an explosion occurs the explorer materials produce a large volume of gas and release a large amount of energy. A person can be injured by an explosion in number of ways
 
The temperature of exposure gases can exceed 200c, causing heat cramps, heat strokes, heart exhaustion. The radiated heat can course flash burns.
It causes extensive burn which involves irregular area of skin to a deferent degree.
Some bomb produce irrespirable gases like co, H2S, So2 etc if a bomb explodes in a confined space enough CO2 is produced to cause asphyxia.
The tympanic membrane may rupture with hemorrhage in the ear.
 
In high powered bomb explosion a building is demolished. The person inside the building sustains multiple injuries and die from traumatic asphyxia.
 
Suppositional hemorrhage and tearing of abdominal my occur Intracranial hemorrhage, pneunmothorax raptures stomach and bowel.
 
Bombing Bangladesh a debate is raging on the cause of suicide or Militant Bombing. There are deferent views, of course (1) some commentators emphasize that islam breeds contempt and violence against the other’s and especially against the west and that motivates the young angry Muslims to attempts suicide bombing. Some other feel that it is Alienation of the youth in western countries due to their marginalization in that it is maintain on Account of Modrasha education.
 
(2) Many Commentators have also pointed out any militancy is response to other state militancy
(3) Many of then has also point out that any boring is Product of madrasha, the majority of the mad rasha graduates are not equipped with education suitable.
(4) Some generally believe that may be the are emotionally involved But when they are emotionally involved their objectively also goes down the hill.
(5) The policy makers are often rectums of their own Prejudices A part from their political Interest.
(6) Many of them believe in that properly and unemployment is also on caused of Militancy.
Militancy problem is urgently necessary to take proper steps for the control of militancy in our country both long and short term plans can be taken.
(1) Fire priorities are being currently pursued
(A) Breaking the I ideological motivation of the militancy
(B) Blocking their financial supply
(C) Closing sources of explosives
(D) Rounding up the militant
(E) Putting in place effective counter Militant unit.
Investigating the bomb blasts, what need to be done.
 (1) First of all it has to be ensured that following a bomb blast leaders of the political parties do not engage them selves in an acrimonious blame game.
(2) Secondly, adequate training both in country and external has to be organized along with simile ligneous creation of enclosure unites in selected place. These unites must have sufficient technical support to conduct the initial investigation since these exclusive unites will not attack volunteers for practical reasons. It would be necessary to provides them very attractive incentives for drawing the proper talents from the police organization At the same time very intensive or in depth exposure will no be necessary at this armed forces expertise can always be counted upon as supple mentary assistance.
(3) Increased support needs to be given for strengthening the laboratory of CID that has a ballistics section in a less than modern condition.
(4) Monetary incentives should be substantially increased so that the allegedly dormant intelligence out fits are sufficiently energized and quality in for motion becomes available to prevent the occurrence and to nab the culprits once the incident has taken place.
 
THE ADMINISTRATION SOME PLAN CAN BE TAKEN.
(1) The administration should immediately call for an all party meeting to discuses and decide upon a plan of action for tacking the resign incidences of militancy in the country.
(2) The Administration should arrange to close down forth with all religious organization and NGO,s on which intelligence in formation mint in financing Militant act
(3) The Administration should impose visa restriction for foreign visitors coming to participle in such religious gathering like the Bishwa ljtema or other religious sites and shrines
(4) The Administration should gear up intelligence monitoring of tabligh Jammat like, activities all over country like the one at the kakrail Masjid.
(5) The Administration should arrange to register madrasha all over the country. Create an independent national commission for recasting an d modernizing of the curriculum for the Madrashes. This should be a unified one and Mandatory for madrasha all over country.
 
(6) With immediate effect the focus of the electronic media on religious programs should be recast to reflect upon the various humanistic aspects of our religion.
(7) The Administration should enter into a network of collaborate agreements with other international agencies or countries the region Specific collaborative agreements should also be draw with such well know international intelligence agencies like the Scotlandyeard Interpol and FBI.
(8) Serious consideration should also be given of working out extradition agreements between our neighbors.
(9) As a part of our long term strategy we should routinely send our intelligence and member of the regular police force for training aimed at enhancing their professional expertise.
(10) Last but not least in important, plans should be put in plane right now with due ratification by the parliament for separating religious for polities
 
Bangladesh is suffering from the deadly problem of Militancy over the recent 10 years. and It is Global problem militancy problem over side all the above problem and spread its fang in our country. So Bangladesh takes steps against militant group.
 
REFERENCE
 
  1. Global war on Tereer: Bangladesh perspective (Muflesh-R Osmany)
  2. Faces of Terrorism on Bangladesh (Shawkat Ali)
  3. Daily Star – 19/08/05
  4. Daily Star 21/08/05
  5. Daily Star 28/08/04
  6. Daily Star 30/05/04
  7. Bangladesh Observer 25/08/04
  8. www.google.com
  9. New age 8/11/05
  10. Daily Samakal 14/12/05
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CONSUMER BEHAVIOR

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Introduction
The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how
The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products);
The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media);
The behavior of consumers while shopping or making other marketing decisions;
Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;
How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and
How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.
One “official” definition of consumer behavior is “The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.” Although it is not necessary to memorize this definition, it brings up some useful points:
Behavior occurs either for the individual, or in the context of a group (e.g., friends’ influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use).
Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an area of interest.
Consumer behavior involves services and ideas as well as tangible products.
The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy.
There are four main applications of consumer behavior:
The most obvious is for marketing strategy—i.e., for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers’ brand choices.
A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women. Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers’ attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers.
Social marketing involves getting ideas across to consumers rather than selling something. Marty Fisheye, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic.
As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain.
There are several units in the market that can be analyzed. Our main thrust in this course is the consumer. However, we will also need to analyze our own firm’s strengths and weaknesses and those of competing firms. Suppose, for example, that we make a product aimed at older consumers, a growing segment. A competing firm that targets babies, a shrinking market, is likely to consider repositioning toward our market. To assess a competing firm’s potential threat, we need to examine its assets (e.g., technology, patents, market knowledge, awareness of its brands) against pressures it faces from the market. Finally, we need to assess conditions (the marketing environment). For example, although we may have developed a product that offers great appeal for consumers, a recession may cut demand dramatically.
Consumer Research Methods
Market research is often needed to ensure that we produce what customers really want and not what we think they want.
Primary vs. secondary research methods. There are two main approaches to marketing. Secondary research involves using information that others have already put together. For example, if you are thinking about starting a business making clothes for tall people, you don’t need to question people about how tall they are to find out how many tall people exist—that information has already been published by the U.S. Government. Primary research, in contrast, is research that you design and conduct yourself. For example, you may need to find out whether consumers would prefer that your soft drinks be sweater or tarter.
Research will often help us reduce risks associated with a new product, but it cannot take the risk away entirely. It is also important to ascertain whether the research has been complete. For example, Coca Cola did a great deal of research prior to releasing the New Coke, and consumers seemed to prefer the taste. However, consumers were not prepared to have this drink replace traditional Coke.
Secondary Methods. For more information about secondary market research tools and issues, please see.
Primary Methods. Several tools are available to the market researcher—e.g., mail questionnaires, phone surveys, observation, and focus groups. Please see for advantages and disadvantages of each.
Surveys are useful for getting a great deal of specific information. Surveys can contain open-ended questions (e.g., “In which city and state were you born? closed-ended, where the respondent is asked to select answers from a brief list .Male Female.” Open ended questions have the advantage that the respondent is not limited to the options listed, and that the respondent is not being influenced by seeing a list of responses. However, open-ended questions are often skipped by respondents, and coding them can be quite a challenge. In general, for surveys to yield meaningful responses, sample sizes of over 100 are usually required because precision is essential. For example, if a market share of twenty percent would result in a loss while thirty percent would be profitable, a confidence interval of 20-35% is too wide to be useful.
Surveys come in several different forms. Mail surveys are relatively inexpensive, but response rates are typically quite low—typically from 5-20%. Phone-surveys get somewhat higher response rates, but not many questions can be asked because many answer options have to be repeated and few people are willing to stay on the phone for more than five minutes. Mall intercepts are a convenient way to reach consumers, but respondents may be reluctant to discuss anything sensitive face-to-face with an interviewer.
Surveys, as any kind of research, are vulnerable to bias. The wording of a question can influence the outcome a great deal. For example, more people answered no to the question “Should speeches against democracy be allowed?” than answered yes to “Should speeches against democracy be forbidden?” For face-to-face interviews, interviewer bias is a danger, too. Interviewer bias occurs when the interviewer influences the way the respondent answers. For example, unconsciously an interviewer that works for the firm manufacturing the product in question may smile a little when something good is being said about the product and frown a little when something negative is being said. The respondent may catch on and say something more positive than his or her real opinion. Finally, a response bias may occur—if only part of the sample responds to a survey, the respondents’ answers may not be representative of the population.
Focus groups are useful when the marketer wants to launch a new product or modify an existing one. A focus group usually involves having some 8-12 people come together in a room to discuss their consumption preferences and experiences. The group is usually led by a moderator, who will start out talking broadly about topics related broadly to the product without mentioning the product itself. For example, a focus group aimed at sugar-free cookies might first address consumers’ snacking preferences, only gradually moving toward the specific product of sugar-free cookies. By not mentioning the product up front, we avoid biasing the participants into thinking only in terms of the specific product brought out. Thus, instead of having consumers think primarily in terms of what might be good or bad about the product, we can ask them to discuss more broadly the ultimate benefits they really seek. For example, instead of having consumers merely discuss what they think about some sugar-free cookies that we are considering releasing to the market, we can have consumers speak about their motivations for using snacks and what general kinds of benefits they seek. Such a discussion might reveal a concern about healthfulness and a desire for wholesome foods. Probing on the meaning of wholesomeness, consumers might indicate a desire to avoid artificial ingredients. This would be an important concern in the marketing of sugar-free cookies, but might not have come up if consumers were asked to comment directly on the product where the use of artificial ingredients is, by virtue of the nature of the product, necessary.
Focus groups are well suited for some purposes, but poorly suited for others. In general, focus groups are very good for getting breadth—i.e., finding out what kinds of issues are important for consumers in a given product category. Here, it is helpful that focus groups are completely “open-ended:” The consumer mentions his or her preferences and opinions, and the focus group moderator can ask the consumer to elaborate. In a questionnaire, if one did not think to ask about something, chances are that few consumers would take the time to write out an elaborate answer. Focus groups also have some drawbacks, for example:
They represent small sample sizes. Because of the cost of running focus groups, only a few groups can be run. Suppose you run four focus groups with ten members each. This will result in an n of 4(10)=40, which is too small to generalize from. Therefore, focus groups cannot give us a good idea of:
What proportion of the population is likely to buy the product?
What price consumers are willing to pay.
The groups are inherently social. This means that:
Consumers will often say things that may make them look good (i.e., they watch public television rather than soap operas or cook fresh meals for their families daily) even if that is not true.
Consumers may be reluctant to speak about embarrassing issues (e.g., weight control, birth control).
Personal interviews involve in-depth questioning of an individual about his or her interest in or experiences with a product. The benefit here is that we can get really into depth (when the respondent says something interesting, we can ask him or her to elaborate), but this method of research is costly and can be extremely vulnerable to interviewer bias.
To get a person to elaborate, it may help to try a common tool of psychologists and psychiatrists—simply repeating what the person said. He or she will often become uncomfortable with the silence that follows and will then tend to elaborate. This approach has the benefit that it minimizes the interference with the respondent’s own ideas and thoughts. He or she is not influenced by a new question but will, instead, go more in depth on what he or she was saying.
Personal interviews are highly susceptible to inadvertent “signaling” to the respondent. Although an interviewer is looking to get at the truth, he or she may have a significant interest in a positive consumer response. Unconsciously, then, he or she may inadvertently smile a little when something positive is said and frown a little when something negative is said. Consciously, this will often not be noticeable, and the respondent often will not consciously be aware that he or she is being “reinforced” and “punished” for saying positive or negative things, but at an unconscious level, the cumulative effect of several facial expressions are likely to be felt. Although this type of conditioning will not get a completely negative respondent to say all positive things, it may “swing” the balance a bit so that respondents are more likely to say positive thoughts and withhold, or limit the duration of, negative thoughts.
Projective techniques are used when a consumer may feel embarrassed to admit to certain opinions, feelings, or preferences. For example, many older executives may not be comfortable admitting to being intimidated by computers. It has been found that in such cases, people will tend to respond more openly about “someone else.” Thus, we may ask them to explain reasons why a friend has not yet bought a computer, or to tell a story about a person in a picture who is or is not using a product. The main problem with this method is that it is difficult to analyze responses.
Projective techniques are inherently inefficient to use. The elaborate context that has to be put into place takes time and energy away from the main question. There may also be real differences between the respondent and the third party. Saying or thinking about something that “hits too close to home” may also influence the respondent, who may or may not be able to see through the ruse.
Observation of consumers is often a powerful tool. Looking at how consumers select products may yield insights into how they make decisions and what they look for. For example, some American manufacturers were concerned about low sales of their products in Japan. Observing Japanese consumers, it was found that many of these Japanese consumers scrutinized packages looking for a name of a major manufacturer—the product specific-brands that are common in the U.S. (e.g., Tide) were not impressive to the Japanese, who wanted a name of a major firm like Mitsubishi or Proctor & Gamble. Observation may help us determine how much time consumers spend comparing prices, or whether nutritional labels are being consulted.
A question arises as to whether this type of “spying” inappropriately invades the privacy of consumers. Although there may be cause for some concern in that the particular individuals have not consented to be part of this research, it should be noted that there is no particular interest in what the individual customer being watched does. The question is what consumers—either as an entire group or as segments—do. Consumers benefit, for example, from stores that are designed effectively to promote efficient shopping. If it is found that women are more uncomfortable than men about others standing too close, the areas of the store heavily trafficked by women can be designed accordingly. What is being reported here, then, are averages and tendencies in response. The intent is not to find “juicy” observations specific to one customer.
The video clip with Paco Underhill that we saw in class demonstrated the application of observation research to the retail setting. By understanding the phenomena such as the tendency toward a right turn, the location of merchandise can be observed. It is also possible to identify problem areas where customers may be overly vulnerable to the “but brush,” or overly close encounter with others. This method can be used to identify problems that the customer experiences, such as difficulty finding a product, a mirror, a changing room, or a store employee for help.
Online research methods. The Internet now reaches the great majority of households in the U.S., and thus, online research provides new opportunity and has increased in use.
One potential benefit of online surveys is the use of “conditional branching.” In conventional paper and pencil surveys, one question might ask if the respondent has shopped for a new car during the last eight months. If the respondent answers “no,” he or she will be asked to skip ahead several questions—e.g., going straight to question 17 instead of proceeding to number 9. If the respondent answered “yes,” he or she would be instructed to go to the next question which, along with the next several ones, would address issues related to this shopping experience. Conditional branching allows the computer to skip directly to the appropriate question. If a respondent is asked which brands he or she considered, it is also possible to customize brand comparison questions to those listed. Suppose, for example, that the respondent considered Ford, Toyota, and Hyundai, it would be possible to ask the subject questions about his or her view of the relative quality of each respective pair—in this case, Ford vs. Toyota, Ford vs. Hyundai, and Toyota vs. Hyundai.
There are certain drawbacks to online surveys. Some consumers may be more comfortable with online activities than others—and not all households will have access. Today, however, this type of response bias is probably not significantly greater than that associated with other types of research methods. A more serious problem is that it has consistently been found in online research that it is very difficult—if not impossible—to get respondents to carefully read instructions and other information online—there is a tendency to move quickly. This makes it difficult to perform research that depends on the respondent’s reading of a situation or product description.
An online search data and page visit log provides valuable ground for analysis. It is possible to see how frequently various terms are used by those who use a firm’s web site search feature or to see the route taken by most consumers to get to the page with the information they ultimately want. If consumers use a certain term frequently that is not used by the firm in its product descriptions, the need to include this term in online content can be seen in search logs. If consumers take a long, “torturous” route to information frequently accessed, it may be appropriate to redesign the menu structure and/or insert hyperlinks in “intermediate” pages that are found in many users’ routes.
Scanner data. Many consumers are members of supermarket “clubs.” In return for signing p for a card and presenting this when making purchases, consumers are often eligible for considerable discounts on selected products.
Researchers use a more elaborate version of this type of program in some communities. Here, a number of consumers receive small payments and/or other incentives to sign up to be part of a research panel. They then receive a card that they are asked to present any time they go shopping. Nearly all retailers in the area usually cooperate. It is now possible to track what the consumer bought in all stores and to have a historical record.
The consumer’s shopping record is usually combined with demographic information (e.g., income, educational level of adults in the household, occupations of adults, ages of children, and whether the family owns and rents) and the family’s television watching habits. (Electronic equipment run by firms such as A. C. Nielsen will actually recognize the face of each family member when he or she sits down to watch).

It is now possible to assess the relative impact of a number of factors on the consumer’s choice—e.g.,
What brand in a given product category was bought during the last, or a series of past, purchase occasions;
Whether, and if so, how many times a consumer has seen an ad for the brand in question or a competing one;
Whether the target brand (and/or a competing one) is on sale during the store visit;
Whether any brand had preferential display space;
The impact of income and/or family size on purchase patterns; and
Whether a coupon was used for the purchase and, if so, its value.
A “split cable” technology allows the researchers to randomly select half the panel members in a given community to receive one advertising treatment and the other half another. The selection is truly random since each household, as opposed to neighborhood, is selected to get one treatment or the other. Thus, observed differences should, allowing for sampling error, the be result of advertising exposure since there are no other systematic differences between groups.
Interestingly, it has been found that consumers tend to be more influenced by commercials that they “zap” through while channel surfing even if they only see part of the commercial. This most likely results from the reality that one must pay greater attention while channel surfing than when watching a commercial in order to determine which program is worth watching.
Scanner data is, at the present time, only available for certain grocery item product categories
Food items, beverages, cleaning items, laundry detergent, paper towels, and toilet paper. It is not available for most non-grocery product items. Scanner data analysis is most useful for frequently purchased items (e.g., drinks, food items, snacks, and toilet paper) since a series of purchases in the same product category yield more information with greater precision than would a record of one purchase at one point in time. Even if scanner data were available for electronic products such as printers, computers, and MP3 players, for example, these products would be purchased quite infrequently. A single purchase, then, would not be as effective in effectively distinguishing the effects of different factors—e.g., advertising, shelf space, pricing of the product and competitors, and availability of a coupon—since we have at most one purchase instance during a long period of time during which several of these factors would apply at the same time. In the case of items that are purchased frequently, the consumer has the opportunity to buy a product, buy a competing product, or buy nothing at all depending on the status of the brand of interest and competing brands. In the case of the purchase of an MP3 player, in contrast, there may be promotions associated with several brands going on at the same time, and each may advertise. It may also be that the purchase was motivated by the breakdown of an existing product or dissatisfaction or a desire to add more capabilities.
Physiological measures are occasionally used to examine consumer response. For example, advertisers may want to measure a consumer’s level of arousal during various parts of an advertisement. This can be used to assess possible discomfort on the negative side and level of attention on the positive side.
By attaching a tiny camera to plain eye glasses worn by the subject while watching an advertisement, it is possible to determine where on screen or other ad display the subject focuses at any one time. If the focus remains fixed throughout an ad sequence where the interesting and active part area changes, we can track whether the respondent is following the sequence intended. If he or she is not, he or she is likely either not to be paying as much attention as desired or to be confused by an overly complex sequence. In situations where the subject’s eyes do move, we can assess whether this movement is going in the intended direction.
Mind-reading would clearly not be ethical and is, at the present time, not possible in any event. However, it is possible to measure brain waves by attaching electrodes. These readings will not reveal what the subject actually thinks, but it is possible to distinguish between beta waves—indicating active thought and analysis—and alpha waves, indicating lower levels of attention.
An important feature of physiological measures is that we can often track performance over time. A subject may, for example, be demonstrating good characteristics—such as appropriate level of arousal and eye movement—during some of the ad sequence and not during other parts. This, then, gives some guidance as to which parts of the ad are effective and which ones need to be reworked.
In a variation of direct physiological measures, a subject may be asked, at various points during an advertisement, to indicate his or her level of interest, liking, comfort, and approval by moving a lever or some instrument (much like one would adjust the volume on a radio or MP3 player). Republican strategist used this technique during the impeachment and trial of Bill Clinton in the late 1990s. By watching approval during various phases of a speech by the former President, it was found that viewers tended to respond negatively when he referred to “speaking truthfully” but favorably when the President referred to the issues in controversy as part of his “private life.” The Republican researchers were able to separate average results from Democrats, Independents, and Republicans, effectively looking at different segments to make sure that differences between each did not cancel out effects of the different segments. (For example, if at one point Democrats reacted positively and Republicans responded negatively with the same intensity, the average result of apparent indifference would have been very misleading).
Research sequence. In general, if more than one type of research is to be used, the more flexible and less precise method—such as focus groups and/or individual interviews—should generally be used before the less flexible but more precise methods (e.g., surveys and scanner data) are used. Focus groups and interviews are flexible and allow the researcher to follow up on interesting issues raised by participants who can be probed. However, because the sample sizes are small and because participants in a focus group are influenced by each other, few data points are collected. If we run five focus groups with eight people each, for example, we would have a total of forty responses. Even if we assume that these are independent, a sample size of forty would give very imprecise results. We might conclude, for example, that somewhere between 5% and 40% of the target market would be interested in the product we have to offer. This is usually no more precise than what we already reasonably new. Questionnaires, in contrast, are highly inflexible. It is not possible to ask follow-up questions. Therefore, we can use our insights from focus groups and interviews to develop questionnaires that contain specific questions that can be asked to a larger number of people. There will still be some sampling error, but with a sample size of 1,000+ responses, we may be able to narrow the 95% confidence interval for the percentage of the target market that is seriously interested in our product to, say, 17-21%, a range that is much more meaningful.
Cautions. Some cautions should be heeded in marketing research. First, in general, research should only be commissioned when it is worth the cost. Thus, research should normally be useful in making specific decisions (what size should the product be? Should the product be launched? Should we charge $1.75 or $2.25?)
Secondly, marketing research can be, and often is, abused. Managers frequently have their own “agendas” (e.g., they either would like a product to be launched or would prefer that it not be launched so that the firm will have more resources left over to tackle their favorite products). Often, a way to get your way is to demonstrate through “objective” research that your opinions make economic sense. One example of misleading research, which was reported nationwide in the media, involved the case of “The Pentagon Declares War on Rush Limbaugh.” The Pentagon, within a year of the election of Democrat Bill Clinton, reported that only 4.2% of soldiers listening to the Armed Forces Network wanted to hear Rush Limbaugh. However, although this finding was reported without question in the media, it was later found that the conclusion was based on the question “What single thing can we do to improve programming?” If you did not write in something like “Carry Rush Limbaugh,” you were counted as not wanting to hear him.
Culture and Subculture
NOTE: This topic is also discussed in the International Marketing section of this site.
Culture is part of the external influences that impact the consumer. That is, culture represents influences that are imposed on the consumer by other individuals.
The definition of culture offered in one textbook is “That complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by man person as a member of society.” From this definition, we make the following observations:
Culture, as a “complex whole,” is a system of interdependent components.
Knowledge and beliefs are important parts. In the U.S., we know and believe that a person who is skilled and works hard will get ahead. In other countries, it may be believed that differences in outcome result more from luck. “Chunking,” the name for China in Chinese, literally means “The Middle Kingdom.” The belief among ancient Chinese that they were in the center of the universe greatly influenced their thinking.
Other issues are relevant. Art, for example, may be reflected in the rather arbitrary practice of wearing ties in some countries and wearing turbans in others. Morality may be exhibited in the view in the United States that one should not be naked in public. In Japan, on the other hand, groups of men and women may take steam baths together without perceived as improper. On the other extreme, women in some Arab countries are not even allowed to reveal their faces. Notice, by the way, that what at least some countries view as moral may in fact be highly immoral by the standards of another country. For example, the law that once banned interracial marriages in South Africa was named the “Immorality Act,” even though in most civilized countries this law, and any degree of explicit racial prejudice, would itself be considered highly immoral.
Culture has several important characteristics: (1) Culture is comprehensive. This means that all parts must fit together in some logical fashion. For example, bowing and a strong desire to avoid the loss of face are unified in their manifestation of the importance of respect. (2) Culture is learned rather than being something we are born with. We will consider the mechanics of learning later in the course. (3) Culture is manifested within boundaries of acceptable behavior. For example, in American society, one cannot show up to class naked, but wearing anything from a suit and tie to shorts and a T-shirt would usually be acceptable. Failure to behave within the prescribed norms may lead to sanctions, ranging from being hauled off by the police for indecent exposure to being laughed at by others for wearing a suit at the beach. (4) Conscious awareness of cultural standards is limited. One American spy was intercepted by the Germans during World War II simply because of the way he held his knife and fork while eating. (5) Cultures fall somewhere on a continuum between static and dynamic depending on how quickly they accept change. For example, American culture has changed a great deal since the 1950s, while the culture of Saudi Arabia has changed much less.
Dealing with culture. Culture is a problematic issue for many marketers since it is inherently nebulous and often difficult to understand. One may violate the cultural norms of another country without being informed of this, and people from different cultures may feel uncomfortable in each other’s presence without knowing exactly why (for example, two speakers may unconsciously continue to attempt to adjust to reach an incompatible preferred interpersonal distance).
Warning about stereotyping. When observing a culture, one must be careful not to over-generalize about traits that one sees. Research in social psychology has suggested a strong tendency for people to perceive an “outgroup” as more homogenous than an “ingroup,” even when they knew what members had been assigned to each group purely by chance. When there is often a “grain of truth” to some of the perceived differences, the temptation to over-generalize is often strong. Note that there are often significant individual differences within cultures.
Cultural lessons. We considered several cultural lessons in class; the important thing here is the big picture. For example, within the Muslim tradition, the dog is considered a “dirty” animal, so portraying it as “man’s best friend” in an advertisement is counter-productive. Packaging, seen as a reflection of the quality of the “real” product, is considerably more important in Asia than in the U.S., where there is a tendency to focus on the contents which “really count.” Many cultures observe significantly greater levels of formality than that typical in the U.S., and Japanese negotiator tend to observe long silent pauses as a speaker’s point is considered.
Cultural characteristics as a continuum. There is a tendency to stereotype cultures as being one way or another (e.g., individualistic rather than collectivistic). Note, however, countries fall on a continuum of cultural traits. Hofstede’s research demonstrates a wide range between the most individualistic and collectivistic countries, for example—some fall in the middle.
Hofstede’s Dimensions. Gert Hofstede, a Dutch researcher, was able to interview a large number of IBM executives in various countries, and found that cultural differences tended to center around four key dimensions:
Individualism vs. collectivism: To what extent do people believe in individual responsibility and reward rather than having these measures aimed at the larger group? Contrary to the stereotype, Japan actually ranks in the middle of this dimension, while Indonesia and West Africa rank toward the collectivistic side. The U.S., Britain, and the Netherlands rate toward individualism.
Power distance: To what extent is there a strong separation of individuals based on rank? Power distance tends to be particularly high in Arab countries and some Latin American ones, while it is more modest in Northern Europe and the U.S.
Masculinity vs. femininity involves a somewhat more nebulous concept. “Masculine” values involve competition and “conquering” nature by means such as large construction projects, while “feminine” values involve harmony and environmental protection. Japan is one of the more masculine countries, while the Netherlands rank relatively low. The U.S. is close to the middle, slightly toward the masculine side. (The fact that these values are thought of as “masculine” or “feminine” does not mean that they are consistently held by members of each respective gender—there are very large “within-group” differences. There is, however, often a large correlation of these cultural values with the status of women.)
Uncertainty avoidance involves the extent to which a “structured” situation with clear rules is preferred to a more ambiguous one; in general, countries with lower uncertainty avoidance tend to be more tolerant of risk. Japan ranks very high. Few countries are very low in any absolute sense, but relatively speaking, Britain and Hong Kong are lower, and the U.S. is in the lower range of the distribution.
Although Hofstede’s original work did not address this, a fifth dimension of long term vs. short term orientation has been proposed. In the U.S., managers like to see quick results, while Japanese managers are known for take a long term view, often accepting long periods before profitability is obtained.
High vs. low context cultures: In some cultures, “what you see is what you get”—the speaker is expected to make his or her points clear and limit ambiguity. This is the case in the U.S.—if you have something on your mind, you are expected to say it directly, subject to some reasonable standards of diplomacy. In Japan, in contrast, facial expressions and what is not said may be an important clue to understanding a speaker’s meaning. Thus, it may be very difficult for Japanese speakers to understand another’s written communication. The nature of languages may exacerbate this phenomenon—while the German language is very precise, Chinese lacks many grammatical features, and the meaning of words may be somewhat less precise. English ranks somewhere in the middle of this continuum.
Ethnocentrism and the self-reference criterion. The self-reference criterion refers to the tendency of individuals, often unconsciously, to use the standards of one’s own culture to evaluate others. For example, Americans may perceive more traditional societies to be “backward” and “unmotivated” because they fail to adopt new technologies or social customs, seeking instead to preserve traditional values. In the 1960s, a supposedly well read American psychology professor referred to India’s culture of “sick” because, despite severe food shortages, the Hindu religion did not allow the eating of cows. The psychologist expressed disgust that the cows were allowed to roam free in villages, although it turns out that they provided valuable functions by offering milk and fertilizing fields. Ethnocentrism is the tendency to view one’s culture to be superior to others. The important thing here is to consider how these biases may come in the way in dealing with members of other cultures.
It should be noted that there is a tendency of outsiders to a culture to overstate the similarity of members of that culture to each other. In the United States, we are well aware that there is a great deal of heterogeneity within our culture; however, we often underestimate the diversity within other cultures. For example, in Latin America, there are great differences between people who live in coastal and mountainous areas; there are also great differences between social classes.
Language issues. Language is an important element of culture. It should be realized that regional differences may be subtle. For example, one word may mean one thing in one Latin American country, but something off-color in another. It should also be kept in mind that much information is carried in non-verbal communication. In some cultures, we nod to signify “yes” and shake our heads to signify “no;” in other cultures, the practice is reversed. Within the context of language:
There are often large variations in regional dialects of a given language. The differences between U.S., Australian, and British English are actually modest compared to differences between dialects of Spanish and German.
Idioms involve “figures of speech” that may not be used, literally translated, in other languages. For example, baseball is a predominantly North and South American sport, so the notion of “in the ball park” makes sense here, but the term does not carry the same meaning in cultures where the sport is less popular.
Neologisms involve terms that have come into language relatively recently as technology or society involved. With the proliferation of computer technology, for example, the idea of an “add-on” became widely known. It may take longer for such terms to “diffuse” into other regions of the world. In parts of the World where English is heavily studied in schools, the emphasis is often on grammar and traditional language rather than on current terminology, so neologisms have a wide potential not to be understood.
Slang exists within most languages. Again, regional variations are common and not all people in a region where slang is used will necessarily understand this. There are often significant generation gaps in the use of slang.
Writing patterns, or the socially accepted ways of writing, will differs significantly between cultures.

In English and Northern European languages, there is an emphasis on organization and conciseness. Here, a point is made by building up to it through background. An introduction will often foreshadow what is to be said. In Romance languages such as Spanish, French, and Portuguese, this style is often considered “boring” and “inelegant.” Detours are expected and are considered a sign of class, not of poor organization. In Asian languages, there is often a great deal of circularity. Because of concerns about potential loss of face, opinions may not be expressed directly. Instead, speakers may hint at ideas or indicate what others have said, waiting for feedback from the other speaker before committing to a point of view.
Because of differences in values, assumptions, and language structure, it is not possible to meaningfully translate “word-for-word” from one language to another. A translator must keep “unspoken understandings” and assumptions in mind in translating. The intended meaning of a word may also differ from its literal translation. For example, the Japanese word hai is literally translated as “yes.” To Americans, that would imply “Yes, I agree.” To the Japanese speaker, however, the word may mean “Yes, I hear what you are saying” (without any agreement expressed) or even “Yes, I hear you are saying something even though I am not sure exactly what you are saying.”
Differences in cultural values result in different preferred methods of speech. In American English, where the individual is assumed to be more in control of his or her destiny than is the case in many other cultures, there is a preference for the “active” tense (e.g., “I wrote the marketing plan”) as opposed to the passive (e.g., “The marketing plan was written by me.”)
Because of the potential for misunderstandings in translations, it is dangerous to rely on a translation from one language to another made by one person. In the “decentering” method, multiple translators are used.

The text is first translated by one translator—say, from German to Mandarin Chinese. A second translator, who does not know what the original German text said, will then translate back to German from Mandarin Chinese translation. The text is then compared. If the meaning is not similar, a third translator, keeping in mind this feedback, will then translate from German to Mandarin. The process is continued until the translated meaning appears to be satisfactory.
Different perspectives exist in different cultures on several issues; e.g.:
Monochronic cultures tend to value precise scheduling and doing one thing at a time; in polychronic cultures, in contrast, promptness is valued less, and multiple tasks may be performed simultaneously. (See text for more detail).
Space is perceived differently. Americans will feel crowded where people from more densely populated countries will be comfortable.
Symbols differ in meaning. For example, while white symbols purity in the U.S., it is a symbol of death in China. Colors that are considered masculine and feminine also differ by culture.
Americans have a lot of quite shallow friends toward whom little obligation is felt; people in European and some Asian cultures have fewer, but more significant friends. For example, one Ph.D. student from India, with limited income, felt obligated to try buy an airline ticket for a friend to go back to India when a relative had died.
In the U.S. and much of Europe, agreements are typically rather precise and contractual in nature; in Asia, there is a greater tendency to settle issues as they come up. As a result, building a relationship of trust is more important in Asia, since you must be able to count on your partner being reasonable.
In terms of etiquette, some cultures have more rigid procedures than others. In some countries, for example, there are explicit standards as to how a gift should be presented. In some cultures, gifts should be presented in private to avoid embarrassing the recipient; in others, the gift should be made publicly to ensure that no perception of secret bribery could be made.
Demographics
Demographics are clearly tied to subculture and segmentation. Here, however, we shift our focus from analyzing specific subcultures to trying to understand the implications for an entire population of its makeup.
Some articles of possible interest:
Several issues are useful in the structure of a population. For example, in some rapidly growing countries, a large percentage of the population is concentrated among younger generations. In countries such as Korea, China, and Taiwan, this has helped stimulate economic growth, while in certain poorer countries, it puts pressures on society to accommodate an increasing number of people on a fixed amount of land. Other countries such as Japan and Germany, in contrast, experience problems with a “graying” society, where fewer non-retired people are around to support an increasing number of aging seniors. Because Germany actually hovers around negative population growth, the German government has issued large financial incentives, in the forms of subsidies, for women who have children. In the United States, population growth occurs both through births and immigration. Since the number of births is not growing, problems occur for firms that are dependent on population growth (e.g., Gerber, a manufacturer of baby food).
Social class is a somewhat nebulous subject that involves stratifying people into groups with various amounts of prestige, power, and privilege. In part because of the pioneering influence in American history, status differentiations here are quite vague. We cannot, for example, associate social class with income, because a traditionally low status job as a plumber may today come with as much income as a traditionally more prestigious job as a school teacher. In certain other cultures, however, stratification is more clear-cut. Although the caste system in India is now illegal, it still maintains a tremendous influence on that society. While some mobility exists today, social class awareness is also somewhat greater in Britain, where social status is in part reinforced by the class connotations of the accent with which one speaks.
Textbooks speak of several indices that have been used to “compute” social class in the United States, weighing factors such as income, the nature of one’s employment, and level of education. Taken too literally, these indices are not very meaningful; more broadly speaking, they illustrate the reality that social status is a complex variable that is determined, not always with consensus among observers, by several different variables.
Segmentation, Targeting, and Positioning
Segmentation, targeting, and positioning together comprise a three stage process. We first (1) determine which kinds of customers exist, then (2) select which ones we are best off trying to serve and, finally, (3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.

Segmentation involves finding out what kinds of consumers with different needs exist. In the auto market, for example, some consumers demand speed and performance, while others are much more concerned about roominess and safety. In general, it holds true that “You can’t be all things to all people,” and experience has demonstrated that firms that specialize in meeting the needs of one group of consumers over another tend to be more profitable.
Generically, there are three approaches to marketing. In the undifferentiated strategy, all consumers are treated as the same, with firms not making any specific efforts to satisfy particular groups. This may work when the product is a standard one where one competitor really can’t offer much that another one can’t. Usually, this is the case only for commodities. In the concentrated strategy, one firm chooses to focus on one of several segments that exist while leaving other segments to competitors. For example, Southwest Airlines focuses on price sensitive consumers who will forego meals and assigned seating for low prices. In contrast, most airlines follow the differentiated strategy: They offer high priced tickets to those who are inflexible in that they cannot tell in advance when they need to fly and find it impractical to stay over a Saturday. These travelers—usually business travelers—pay high fares but can only fill the planes up partially. The same airlines then sell some of the remaining seats to more price sensitive customers who can buy two weeks in advance and stay over.
Note that segmentation calls for some tough choices. There may be a large number of variables that can be used to differentiate consumers of a given product category; yet, in practice, it becomes impossibly cumbersome to work with more than a few at a time. Thus, we need to determine which variables will be most useful in distinguishing different groups of consumers. We might thus decide, for example, that the variables that are most relevant in separating different kinds of soft drink consumers are (1) preference for taste vs. low calories, (2) preference for Cola vs. non-cola taste, (3) price sensitivity—willingness to pay for brand names; and (4) heavy vs. light consumers. We now put these variables together to arrive at various combinations.
Several different kinds of variables can be used for segmentation.
Demographic variables essentially refer to personal statistics such as income, gender, education, location (rural vs. urban, East vs. West), ethnicity, and family size. Campbell’s soup, for instance, has found that Western U.S. consumers on the average prefer spicier soups—thus, you get a different product in the same cans at the East and West coasts. Facing flat sales of guns in the traditional male dominated market, a manufacturer came out with the Lady Remmington, a more compact, handier gun more attractive to women. Taking this a step farther, it is also possible to segment on lifestyle and values.”
Some consumers want to be seen as similar to others, while a different segment wants to stand apart from the crowd.
Another basis for segmentation is behavior. Some consumers are “brand loyal”—i.e., they tend to stick with their preferred brands even when a competing one is on sale. Some consumers are “heavy” users while others are “light” users. For example, research conducted by the wine industry shows that some 80% of the product is consumed by 20% of the consumers—presumably a rather intoxicated group.
One can also segment on benefits sought, essentially bypassing demographic explanatory variables. Some consumers, for example, like scented soap (a segment likely to be attracted to brands such as Irish Spring), while others prefer the “clean” feeling of unscented soap (the “Ivory” segment). Some consumers use toothpaste primarily to promote oral health, while another segment is more interested in breath freshening.
In the next step, we decide to target one or more segments. Our choice should generally depend on several factors. First, how well are existing segments served by other manufacturers? It will be more difficult to appeal to a segment that is already well served than to one whose needs are not currently being served well. Secondly, how large is the segment, and how can we expect it to grow? (Note that a downside to a large, rapidly growing segment is that it tends to attract competition). Thirdly, do we have strengths as a company that will help us appeal particularly to one group of consumers? Firms may already have an established reputation. While McDonald’s has a great reputation for fast, consistent quality, family friendly food, it would be difficult to convince consumers that McDonald’s now offers gourmet food. Thus, McD’s would probably be better off targeting families in search of consistent quality food in nice, clean restaurants.
Positioning involves implementing our targeting. For example, Apple Computer has chosen to position itself as a maker of user-friendly computers. Thus, Apple has done a lot through its advertising to promote itself, through its unintimidating icons, as a computer for “non-geeks.” The Visual C software programming language, in contrast, is aimed a “techies.”

Michael Treacy and Fred Wiersema suggested in their 1993 book The Discipline of Market Leaders that most successful firms fall into one of three categories:
Operationally excellent firms, which maintain a strong competitive advantage by maintaining exceptional efficiency, thus enabling the firm to provide reliable service to the customer at a significantly lower cost than those of less well organized and well run competitors. The emphasis here is mostly on low cost, subject to reliable performance, and less value is put on customizing the offering for the specific customer. Wal-Mart is an example of this discipline. Elaborate logistical designs allow goods to be moved at the lowest cost, with extensive systems predicting when specific quantities of supplies will be needed.
Customer intimate firms, which excel in serving the specific needs of the individual customer well. There is less emphasis on efficiency, which is sacrificed for providing more precisely what is wanted by the customer. Reliability is also stressed. Nordstrom’s and IBM are examples of this discipline.
Technologically excellent firms, which produce the most advanced products currently available with the latest technology, constantly maintaining leadership in innovation. These firms, because they work with costly technology that need constant refinement, cannot be as efficient as the operationally excellent firms and often cannot adapt their products as well to the needs of the individual customer. Intel is an example of this discipline.
Treacy and Wiersema suggest that in addition to excelling on one of the three value dimensions, firms must meet acceptable levels on the other two. Wal-Mart, for example, does maintain some level of customer service. Nordstrom’s and Intel both must meet some standards of cost effectiveness. The emphasis, beyond meeting the minimum required level in the two other dimensions, is on the dimension of strength.
Repositioning involves an attempt to change consumer perceptions of a brand, usually because the existing position that the brand holds has become less attractive. Sears, for example, attempted to reposition itself from a place that offered great sales but unattractive prices the rest of the time to a store that consistently offered “everyday low prices.” Repositioning in practice is very difficult to accomplish. A great deal of money is often needed for advertising and other promotional efforts, and in many cases, the repositioning fails.
To effectively attempt repositioning, it is important to understand how one’s brand and those of competitors are perceived. One approach to identifying consumer product perceptions is multidimensional scaling. Here, we identify how products are perceived on two or more “dimensions,” allowing us to plot brands against each other. It may then be possible to attempt to “move” one’s brand in a more desirable direction by selectively promoting certain points. There are two main approaches to multi-dimensional scaling. In the a priori approach, market researchers identify dimensions of interest and then ask consumers about their perceptions on each dimension for each brand. This is useful when (1) the market researcher knows which dimensions are of interest and (2) the customer’s perception on each dimension is relatively clear (as opposed to being “made up” on the spot to be able to give the researcher a desired answer). In the similarity rating approach, respondents are not asked about their perceptions of brands on any specific dimensions. Instead, subjects are asked to rate the extent of similarity of
ducts (e.g., How similar, on a scale of 1-7, is Snicker’s to Kitkat, and how similar is Toblerone to Three Musketeers?) Using a computer algorithms, the computer then identifies positions of each brand on a map of a given number of dimensions. The computer does not reveal what each dimension means—that must be left to human interpretation based on what the variations in each dimension appears to reveal. This second method is more useful when no specific product dimensions have been identified as being of particular interest or when it is not clear what the variables of difference are for the product category.
Information Search and Decision Making
Problem Recognition. One model of consumer decision making involves several steps. The first one is problem recognition—you realize that something is not as it should be. Perhaps, for example, your car is getting more difficult to start and is not accelerating well. The second step is information search—what are some alternative ways of solving the problem? You might buy a new car, buy a used car, take your car in for repair, ride the bus, ride a taxi, or ride a skateboard to work. The third step involves evaluation of alternatives. A skateboard is inexpensive, but may be ill-suited for long distances and for rainy days. Finally, we have the purchase stage, and sometimes a post-purchase stage (e.g., you return a product to the store because you did not find it satisfactory). In reality, people may go back and forth between the stages. For example, a person may resume alternative identification during while evaluating already known alternatives.

Consumer involvement will tend to vary dramatically depending on the type of product. In general, consumer involvement will be higher for products that are very expensive (e.g., a home, a car) or are highly significant in the consumer’s life in some other way (e.g., a word processing program or acne medication).
It is important to consider the consumer’s motivation for buying products. To achieve this goal, we can use the Means-End chain, wherein we consider a logical progression of consequences of product use that eventually lead to desired end benefit. Thus, for example, a consumer may see that a car has a large engine, leading to fast acceleration, leading to a feeling of performance, leading to a feeling of power, which ultimately improves the consumer’s self-esteem. A handgun may aim bullets with precision, which enables the user to kill an intruder, which means that the intruder will not be able to harm the consumer’s family, which achieves the desired end-state of security. In advertising, it is important to portray the desired end-states. Focusing on the large motor will do less good than portraying a successful person driving the car.
Information search and decision making. Consumers engage in both internal and external information search.

Internal search involves the consumer identifying alternatives from his or her memory. For certain low involvement products, it is very important that marketing programs achieve “top of mind” awareness. For example, few people will search the Yellow Pages for fast food restaurants; thus, the consumer must be able to retrieve one’s restaurant from memory before it will be considered. For high involvement products, consumers are more likely to use an external search. Before buying a car, for example, the consumer may ask friends’ opinions, read reviews in Consumer Reports, consult several web sites, and visit several dealerships. Thus, firms that make products that are selected predominantly through external search must invest in having information available to the consumer in need—e.g., through brochures, web sites, or news coverage.
A compensatory decision involves the consumer “trading off” good and bad attributes of a product. For example, a car may have a low price and good gas mileage but slow acceleration. If the price is sufficiently inexpensive and gas efficient, the consumer may then select it over a car with better acceleration that costs more and uses more gas. Occasionally, a decision will involve a non-compensatory strategy. For example, a parent may reject all soft drinks that contain artificial sweeteners. Here, other good features such as taste and low calories cannot overcome this one “non-negotiable” attribute.
The amount of effort a consumer puts into searching depends on a number of factors such as the market (how many competitors are there, and how great are differences between brands expected to be?), product characteristics (how important is this product? How complex is the product? How obvious are indications of quality?), consumer characteristics (how interested is a consumer, generally, in analyzing product characteristics and making the best possible deal?), and situational characteristics (as previously discussed).
Two interesting issues in decisions are:
Variety seeking (where consumers seek to try new brands not because these brands are expected to be “better” in any way, but rather because the consumer wants a “change of pace,” and
“Impulse” purchases—unplanned buys. This represents a somewhat “fuzzy” group. For example, a shopper may plan to buy vegetables but only decide in the store to actually buy broccoli and corn. Alternatively, a person may buy an item which is currently on sale, or one that he or she remembers that is needed only once inside the store.
A number of factors involve consumer choices. In some cases, consumers will be more motivated. For example, one may be more careful choosing a gift for an in-law than when buying the same thing for one self. Some consumers are also more motivated to comparison shop for the best prices, while others are more convenience oriented. Personality impacts decisions. Some like variety more than others, and some are more receptive to stimulation and excitement in trying new stores. Perception influences decisions. Some people, for example, can taste the difference between generic and name brand foods while many cannot. Selective perception occurs when a person is paying attention only to information of interest. For example, when looking for a new car, the consumer may pay more attention to car ads than when this is not in the horizon. Some consumers are put off by perceived risk. Thus, many marketers offer a money back guarantee. Consumers will tend to change their behavior through learning—e.g., they will avoid restaurants they have found to be crowded and will settle on brands that best meet their tastes. Consumers differ in the values they hold (e.g., some people are more committed to recycling than others who will not want to go through the hassle). We will consider the issue of lifestyle under segmentation.
Families and Family Decision Making
The Family Life Cycle. Individuals and families tend to go through a “life cycle:” The simple life cycle goes from

For purposes of this discussion, a “couple” may either be married or merely involve living together. The breakup of a non-marital relationship involving cohabitation is similarly considered equivalent to a divorce.
In real life, this situation is, of course, a bit more complicated. For example, many couples undergo divorce. Then we have one of the scenarios:

Single parenthood can result either from divorce or from the death of one parent. Divorce usually entails a significant change in the relative wealth of spouses. In some cases, the non-custodial parent (usually the father) will not pay the required child support, and even if he or she does, that still may not leave the custodial parent and children as well off as they were during the marriage. On the other hand, in some cases, some non-custodial parents will be called on to pay a large part of their income in child support. This is particularly a problem when the non-custodial parent remarries and has additional children in the second (or subsequent marriages). In any event, divorce often results in a large demand for:
Low cost furniture and household items
Time-saving goods and services
Divorced parents frequently remarry, or become involved in other non-marital relationships; thus, we may see
Here, the single parent who assumes responsibility for one or more children may not form a relationship with the other parent of the child.
Integrating all the possibilities discussed, we get the following depiction of the Family Life Cycle:

Generally, there are two main themes in the Family Life Cycle, subject to significant exceptions:
As a person gets older, he or she tends to advance in his or her career and tends to get greater income (exceptions: maternity leave, divorce, retirement).
Unfortunately, obligations also tend to increase with time (at least until one’s mortgage has been paid off). Children and paying for one’s house are two of the greatest expenses.
Note that although a single person may have a lower income than a married couple, the single may be able to buy more discretionary items.
Family Decision Making. Individual members of families often serve different roles in decisions that ultimately draw on shared family resources. Some individuals are information gatherers/holders, who seek out information about products of relevance. These individuals often have a great deal of power because they may selectively pass on information that favors their chosen alternatives. Influencers do not ultimately have the power decide between alternatives, but they may make their wishes known by asking for specific products or causing embarrassing situations if their demands are not met. The decision maker(s) have the power to determine issues such as:
Whether to buy;
Which product to buy (pick-up or passenger car?);
Which brand to buy;
Where to buy it; and
When to buy.
Note, however, that the role of the decision maker is separate from that of the purchaser. From the point of view of the marketer, this introduces some problems since the purchaser can be targeted by point-of-purchase (POP) marketing efforts that cannot be aimed at the decision maker. Also note that the distinction between the purchaser and decision maker may be somewhat blurred:
The decision maker may specify what kind of product to buy, but not which brand;
The purchaser may have to make a substitution if the desired brand is not in stock;
The purchaser may disregard instructions (by error or deliberately).
It should be noted that family decisions are often subject to a great deal of conflict. The reality is that few families are wealthy enough to avoid a strong tension between demands on the family’s resources. Conflicting pressures are especially likely in families with children and/or when only one spouse works outside the home. Note that many decisions inherently come down to values, and that there is frequently no “objective” way to arbitrate differences. One spouse may believe that it is important to save for the children’s future; the other may value spending now (on private schools and computer equipment) to help prepare the children for the future. Who is right? There is no clear answer here. The situation becomes even more complex when more parties—such as children or other relatives—are involved.
Some family members may resort to various strategies to get their way. One is bargaining—one member will give up something in return for someone else. For example, the wife says that her husband can take an expensive course in gourmet cooking if she can buy a new pickup truck. Alternatively, a child may promise to walk it every day if he or she can have a hippopotamus. Another strategy is reasoning—trying to get the other person(s) to accept one’s view through logical argumentation. Note that even when this is done with a sincere intent, its potential is limited by legitimate differences in values illustrated above. Also note that individuals may simply try to “wear down” the other party by endless talking in the guise of reasoning (this is a case of negative reinforcement as we will see subsequently). Various manipulative strategies may also be used. One is impression management, where one tries to make one’s side look good (e.g., argue that a new TV will help the children see educational TV when it is really mostly wanted to see sports programming, or argue that all “decent families make a contribution to the church”). Authority involves asserting one’s “right” to make a decision (as the “man of the house,” the mother of the children, or the one who makes the most money). Emotion involves making an emotional display to get one’s way (e.g., a man cries if his wife will not let him buy a new rap album).
Group Influences
Humans are inherently social animals, and individuals greatly influence each other.
A useful framework of analysis of group influence on the individual is the so called reference group—the term comes about because an individual uses a relevant group as a standard of reference against which oneself is compared. Reference groups come in several different forms.
The aspirational reference group refers to those others against whom one would like to compare oneself. For example, many firms use athletes as spokespeople, and these represent what many people would ideally like to be.
Associative reference groups include people who more realistically represent the individuals’ current equals or near-equals—e.g., coworkers, neighbors, or members of churches, clubs, and organizations. Paco Underhill, a former anthropologist turned retail consultant and author of the book Why We Buy has performed research suggesting that among many teenagers, the process of clothes buying is a two stage process. In the first stage, the teenagers go on a “reconnaissance” mission with their friends to find out what is available and what is “cool.” This is often a lengthy process. In the later phase, parents—who will need to pay for the purchases—are brought. This stage is typically much briefer.
Finally, the dissociative reference group includes people that the individual would not like to be like. For example, the store literally named The Gap came about because many younger people wanted to actively dissociate from parents and other older and “uncool” people. The Quality Paperback Book Club specifically suggests in its advertising that its members are “a breed apart” from conventional readers of popular books.
Reference groups come with various degrees of influence. Primary reference groups come with a great deal of influence—e.g., members of a fraternity/sorority. Secondary reference groups tend to have somewhat less influence—e.g., members of a boating club that one encounters only during week-ends are likely to have their influence limited to consumption during that time period.
Another typology divides reference groups into the informational kind (influence is based almost entirely on members’ knowledge), normative (members influence what is perceived to be “right,” “proper,” “responsible,” or “cool”), or identification. The difference between the latter two categories involves the individual’s motivation for compliance. In case of the normative reference group, the individual tends to comply largely for utilitarian reasons—dressing according to company standards is likely to help your career, but there is no real motivation to dress that way outside the job. In contrast, people comply with identification groups’ standards for the sake of belonging—for example, a member of a religious group may wear a symbol even outside the house of worship because the religion is a part of the person’s identity.
Perception
Background. Our perception is an approximation of reality. Our brain attempts to make sense out of the stimuli to which we are exposed. This works well, for example, when we “see” a friend three hundred feet away at his or her correct height; however, our perception is sometimes “off”—for example, certain shapes of ice cream containers look like they contain more than rectangular ones with the same volume.
Factors in percpetion. Several sequential factors influence our perception. Exposure involves the extent to which we encounter a stimulus. For example, we are exposed to numerous commercial messages while driving on the freeway: bill boards, radio advertisements, bumper-stickers on cars, and signs and banners placed at shopping malls that we pass. Most of this exposure is random—we don’t plan to seek it out. However, if we are shopping for a car, we may deliberately seek out advertisements and “tune in” when dealer advertisements come on the radio.
Exposure is not enough to significantly impact the individual—at least not based on a single trial (certain advertisements, or commercial exposures such as the “Swoosh” logo, are based on extensive repetition rather than much conscious attention). In order for stimuli to be consciously processed, attention is needed. Attention is actually a matter of degree—our attention may be quite high when we read directions for getting an income tax refund, but low when commercials come on during a television program. Note, however, that even when attention is low, it may be instantly escalated—for example, if an advertisement for a product in which we are interested comes on.
Interpretation involves making sense out of the stimulus. For example, when we see a red can, we may categorize it as a CokeÒ.
Weber’s Law suggests that consumers’ ability to detect changes in stimulus intensity appear to be strongly related to the intensity of that stimulus to begin with. That is, if you hold an object weighing one pound in your hand, you are likely to notice it when that weight is doubled to two pounds. However, if you are holding twenty pounds, you are unlikely to detect the addition of one pound—a change that you easily detected when the initial weight was one pound. You may be able to eliminate one ounce from a ten ounce container, but you cannot as easily get away with reducing a three ounce container to two (instead, you must accomplish that gradually—e.g., 3.0 –> 2.7 –> 2.5 –> 2.3 –> 2.15 –> 2.00).
Several factors influence the extent to which stimuli will be noticed. One obvious issue is relevance. Consumers, when they have a choice, are also more likely to attend to pleasant stimuli (but when the consumer can’t escape, very unpleasant stimuli are also likely to get attention—thus, many very irritating advertisements are remarkably effective). One of the most important factors, however, is repetition. Consumers often do not give much attention to a stimuli—particularly a low priority one such as an advertisement—at any one time, but if it is seen over and over again, the cumulative impact will be greater.
Surprising stimuli are likely to get more attention—survival instinct requires us to give more attention to something unknown that may require action. A greater contrast (difference between the stimulus and its surroundings) as well as greater prominence (e.g., greater size, center placement) also tend to increase likelihood of processing.
Subliminal stimuli. Back in the 1960s, it was reported that on selected evenings, movie goers in a theater had been exposed to isolated frames with the words “Drink Coca Cola” and “Eat Popcorn” imbedded into the movie. These frames went by so fast that people did not consciously notice them, but it was reported that on nights with frames present, Coke and popcorn sales were significantly higher than on days they were left off. This led Congress to ban the use of subliminal advertising. First of all, there is a question as to whether this experiment ever took place or whether this information was simply made up. Secondly, no one has been able to replicate these findings. There is research to show that people will start to giggle with embarrassment when they are briefly exposed to “dirty” words in an experimental machine. Here, again, the exposure is so brief that the subjects are not aware of the actual words they saw, but it is evident that something has been recognized by the embarrassment displayed.
Learning and Memory
Background. Learning involves “a change in the content or organization of long term memory and/or behavior.” The first part of the definition focuses on what we know (and can thus put to use) while the second focuses on concrete behavior. For example, many people will avoid foods that they consumed shortly before becoming ill. Learning is not all knowledge based. For example, we may experience the sales people in one store being nicer to us than those in the other. We thus may develop a preference for the one store over the other; however, if pressed, we may not be able to give a conscious explanation as to the reason for our preference.
Much early work on learning was actually done on rats and other animals (and much of this research was unjustifiably cruel, but that is another matter).
Classical conditioning. Pavlov’s early work on dogs was known as classical conditioning. Pavlov discovered that when dogs were fed meat powder they salivated. Pavlov then discovered that if a bell were rung before the dogs were fed, the dogs would begin salivating in anticipation of being fed (this was efficient, since they could then begin digesting the meat powder immediately). Pavlov then found that after the meat had been “paired” with the meat powder enough times, Pavlov could ring the bell without feeding the dogs and they would still salivate.
In the jargon of classical conditioning, the meat powder was an unconditioned stimulus (US) and the salivation was, when preceded by the meat powder, an unconditioned response (UR). That is, it is a biologically “hard-wired” response to salivate when you are fed. By pairing the bell with the unconditioned stimulus, the bell became a conditioned stimulus (CS) and salivation in response to the bell (with no meat powder) became a conditioned response (CR).
Many modern day advertisers use classical conditioning in some way. Consider this sequence:
Operant conditioning. Instrumental, or operant, conditioning, involves a different series of events, and this what we usually think of as learning. The general pattern is:
There are three major forms of operant learning. In positive reinforcement, an individual does something and is rewarded. He or she is then more likely to repeat the behavior. For example, you eat a candy bar (behavior), it tastes good (consequence), and you are thus more likely to eat a similar candy bar in the future (behavioral change).

Punishment is the opposite. You eat what looks like a piece of candy (behavior), only to discover that it is a piece of soap with a foul taste (consequences), and subsequently you are less likely to eat anything that looks remotely like that thing ever again (changed behavior).
It should be noted that negative reinforcement is very different from punishment. An example of negative reinforcement is an obnoxious sales person who calls you up on the phone, pressuring you into buying something you don’t want to do (aversive stimulus). You eventually agree to buy it (changed behavior), and the sales person leaves you alone (the aversive stimulus is terminated as a result of consequences of your behavior).
In general, marketers usually have relatively little power to use punishment or negative reinforcement. However, parking meters are often used to discourage consumers from taking up valuable parking space, and manufacturers may void warranties if the consumers take their product to non-authorized repair facilities.
Several factors influence the effectiveness of operant learning. In general, the closer in time the consequences are to the behavior, the more effective the learning. That is, electric utilities would be more likely to influence consumers to use less electricity at peak hours if the consumers actually had to pay when they used electricity (e.g., through a coin-slot) rather than at the end of the month. Learning is also more likely to occur when the individual can understand a relationship between behavior and consequences (but learning may occur even if this relationship is not understood consciously).
Another issue is schedules of reinforcement and extinction. Extinction occurs when behavior stops having consequences and the behavior then eventually stops occurring. For example, if a passenger learns that yelling at check-in personnel no longer gets her upgraded to first class, she will probably stop that behavior. Sometimes, an individual is rewarded every time a behavior is performed (e.g., a consumer gets a soft drink every time coins are put into a vending machine). However, it is not necessary to reward a behavior every time for learning to occur. Even if a behavior is only rewarded some of the time, the behavior may be learned. Several different schedules of reinforcement are possible:
Fixed interval: The consumer is given a free dessert on every Tuesday when he or she eats in a particular restaurant.
Fixed ratio: Behavior is rewarded (or punished) on every nth occasion that it is performed. (E.g., every tenth time a frequent shopper card is presented, a free product is provided).
Variable ratio: Every time an action is performed, there is a certain percentage chance that a reward will be given. For example, every time the consumer enters the store, he or she is given a lottery ticket. With each ticket, there is a 20% chance of getting a free hamburger. The consumer may get a free hamburger twice in a row, or he or she may go ten times without getting a hamburger even once.
Variable ratio reinforcement is least vulnerable to extinction.
Sometimes, shaping may be necessary to teach the consumer the desired behavior. That is, it may be impossible to teach the consumer to directly perform the desired behavior. For example, a consumer may first get a good product for free (the product itself, if good, is a reward), then buy it with a large cents off coupon, and finally buy it at full price. Thus, we reinforce approximations of the desired behavior. Rather than introducing Coca Cola directly in Indonesia, fruit flavored soft drinks were first introduced, since these were more similar to beverages already consumed.
Vicarious learning. The consumer does not always need to go through the learning process himself or herself—sometimes it is possible to learn from observing the consequences of others. For example, stores may make a big deal out of prosecuting shop lifters not so much because they want to stop that behavior in the those caught, but rather to deter the behavior in others. Similarly, viewers may empathize with characters in advertisements who experience (usually positive) results from using a product. The Head ‘n’ Shoulders advertisement, where a poor man is rejected by women until he treats his dandruff with an effective cure, is a good example of vicarious learning.
Memory ranges in duration on a continuum from extremely short to very long term. Sensory memory includes storage of stimuli that one might not actually notice (e.g., the color of an advertisement some distance away). For slightly longer duration, when you see an ad on TV for a mail order product you might like to buy, you only keep the phone number in memory until you have dialed it. This is known as short term memory. In order for something to enter into long term memory, which is more permanent, you must usually “rehearse” it several times. For example, when you move and get a new phone number, you will probably repeat it to yourself many times. Alternatively, you get to learn your driver’s license or social security numbers with time, not because you deliberately memorize them, but instead because you encounter them numerous times as you look them up.
Several techniques can be used to enhance the memorability of information. “Chunking” involves rearranging information so that fewer parts need to be remembered. For example, consider the phone number (800) 444-1000. The eight digits can be more economically remembered as an 800 number (1 piece), four repeated 3 times (2 pieces), and 1000 (1-2 pieces). “Rehearsal” involves the consumer repeating the information over and over so that it can be remembered; this is often done so that a phone number can be remembered while the “memoree” moves to the phone to dial it. “Recirculation” involves repeated exposure to the same information; the information is not learned deliberately, but is gradually absorbed through repetition. Thus, it is to the advantage to a marketer to have an advertisement repeated extensively—especially the brand name. “Elaboration” involves the consumer thinking about the object—e.g., the product in an advertisement—and thinking about as many related issues as possible. For example, when seeing an ad for Dole bananas, the person may think of the color yellow, going to the zoo seeing a monkey eating a banana, and her grandmother’s banana-but bread. The Dole brand name may then be activated when any of those stimuli are encountered.
Memories are not always easily retrievable. This could be because the information was given lower priority than something else—e.g., we have done a lot of things since last buying a replacement furnace filter and cannot remember where this was bought last. Other times, the information can be retrieved but is not readily “available”—e.g., we will be able to remember the location of a restaurant we tried last time we were in Paris, but it may take some thinking before the information emerges.
“Spreading activation” involves the idea of one memory “triggering” another one. For example, one might think of Coke every time one remembers a favorite (and very wise) professor who frequently brought one to class. Coke might also be tied a particular supermarket that always stacked a lot of these beverages by the entrance, and to baseball where this beverage was consumed after the game. It is useful for firms to have their product be activated by as many other stimuli as possible.
There are numerous reasons why retrieval can fail or, in less fancy terms, how we come to forget. One is decay. Here, information that is not accessed frequently essentially “rusts” away. For example, we may not remember the phone number of a friend to whom we have not spoken for several months and may forget what brand of bullets an aunt prefers if we have not gone ammunition shopping with her lately. Other times, the problem may rest in interference. Proactive interference involves something we have learned interfering with what we will late later. Thus, if we remember that everyone in our family always used Tide, we may have more difficulty later remembering what other brands are available. You may be unable to remember what a new, and less important, friend’s last name is if that person shares a first name with an old friend. For example, if your best friend for many years has been Jennifer Smith, you may have difficulty remembering that your new friend Jennifer’s last name is Silverman. In retroactive interference, the problem is the reverse—learning something new blocks out something old. For example, if you once used WordPerfect than then switched to Microsoft Word, you may have trouble remembering how to use WordPerfect at a friend’s house—more so than if you had merely not used any word processing program for some time.
Memorability can be enhanced under certain conditions. One is more likely to remember favorable—or likable stimuli (all other things being equal). Salience—or the extent to which something is highly emphasized or very clearly evident—facilitates memory. Thus, a product which is very visible in an ad, and handled and given attention by the actors, will more likely be remembered. Prototypicality involves the extent to which a stimulus is a “perfect” example of a category. Therefore, people will more likely remember Coke or Kleenex than competing brands. Congruence involves the “fit” with a situation. Since memory is often reconstructed based on what seems plausible, something featured in an appropriate setting—e.g., charcoal on a porch next to a grill rather than in a garage or kitchen—is more likely to be remembered (unless the incongruence triggers an elaboration—life is complicated!) Redundancies involve showing the stimulus several times. Thus, if a given product is shown several places in a house—and if the brand name is repeated—it is more likely to be remembered.
Priming involves tying a stimulus with something so that if “that something” is encountered, the stimulus is more likely to be retrieved. Thus, for example, when one thinks of anniversaries, the Hallmark brand name is more likely to be activated. (This is a special case of spreading activation discussed earlier).
A special issue in memory are so called “scripts,” or procedures we remember for doing things. Scripts involve a series of steps for doing various things (e.g., how to send a package). In general, it is useful for firms to have their brand names incorporated into scripts (e.g., to have the consumer reflexively ask the pharmacist for Bayer rather than an unspecified brand of aspirin).
Positioning involves implementing our targeting. For example, Apple Computer has chosen to position itself as a maker of user-friendly computers. Thus, Apple has done a lot through its advertising to promote itself, through its unintimidating icons, as a computer for “non-geeks.” The Visual C software programming language, in contrast, is aimed a “techies.”
Repositioning involves an attempt to change consumer perceptions of a brand, usually because the existing position that the brand holds has become less attractive. Sears, for example, attempted to reposition itself from a place that offered great sales but unattractive prices the rest of the time to a store that consistently offered “everyday low prices.” Repositioning in practice is very difficult to accomplish. A great deal of money is often needed for advertising and other promotional efforts, and in many cases, the repositioning fails.
Diffusion of Innovation
Products tend to go through a life cycle. Initially, a product is introduced. Since the product is not well known and is usually expensive (e.g., as microwave ovens were in the late 1970s), sales are usually limited. Eventually, however, many products reach a growth phase—sales increase dramatically. More firms enter with their models of the product. Frequently, unfortunately, the product will reach a maturity stage where little growth will be seen. For example, in the United States, almost every household has at least one color TV set. Some products may also reach a decline stage, usually because the product category is being replaced by something better. For example, typewriters experienced declining sales as more consumers switched to computers or other word processing equipment. The product life cycle is tied to the phenomenon of diffusion of innovation. When a new product comes out, it is likely to first be adopted by consumers who are more innovative than others—they are willing to pay a premium price for the new product and take a risk on unproven technology. It is important to be on the good side of innovators since many other later adopters will tend to rely for advice on the innovators who are thought to be more knowledgeable about new products for advice.

At later phases of the PLC, the firm may need to modify its market strategy. For example, facing a saturated market for baking soda in its traditional use, Arm ü Hammer launched a major campaign to get consumers to use the product to deodorize refrigerators. Deodorizing powders to be used before vacuuming were also created.
It is sometimes useful to think of products as being either new or existing.
Many firms today rely increasingly on new products for a large part of their sales. New products can be new in several ways. They can be new to the market—noone else ever made a product like this before. For example, Chrysler invented the minivan. Products can also be new to the firm—another firm invented the product, but the firm is now making its own version. For example, IBM did not invent the personal computer, but entered after other firms showed the market to have a high potential. Products can be new to the segment—e.g., cellular phones and pagers were first aimed at physicians and other price-insensitive segments. Later, firms decided to target the more price-sensitive mass market. A product can be new for legal purposes. Because consumers tend to be attracted to “new and improved” products, the Federal Trade Commission (FTC) only allows firms to put that label on reformulated products for six months after a significant change has been made.
The diffusion of innovation refers to the tendency of new products, practices, or ideas to spread among people. Usually, when new products or ideas come about, they are only adopted by a small group of people initially; later, many innovations spread to other people.

The bell shaped curve frequently illustrates the rate of adoption of a new product. Cumulative adoptions are reflected by the S-shaped curve. The saturation point is the maximum proportion of consumers likely to adopt a product.

In the case of refrigerators in the U.S., the saturation level is nearly one hundred percent of households; it well below that for video games that, even when spread out to a large part of the population, will be of interest to far from everyone.
Several specific product categories have case histories that illustrate important issues in adoption. Until some time in the 1800s, few physicians bothered to scrub prior to surgery, even though new scientific theories predicted that small microbes not visible to the naked eye could cause infection. Younger and more progressive physicians began scrubbing early on, but they lacked the stature to make their older colleagues follow.
ATM cards spread relatively quickly. Since the cards were used in public, others who did not yet hold the cards could see how convenient they were. Although some people were concerned about security, the convenience factors seemed to be a decisive factor in the “tug-of-war” for and against adoption.
The case of credit cards was a bit more complicated and involved a “chicken-and-egg” paradox. Accepting credit cards was not a particularly attractive option for retailers until they were carried by a large enough number of consumers. Consumers, in contrast, were not particularly interested in cards that were not accepted by a large number of retailers. Thus, it was necessary to “jump start” the process, signing up large corporate accounts, under favorable terms, early in the cycle, after which the cards became worthwhile for retailers to accept.
Rap music initially spread quickly among urban youths in large part because of the low costs of recording. Later, rap music became popular among a very different segment, suburban youths, because of its apparently authentic depiction of an exotic urban lifestyle.
Hybrid corn was adopted only slowly among many farmers. Although hybrid corn provided yields of about 20% more than traditional corn, many farmers had difficulty believing that this smaller seed could provide a superior harvest. They were usually reluctant to try it because a failed harvest could have serious economic consequences, including a possible loss of the farm. Agricultural extension agents then sought out the most progressive farmers to try hybrid corn, also aiming for farmers who were most respected and most likely to be imitated by others. Few farmers switched to hybrid corn outright from year to year. Instead, many started out with a fraction of their land, and gradually switched to 100% hybrid corn when this innovation had proven itself useful.
Several forces often work against innovation. One is risk, which can be either social or financial. For example, early buyers of the CD player risked that few CDs would be recorded before the CD player went the way of the 8 track player. Another risk is being perceived by others as being weird for trying a “fringe” product or idea. For example, Barbara Mandrell sings the song “I Was Country When Country Wasn’t Cool.” Other sources of resistance include the initial effort needed to learn to use new products (e.g., it takes time to learn to meditate or to learn how to use a computer) and concerns about compatibility with the existing culture or technology. For example, birth control is incompatible with strong religious influences in countries heavily influenced by Islam or Catholicism, and a computer database is incompatible with a large, established card file.
Innovations come in different degrees. A continuous innovation includes slight improvements over time. Very little usually changes from year to year in automobiles, and even automobiles of the 1990s are driven much the same way that automobiles of the 1950 were driven. A dynamically continuous innovation involves some change in technology, although the product is used much the same way that its predecessors were used—e.g., jet vs. propeller aircraft. A discontinous innovation involves a product that fundamentally changes the way that things are done—e.g., the fax and photocopiers. In general, discontinuous innovations are more difficult to market since greater changes are required in the way things are done, but the rewards are also often significant.
Several factors influence the speed with which an innovation spreads. One issue is relative advantage (i.e., the ratio of risk or cost to benefits). Some products, such as cellular phones, fax machines, and ATM cards, have a strong relative advantage. Other products, such as automobile satellite navigation systems, entail some advantages, but the cost ratio is high. Lower priced products often spread more quickly, and the extent to which the product is trialable (farmers did not have to plant all their land with hybrid corn at once, while one usually has to buy a cellular phone to try it out) influence the speed of diffusion. Finally, the extent of switching difficulties influences speed—many offices were slow to adopt computers because users had to learn how to use them.
Some cultures tend to adopt new products more quickly than others, based on several factors:
Modernity: The extent to which the culture is receptive to new things. In some countries, such as Britain and Saudi Arabia, tradition is greatly valued—thus, new products often don’t fare too well. The United States, in contrast, tends to value progress.
Homophily: The more similar to each other that members of a culture are, the more likely an innovation is to spread—people are more likely to imitate similar than different models. The two most rapidly adopting countries in the World are the U.S. and Japan. While the U.S. interestingly scores very low, Japan scores high.
Physical distance: The greater the distance between people, the less likely innovation is to spread.
Opinion leadership: The more opinion leaders are valued and respected, the more likely an innovation is to spread. The style of opinion leaders moderates this influence, however. In less innovative countries, opinion leaders tend to be more conservative, i.e., to reflect the local norms of resistance.
It should be noted that innovation is not always an unqualifiedly good thing. Some innovations, such as infant formula adopted in developing countries, may do more harm than good. Individuals may also become dependent on the innovations. For example, travel agents who get used to booking online may be unable to process manual reservations.
Sometimes innovations are disadopted. For example, many individuals disadopt cellular phones if they find out that they don’t end up using them much.
Attitudes
Introduction. Consumer attitudes are a composite of a consumer’s (1) beliefs about, (2) feelings about, (3) and behavioral intentions toward some object–within the context of marketing, usually a brand or retail store. These components are viewed together since they are highly interdependent and together represent forces that influence how the consumer will react to the object.
Beliefs. The first component is beliefs. A consumer may hold both positive beliefs toward an object (e.g., coffee tastes good) as well as negative beliefs (e.g., coffee is easily spilled and stains papers). In addition, some beliefs may be neutral (coffee is black), and some may be differ in valance depending on the person or the situation (e.g., coffee is hot and stimulates–good on a cold morning, but not good on a hot summer evening when one wants to sleep). Note also that the beliefs that consumers hold need not be accurate (e.g., that pork contains little fat), and some beliefs may, upon closer examination, be contradictory (e.g., that a historical figure was a good person but also owned slaves).
Since a consumer holds many beliefs, it may often be difficult to get down to a “bottom line” overall belief about whether an object such as McDonald’s is overall good or bad. The Multiattribute (also sometimes known as the Fishbein) Model attempts to summarize overall attitudes into one score using the equation:

That is, for each belief, we take the weight or importance (Wi) of that belief and multiply it with its evaluation (Xib). For example, a consumer believes that the taste of a beverage is moderately important, or a 4 on a scale from 1 to 7. He or she believes that coffee tastes very good, or a 6 on a scale from 1 to 7. Thus, the product here is 4(6)=24. On the other hand, he or she believes that the potential of a drink to stain is extremely important (7), and coffee fares moderately badly, at a score -4, on this attribute (since this is a negative belief, we now take negative numbers from -1 to -7, with -7 being worst). Thus, we now have 7(-4)=-28. Had these two beliefs been the only beliefs the consumer held, his or her total, or aggregated, attitude would have been 24+(-28)=-4. In practice, of course, consumers tend to have many more beliefs that must each be added to obtain an accurate measurement.
Affect. Consumers also hold certain feelings toward brands or other objects. Sometimes these feelings are based on the beliefs (e.g., a person feels nauseated when thinking about a hamburger because of the tremendous amount of fat it contains), but there may also be feelings which are relatively independent of beliefs. For example, an extreme environmentalist may believe that cutting down trees is morally wrong, but may have positive affect toward Christmas trees because he or she unconsciously associates these trees with the experience that he or she had at Christmas as a child.
Behavioral Intention. The behavioral intention is what the consumer plans to do with respect to the object (e.g., buy or not buy the brand). As with affect, this is sometimes a logical consequence of beliefs (or affect), but may sometimes reflect other circumstances–e.g., although a consumer does not really like a restaurant, he or she will go there because it is a hangout for his or her friends.
Attitude-Behavior Consistency. Consumers often do not behave consistently with their attitudes for several reasons:
Ability. He or she may be unable to do so. Although junior high school student likes pick-up trucks and would like to buy one, she may lack a driver’s license.
Competing demands for resources. Although the above student would like to buy a pickup truck on her sixteenth birthday, she would rather have a computer, and has money for only one of the two.
Social influence. A student thinks that smoking is really cool, but since his friends think it’s disgusting, he does not smoke.
Measurement problems. Measuring attitudes is difficult. In many situations, consumers do not consciously set out to enumerate how positively or negatively they feel about mopeds, and when a market researcher asks them about their beliefs about mopeds, how important these beliefs are, and their evaluation of the performance of mopeds with respect to these beliefs, consumers often do not give very reliable answers. Thus, the consumers may act consistently with their true attitudes, which were never uncovered because an erroneous measurement was made.
Attitude Change Strategies. Changing attitudes is generally very difficult, particularly when consumers suspect that the marketer has a self-serving agenda in bringing about this change (e.g., to get the consumer to buy more or to switch brands).
Changing affect. One approach is to try to change affect, which may or may not involve getting consumers to change their beliefs. One strategy uses the approach of classical conditioning try to “pair” the product with a liked stimulus. For example, we “pair” a car with a beautiful woman. Alternatively, we can try to get people to like the advertisement and hope that this liking will “spill over” into the purchase of a product. For example, the Pillsbury Doughboy does not really emphasize the conveyance of much information to the consumer; instead, it attempts to create a warm, fuzzy image. Although Energizer Bunny ads try to get people to believe that their batteries last longer, the main emphasis is on the likeable bunny. Finally, products which are better known, through the mere exposure effect, tend to be better liked–that is, the more a product is advertised and seen in stores, the more it will generally be liked, even if consumers to do not develop any specific beliefs about the product.
Changing behavior. People like to believe that their behavior is rational; thus, once they use our products, chances are that they will continue unless someone is able to get them to switch. One way to get people to switch to our brand is to use temporary price discounts and coupons; however, when consumers buy a product on deal, they may justify the purchase based on that deal (i.e., the low price) and may then switch to other brands on deal later. A better way to get people to switch to our brand is to at least temporarily obtain better shelf space so that the product is more convenient. Consumers are less likely to use this availability as a rationale for their purchase and may continue to buy the product even when the product is less conveniently located. (Notice, by the way, that this represents a case of shaping).
Changing beliefs. Although attempting to change beliefs is the obvious way to attempt attitude change, particularly when consumers hold unfavorable or inaccurate ones, this is often difficult to achieve because consumers tend to resist. Several approaches to belief change exist:
Change currently held beliefs. It is generally very difficult to attempt to change beliefs that people hold, particularly those that are strongly held, even if they are inaccurate. For example, the petroleum industry advertised for a long time that its profits were lower than were commonly believed, and provided extensive factual evidence in its advertising to support this reality. Consumers were suspicious and rejected this information, however.
Change the importance of beliefs. Although the sugar manufacturers would undoubtedly like to decrease the importance of healthy teeth, it is usually not feasible to make beliefs less important–consumers are likely to reason, why, then, would you bother bringing them up in the first place? However, it may be possible to strengthen beliefs that favor us–e.g., a vitamin supplement manufacturer may advertise that it is extremely important for women to replace iron lost through menstruation. Most consumers already agree with this, but the belief can be made stronger.
Add beliefs. Consumers are less likely to resist the addition of beliefs so long as they do not conflict with existing beliefs. Thus, the beef industry has added beliefs that beef (1) is convenient and (2) can be used to make a number of creative dishes. Vitamin manufacturers attempt to add the belief that stress causes vitamin depletion, which sounds quite plausible to most people.
Change ideal. It usually difficult, and very risky, to attempt to change ideals, and only few firms succeed. For example, Hard Candy may have attempted to change the ideal away from traditional beauty toward more unique self expression.
One-sided vs. two-sided appeals. Attitude research has shown that consumers often tend to react more favorably to advertisements which either (1) admit something negative about the sponsoring brand (e.g., the Volvo is a clumsy car, but very safe) or (2) admits something positive about a competing brand (e.g., a competing supermarket has slightly lower prices, but offers less service and selection). Two-sided appeals must, contain overriding arguments why the sponsoring brand is ultimately superior–that is, in the above examples, the “but” part must be emphasized.
The Elaboration Likelihood Model (ELM) and Celebrity Endorsements. The ELM suggests that consumers will scrutinize claims more in important situations than in unimportant ones. For example, we found that in the study of people trying to get ahead of others in a line to use photo copiers, the compliance rate was about fifty percent when people just asked to get ahead. However, when the justification “… because I have to make copies” was added, compliance increased to 80%. Since the reason offered really did not add substantive information, we conclude that it was not extensively analyzed–in the jargon of the theory, “elaboration” was low.

The ELM suggests that for “unimportant” products, elaboration will be low, and thus Bill Cosby is able to endorse Coke and Jell-O without having any special credentials to do so. However, for products which are either expensive or important for some other reason (e.g., a pain reliever given to a child that could be harmed by using dangerous substances), elaboration is likely to be more extensive, and the endorser is expected to be “congruent,” or compatible, with the product. For example, a basket ball player is likely to be effective in endorsing athletic shoes, but not in endorsing automobiles. On the other hand, a nationally syndicated auto columnist would be successful in endorsing cars, but not athletic shoes. All of them, however, could endorse fast food restaurants effectively.
Appeal Approaches. Several approaches to appeal may be used. The use of affect to induce empathy with advertising characters may increase attraction to a product, but may backfire if consumers believe that people’s feelings are being exploited. Fear appeals appear to work only if (1) an optimal level of fear is evoked–not so much that people tune it out, but enough to scare people into action and (2) a way to avoid the feared stimulus is explicitly indicated–e.g., gingivitis and tooth loss can be avoided by using this mouth wash. Humor appears to be effective in gaining attention, but does not appear to increase persuasion in practice. In addition, a more favorable attitude toward the advertisement may be created by humorous advertising, which may in turn result in increased sales. Comparative advertising, which is illegal in many countries, often increases sales for the sponsoring brand, but may backfire in certain cultures.

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Contract law is one of the fundamental institutions that underpin the market system

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Contract law is one of the fundamental institutions that underpin the market system – Explain and evaluate the statements in the parlance of Law of Contract.

1. Introduction

Contract law is one of the fundamental institutions that underpin the market system. It is not often understood that the religious and governmental regulations that underpin agreements have a very long history. Therefore, it is not often realized that the above quotation from the Ten Commandments refers not to the uttering of obscenities, but to the process of oath taking in ancient Israel, which—among other things—helped enforce contractual arrangements. A rigid view of contract law in the form of the doctrine of freedom of contract is a central element in economic fundamentalist rhetoric. It is desirable, therefore, for critics of economic fundamentalism to equip themselves with some understanding of the origins of this doctrine and how it emerged and then declined as part of the nineteenth-century view of social theory and laissez-faire economic doctrine. Our account now turns to an examination of the emergence of classical contract law towards the end of the nineteenth century in England and the United States and other side. It will be shown that the doctrine has its origins in the breakdown of medieval ideas regulating social and economic life and the emergence of social contract ideas as a basis for explaining social order and for justifying the property rights of the elite.

2. Definition of Contract

An agreement enforceable at law, made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others, is a contract. Section 2(h) of the Contract Act, 1872, provides us the authoritative definition of a contract, “an agreement enforceable by law is a contract.” It is a simple definition of term contract given by the Act. From the definition, it is found that, to be a lawful contract, an agreement is necessary and that agreement must be lawful that is enforceable by law.

Section, 2(e) of contract Act 1872 also provides that “Every promises and every set of promises, forming the consideration of each other is an agreement”. But every agreement cannot be enforced by law only legal agreement will be enforced by law.

According to Salmond A contract is “An agreement creating and defining obligations between the parties”.

According to Sir William Anson “A contract is an agreement enforceable at law made between two or more persons. by which right are acquired by one or more acts or forbearance on the part of the other or others”.

From the above definitions it is clear to us that persons are free to make agreements and that agreements must be enforced by law if there is no illegal intention

3. Essential elements of a contract

1. Offer and acceptance.

2. Intention to create legal relationship.

3. Lawful consideration.

4. Capacity of parties.

5. Legality of objects.

6. Communication

7. Free consent

8. Certainty.

9. Possibility of performance.

10. Void agreements.

11. Writing registration legal formalities.

4. Types of Contract

The classification of contract is made depending on certain modes. The classification made under certain modes, is not expressly said in the Contract Act, 1872. In law of contract those certain terms of classification are use indicating their lawful meaning. So here is a classification of contract depending on certain moods.

A) Contracts depending on the mood of creation.

Express and implied contract

.Express Contract: The offer and acceptance of a contract if made in words, either expressed orally or in written words, the contract will be considered to be an express one. From instance, A proposes B, I would like to sell this house for Tk.3 lack and B replies ’I agree’-this deemed to be an express contract. Thu express contact may be of two types: written contract, and oral contract.

Implied Contract:- An imlied contract is formed when the offer and acceptance of a contract is made without the use of any words, rather by some other means. For example, if a repairer start to repair the watch of one person and the later permits it remaining silent knowingly that the first person is doing so to get a payment in exchange of this service, it will be treated as a implied by the law.

B) Contracts as regards the mood of time of performance.

a) Executed Contract

b) Executory Contract

Executed Contract: If the condition of contract is performed as soon as possible, the contract is said to be a executed contract. On other words, the contract the obligations of which, is already performed, or to be performed in a very short time is the executed contract.

Executory contract:

In this contract the obligations of the contract is supposed to be performed at the later period of the formation of the contract. There is no limitation of the performance of the contract in this regard. The contract itself suggests such limitation, unless it is prescribed by law.

C) Contracts as regards the number of parties:

a) Bilateral Contract

b) Unilateral Contract.

Bilateral Contract: It is the apparent rule of a contract that at least two parties are necessary to form a contract. Therefore all contracts are bilateral or multilateral.

Unilateral Contract: In a contract, where one party has to fulfill his obligations whereas the other party has already performed his obligations, it is called unilateral contract.

D) Contracts as regards the mood of enforceability and validity:

a) Valid Contract

b) Voidable Contract

c) Void Contract

1. Section 1 the Contract Act, 1872(ACT NO. IX OF 1872)

2. Section 1 of the Contract Act, 1872(ACT NO. IX OF 1872)

5. Meaning of ‘freedom of contract

Thou shall not take name of the lord God in vain, for the Lord not hold guiltless that take His name in vain

_Exodus 20

But governments do not limit their concern with contract to a simple enforcement. They take upon themselves to determine what contracts are fit to be enforced… There are promises by which it is not for the public good that person should have the power of binding themselves.

— J. S. Mill

Few who consider dispassionately the facts of social history will be disposed to deny that the exploitation of the weak by the powerful, organized for purposes of economic gain, buttressed by imposing systems of law, and screened by decorous draperies of virtuous sentiment and resounding rhetoric, has been a permanent feature in the life of most communities that the world has yet seen. –h k

6. Freedom to Contract

A contract is a binding agreement between two or more parties that usually results in some type of performance. Without doubt, trade and commerce could not thrive if freely made agreements were not normally carried out. Contract can be viewed as a method in which men bargaining with one another can make sure that their promises will last longer than their changeable states of mind. The law of contract provides a mechanism through which private individuals can, to a certain degree, predict, control, and stabilize the future. Contracts allow people to incur reciprocal responsibilities and commitments, to make promises others can rely on, to remove some uncertainty from life, and to establish reasonable expectations for future actions.

A function of the state, operating mainly through the court system, is to enforce performance by requiring the promisor to fulfill his bargain on penalty of fine or imprisonment or by awarding judgment against him for money damages when, without legal reason, he fails to perform. State compulsion has replaced private force, which was common in earlier time periods. State enforcement in concerns of bargain and promise can be viewed as one of the state’s most important functions behind only peacekeeping and property defense. In essence, a breach of contract is an indirect use of force.

3. Dr. Edward Younkins. .Professor, of Accountancy and Business Administration at Wheeling Jesuit University in West Virginia and author of Capitalism and Commerce.

4. Liberty Free Press June 15, 2000

7. The Moral Foundation of Contracts

In addition to the above pragmatic foundation for the law of contract, there is a moral basis for requiring a man to keep his promise. Deceit is wrong and should not be practiced. A man should do what he promises to do, particularly when his given word encourages another person, relying on that promise, to take action or make a promise to take action.

Morality, according to Immanuel Kant, requires that a man not make an exception of himself and that he not follow rules or engages in practices that he could not recommend to all persons. As Kant puts it in his categorical imperative, “I ought never to act except in such a way that I can also will that my maxim become a universal law.”

Consider the case in which a businessman is deciding whether or not he should break a contract. If he were to declare the principle of his action to be a universal law such as, “Always break contracts”or“Contract breaking is permissible,” the act of breaking contracts would be self-defeating. The first assertion logically would result in a world in which people always breached their contracts and no one kept his word. Given the second maxim, people would never know whether or not a contract would be kept, and thus the purpose of both keeping a contract and breaking one would be defeated. Successful contract breaking is possible only when it is not made a universal law. Profitable contract breaking can only occur in a world in which contracts are normally honored. If contract breaking were universalized then business practice would become inconceivable and in executable. If a businessman were to advocate universal contract violation, his advocacy would be in vain. Therefore, applying Kant’s categorical imperative, the businessman ought to keep the contract accept, of course, in a case in which his promise was exacted by force or fraud. Fraud is implicit theft in that it involves the failure to fulfill a freely agreed-upon transfer of property.

The right of property includes the right to make contracts regarding that property. The right to contract is derivable from the right of private property. It follows that enforceable contracts are those in which the failure of one party to live up to the provisions of the contract implies the appropriation of property from the other party. Enforceable contracts are those supported by the authorization of legal coercion

8. from Status to Contract

Contract law is a key component of a free society. Contracts involve a trade-off of flexibility for security and the voluntary assumption of mutual obligation and commitment. Through contract, a participant in civil society is differentiated from the atomistic individual.

Autonomous human beings have the rational ability and natural right to make their own life choices. A necessary condition of acting autonomously is the possibility of freely making mutually binding agreements. Autonomy thus requires freedom of contract. Better connections between persons can be made by contract, which works to mutual benefit, instead of through coercion, which does not.

Although a contract may appear to be the subordination of one man’s will to another, the former gains more than he gives up, as does the latter. In a free society, the only transactions people engage in are positive-sum ones in which both parties believe they will benefit.

Historically, the rise of contract within Western civilization reflected the disintegration of a status-determined society. Contract became a tool of change and self-determination, an instrument of peace, and the only legitimate means of social integration in a free society. Progress depends on protected property rights and the confidence that contractual obligations will be honored.

Sir Henry Sumner Maine, the nineteenth-century legal historian, wrote that progressive societies exhibit a development from status-bound roles to those founded more and more on contractual freedom. Whereas a status system establishes obligations, conditions, and interrelations by birth, contract regards individuals as free and equal moral agents developing their own bonds with others. In a free society, there is high degree of social mobility and freedom to associate in response to current and expected future needs. Social arrangements are a result of the independent decisions of separate individuals pursuing their own interests, rather than by a central powerful authority such as the state or the Church.

In Western society, with the steady dissolution of castes, social classes, guilds, ethnic cultures, and so on, human resources have become more available to organizers in business and other associations. Organizers compete for the best managerial and non managerial employees, and with the freedom of association present in the era of contracts, it is possible to create successful organizations despite some interference by the state.

9. Freedom to Contract Promotes Progress

In her 1998 book, The Future and Its Enemies, Virginia Postrel explains that, by treating individuals as free and equal generic units, contract permits people to create arrangements far beyond the plans of any grand designers. Only by treating individuals in this manner can over-arching rules allow people to use their own knowledge, express their individuality, and take advantage of their own ideas by joining them and their property in various unanticipated ways. When people cannot make binding, enforceable commitments, dynamic progress is severely hampered. The idea of contract fosters progress by encouraging specialization and allowing an extended order to develop. Postrel also points out the especial importance of well-functioning legal systems when strangers interact in commercial and other situations. In addition, she notes that the goal of contract law is not to inspire legal suits but to settle or avoid them. Well-known rules that eliminate ambiguity make it more likely that promises will be kept.

In order to be invaluable to businessmen and other members of a free society, the contract must be a tool of virtually unlimited adaptability. To achieve this, the legal system must minimize the formality necessary for contractual transactions. It can do this by permitting freedom as to the form and content of contractual arrangements. Contracts have been rewritten through prior restraints (e.g., rent control, minimum wage laws, and interest rate ceilings) and subsequent nullification of contract terms. Legislators and judges should refrain from substituting their own judgments in cases where they believe there is unequal bargaining power or where they think that certain contracts are not in the “public interest.” Contract sanctity is paramount. Such a free contract system encourages dynamic processes and technological achievements by permitting entrepreneurs to quickly and flexibly experiment with new ways of satisfying wants.

10. Meaning of ‘Sanctity of contract’:

Sanctity of Contract is a general idea that once parties duly enter into a contract, they must honor their obligations under that contract. Whereas, efficient breach theory is that parties should feel free to breach a contract and pay damages, so long as this result is more economically efficient than performing under the contract.

There have some points what are necessary to make clear the idea of sanctity of contract. The points are given below:

Privacy of contracts: Part of the Sanctity of Contract is the natural right to privacy therein. One absolutely has a right to privacy in one’s agreements with others. One may waive this right to privacy, and one’s right to do so is absolute as well. The Right to Privacy of Contracts and Agreements is a fundamental individual right. Assert this Right for yourself! If, in your contracts you say nothing about private dispute resolution, or you say something like, “disputes will be resolved according to the laws of California,” then the bureaucrats can claim that you made them a party to the contract, that you’ve granted them jurisdiction, and therefore they can interfere with the contract.

11. Privacy of Contracts

Part of the Sanctity of Contract is the natural right to privacy therein. You absolutely have a right to privacy in your agreements with others. You may waive this right to privacy, and your right to do so is absolute as well.

But consider this: If you do waive your right to privacy, don’t you want to do so knowingly? In the time, place, and manner of you’re choosing?

Some agreements in your life you probably don’t care too much whether lots of other people (not involved in the agreement) know about them. You may not care much whether neighbors know that you often agree to have pizza delivered to your home on short notice. However, you may care a lot about whether all your neighbors know your salary. Do you care whether the IRS knows your salary?

No one but the parties to a contract have the right to know the terms of the contract, unless permission is given by the parties to the contract. Do you think it’s a good idea to give permission to your bureaucratic enemies to know the terms of the contracts and agreements you have in your life? If you agree to be regulated, then you should not object when regulatory bureaucrats try to regulate you. This includes disclosure of information and other invasions of your privacy. Maybe you should take steps to take away your permission to be regulated.

Any aggrieved party may request that the Trustee(s) appoint a mediator acceptable to all parties concerned to resolve a dispute with the Pure Contract Trust Organization through mediation. How the cost of mediation will be shared by the parties concerned shall be determined as part of the mediation procedure. Should mediation fail, arbitration would be the next resort.

Any aggrieved party may request in writing that the Trustee(s) convene a Board of Arbitration to resolve any dispute between the aggrieved party and the Pure Contract Trust Organization. Unless otherwise specified by a prior contract between the aggrieved party and the Pure Contract Trust Organization, the Board of Arbitration shall consist of three (3) persons, independent of the Pure Contract Trust Organization: one selected by the aggrieved party, one selected by the Trustee(s), and the third selected jointly by the two selected arbitrators. The Board of Arbitration shall, after meeting, investigation, and majority agreement, give judgment which shall be binding on all parties. Such judgment shall include the sharing of costs incurred as a result of the arbitration process.” The Right to Privacy of Contracts and Agreements is a fundamental individual right. Assert this Right for yourself! If, in your contracts you say nothing about private dispute resolution, or you say something like, “disputes will be resolved according to the laws of California,” then the bureaucrats can claim that you made them a party to the contract, that you’ve granted them jurisdiction, and therefore they can interfere with the contract.

12. Social Contract

The political and bureaucratic tyrants in America operate on the basis that the “Social Contract” under public policy is in full force and effect. In political philosophy, the “social contract” is a crucial theory that lawyers and judges are trained by. The old philosophers dating back to the 1600s agreed that in the pre-social state, man was unwarlike and timid. Therefore, “modern man” requires a “social contract” consisting of laws for mutual protection and a surrender of individual freedom.

The social contract is not a pledge of the ruled to obey the ruler, but is supposed to be an agreement of individuals to subordinate their judgment, rights, and powers to the needs of their community as a whole. The sovereign power doesn’t lie in the ruler, but in the general will of the community. Each person supposedly enters into such a contract by accepting the protection of the communal laws, such as different types of business licenses. In other words, just by being a member of society, one has surrendered his natural rights and is under specific performance to pay his fair share of taxes, etc.

There’s nothing in the U.S. Constitution about any “social contract.” Individuals, who stand on their common law and constitutional rights, regard the very notion of “social contract” as an absurd fraud.

Any individual who, by trickery, fraud and deceit, has been inducted into a contractual relation that has resulted in a loss of liberty may seek for redress and grievance as it applies to his case. The common law of contracts provides us with remedies to arrest or review a judgment when there is fraud, misconduct, and lack of service of process, undue influence, mistake, inadvertence or impossibility. These points of law are called “Affirmative Defenses,” and the burden of proof is on the one who affirms.

5. REPORT #PCT08: THE SANCTITY OF CONTRACT

6. © Copyright 1994 Sovereign Services ALL RIGHTS RESERVED .Hale v. Henkel, 201 U.S. 43 at 47 (1905).

13. The Role of the Courts in Contract Affairs:

By the mid-1800s, courts had established the fundamental principles that govern the formation, performance, and enforcement of the bargain contract. They created a complex system of universal rules that mirrored the propositions of classical contract theory. This system assumed that equal parties exist in the marketplace and that each party is competent to choose the terms upon which he is willing to be bound. The presumption of party competence led to the conclusion that courts were not to inquire into the fairness of contracts or contract content, but to exercise restraint and to enforce bargains as made. Their role was to act as “detached umpires or referees, doing no more than to see that the rules of the game were observed and refusing to intervene affirmatively to see that justice or anything of that sort was done.” But courts were not indifferent to the realities of contract practice. Common law doctrines granted the power to avoid contract obligations to minors as well as to those victimized by fraud, duress, and undue influence. These doctrines were narrowly defined and limited in number in order to avoid the adverse consequences that were believed to flow to the economic order from state regulation of private contracting. Except in extraordinary circumstances, courts avoided scrutiny of contract equities on the grounds that efforts to achieve justice in individual cases limited freedom of contract and fostered uncertainty that promises would be kept. Commercial life in this country could ill-afford a system of principles that restricted private autonomy and threatened efficiency in the exchange of goods and services.” Thus, the responsibility of the courts to protect those who were weak and vulnerable did not extend to parties who suffered hardships simply because they failed to protect themselves.

7. Law of England, 3rd Edition, p. 360

8. AIR(1983) Mad351

9. Black ‘Law Dictionary(8th edition by Bryan Garne

14. Court Jurisdiction and the Liability of Judges

The Pure Contract Trust is based on:

  1. The U.S. Constitution being the law of the Parties;
  2. The obligation of contracts clause being in full force and effect;
  3. An amendment to the U.S. Constitution being required to change it;
  4. All statutes, regulations, and court decisions contrary to the obligation of contracts clause being null and void;
  5. All judges having sworn an oath to uphold the U.S. Constitution – including the obligation of contracts clause;
  6. Any judge’s ruling contrary to the obligation of contracts clause are not only violating their oaths of office, but also acting beyond their jurisdiction – and should be prosecuted to the full extent of the law.

“The rights and liberties of the citizens of the United States are not protected by custom and tradition alone; they are preserved from the encroachments of government by express/enumerated provisions of the Federal Constitution.”

15. Conclusion

The main lesson to be learned here is that if you give up your Individual Sovereignty protected by the Law of the Land (Common Law), you then submit to be regulated by statutes such as those of FDR. But those Rights originate from you as an individual, not from any legislature or bureaucrat. They are protected by the Law of the Land in that Constitution. You should consider conducting many of your affairs outside the jurisdiction of the regulatory bureaucrats. Rely on your Sovereign Rights of Privacy and Contract, which are protected by the plain, clear, and concise language in Constitution: “No state shall pass any law impairing the obligation of contracts.” which has never been overruled for those individuals subject only to the Law of the Land (Common Law).

You do not challenge the right of the legislature to regulate those who agree by (default) contract to be regulated. But you can conduct many of your own affairs privately under the Freedom of contract and Sanctity of Contract,

Thus after the above discussion we came to know that the freedom of contract and sanctity of contract are the dominant ideologies. And parties are free to make their agreements with the interference the courts or parliament.

**Bibliography**

  1. Panford, Hilary. Module Study Guide.
  2. Atiyah, P. H (1995) an Introduction to the Law of Contract. Clarendon Press.
  3. Elliott, Catherine and Quinn, Frances.(1999) Contract Law. Longman.
  4. Fifoot, Cheshire & Furmstone’s.(1996) Law of Contract. Butterworths.
  5. Hawkins, Barrie with Bage, Grant. (1991) Making Contracts. Kogan Page.
  6. Mckendrick, Ewan. (1994) Contract law. Macmillan.
  7. Major, W. T. (1993) Law of Contract. The M& E Handbook Series.
  8. Mcgregor Harvey (1993) Contract Code. Sweet & Maxwell
  9. Poole, Jill.(1999) Case Book on Contract. Blackstone.
  10. Richards, H. Paul.(1997) Law of Contract. Pitman Publishing.
  11. Stone, Richard (1996) Principles of Contract Law. Avindish
  12. Upex, Robert.(1995) Davies on Contract. Sweet & Maxwell
  13. The Sanctity of Contract in English law- Sir David Hughes Parry.
  14. Roscoe Pound, “Liberty of Contract,” 18 Yale Law Journal 454 (1909)
  15. Business Law -Arun Kumar Sen and Jitendra.
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Contribution of NGO’s in the Development of Bangladesh Economy

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Contribution of NGO’s in the Development of Bangladesh Economy

Introduction:

In Bangladesh NGOs have appeared as the savior of countless number of people without food, cloth, education and basic health facilities. Bangladesh is one of the top thirteen underprivileged countries. With the record of being the most densely populated country on earth and feeble manpower competency, Bangladesh is facing massive challenge to meet up the demand of her ever-increasing population. Although agriculture sector is the main source of income for this rural-agro based country, unfortunately this sector has completely failed to create rewarding employment opportunity for the landless. Considering these overall situations, the NGOs are working on poverty eradication by directly involving the poverty stricken population. Their target groups are basically the poor and vulnerable ones with hardly any possessions. Their main tasks are to organize these people, create awareness in them and make them development oriented. These organizations are working based on the assessed need and demand of the grass root level farmers and women. By involving the beneficiaries directly, they are working within the context of overall national planning for development.

NGO: BACKGROUND, DEFINITION AND MISSIONS

The history of philanthropic activities is as antiquated as the history of mankind. From the day men started living together in society, since then they have begun to help each other in time of need. In ancient time, people used to live in small clans and whenever any one of them fell into trouble, and then the strong and sympathetic kinsmen would come out to help the poor and the feeble. The substituted prevalent version of these separate and unorganized activities is today’s NGOs. The chronic increase of population, evolution of new socio-economic as well as psychological problems, limitations of the state fund in social welfare etc. made it almost impossible for any long-term solution of all these problems by the government alone. Hence the emergence of NGOs was considered with much importance in this regard.

Defining NGO

In Bangladesh the term NGO is very well known and NGO activities are wide spread. Literally NGO is Non-Governmental aid providing organization. According to social science dictionary, “ Non Government Organization is a non-profit agency that serves some public interest. Non Government Organization is established to fulfill some social purposes other than monetary rewards to financial backers. In other words it is stated “NGO’s are usually defined as an association of persons organized on voluntary basis through the initiative of one or more dedicated persons committed to the planning and implementation of development projects at the grass root level. NGO’s although work outside the government structure but they are within the legal framework of the country”.

The book “Social Welfare Legislation in Bangladesh” said, “A broader definition of NGO refers to associations voluntarily formed by individuals for the purpose of rendering welfare and development services outside Government structures; drawing funds from national or international sources; and functioning within the legal frame work of the country.” From the above discussion it is clearly evident that NGOs are those organizations, which are one way or the other involved in development or welfare oriented activities.

Missions and Goals of NGOs

Non Governmental Organizations (NGOs) are launched with various purposes. Based on the region or local demand and problems, divergence in each NGO targets and objectives can be observed. But everywhere the main purpose of NGOs is the much-desired development of poverty stricken deprived people. The missions and goals with which the NGOs are established and conducting their operations in Bangladesh are:

§ Assisting the poor and suffering people as well as exercising self-control through utilization of own resources.

§ Identifying native assets, local leadership and ensuring effective utilization of these for welfare and development.

§ Coordinating the poor and deprived ones through formation of co-operatives and thus facilitate the socio-economic progress.

§ Health and Nutrition development.

§ Acting as the associate of the government and no as competitor.

§ Generating alternatives to overcome special social problems and hurdles besides taking necessary steps to aware the general population.

§ Creating positive attitude of the society, annihilation of superstition and belief against development and bringing in the deprived ones in the main stream of development.

§ Giving priority to women in loan scheme by involving them directly in production process and thus creating scope of additional income in the family, which gradually leads to self-sufficiency.

§ Continuing the assistance towards poor so that they can create own investment by saving at a growing rate from upward income.

§ Creating awareness and developing leadership for the landless and relatively less facilitated ones.

§ Helping out people in coping with the changing societal environment.

ECONOMIC SITUATION IN BANGLADESH

The incessant battle against poverty and famine is long observed in our country. People like day laborer, rickshaw puller, weavers, fisherman, small businessman, shop owners, smith, and landless people, farmer and marginal farmer live in abject poverty. According to World Bank, poverty rate in Bangladesh is around 36%-40% with 40% ultra poor living in the rural area and 15% in the urban area. Poverty at the rural area is considered one of our most important and increasing tribulations.

Eradication of poverty in Bangladesh is an enormous and multi-dimensional challenge. Almost 42.5% of the people living in villages are poor while 18.7% are termed ultra-poor. In the last three decades the government has undertaken extensive activities. The main objective of first five-year plan (1973-1978) was poverty eradication. This trend is still continued in all subsequent five-year plans. But to handle multifaceted and inter-related problems like rural poverty, the government also has limitations if the matter is to be managed single handedly due to inadequate assets, capability and sometimes lack of willingness. In this case overall cooperation between government and different development agencies can play significant role in poverty eradication.

Calorie wise poor and ultra poor population nature of poverty 1983/84

(%)

 1985/86

(%)

 1988/89

(%)

 1991/1992

(%)

 1995/96

(%)

 2003

(%)
Poor 61.9 54.7 47.8 47.6 47.1 42.3
Ultra Poor 36.7 26.3 28.6 28.3 24.6 18.7

The developing agencies in Bangladesh can engage themselves in developing activities and at the same time can bring in a positive change in the life of the poor through social changes and development. The NGOs of Bangladesh think that development is a process through which the members of a society build their organizations as well as themselves in such a way, which increases their capability to manage required assets to match expectations with a well distributed, stable corresponding living standard. The ideologies of NGOs to eradicate rural poverty are the empowerment of poor, developing their institution and creating ability through appropriate distribution of assets and capacity. NGOs give importance on the causes of poverty to eradicate poverty instead of changing the attributes of poverty.

NGO ACTIVITIES IN BANGLADESH

The NGO have taken some significant initiatives to handle the poverty situation in Bangladesh considering certain aspects stated below:

a) Speedier economic growth achievement process

b) Human Resource development

c) Specific target setting for poor

Hence, a combined strategy considering all three stated aspects is necessary to undertake. In the following section, as a follow up/ part of this combined strategies some key activities already commenced by NGOs are discussed.

A. Humanitarian Progress and Structural Development of Organizations for Rural Poor :

Despite the fact that poor people have vast experience about life, still they are incapable of developing exact ways to scientifically analyze and fix their problems and whatever possessions they have. In this case, efforts of the NGOs are worth mentioning to help these people analyze the society and problems in the backdrop of old, superstitious, anti life perspectives. For example: primary training, improved training, organizing exchange of views program among different groups or areas, regular adult education activities, weekly analytical discussion etc. Different NGOs are playing essential role for humanitarian development through joint analysis and seeking solution through different seminars and workshop, joint social activities, and application of socio-economic projects. Besides, they have introduced certain essential concepts like developing small groups, credit based cooperatives, mother welfare society and cooperatives etc. for homeless/ landless etc. and thus have strengthened the root of organizational structure for rural poverty.

B. Employment Generation :

In order to encourage the rural poor to participate in different economic activities and to increase their income through employment generation, several policies, methods and strategies of the NGOs have attracted the attention of some foreign development experts. NGOs usually create employment in two ways. First of all, they provide employment in their own organization since they also need human resource to operate. Secondly, they provide loans and management assistance to individuals, which create new employment opportunity.

Currently the projects that are being conducted under the supervision and assistance of NGOs are: Irrigation project for landless, fishery in ponds (khash), Fishing in the coastal area, weaving, equipment supplies for landless share cropper, bee keeping, small business, rice and popcorn production, sericulture, handicrafts i.e. earthen wares, wood and cane works, developing nursery.

Besides, they are providing training to hundreds of men and women on vaccination and treatment of domestic livestock and poultry, construction of sanitary laboratory and slabs; to be mechanics of pump machine or rice/paddy mills etc. Thus they are significantly contributing in eradication of poverty by providing the above-mentioned essentials.

C. Organizing Groups and Participation of the Beneficiaries :

One very important and effective innovation by NGOs is the strategy of organizing group wise meeting. As a result, participation of the true beneficiaries and direct objective setup is possible to achieve economic target. Besides, It is an effective element in making the loan scheme (to economically empower the poor) successful. This type of meeting keeps up for the poor the trend of empowerment and awareness along with raise in their entitlement.

D. Micro Credit :

Overall economic development is essential for poverty eradication at the rural level. Besides employment generation, per head income and scheme to increase savings is required so that a sustainable development and poverty reduction can be seen for the poor. The identification of loan as a significant necessity for sustainable economic development for the poor as well as developing an effective method for meeting the demand for loan is a competent model of poverty eradication. The micro credit scheme launched by Grameen Bank is now established world wide for its success in poverty eradication. This model has been accepted even at the government level.

The government has established Palli Karma Sahayak Foundation (Rural Activities Assistance Foundation) or PKSF and till December 2001, has provided loans to several eligible NGOs 1,04,089 crore taka for micro credit scheme. Different NGOs so far have given (June 2001) 1,04,089 crore taka micro-credit loans. The number of people enjoying such benefits are 116.05 lakh. Almost 23.50% of these loans are collected from PKSF and 9.15% from local Banks. Presented below briefly is the data on four major NGOs of Bangladesh and their micro credit scheme.

Name of NGO Active member no.

(in thousands)

 Cumulative credit distribution (in crore taka)
1. BRAC

2. Proshika

3. ASHA

4. Swanirvar Bangladesh

 2,253

1,132

873

667

 2560.10

677.40

925.10

157.20
Total (Inclusive of other NGOs) 7,165 5,354.40

Source: Bangladesh Economic Survey – 1999

E. Targeting Poor Rural Women as Beneficiary :

Although half the population of Bangladesh is women still they are leading a much backward life. The NGOs of Bangladesh have consciously targeted the fallen behind poor women folks as their beneficiaries. The NGOs, which are enlisted under the Bureau of NGOs, have more than fifty- percent women clientele (population). In 1995 with financial aids from ADAB and BRAC almost 549 NGOs worked for only women. Almost 96% of the credit facility holders are women. Swanirvar Bangladesh has 71% women as credit holder. Till the year 2001 BRAC has provided loan to 41.38lakh beneficiaries worth 6953.78 crore taka throughout 64 districts and 460 sub-districts of Bangladesh.

Statistics shows that 99% of these beneficiaries were women. Palli Karma Shahayak Foundation (PKSF) has 86.43% Women credit holders. Besides till 1998 ASA distributed 13,183,46 million taka to 7,34,684 women which is about 93.41% of total credit holders. Till 1998 Grameen Bank provided loan of 1,06,14,242 million taka to its total member of 23,64,755 out of which 22,40,139 were women and 1,24,616 were male. The importance that NGOs have placed on women to eradicate rural poverty has truly improvised the economic and health status of rural women. This has brought in the possibility of representing women as a media to change the socio-economic standing of the country. Changes can be seen in the way our society regards its women folk now a days. Empowerment of rural women and their participation in development process has brought in a long-term positive effect, which is a direct contribution by the NGOs in Bangladesh.

F. Creating Facilities for Poor to Enjoy Government Owned Khas Land And Properties :

In Bangladesh, the proportion of land per head is decreasing at an escalating rate. In comparison to1983-84 population census, 1996 census shows that total arable land has decreased by 27%. Per head arable land has decreased to 10 katha from 16 katha (37.5 %) [22]. Only a limited number of people in our country actually enjoy land as assets. Introduction of social forestation and group irrigation system by the NGO for the landless has created the unconventional opportunity to enjoy land facility. The government owned khas land specially the roadside lands are now being used by the by the landless people for social forestation. On the other hand, under the project of irrigation for landless by organizing the landless people, the NGOs are helping them to become the owner of deep tube-well and shallow tube-well and low-lift pump. Besides many NGOs are organizing the landless people and taking lease of khas land and dry riverbed to use for shared fish culture. Where as, some NGOs are organizing the fishermen by managing fishing and fish cultivation in open water bodies for them. Again there are NGOs which has established village based nursery and thus assisting in social forestation and tree plantation, yet another assistance by the NGOs to eradicate poverty in the rural sector.

G. Health, Nutrition and Hygiene:

In Bangladesh, Health and nutrition status of the rural populace is very poor. Majority is deprived from even minimal health and nutrition facilities. For this reason, a significant part of the active NGOs of Bangladesh are providing training and education service in the field of health and nutrition. An independent organization named Voluntary Health Services Society (VHSS) is supervising the NGOs that are working on the health and nutrition sector. Health and nutrition is one very important indicator of poverty measurement.

In some specific area of primary health care sector like diarrhoea control, vaccination against six hazardous diseases, campaigning for health consciousness, expansion of water and sanitation services, reproductive health care and family planing services etc. the NGOs have achieved extensive success. World Vision has spent in heath sector taka 6,58,41,474.45 which consists of 20.20% of their budget. In order to develop the health and nutrition situation, around 350 NGOs have brought in sanitary toilets for 14 lakh people and safe water for 1.5 crore people through establishment of 1.5 lakh tube-well, 186 rural sanitation center and 2.5 lakh latrine. Till 1990, 85% children were vaccinated and 90% families’ women were given training on how to make oral saline under the EPI project.

In one research it was found that, in terms of food intake, knowledge on nutrition, mother and child care, tendency to take purified water etc. those poor people under Grameen bank projects had daily intake of 2,171 calorie where as those not included in the projects took only 1,982 calorie. 50% children under Grameen Bank project have normal nutrition and those not included under Grameen Bank, only 30% children aged nine years have normal nutrition. In other words, NGOs are playing notable role in changing poverty state by bringing in primary and other health and nutrition care services within the reach of poor people.

H. Relief and Rehabilitation Projects :

One major cause of poverty rate increase in Bangladesh is natural disaster. The NGOs are working for the poor people in time of regular need as well as emergencies. Whenever there is a natural disaster like flood, drought, famine, storm, contaminated diseases, tidal waves etc. they would extend their hands and conduct relief works. Besides after disasters are over, then they would also undertake different rehabilitation activities for the betterment of the disaster affected people. In 1991 Cyclone, World Vision gave taka 110,788,560 in aid and rehabilitation assistance. They also built 11 disaster time shelters and one multipurpose center, which was worth taka 60,441,713. Moreover in 1998 they also gave taka 378,292 as relief for the flood affected people and health care service for 3,00,000 people. Till 1999 Mid June, ASA rehabilitated around 450 families in Saturia and Manikgang and built 2,171 houses. Thus, through management of different relief and rehabilitation programs also the NGOs are playing crucial role in helping out the unfortunate people from problems encountered during any calamity.

I. Informal and Non-formal Education :

The NGOs are highly active in the sector of informal and non-formal education. The best way to develop human resource is through appropriate education. Illiterates created due to lack of education is one major obstacle for socio economic development hence also for poverty eradication. The Bangladesh Government and UNICEF are trying at their utmost level to eradicate illiteracy. The low rate of admission in the primary schools, failure to attract the children to schools, unlikable education method and syllabus for etc. reason the rate of primary education in the rural area are not at all hopeful. The largest NGO in our country and also world wide, BRAC have started satellite school system based on informal education policy. As a result the poor children at the rural area are now being given special importance.

More emphasis is given on the participation of parents as well as community in this regard. This program has turned into a vital accompaniment for the primary education system by the government. In 1998, World Vision spent taka 13,06,87,996.58 which amounted to 40.10% of their total expenditure. So far the NGOs have been successful in providing education to 23 lakh people in the last five years through establishment of 30 thousands primary schools and 44 thousands adult-education centers. At present almost 9 lakh men and women are studying in these schools.

J. Innovating Appropriate Technology for Small and Seasonal Farmers :

In Bangladesh during the 70’s the government agencies initiated irrigation in agriculture. But it was not that successful in small farmland. In small size farming land, deep and shallow tube-well was not that suitable when growing vegetables and spices. On demand from the small and seasonal farmers the NGOs have developed bamboo/cane tube-well, oar pump, star pump, dheki pump etc. type of irrigation technology. As this can be produced with little cost, the small and marginal farmers can now easily afford these. Right now in Bangladesh 400 irrigation projects are running with loans from NGOs.

The NGOs arrange to teach appropriate technology for fruits, vegetables, fish and cooking through transfer of suitable technology for family agriculture. The NGOs also use newer communication and transportation technology to play significant role in poverty eradication.

CONCLUSION

At present, for the betterment of the destitute and the helpless, the untended population of the society, Non Government Organization or NGO is much acknowledged. It was proven that the active presences of NGOs are a boon for the overall and social development of Bangladesh. The NGOs started in a war stricken Bangladesh with relief and rehabilitation program. Right now they are omnipresent in Bangladesh’s socio-economic, cultural, geographic, family planning, education, health etc. The NGOs have proven themselves as the true associates/partner of the government in poverty eradication and socio-cultural development. In many cases (i.e. micro-credit) NGOs are more successful in some aspects of development where the government is playing a secondary role.

In this country expansion of loan amount, loan activities, and success are needed for poverty eradication. Moreover it is essential to establish a warm and dependable relationship by setting aside different obstacles between Government and NGOs. In this case expansion of Government-NGO partnership activities, opinion exchange/knowledge sharing at a regular interval and developing contemporary strategies, ensuring accountability, and by staying above differences in political opinions are absolutely essential for the sake of this country, for its poor and forsaken populace.

However, some limitations was observed in the NGO effort to poverty eradication for i.e. leaving out the ultra poor, partial and sub-divided working periphery, area based differences in activities/projects, differentiating outside target people and weak relationship, participating in commercial activities, supporting political parties etc. If NGOs can overcome these limitations then it can surely be hoped that they continue playing the role of savior of economic and social development in Bangladesh and lead the country to sustainable economic growth and development.

" 85,"

Contribution of NGO’s in the Development of Bangladesh Economy

","

 

 

Introduction:

In Bangladesh NGOs have appeared as the savior of countless number of people without food, cloth, education and basic health facilities. Bangladesh is one of the top thirteen underprivileged countries. With the record of being the most densely populated country on earth and feeble manpower competency, Bangladesh is facing massive challenge to meet up the demand of her ever-increasing population. Although agriculture sector is the main source of income for this rural-agro based country, unfortunately this sector has completely failed to create rewarding employment opportunity for the landless. Considering these overall situations, the NGOs are working on poverty eradication by directly involving the poverty stricken population. Their target groups are basically the poor and vulnerable ones with hardly any possessions. Their main tasks are to organize these people, create awareness in them and make them development oriented. These organizations are working based on the assessed need and demand of the grass root level farmers and women. By involving the beneficiaries directly, they are working within the context of overall national planning for development.

 

NGO: BACKGROUND, DEFINITION AND MISSIONS

The history of philanthropic activities is as antiquated as the history of mankind. From the day men started living together in society, since then they have begun to help each other in time of need. In ancient time, people used to live in small clans and whenever any one of them fell into trouble, and then the strong and sympathetic kinsmen would come out to help the poor and the feeble. The substituted prevalent version of these separate and unorganized activities is today’s NGOs. The chronic increase of population, evolution of new socio-economic as well as psychological problems, limitations of the state fund in social welfare etc. made it almost impossible for any long-term solution of all these problems by the government alone. Hence the emergence of NGOs was considered with much importance in this regard.

 

Defining NGO

In Bangladesh the term NGO is very well known and NGO activities are wide spread. Literally NGO is Non-Governmental aid providing organization. According to social science dictionary, “ Non Government Organization is a non-profit agency that serves some public interest. Non Government Organization is established to fulfill some social purposes other than monetary rewards to financial backers. In other words it is stated “NGO’s are usually defined as an association of persons organized on voluntary basis through the initiative of one or more dedicated persons committed to the planning and implementation of development projects at the grass root level. NGO’s although work outside the government structure but they are within the legal framework of the country” .

 

The book “Social Welfare Legislation in Bangladesh” said, “A broader definition of NGO refers to associations voluntarily formed by individuals for the purpose of rendering welfare and development services outside Government structures; drawing funds from national or international sources; and functioning within the legal frame work of the country.” From the above discussion it is clearly evident that NGOs are those organizations, which are one way or the other involved in development or welfare oriented activities.

 

Missions and Goals of NGOs

Non Governmental Organizations (NGOs) are launched with various purposes. Based on the region or local demand and problems, divergence in each NGO targets and objectives can be observed. But everywhere the main purpose of NGOs is the much-desired development of poverty stricken deprived people. The missions and goals with which the NGOs are established and conducting their operations in Bangladesh are:

§  Assisting the poor and suffering people as well as exercising self-control through utilization of own resources.

§  Identifying native assets, local leadership and ensuring effective utilization of these for welfare and development.

§  Coordinating the poor and deprived ones through formation of co-operatives and thus facilitate the socio-economic progress.

§  Health and Nutrition development.

§  Acting as the associate of the government and no as competitor.

§  Generating alternatives to overcome special social problems and hurdles besides taking necessary steps to aware the general population.

§  Creating positive attitude of the society, annihilation of superstition and belief against development and bringing in the deprived ones in the main stream of development.

§  Giving priority to women in loan scheme by involving them directly in production process and thus creating scope of additional income in the family, which gradually leads to self-sufficiency.

§  Continuing the assistance towards poor so that they can create own investment by saving at a growing rate from upward income.

§  Creating awareness and developing leadership for the landless and relatively less facilitated ones.

§  Helping out people in coping with the changing societal environment.

 

ECONOMIC SITUATION IN BANGLADESH

The incessant battle against poverty and famine is long observed in our country. People like day laborer, rickshaw puller, weavers, fisherman, small businessman, shop owners, smith, and landless people, farmer and marginal farmer live in abject poverty. According to World Bank, poverty rate in Bangladesh is around 36%-40% with 40% ultra poor living in the rural area and 15% in the urban area. Poverty at the rural area is considered one of our most important and increasing tribulations.

 

Eradication of poverty in Bangladesh is an enormous and multi-dimensional challenge. Almost 42.5% of the people living in villages are poor while 18.7% are termed ultra-poor. In the last three decades the government has undertaken extensive activities. The main objective of first five-year plan (1973-1978) was poverty eradication. This trend is still continued in all subsequent five-year plans. But to handle multifaceted and inter-related problems like rural poverty, the government also has limitations if the matter is to be managed single handedly due to inadequate assets, capability and sometimes lack of willingness. In this case overall cooperation between government and different development agencies can play significant role in poverty eradication.

 

Calorie wise poor and ultra poor population nature of poverty

1983/84

(%)

1985/86

(%)

1988/89

(%)

1991/1992

(%)

1995/96

(%)

2003

(%)

Poor

61.9

54.7

47.8

47.6

47.1

42.3

Ultra Poor

36.7

26.3

28.6

28.3

24.6

18.7

 

 

 

 

 

 

 

 

 

The developing agencies in Bangladesh can engage themselves in developing activities and at the same time can bring in a positive change in the life of the poor through social changes and development. The NGOs of Bangladesh think that development is a process through which the members of a society build their organizations as well as themselves in such a way, which increases their capability to manage required assets to match expectations with a well distributed, stable corresponding living standard. The ideologies of NGOs to eradicate rural poverty are the empowerment of poor, developing their institution and creating ability through appropriate distribution of assets and capacity. NGOs give importance on the causes of poverty to eradicate poverty instead of changing the attributes of poverty.

 

NGO ACTIVITIES IN BANGLADESH

The NGO have taken some significant initiatives to handle the poverty situation in Bangladesh considering certain aspects stated below:

a) Speedier economic growth achievement process

b) Human Resource development

c) Specific target setting for poor

 

Hence, a combined strategy considering all three stated aspects is necessary to undertake. In the following section, as a follow up/ part of these combined strategies some key activities already commenced by NGOs are discussed.

 

A. Humanitarian Progress and Structural Development of Organizations for Rural Poor:

Despite the fact that poor people have vast experience about life, still they are incapable of developing exact ways to scientifically analyze and fix their problems and whatever possessions they have. In this case, efforts of the NGOs are worth mentioning to help these people analyze the society and problems in the backdrop of old, superstitious, anti life perspectives. For example: primary training, improved training, organizing exchange of views program among different groups or areas, regular adult education activities, weekly analytical discussion etc. Different NGOs are playing essential role for humanitarian development through joint analysis and seeking solution through different seminars and workshop, joint social activities, and application of socio-economic projects. Besides, they have introduced certain essential concepts like developing small groups, credit based cooperatives, mother welfare society and cooperatives etc. for homeless/ landless etc. and thus have strengthened the root of organizational structure for rural poverty.

 

B. Employment Generation:

In order to encourage the rural poor to participate in different economic activities and to increase their income through employment generation, several policies, methods and strategies of the NGOs have attracted the attention of some foreign development experts. NGOs usually create employment in two ways. First of all, they provide employment in their own organization since they also need human resource to operate. Secondly, they provide loans and management assistance to individuals, which create new employment opportunity. Currently the projects that are being conducted under the supervision and assistance of NGOs are: Irrigation project for landless, fishery in ponds (khash), Fishing in the coastal area, weaving, equipment supplies for landless share cropper, bee keeping, small business, rice and popcorn production, sericulture, handicrafts i.e. earthen wares, wood and cane works, developing nursery.

 

Besides, they are providing training to hundreds of men and women on vaccination and treatment of domestic livestock and poultry, construction of sanitary laboratory and slabs; to be mechanics of pump machine or rice/paddy mills etc. Thus they are significantly contributing in eradication of poverty by providing the above-mentioned essentials.

 

C. Organizing Groups and Participation of the Beneficiaries :

One very important and effective innovation by NGOs is the strategy of organizing group wise meeting. As a result, participation of the true beneficiaries and direct objective setup is possible to achieve economic target. Besides, It is an effective element in making the loan scheme (to economically empower the poor) successful. This type of meeting keeps up for the poor the trend of empowerment and awareness along with raise in their entitlement.

 

D. Micro Credit :

Overall economic development is essential for poverty eradication at the rural level. Besides employment generation, per head income and scheme to increase savings is required so that a sustainable development and poverty reduction can be seen for the poor. The identification of loan as a significant necessity for sustainable economic development for the poor as well as developing an effective method for meeting the demand for loan is a competent model of poverty eradication. The micro credit scheme launched by Grameen Bank is now established world wide for its success in poverty eradication. This model has been accepted even at the government level. The government has established Palli Karma Sahayak Foundation (Rural Activities Assistance Foundation) or PKSF and till December 2001, has provided loans to several eligible NGOs 1,04,089 crore taka for micro credit scheme. Different NGOs so far have given (June 2001) 1,04,089 crore taka micro-credit loans. The numbers of people enjoying such benefits are 116.05 lakh. Almost 23.50% of these loans are collected from PKSF and 9.15% from local Banks. Presented below briefly is the data on four major NGOs of Bangladesh and their micro credit scheme.

Name of NGO

Active member no.

(in thousands)

Cumulative credit distribution (in crore taka)

1. BRAC

2. Proshika

3. ASHA

4. Swanirvar Bangladesh

2,253

1,132

873

667

2560.10

677.40

925.10

157.20

Total (Inclusive of other NGOs)

7,165

5,354.40

 

 

 

 

 

 

 

 

 

 

Source: Bangladesh Economic Survey – 1999

 

E. Targeting Poor Rural Women as Beneficiary:

Although half the population of Bangladesh is women still they are leading a much backward life. The NGOs of Bangladesh have consciously targeted the fallen behind poor women folks as their beneficiaries. The NGOs, which are enlisted under the Bureau of NGOs, have more than fifty- percent women clientele (population). In 1995 with financial aids from ADAB and BRAC almost 549 NGOs worked for only women. Almost 96% of the credit facility holders are women. Swanirvar Bangladesh has 71% women as credit holder. Till the year 2001 BRAC has provided loan to 41.38lakh beneficiaries worth 6953.78 crore taka throughout 64 districts and 460 sub-districts of Bangladesh. Statistics shows that 99% of these beneficiaries were women. Palli Karma Shahayak Foundation (PKSF) has 86.43% Women credit holders. Besides till 1998 ASA distributed 13,183,46 million taka to 7,34,684 women which is about 93.41% of total credit holders. Till 1998 Grameen Bank provided loan of 1,06,14,242 million taka to its total member of 23,64,755 out of which 22,40,139 were women and 1,24,616 were male. The importance that NGOs have placed on women to eradicate rural poverty has truly improvised the economic and health status of rural women. This has brought in the possibility of representing women as a media to change the socio-economic standing of the country. Changes can be seen in the way our society regards its women folk now a days. Empowerment of rural women and their participation in development process has brought in a long-term positive effect, which is a direct contribution by the NGOs in Bangladesh.

 

F. Creating Facilities for Poor to Enjoy Government Owned Khas Land And  Properties:

In Bangladesh, the proportion of land per head is decreasing at an escalating rate. In comparison to1983-84 population census, 1996 census shows that total arable land has decreased by 27%. Per head arable land has decreased to 10 katha from 16 katha (37.5 %) [22]. Only a limited number of people in our country actually enjoy land as assets. Introduction of social forestation and group irrigation system by the NGO for the landless has created the unconventional opportunity to enjoy land facility. The government owned khas land specially the roadside lands are now being used by the by the landless people for social forestation. On the other hand, under the project of irrigation for landless by organizing the landless people, the NGOs are helping them to become the owner of deep tube-well and shallow tube-well and low-lift pump. Besides many NGOs are organizing the landless people and taking lease of khas land and dry riverbed to use for shared fish culture. Where as, some NGOs are organizing the fishermen by managing fishing and fish cultivation in open water bodies for them. Again there are NGOs which has established village based nursery and thus assisting in social forestation and tree plantation, yet assistance by the NGOs to eradicate poverty in the rural sector.

 

G. Health, Nutrition and Hygiene:

In Bangladesh, Health and nutrition status of the rural populace is very poor. Majority is deprived from even minimal health and nutrition facilities. For this reason, a significant part of the active NGOs of Bangladesh are providing training and education service in the field of health and nutrition. An independent organization named Voluntary Health Services Society (VHSS) is supervising the NGOs that are working on the health and nutrition sector. Health and nutrition is one very important indicator of poverty measurement. In some specific area of primary health care sector like diarrhoea control, vaccination against six hazardous diseases, campaigning for health consciousness, expansion of water and sanitation services, reproductive health care and family planing services etc. the NGOs have achieved extensive success. World Vision has spent in heath sector taka 6,58,41,474.45 which consists of 20.20% of their budget. In order to develop the health and nutrition situation, around 350 NGOs have brought in sanitary toilets for 14 lakh people and safe water for 1.5 crore people through establishment of 1.5 lakh tube-well, 186 rural sanitation center and 2.5 lakh latrine. Till 1990, 85% children were vaccinated and 90% families’ women were given training on how to make oral saline under the EPI project. In one research it was found that, in terms of food intake, knowledge on nutrition, mother and child care, tendency to take purified water etc. those poor people under Grameen bank projects had daily intake of 2,171 calorie where as those not included in the projects took only 1,982 calorie. 50% children under Grameen Bank project have normal nutrition and those not included under Grameen Bank, only 30% children aged nine years have normal nutrition. In other words, NGOs are playing notable role in changing poverty state by bringing in primary and other health and nutrition care services within the reach of poor people.

 

H. Relief and Rehabilitation Projects :

One major cause of poverty rate increase in Bangladesh is natural disaster. The NGOs are working for the poor people in time of regular need as well as emergencies. Whenever there is a natural disaster like flood, drought, famine, storm, contaminated diseases, tidal waves etc. they would extend their hands and conduct relief works. Besides after disasters are over, then they would also undertake different rehabilitation activities for the betterment of the disaster affected people. In 1991 Cyclone, World Vision gave taka 110,788,560 in aid and rehabilitation assistance. They also built 11 disaster time shelters and one multipurpose center, which was worth taka 60,441,713. Moreover in 1998 they also gave taka 378,292 as relief for the flood affected people and health care service for 3,00,000 people. Till 1999 Mid June, ASA rehabilitated around 450 families in Saturia and Manikgang and built 2,171 houses. Thus, through management of different relief and rehabilitation programs also the NGOs are playing crucial role in helping out the unfortunate people from problems encountered during any calamity.

 

I. Informal and Non-formal Education :

The NGOs are highly active in the sector of informal and non-formal education. The best way to develop human resource is through appropriate education. Illiterates created due to lack of education is one major obstacle for socio economic development hence also for poverty eradication. The Bangladesh Government and UNICEF are trying at their utmost level to eradicate illiteracy. The low rate of admission in the primary schools, failure to attract the children to schools, unlikable education method and syllabus for etc. reason the rate of primary education in the rural area are not at all hopeful. The largest NGO in our country and also world wide, BRAC have started satellite school system based on informal education policy. As a result the poor children at the rural area are now being given special importance. More emphasis is given on the participation of parents as well as community in this regard. This program has turned into a vital accompaniment for the primary education system by the government. In 1998, World Vision spent taka 13,06,87,996.58 which amounted to 40.10% of their total expenditure. So far the NGOs have been successful in providing education to 23 lakh people in the last five years through establishment of 30 thousands primary schools and 44 thousands adult-education centers. At present almost 9 lakh men and women are studying in these schools.

 

J. Innovating Appropriate Technology for Small and Seasonal Farmers :

In Bangladesh during the 70’s the government agencies initiated irrigation in agriculture. But it was not that successful in small farmland. In small size farming land, deep and shallow tube-well was not that suitable when growing vegetables and spices. On demand from the small and seasonal farmers the NGOs have developed bamboo/cane tube-well, oar pump, star pump, dheki pump etc. type of irrigation technology. As this can be produced with little cost, the small and marginal farmers can now easily afford these. Right now in Bangladesh 400 irrigation projects are running with loans from NGOs.

 

The NGOs arrange to teach appropriate technology for fruits, vegetables, fish and cooking through transfer of suitable technology for family agriculture. The NGOs also use newer communication and transportation technology to play significant role in poverty eradication.

 

CONCLUSION

At present, for the betterment of the destitute and the helpless, the untended population of the society, Non Government Organization or NGO is much acknowledged. It was proven that the active presences of NGOs are a boon for the overall and social development of Bangladesh. The NGOs started in a war stricken Bangladesh with relief and rehabilitation program. Right now they are omnipresent in Bangladesh’s socio-economic, cultural, geographic, family planning, education, health etc. The NGOs have proven themselves as the true associates/partner of the government in poverty eradication and socio-cultural development. In many cases (i.e. micro-credit) NGOs are more successful in some aspects of development where the government is playing a secondary role.

 

In this country expansion of loan amount, loan activities, and success are needed for poverty eradication. Moreover it is essential to establish a warm and dependable relationship by setting aside different obstacles between Government and NGOs. In this case expansion of Government-NGO partnership activities, opinion exchange/knowledge sharing at a regular interval and developing contemporary strategies, ensuring accountability, and by staying above differences in political opinions are absolutely essential for the sake of this country, for its poor and forsaken populace.

 

However, some limitations was observed in the NGO effort to poverty eradication for i.e. leaving out the ultra poor, partial and sub-divided working periphery, area based differences in activities/projects, differentiating outside target people and weak relationship, participating in commercial activities, supporting political parties etc. If NGOs can overcome these limitations then it can surely be hoped that they continue playing the role of savior of economic and social development in Bangladesh and lead the country to sustainable economic growth and development.

 

 

" 86,"

Cost-Volume-Profit Analysis

","

View With Charts And Images 

Introduction

Activity-based
costing is a costing method that is designed to provide managers with cost
information for strategic and other decisions that potentially affect capacity
and therefore “fixed” costs. Activity-based costing is ordinarily used as a
supplement to, rather than as a replacement for, the company’s usual costing
system.

Activity-Based
Cost system has recently gained popularity. It is based on a simple idea: in an
enterprise, overhead (or operating) expenses are generated by a number of activities
needed to successfully perform manufacturing and business processes. Since activities
consume overhead resources, and products (or projects or processes) demand
activities, the cost of products is related to the cost of resources. By
design, ABC provides not only relatively accurate cost data, but also
information about the origin of the cost. ABC has been implemented in numerous
companies, and managers familiar with the ABC method were able to manage costs more
successfully. Costs were kept in-line through the removal of non-value-added
activities, process improvement, or outsourcing. Even the most impressive cost
reductions, however, do not automatically imply an improvement in value creation;
often the shareholder value remained unchanged or was reduced. This results
from the fact that the ABC method, however sufficient in the calculation of
operating costs, is deficient in the handling of full capital costs.

·
Why Activity-Based
Cost Systems:

Activity-Based Costing (ABC) arose in the 1980s from the
increasing lack of relevance of traditional cost accounting methods. The
traditional cost accounting methods were designed around 1870 – 1920 and in
those days industry was labor intensive, there was no automation, the product
variety was small and the overhead costs in companies were generally very low
compared to today. However, from the 1960s – particularly 1980s – this changed
rapidly. For these reasons, and more, traditional cost accounting has been
called everything from ‘number 1 enemy of production’ and questions whether it
is ‘an asset or a liability’ have been raised.

The question of course is whether ABC has overcome these
deficiencies or not?  It has. In fact, ABC has been called one of the most
important management innovations the last hundred years.

So what is really the difference between ABC and traditional cost
accounting methods? Despite the enormous difference in performance, there are
some major differences:

  1. In
    traditional cost accounting it is assumed that cost objects consume
    resources whereas in ABC it is assumed that cost objects consume
    activities.
  2. Traditional
    cost accounting mostly utilizes volume related allocation bases while ABC
    uses drivers at various levels.
  3. Traditional
    cost accounting is structure-oriented whereas ABC is process-oriented.
  4. The
    allocation bases often differ from those used in traditional costing
    systems.
  5. Some
    manufacturing costs may be excluded from product costs.

·
ABC versus
Traditional Costing

Activity
causes costs to be incurred. Traditional costing uses broad cost drivers that
do not reflect cause and effect.

1 hour of activity A has different
costs than 1 hour of activity B

In
traditional cost accounting, predetermined overhead rated are computed by
dividing budgeted overhead costs by a measure of budgeted activity such as
budgeted direct labor-hours this practice results in applying the costs of
unused, or idle, capacity to products, and it results in unstable unit product
costs. If budgeted activity falls, the overhead rate increases because the
fixed components of overhead are spread over a smaller base, resulting in
increased unit product costs.

In
contrast to traditional cost accounting, in activity-based costing, products
are charged for the costs of capacity they use- not for the costs of capacity
they don’t use. In other words, the costs of idle capacity are not charged to
products. This results in more stable unit costs and is consistent with the
objective of assigning only those costs of idle capacity to products, in
activity-based costing these costs are considered to be period costs that flow
through to the income statement as an expense of the current period this
treatment highlights the cost of idle capacity rather than burying it in
inventory and cost of goods sold.

Accordingly,
under traditional costing, cost targets (products, jobs, customers) involving
complex (costly) activity tends to be under-costed while products involving
simple (less costly) activities tend to be over-costed.

The direction of the arrows are different because ABC brings
detailed information from the processes up to assess costs and manage capacity
on many levels whereas traditional cost accounting methods simply allocate
costs, or capacity to be correct, down onto the cost objects without
considering any ’cause and effect’ relations.

Consumption of resources versus consumption of activities

ABC acknowledges that costs cannot be managed, the only thing
that can be managed is what is being done and then costs will change as a
consequence. In traditional cost accounting, however, the underlying
assumption is that costs can be managed, but as most managers have found out
the hard way – managing costs is almost impossible.

The benefit of the ABC mindset is that it opens up for a much
wider array of measures when it comes to improving productivity. By
investigating systematically what is being done, i.e. the activities, one
will not only be able to identify surplus capacity if it occurs, but also
lack of capacity and misallocation of capacity. A result of this might be
that costs are cut the traditional way, but it might as well lead to a
reallocation of capacity to where it is most needed which will yield high
productivity more effectively than the traditional way.

Volume related allocation bases versus drivers at many levels

Due to the historic background of traditional cost accounting
methods, they tend to use direct labor – or other volume related allocation
bases – for cost assignment purposes. But as overhead has grown and new
technologies have come, it goes without saying that assigning costs based on
only 5 – 15% (in most companies) of total costs is highly risky. In fact, the
incurred errors are up to several hundred percent!

In ABC, however, costs are assigned according to the ‘cause and effect’ relationship between
activities (the actual process) and cost objects, which is captured using
drivers. The drivers are therefore not allocation bases in the traditional
sense, although they work the same way mathematically – drivers are estimates
of actual cost behavior and can therefore also be used to identify, or they
are themselves, the critical cost factors. Because the drivers are related to
the actual processes, they occur on several levels. The four most common
levels are;

  1. Unit level.
    Unit level drivers are triggered for every unit that is being produced.
    For example, for a man and a machine that produces one unit at a time,
    the associated direct labor will be a unit level cost driver. This is
    therefore a volume related driver similar to the traditional allocation
    bases.
  2. Batch level.
    Batch level drivers are triggered for every batch produced. A good
    example of that is production planning, because the planning is done for
    each and every batch regardless of the size of the batch. Here, number
    of batches can be a good driver.
  3. Product level.
    Product level drivers are triggered for every product regardless of the
    number of units and batches produced. These drivers occur by the sole
    existence of a product. A good example of a driver is the number of
    product development hours per product so that the more product
    development hours a product triggers the more product development costs
    should be assigned to that product.
  4. Facility level.
    Facility level driver are drivers that are not related to the products
    at all. Costs that are traced by such drivers will therefore be
    allocated to products and not traced. The difference between allocation
    and tracing is that allocation is quite arbitrary whereas tracing is
    based on ’cause and effect’ relations.

Hence, it can be seen that the traditional usage of fixed and
variable costs is totally meaningless. In ABC, all costs are included.
However, ABC employs a different usage and definition of fixed and variable
costs.  A fixed activity cost is a cost that exists due to the
very existence of the activity whereas a variable activity cost
changes as the output of the activity changes.  This distinction is very
helpful in various improvement efforts.

In ABC there are two types of drivers:

  1. Activity
    Cost Drivers:

 That keep track of how cost object behavior
influences activity levels, i.e., the level of activity for each
activity.

©  Selecting activity cost drivers

Activity
cost drivers are the central innovation of activity-based cost systems. They
are also the most costly to measure, particularly the quantity of each
activity cost driver used by each product. The selection of an activity cost
driver reflects a subjective trade-off between accuracy and the cost of
measurement. An ABC system, with 50 activity cost drivers and 2000 products
would require 100,000 data elements to be estimated (the quantity of each
activity cost driver used by each product). Because of the large number of
potential activity-to-product linkages, management accountants attempt to
economize the number of different activity cost driver.

ABC
system designers can choose from three types of activity cost drivers:

·
Transaction
drivers:

Transaction
drivers are the least expensive type of cost driver but are also the least
accurate because they assume that the same quantity of resources is required
every time an activity is performed. For example, a transaction driver such
as the number of setups assumes that all setups take about the same time to
perform. For many activities, the variation in the quantity of resources used
by each is small enough that a transaction driver will be fine for assigning
activity expenses to the cost object. If however, the amount of resources
required to perform the activity varies considerably from product to product,
more accurate and more expensive types of cost drivers should be used.

·
Duration Drivers:

Duration
drivers represent the amount of time required to perform an activity.
Duration drivers should be used when significant variation exists in the
amount of activity required for different outputs. Examples of duration
drivers include inspection hours and direct labor hours. In general, duration
drivers are more accurate than transaction drivers, but duration drivers are
more expensive to implement because they require an estimate of the time
required each time an activity is performed.

·
Intensity
Drivers:

Intensity
drivers charge directly for the resources used each time an activity is
performed. Intensity cost drivers are the most accurate activity cost drivers
but the most expensive to implement; in effect, they require a job order
costing system to track all the resources used and their cost each time an
activity is performed. Unless such measurement is inexpensive, intensity
drivers should be used only when the resources associated with performing an
activity are both expensive and variable each time an activity is performed.

2. Resource Cost Drivers:

Resource cost drivers are drivers that keep track of how the
subsequent activity level affects the resource consumption.

In early terminology activity drivers were referred to as
‘second stage cost drivers’ whereas resource drivers were denoted ‘first
stage cost drivers’.  But it is evident that the word ‘cost driver’ is
misleading in this context because activity- and resource drivers do not tell
what drives costs in the general case.

Therefore, in Activity-Based Management (ABM) a third
type of drivers is employed in addition to the two aforementioned drivers.
This type of drivers is called cost drivers and they are the
underlying causes of costs of activities and measured by non-financial
performance measures. Today, the most important of these measures can be
presented in Balanced Scorecard and they represent the process view in ABM.
These are possibly the most difficult drivers to identify.

Structure-orientation versus process-orientation

Traditional costing systems are more concerned about the
organizational charts than the actual process. Traditional cost accounting
systems are therefore structurally oriented and the process view is
completely missing. The result is that one cannot ask ‘what needs to be
done?’, because the process is unknown. The only questions such costing
systems can give answers to, although often off the mark, is ‘what do we have
at our disposal to do the job?’

The latter question is a question of capacity, that is, how
capacity is managed. Capacity is measured as an expense and found easily in
the accounting system. The first question is a question of resource
management, because resources is what you need in order to do a job and
measured as a cost, but the resource measures can only be found by
investigating the processes.

Thus, because ABC is process-oriented and gathers information
from the processes it can be used to identify both ‘what needs to be done?’
and how to allocate resources most productively. ABC can therefore give
managers the ability to match the resource needs with the available capacity
as closely as possible and hence improving productivity. From this we
understand that the structure oriented approach of traditional costing
systems gives no decision support in allocating capacity to match resource
needs. Over time this leads to cost inefficient organizations and poor
profitability.

There is also another aspect to process-orientation; how ABC is
used and implemented. Because ABC can direct attention towards the causes of
costs (critical success factors) related to both cost objects and processes
and not to mention the cost of quality, ABC is viewed as more than a method
for cost accounting – it invites to a whole new way of management, such as;

The identification of critical
success factors that enables continuous improvement of product- and process
design.

The link between cost information
and other information enables a much wider array of improvement strategies
than traditionally acknowledged.

The identification of the cost of
quality and the process-orientation in ABC open up for a very powerful link
to various quality management methods.

From the above discussion it should be evident that not only is
ABC useful and powerful to any organization, but a need for companies that
want to excel, and efficiently and effectively increase their Sustainable
Competitive Advantage (SCA).

·
Two stage ABC systems

Sometimes
two stage ABC system is used. The first stage cost drivers are used to allocate
indirect resource costs to activities that require the resources. The cost
drivers are usually expressed as percentages.

And
for the second-stage allocation, the cost driver for the production-support
activity costs might be “number of customer-generated engineering changes” or
“number of distinct parts,” whichever is a better measure of the consumption of
production-support activity.

·
How costs are
treated under Activity-based Costing

Nonmanufacturing
costs and activity-based costing:

In
traditional cost accounting, only manufacturing costs are assigned to products.
Selling, general, and administrative expenses are treated as period expenses
and are not assigned to products. However man of these nonmanufacturing costs
are also part of the costs of producing, selling, distributing, and servicing
products in activity-based costing, products are assigned all of the overhead
costs- nonmanufacturing as well as manufacturing-that they can reasonably be
supposed to have caused.

Manufacturing
costs and Activity-Based costing:

In
traditional cost accounting, all manufacturing costs are assigned to
products—even manufacturing costs that are not caused by the products. For
example, a portion of the factory security guard’s wages would be allocated to
each product even though the guard’s wages are totally unaffected b which
products are made or not made during a period. In activity-based costing, a
cost is assigned to a product only if there is good reason to believe that the
cost would be affected by decisions concerning the product.

·
Plant wide Overhead
Rate

On
an economy wide basis, direct labor and overhead costs has been moving in
opposite directions for a long time as a percentage of total cost, direct labor
has been declining, whereas overhead has been increasing many tasks that used
to be done b hand are now done with largely automated equipment-a component of
overhead. Further more, product diversity has increased companied are creating
new products and services at an ever-accelerating rate that differ in volume,
batch size, and complexity managing and sustaining this product diversity
requires many more overhead resources such as production schedulers and product
design engineers, and many of these overhead resources have no obvious
connection with direct labor. Finally computers, bar code readers, and other
technology have dramatically reduced the costs of collecting and manipulating
data- making more complex (and accurate) costing systems such as activity-based
costing much less expensive to build and maintain.

Nevertheless,
direct labor remains a viable base for applying overhead to products in some
companies-particularly for external reports. Direct labor is an appropriate
allocation base for overhead when overhead costs and direct labor are highly
correlated and indeed, most companies throughout the world continue to base
overhead allocations on direct labor or machine-hours.

·
Departmental Overhead
Rates

Rather
than using a plant wide overhead rate, many companied have a system in which
each department has its own overhead rate. The nature of the work performed in a
department will determine the department’s allocation base. For example,
overhead costs in a machining department may be allocated on the basis of the
machine-hours incurred in that department. In contrast, the overhead costs in
an assembly department may be allocated on the basis of direct labor-hours
incurred in that department.

Unfortunately
even departmental overhead rates will not correctly assign overhead costs in
situations where a company has a range of products that differ in volume,
batch, size, or complexity of production. The reason is that the departmental
approach usually relied on volume as the factor in allocating overhead cost to
products. However, the department’s overhead costs are probably more complex
than this and are caused by a variety of factors, including the range of
products processed in the department, the number of batch setups that are
required, the complexity of the products, and so on. Activity-based costing is
a technique that is designed to reflect these diverse factors more accurately
when costing products. It attempts to accomplish this goal by identifying the
major activities such as batch setups, purchase order processing and so on,
that consumes overhead resources and thus cause costs.

Fixed Costs and
Variable costs in activity-based cost systems:

The
ABC system assigns most indirect costs to products, but this system does not
assume that such costs will vary based on short-term changes in activity
volumes. In fact, most indirect expenses assigned by an ABC system are
committed costs. Committed costs become variable via a two step procedure.

 

First Demands for resources change either
because of changes in the quantity of activities performed or because of
changes in the efficiency of performing activities.

 

Second  Managers must make decisions to change the
supply of committed resources, either up or down, to meet the new level of
demand for the activities performed by these resources.

If
activity volumes exceed the capacity of existing resources, the result is
bottlenecks, shortages, increased pace of activity, delays or poor-quality
work. Such shortages occur often on machines, but the ABC approach makes clear
that shortages can also occur for human resources who perform support
activities, such as designing, scheduling, ordering, purchasing, maintaining
and handling products and customers. Companies facing such shortages typically
make committed costs variable. They relieve the bottleneck by spending more to
increase the supply of resources to perform work, which is why many indirect
costs increase over time.

Demand
for indirect and support resources also can decline, either intentionally
through activity-based management or inadvertently through competitive or
economy wide forces that lead to declines in sales. For many unit level
resources such as machines and direct labor, reduced demands for work do not
immediately lead to spending decreases. People have been hired, space has been
rented, and computers, telephones and furniture have been acquired. The
expenses for these resources continue even though there is less work for the
resources to perform. The reduced demand for organizational resources does
lower the cost of resources used by products, services and customers. But this
decrease is offset by an equivalent increase in the cost of unused capacity.

After
unused capacity has been created, committed costs will vary downward if, and
only if, managers actively reduce the supply of unused resources. Organizations
often create unused capacity through activity-based management actions, such as
process improvement, repricing to modify the product mix, and imposing minimum
order sizes on customers. They keep existing resources in place, however, even
though the demands for the activities performed by the resources have
diminished substantially. They also fail to find new activities that could be
done by the resources already in place but not being used. In this case, the
organization receives no benefits from its activity-based management decisions
that reduced the demands on its resources. The failure occurs because managers
are unwilling or unable to take advantage of the unused capacity they have
created, such as by spending less on capacity resources or increasing the
volume of work processed by the capacity resources. The costs of these
resources are only fixed if managers do not exploit the opportunities from the
unused capacity they helped to create.

Activity-Based
Pricing:

Pricing
is the most powerful tool a company can use to transform unprofitable customers
into profitable ones. Activity-based pricing establishes a base price for producing
and delivering a standard quantity for each standard product. In addition to
this base price, the company provides a menu of options, with associated
prices, for any special services requested by the customer. The prices for
special services on the menu can be set simply to recover the activity-based
cost-to-serve, allowing the customer to choose from the menu the features and
services it wishes while also allowing the company to recover its cost of
providing those features and services to that customer. Alternatively, the
company may choose to earn a margin on special services by pricing such
services above the costs of providing the service. Price surcharges could be
imposed when designing and producing special variants for a customer’s
particular needs. Discounts would be offered when a customer’s ordering pattern
lowers the company’s cost of supplying it.

Activity-based
pricing, therefore, prices orders, not products. When managers base prices on
valid cost information, customers shift their ordering, shipping, and
distribution patterns in ways that lower total supply-chain costs to the
benefit of both suppliers and customers.

·
Activity-Based
Management: A cost management system tool

ABC
systems not only develop more accurate costs, they also aid control of costs.
Activity based management is using the output of an activity based cost
accounting system to aid strategic decision making and to improve operational
control of an organization. In the broadest terms, activity-based management
aims to improve the value received by customers and to improve profits by
identifying opportunities for improvements in strategy and operations.

Value-added cost

Value
added cost is the cost of an activity that a company cannot eliminate without
affecting a product’s value to the customer. Value-added costs are necessary s
long as the activity that drives such costs is performed efficiently.

©  Non-value-added cost

Companies
try to minimize non-value-added costs in contrast to value-added costs.
Non-value-added costs mean costs that a company can eliminate without affecting
a product’s value to the customer. Activities such as storing and handling
inventories, transporting partly finished products from one part of the plant
to another, and changing the setup of production-line operations to produce a
different model of the product are all non-value-adding activities. A company
can rescue, if not eliminate, them by careful redesign of the plant layout and
the production process.

©  Benchmarking

Another
ABC related technique that has gained popularity is benchmarking, the
continuous process of comparing products, services, and activities to the best
industry standards. Benchmarking is a tool to help an organization measure its
competitive posture. Benchmarks can come from within the organization, from
competing organizations, or from other organizations having similar processes.

Companies
must exercise caution when benchmarking, especially when using financial
benchmarks.

·
Benefits of
activity-based costing and activity-based management

Activity-based
costing systems are more complex and costly than traditional systems. So
companies that have relatively simple operating systems may not realize
sufficient benefits and thus may not want to use ABC systems. But more and more
organizations in both manufacturing and non-manufacturing industries are
adopting activity-based costing systems for a variety of reasons:

1.
Fierce competitive pressure has resulted in shrinking profit margins. Companies
may know their overall margin, but they often do not have confidence in the
accuracy of the margins for individual products or services. Some are winners
and some are losers. Accurate costs are essential for these purposes.

2.
Greater diversity in the types of products and services as well as customer
classes results in greater business operating complexity. Therefore, the
consumption of a company’s shared resources also varies substantially across
products and customers.

3. New
production techniques have increased the proportion of indirect costs. That is
indirect costs are far more important in today’s world-class manufacturing
environment than they have been in the past. In many industries automated
equipment is replacing direct labor. Indirect costs are sometimes more than 50%
of total cost.

4. The
rapid pace of technological change has shortened product life cycles. Hence,
companies do not have time to make price or cost adjustments once they discover
costing errors.

5. The
rapid pace of technological change has shortened product life cycles. Hence,
companies do not have time to make price or cost adjustments once they discover
costing errors.

6. The
cost, associated with bad decisions that result from inaccurate cost
determinations are substantial. Examples include bids lost due to overcosted
products, hidden losses from undercosted products, and failure to detect
activities that are not cost effective companies with accurate costs have a
huge advantage over those with inaccurate costs

7.
Computer technology has reduced the costs of developing and operating ABC
systems.

·
An Activity-Based
Costing Model:

Like most other ABC
implementations, the new ABC system would supplement, rather than replace, the
existing cost accounting system, which would continue to be used for external
financial reports. The new ABC system would be used to prepare special reports
for management decisions such as bidding on new business.

In the above chart the accounting
managers have shown the general model of ABC system. Cost objects such as
products generate activities. For example, a customer order for a brass cup
holder requires the activity of preparing a production order. Such an activity
consumes resources. A production order uses a sheet of paper and takes time to
fill out. And consumption of resources causes costs. The greater the number of
sheets used to fill out production orders and the greater the amount of time
devoted to filling out such orders, the greater the cost. Activity-based
costing attempts to trace through these relationships to identify how products and
customers affect costs.

·
Design of an
Activity-based cost accounting system

How do managers actually design
ABC systems? A team of managers from the billing department and regional
controller used the following four-step procedure to design their new cost
accounting system:

·
Step 1: Determine the
Key Components of the Activity-Based Cost Accounting System:

They key components of an
activity- based cost accounting system are cost objectives, key activities,
resources, and related cost drivers. These components, together with the
purpose of the new system, determine the scope of the ABC system. The system is
–

a. Determine the billing department cost per account for each customer
class in order to support the strategic decision regarding outsourcing accounts
to the local service bureau, and

b. Enhance the managers’ understanding of key billing department
activities to support operational cost control. Because the bid from the local
service bureau includes performing all the activities of the department, the
ABC system must include all department cost. Further, because management wants
to understand the key activities and related costs, the team designed an
activity-based system.

·
Step 2: Determine the
relationships among cost objectives, activities, and resources:

An important phase of any
activity-based analysis is identifying the relationships among key activities
and the resources consumed. The management team does this by interviewing
personnel and analyzing various internal data.

Implementing an ABC system
requires a careful study of operations. As a result, managers often discover
that they can trace directly to cost objectives some previously indirect or
even unallocated costs, thus improving the accuracy of product or service
costs.

Process maps:

A process map is a schematic
diagram with symbols that captures the inter-relationships between cost
objects, activities, and resources. These maps can be efficient method to
enhance managers’ understanding of operations. Many ABC teams find it useful to
develop a process map.

There are two examples following,
which contain the basic concepts of drawing process maps.

Let us assume that there is no
way to physically trace the costs of resource A to activities 1 and 2, so we
must use a cost driver to allocate the costs, making them indirect costs.

Similarly we must use cost
drivers for the allocation of the costs of activities 2 and 3 to the products.
In contrast, any resource cost that is used by only one activity (as for
resources B and C) is direct with respect the activity cost that is required by
only one product (as for activities 1 and 4). There is no ambiguity about which
cost objective is responsible for these direct costs.

A process map depicts in a
concise manner the same information that was gathered from interviews. Process
maps can be a key tool for managers to gain an understanding of operations.

·
Step 3: Collect
relevant data concerning costs and the physical flow of the cost-driver units
among resources and activities:

Using the process map as a guide,
the managers can collect the required cost and operational data by further
interviews with relevant personnel. Sources of data may include the accounting
records, special studies and sometimes best estimates of managers. They can collect
resource cost information from the general ledger and data on the flow of cost
drivers from various operational reports.

·
Step 4: Calculate and
Interpret the New Activity-Based Cost Information:

After collecting all required
financial and operational data, we can calculate the new activity-based
information. Traditional systems generally overcost high- volume cost objects
with simple processes. Which system makes more sense- the traditional
allocation system that “spreads” all support costs to customer classes based
solely on the number of inquiries, or the activity-based costing system that
identifies key activities and assign costs based on the consumption of units of
cost drivers for each key activity can be measured from ABC systems.

·
Steps for Implementing
Activity-Based Costing:

·
Step
1: Identify and difine activities and activity cost pools:

The first major
step in imolementing an ABC system is to identify the activities that will form
the foundation for the system. A common procedure is for the individuals on the
ABC imolementation team to interview people who work in overhead departments
and ask themto describe their major activities.

A useful way to
think about activities and how to combine them is to organize them into five
general levels:

1. Unit level activities:

These are
performed each time a unit is produces. The costs of unit-level activities
should be proportional to the number of units produced. For example, providing
power to run processing equipment would be a unit-level activity since power
tends to be consumed in proportion to the number of units produced.

2. Batch-level activities:

These are
performed each time a batch is handled or processed, regardless of how many
units are in the batch. For example, tasks such as placing purchase orders,
setting up equipment and arranging for shipments ot customers are batch-level
activities. They are incurred once for each batch (or customer order). Costs at
the batch level
depend on the number of batches processed rather than on the number of units
produced, the number of units sold, or other measures of volume. For example,
the cost of setting up a machine for batch processing is the same regardless of
whether the batch contains one or thousands of items.

3. Product-level activities:

These are related to specific
products and typically must be carried out regardless of how many batches are
run or units of product are produced or sold. For example, activities such as
designing a product, advertising a product, and maintaining a product manager
and staff are all product-level activities.

4. Customer-level activities:

These are related to specific
customers and include activities such as sales calls, catalog mailings, and
general technical support that are not tied to any specific product.

5. Organization-sustaining activities:

These are carried out regardless
of which customers are served, which products are produced, how many batches
are run, or how many units are made. This category includes activities such as
heating the factory, cleaning executive offices, providing a computer network,
arranging for loans, preparing annual reports to shareholders and so on.

System of combining activities to ABC:

Activities should be grouped
together at the appropriate level while combining activities in an ABC system.
Batch-level activities should not be combined with unit-level activities or
product-level activities with batch-level activities and so on. In general, it
is best to combine only those activities that are highly correlated with each
other within a level. And it can only be possible when they tend to move in
tandem.

Activity Cost Pool:

It is a bucket in which costs are
accumulated that relate to a single activity measure in the ABC system.

© The Product Design Cost Pool:

The product design cost pool will
be assigned all costs of resources consumed by designing products. The activity
measure for this cost pool is the number of products designed. This is a
product-level activity, since the amount of design work on a new product does
not depend on the number of units ultimately.

©  Order Size Cost Pool:

The order size cost pool will be
assigned all costs of resources consumed as a consequence of the number of
units produced, including the costs of miscellaneous factory supplies, power to
run machines, and some equipment depreciation. This is unit-level activity
since each unit requires some of these resources.

©  Customer Relations cost pool:

The customer relations cost pool
will be assigned all costs associated with maintaining relations with
customers, including the costs of sales calls and the costs of entertaining
customers.

©  Other cost pool:

The other cost pool will be
assigned all overhead costs that are not associated with customer orders,
product design, the size of the orders, or customer relations. These costs
mainly consist of organization-sustaining costs and the costs of unused, idle
capacity.

·
Step 2: Whenever
possible, directly trace overhead costs to activities and cost objects:

The second step in implementing
an ABC system is to directly trace as many overhead costs as possible to the
ultimate cost objects. Let us assume, a company’s cost objects are products,
customer orders and customers. In the ABC system at this company, all the
annual manufacturing overhead and selling, general and administrative costs are
considered to be overhead and will be assigned to cost objects where
appropriate.

·
Step 3: Assign costs
to activity cost pools:

For example, if the ABC system
has an activity called purchase order processing, then all of the costs of the
purchasing department could probably be traced to that activity. To the extent
possible, costs should be traced directly to be activity cost pools. But it is
quite common for an overhead department to be involved in several of the
activities that are tracked in the ABC system. In such situations, the costs of
the department are divided among the activity cost pools via an allocation
process called first-stage allocation. It is the process by which overhead
costs are assigned to activity cost pools.

The immediate problem is to
figure out how to divide. The point of activity-based costing is to determine
the resources consumed by cost objects. Soften, the best way to get this kind
of information is to ask the people who are directly involved. Members of the
ABC team may interview the workers related to the resources. Those who are
interviewed must thoroughly understand what the activities encompass and what
is expected of them in the interview.

·
Step 4: Calculate
Activity Rates

The next step is to calculate activity
rates that will be used for assigning overhead costs to products and customers.
The activity rates are computed by dividing the total cost for each activity by
its total activity. But the activity rates will not be computed for the other
category of costs. This is because the other cost pool consists of
organization-sustaining costs and costs of idle capacity that are not allocated
to products and customers.

·
Step 5: Assign costs
to cost objects:

The fifth step in the
implementation of activity-based costing is called second-stage allocation. In
the second-stage allocation, activity rates are used to apply cots to products
and customers.

·
Step 6: Prepare
Management Reports:

And the last step for
implementing ABC system is to prepare a report showing activity-based costing
margins from an activity view. Such customer analyses can be easily
accomplished by adding together the product margins for each of the products a
customer has ordered and then subtracting the average charge for customer
relations.

·
Managing
Relationships:

Companies
can transform unprofitable customers into profitable ones by persuading such
customers to use a greater scope of the company’s products and services. The
margins from increased purchases contribute to covering customer-sustaining
costs. Let us consider a commercial bank with a basic entry-level product:
commercial loans. The interest spread on such loans-the difference between the
bank’s effective borrowing rate and the rate it charges the customers-may be
insufficient to cover the bank’s cost of making and sustaining the loan because
of intense competition and the customer’s low use of the lending relationship.
However, the bank may make enough profit on other services that the customer
uses- for example, investment banking services and corporate money
management-that in aggregate the customer is a highly profitable one.
Alternatively, however, a small borrower who uses no other commercial banking
or investment banking services may be quite unprofitable. In this case, the bank
would ask the customer to expand its use of the loan facility, such as to
borrow more, and use other and more profitable services offered by the bank’s
services. If these efforts fail, the bank may then contemplate “firing” the
customer by encouraging it to take its demands for a commercial loan to another
institution.

Implementation
issues:

Although
activity-based costing has provided managers in many companies with valuable
information about the cost of their activities, processes, products, services
and customers, not all ABC systems have been sustained or have contributed to
higher profitability for the company. Companies have experienced difficulties
and frustrations in building and using activity-based cost and profitability
models. Here are some pitfalls that have occurred and suggest ways to avoid
them.

·
Lack of clear
Business Purpose:

Often,
the ABC project is initiated out of the finance or accounting department and is
touted as “a more accurate cost system”. The project team gets resources for
the project, builds an initial ABC model, and then becomes disappointed and
disillusioned when no one else looks at or acts upon the new ABC cost and
profitability information.

To avoid
these problems, all ABC projects should be launched with a specific business
purpose in mind, the purpose could be to redesign or improve processes, to
influence product design decisions, to rationalize the product mix, or to
better manage customer relationships. By defining the business purpose at the
start, the team will identify the line manager or department whose behavior and
decisions are expected to change as a consequence of the information. The
decision maker could be the manufacturing or operations manager (for process
improvement), the engineering manager (for product design decisions), the sales
organization (for managing customer relationships), or the marketing department
(for decisions about pricing and product mix).

Many
ABC projects were aborted when they did not provide operating managers with
frequent feedback on the costs and expenses under their responsibility. These
operating managers needed a feedback system, in addition to the ABC system,
that could be specifically designed for the purpose of providing operational
feedback on process efficiencies. Some projects foundered because the company
expected its new ABC system model to also be the basis for costing inventory
for financial reporting. Such companies failed to realize that their
traditional costing system already worked fine for external reporting and did
not need to be replaced right away with the ABC system. Companies should allow
some experimentation and flexibility with their first ABC system, customizing
its design for maximum managerial benefits, before imposing the additional
burden of also satisfying external, regulatory reporting.

For
decisions about pricing, customer relationships and product mix, the ABC model
should be simpler, using fewer than 50 activities and with data readily
available for all the important activity cost drivers. A model intended for
product designers and engineers should use activity cost drivers that would be
meaningful to them. Drivers such as number of parts placements, number of
unique parts and number of unique vendors are understandable and actionable to
product designers.

·
Lack of senior
management commitment:

The
most successful ABC projects occur when clear business purpose exists for
building the ABC model and this purpose is led, or at least understood and
fully supported by, senior line managers in the organization. A steering
committee of senior managers from various functional groups and business units
provides guidance and oversight, meeting monthly to review project progress,
make suggestions on how to enhance the model, and prepare for the decisions that
will be made once the model has been completed.

Even
when the ABC project is initiated from the finance group, a multifunctional
project team should be formed. The team should include, in addition to a
management accountant or other finance group representative, members from
operations, marketing/sales, engineering, and systems. In this way, the
expertise from diverse groups can be incorporated into the model design and
each team member can build support for the project within his or her department
and group.

·
Delegating the
project to consultants:

Some projects
may fail when they were outsourced to an external consulting company. Constants
may have considerable experience with ABC but not the needed familiarity with a
company’s operations and business problems. Nor can they build management
consensus and support within the organization either to make decisions with the
ABC information or to maintain and update the model.

The
companies may use the software but it cannot provide the thinking required to
build a cost effective ABC model.

ABC
consultants and ABC software can play valuable roles for many companies, but
they are not substitutes for leadership and sponsorship and a dedicated,
multifunctional internal project team. These functions cannot be bypassed just
because external consultants and prepackaged software have also been purchased.

·
Poor ABC Model
Design:

Sometimes,
even with strong management support and sponsorship, the project team gets lost
in the details and develops an ABC model that is both too complicated to build
and maintain and too complex for managers to understand and act upon. ABC model
design should be like any design or engineering project. It should be regularly
evaluated, with continual appropriate trade-offs to enable the essential
function of the system to be accomplished at minimal additional cost. If the
ABC project team keeps end-users clearly in mind and gets good advice from its
senior management steering committee, it should make good cost-effective design
decisions along the way. These decisions can help avoid the problem of having
an over complex system or misidentified casual relationships between cost
objects (products and customers), activities and resources.

·
Individual and
organizational resistance to change:

Not
all managers welcome technically superior solutions. Individuals often resist
new ideas and change and organizations have great inertia. The resistance to a
new ABC model may not be overt. Managers can politely sit though an ABC
presentation about product and customer profitability but continue to behave
just as they have in the past. Or they will ask the project team to re-estimate
the model, using a more recent period or at another company site. Sometimes,
however, the resistance is more overt. Managers may exclaim the company has
been successful in the past with its existing cost system. Or, if it has been a
finance-led project, they may accuse the finance people of not understanding
the complexity of the business or wanting to run the company.

·
Activity Based
Costing – Pros & Cons:

·
Pros:

Identifies Non-Value Added
Activities

Identifies cost savings
opportunities (untraceable costs)

Provides very detailed
cost/profitability information

Differentiates
complex versus simple processes

More data can
lead to more information = better decisions

·
Cons:

Very costly to implement and
maintain

Historical in nature
(same as traditional absorption costing)

Detail versus Accuracy

Discourages novel
approach’s to processes

Encourages activity

Assumes
equal and proportionate benefits result from common activity

Conclusion

ABC
systems drive the cost of indirect and support resources-manufacturing
resources in factories and marketing, selling, distribution and administrative
resources-to the activities they perform and then to the cost objects-the
products, services and customers- that generate the demand for the activities.

To
develop an ABC model, management accountants should estimate activity cost
driver rates using the practical capacity of the resources supplied. They
should also make appropriate trade-offs in the design of the model, balancing
the cost of more accurate measurement for more complex models, with the
benefits from the greater accuracy. Managers use the information on activity
costs to improve profitability. They can identify high-cost and inefficient
processes that are prime candidates for operational improvements projects. By
driving activity costs down to cost objects, managers identify profitable and
unprofitable products, services and customer. They can make better decisions on
pricing, product mix, product design, customer and supplier relationships and
technology that transforms unprofitable products and customers into profitable
ones. These are examples of activity-based management in action.

Despite
the apparent attraction of increased accuracy and managerial relevance from
activity-based costing, individual and organizational resistance can arise to
block the effective use of these systems. Management accountants must be
sensitive to the conditions that cause such resistance to arise and devise good
countermeasures to overcome them.

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Cost-Volume-Profit Analysis

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Introduction

Activity-based costing is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore “fixed” costs. Activity-based costing is ordinarily used as a supplement to, rather than as a replacement for, the company’s usual costing system.

Activity-Based Cost system has recently gained popularity. It is based on a simple idea: in an enterprise, overhead (or operating) expenses are generated by a number of activities needed to successfully perform manufacturing and business processes. Since activities consume overhead resources, and products (or projects or processes) demand activities, the cost of products is related to the cost of resources. By design, ABC provides not only relatively accurate cost data, but also information about the origin of the cost. ABC has been implemented in numerous companies, and managers familiar with the ABC method were able to manage costs more successfully. Costs were kept in-line through the removal of non-value-added activities, process improvement, or outsourcing. Even the most impressive cost reductions, however, do not automatically imply an improvement in value creation; often the shareholder value remained unchanged or was reduced. This results from the fact that the ABC method, however sufficient in the calculation of operating costs, is deficient in the handling of full capital costs.

· Why Activity-Based Cost Systems:

Activity-Based Costing (ABC) arose in the 1980s from the increasing lack of relevance of traditional cost accounting methods. The traditional cost accounting methods were designed around 1870 – 1920 and in those days industry was labor intensive, there was no automation, the product variety was small and the overhead costs in companies were generally very low compared to today. However, from the 1960s – particularly 1980s – this changed rapidly. For these reasons, and more, traditional cost accounting has been called everything from ‘number 1 enemy of production’ and questions whether it is ‘an asset or a liability’ have been raised.

The question of course is whether ABC has overcome these deficiencies or not?  It has. In fact, ABC has been called one of the most important management innovations the last hundred years.

So what is really the difference between ABC and traditional cost accounting methods? Despite the enormous difference in performance, there are some major differences:

  1. In traditional cost accounting it is assumed that cost objects consume resources whereas in ABC it is assumed that cost objects consume activities.
  2. Traditional cost accounting mostly utilizes volume related allocation bases while ABC uses drivers at various levels.
  3. Traditional cost accounting is structure-oriented whereas ABC is process-oriented.
  4. The allocation bases often differ from those used in traditional costing systems.
  5. Some manufacturing costs may be excluded from product costs.

· ABC versus Traditional Costing

Activity causes costs to be incurred. Traditional costing uses broad cost drivers that do not reflect cause and effect.

1 hour of activity A has different costs than 1 hour of activity B

In traditional cost accounting, predetermined overhead rated are computed by dividing budgeted overhead costs by a measure of budgeted activity such as budgeted direct labor-hours this practice results in applying the costs of unused, or idle, capacity to products, and it results in unstable unit product costs. If budgeted activity falls, the overhead rate increases because the fixed components of overhead are spread over a smaller base, resulting in increased unit product costs.

In contrast to traditional cost accounting, in activity-based costing, products are charged for the costs of capacity they use- not for the costs of capacity they don’t use. In other words, the costs of idle capacity are not charged to products. This results in more stable unit costs and is consistent with the objective of assigning only those costs of idle capacity to products, in activity-based costing these costs are considered to be period costs that flow through to the income statement as an expense of the current period this treatment highlights the cost of idle capacity rather than burying it in inventory and cost of goods sold.

Accordingly, under traditional costing, cost targets (products, jobs, customers) involving complex (costly) activity tends to be under-costed while products involving simple (less costly) activities tend to be over-costed.

The direction of the arrows are different because ABC brings detailed information from the processes up to assess costs and manage capacity on many levels whereas traditional cost accounting methods simply allocate costs, or capacity to be correct, down onto the cost objects without considering any ’cause and effect’ relations.

Consumption of resources versus consumption of activities

ABC acknowledges that costs cannot be managed, the only thing that can be managed is what is being done and then costs will change as a consequence. In traditional cost accounting, however, the underlying assumption is that costs can be managed, but as most managers have found out the hard way – managing costs is almost impossible.

The benefit of the ABC mindset is that it opens up for a much wider array of measures when it comes to improving productivity. By investigating systematically what is being done, i.e. the activities, one will not only be able to identify surplus capacity if it occurs, but also lack of capacity and misallocation of capacity. A result of this might be that costs are cut the traditional way, but it might as well lead to a reallocation of capacity to where it is most needed which will yield high productivity more effectively than the traditional way.

Volume related allocation bases versus drivers at many levels

Due to the historic background of traditional cost accounting methods, they tend to use direct labor – or other volume related allocation bases – for cost assignment purposes. But as overhead has grown and new technologies have come, it goes without saying that assigning costs based on only 5 – 15% (in most companies) of total costs is highly risky. In fact, the incurred errors are up to several hundred percent!

In ABC, however, costs are assigned according to the ‘cause and effect’ relationship between activities (the actual process) and cost objects, which is captured using drivers. The drivers are therefore not allocation bases in the traditional sense, although they work the same way mathematically – drivers are estimates of actual cost behavior and can therefore also be used to identify, or they are themselves, the critical cost factors. Because the drivers are related to the actual processes, they occur on several levels. The four most common levels are;

  1. Unit level.  Unit level drivers are triggered for every unit that is being produced. For example, for a man and a machine that produces one unit at a time, the associated direct labor will be a unit level cost driver. This is therefore a volume related driver similar to the traditional allocation bases.
  2. Batch level. Batch level drivers are triggered for every batch produced. A good example of that is production planning, because the planning is done for each and every batch regardless of the size of the batch. Here, number of batches can be a good driver.
  3. Product level. Product level drivers are triggered for every product regardless of the number of units and batches produced. These drivers occur by the sole existence of a product. A good example of a driver is the number of product development hours per product so that the more product development hours a product triggers the more product development costs should be assigned to that product.
  4. Facility level. Facility level driver are drivers that are not related to the products at all. Costs that are traced by such drivers will therefore be allocated to products and not traced. The difference between allocation and tracing is that allocation is quite arbitrary whereas tracing is based on ’cause and effect’ relations.

Hence, it can be seen that the traditional usage of fixed and variable costs is totally meaningless. In ABC, all costs are included. However, ABC employs a different usage and definition of fixed and variable costs.  A fixed activity cost is a cost that exists due to the very existence of the activity whereas a variable activity cost changes as the output of the activity changes.  This distinction is very helpful in various improvement efforts.

In ABC there are two types of drivers:

  1. Activity Cost Drivers:

 That keep track of how cost object behavior influences activity levels, i.e., the level of activity for each activity.

©  Selecting activity cost drivers

Activity cost drivers are the central innovation of activity-based cost systems. They are also the most costly to measure, particularly the quantity of each activity cost driver used by each product. The selection of an activity cost driver reflects a subjective trade-off between accuracy and the cost of measurement. An ABC system, with 50 activity cost drivers and 2000 products would require 100,000 data elements to be estimated (the quantity of each activity cost driver used by each product). Because of the large number of potential activity-to-product linkages, management accountants attempt to economize the number of different activity cost driver.

ABC system designers can choose from three types of activity cost drivers:

· Transaction drivers:

Transaction drivers are the least expensive type of cost driver but are also the least accurate because they assume that the same quantity of resources is required every time an activity is performed. For example, a transaction driver such as the number of setups assumes that all setups take about the same time to perform. For many activities, the variation in the quantity of resources used by each is small enough that a transaction driver will be fine for assigning activity expenses to the cost object. If however, the amount of resources required to perform the activity varies considerably from product to product, more accurate and more expensive types of cost drivers should be used.

· Duration Drivers:

Duration drivers represent the amount of time required to perform an activity. Duration drivers should be used when significant variation exists in the amount of activity required for different outputs. Examples of duration drivers include inspection hours and direct labor hours. In general, duration drivers are more accurate than transaction drivers, but duration drivers are more expensive to implement because they require an estimate of the time required each time an activity is performed.

· Intensity Drivers:

Intensity drivers charge directly for the resources used each time an activity is performed. Intensity cost drivers are the most accurate activity cost drivers but the most expensive to implement; in effect, they require a job order costing system to track all the resources used and their cost each time an activity is performed. Unless such measurement is inexpensive, intensity drivers should be used only when the resources associated with performing an activity are both expensive and variable each time an activity is performed.

2. Resource Cost Drivers:

Resource cost drivers are drivers that keep track of how the subsequent activity level affects the resource consumption.

In early terminology activity drivers were referred to as ‘second stage cost drivers’ whereas resource drivers were denoted ‘first stage cost drivers’.  But it is evident that the word ‘cost driver’ is misleading in this context because activity- and resource drivers do not tell what drives costs in the general case.

Therefore, in Activity-Based Management (ABM) a third type of drivers is employed in addition to the two aforementioned drivers. This type of drivers is called cost drivers and they are the underlying causes of costs of activities and measured by non-financial performance measures. Today, the most important of these measures can be presented in Balanced Scorecard and they represent the process view in ABM.  These are possibly the most difficult drivers to identify.

Structure-orientation versus process-orientation

Traditional costing systems are more concerned about the organizational charts than the actual process. Traditional cost accounting systems are therefore structurally oriented and the process view is completely missing. The result is that one cannot ask ‘what needs to be done?’, because the process is unknown. The only questions such costing systems can give answers to, although often off the mark, is ‘what do we have at our disposal to do the job?’

The latter question is a question of capacity, that is, how capacity is managed. Capacity is measured as an expense and found easily in the accounting system. The first question is a question of resource management, because resources is what you need in order to do a job and measured as a cost, but the resource measures can only be found by investigating the processes.

Thus, because ABC is process-oriented and gathers information from the processes it can be used to identify both ‘what needs to be done?’ and how to allocate resources most productively. ABC can therefore give managers the ability to match the resource needs with the available capacity as closely as possible and hence improving productivity. From this we understand that the structure oriented approach of traditional costing systems gives no decision support in allocating capacity to match resource needs. Over time this leads to cost inefficient organizations and poor profitability.

There is also another aspect to process-orientation; how ABC is used and implemented. Because ABC can direct attention towards the causes of costs (critical success factors) related to both cost objects and processes and not to mention the cost of quality, ABC is viewed as more than a method for cost accounting – it invites to a whole new way of management, such as;

The identification of critical success factors that enables continuous improvement of product- and process design.

The link between cost information and other information enables a much wider array of improvement strategies than traditionally acknowledged.

The identification of the cost of quality and the process-orientation in ABC open up for a very powerful link to various quality management methods.

From the above discussion it should be evident that not only is ABC useful and powerful to any organization, but a need for companies that want to excel, and efficiently and effectively increase their Sustainable Competitive Advantage (SCA).

· Two stage ABC systems

Sometimes two stage ABC system is used. The first stage cost drivers are used to allocate indirect resource costs to activities that require the resources. The cost drivers are usually expressed as percentages.

And for the second-stage allocation, the cost driver for the production-support activity costs might be “number of customer-generated engineering changes” or “number of distinct parts,” whichever is a better measure of the consumption of production-support activity.

· How costs are treated under Activity-based Costing

Nonmanufacturing costs and activity-based costing:

In traditional cost accounting, only manufacturing costs are assigned to products. Selling, general, and administrative expenses are treated as period expenses and are not assigned to products. However man of these nonmanufacturing costs are also part of the costs of producing, selling, distributing, and servicing products in activity-based costing, products are assigned all of the overhead costs- nonmanufacturing as well as manufacturing-that they can reasonably be supposed to have caused.

Manufacturing costs and Activity-Based costing:

In traditional cost accounting, all manufacturing costs are assigned to products—even manufacturing costs that are not caused by the products. For example, a portion of the factory security guard’s wages would be allocated to each product even though the guard’s wages are totally unaffected b which products are made or not made during a period. In activity-based costing, a cost is assigned to a product only if there is good reason to believe that the cost would be affected by decisions concerning the product.

· Plant wide Overhead Rate

On an economy wide basis, direct labor and overhead costs has been moving in opposite directions for a long time as a percentage of total cost, direct labor has been declining, whereas overhead has been increasing many tasks that used to be done b hand are now done with largely automated equipment-a component of overhead. Further more, product diversity has increased companied are creating new products and services at an ever-accelerating rate that differ in volume, batch size, and complexity managing and sustaining this product diversity requires many more overhead resources such as production schedulers and product design engineers, and many of these overhead resources have no obvious connection with direct labor. Finally computers, bar code readers, and other technology have dramatically reduced the costs of collecting and manipulating data- making more complex (and accurate) costing systems such as activity-based costing much less expensive to build and maintain.

Nevertheless, direct labor remains a viable base for applying overhead to products in some companies-particularly for external reports. Direct labor is an appropriate allocation base for overhead when overhead costs and direct labor are highly correlated and indeed, most companies throughout the world continue to base overhead allocations on direct labor or machine-hours.

· Departmental Overhead Rates

Rather than using a plant wide overhead rate, many companied have a system in which each department has its own overhead rate. The nature of the work performed in a department will determine the department’s allocation base. For example, overhead costs in a machining department may be allocated on the basis of the machine-hours incurred in that department. In contrast, the overhead costs in an assembly department may be allocated on the basis of direct labor-hours incurred in that department.

Unfortunately even departmental overhead rates will not correctly assign overhead costs in situations where a company has a range of products that differ in volume, batch, size, or complexity of production. The reason is that the departmental approach usually relied on volume as the factor in allocating overhead cost to products. However, the department’s overhead costs are probably more complex than this and are caused by a variety of factors, including the range of products processed in the department, the number of batch setups that are required, the complexity of the products, and so on. Activity-based costing is a technique that is designed to reflect these diverse factors more accurately when costing products. It attempts to accomplish this goal by identifying the major activities such as batch setups, purchase order processing and so on, that consumes overhead resources and thus cause costs.

Fixed Costs and Variable costs in activity-based cost systems:

The ABC system assigns most indirect costs to products, but this system does not assume that such costs will vary based on short-term changes in activity volumes. In fact, most indirect expenses assigned by an ABC system are committed costs. Committed costs become variable via a two step procedure.

 

 

First Demands for resources change either because of changes in the quantity of activities performed or because of changes in the efficiency of performing activities.

 

 

Second  Managers must make decisions to change the supply of committed resources, either up or down, to meet the new level of demand for the activities performed by these resources.

If activity volumes exceed the capacity of existing resources, the result is bottlenecks, shortages, increased pace of activity, delays or poor-quality work. Such shortages occur often on machines, but the ABC approach makes clear that shortages can also occur for human resources who perform support activities, such as designing, scheduling, ordering, purchasing, maintaining and handling products and customers. Companies facing such shortages typically make committed costs variable. They relieve the bottleneck by spending more to increase the supply of resources to perform work, which is why many indirect costs increase over time.

Demand for indirect and support resources also can decline, either intentionally through activity-based management or inadvertently through competitive or economy wide forces that lead to declines in sales. For many unit level resources such as machines and direct labor, reduced demands for work do not immediately lead to spending decreases. People have been hired, space has been rented, and computers, telephones and furniture have been acquired. The expenses for these resources continue even though there is less work for the resources to perform. The reduced demand for organizational resources does lower the cost of resources used by products, services and customers. But this decrease is offset by an equivalent increase in the cost of unused capacity.

After unused capacity has been created, committed costs will vary downward if, and only if, managers actively reduce the supply of unused resources. Organizations often create unused capacity through activity-based management actions, such as process improvement, repricing to modify the product mix, and imposing minimum order sizes on customers. They keep existing resources in place, however, even though the demands for the activities performed by the resources have diminished substantially. They also fail to find new activities that could be done by the resources already in place but not being used. In this case, the organization receives no benefits from its activity-based management decisions that reduced the demands on its resources. The failure occurs because managers are unwilling or unable to take advantage of the unused capacity they have created, such as by spending less on capacity resources or increasing the volume of work processed by the capacity resources. The costs of these resources are only fixed if managers do not exploit the opportunities from the unused capacity they helped to create.

Activity-Based Pricing:

Pricing is the most powerful tool a company can use to transform unprofitable customers into profitable ones. Activity-based pricing establishes a base price for producing and delivering a standard quantity for each standard product. In addition to this base price, the company provides a menu of options, with associated prices, for any special services requested by the customer. The prices for special services on the menu can be set simply to recover the activity-based cost-to-serve, allowing the customer to choose from the menu the features and services it wishes while also allowing the company to recover its cost of providing those features and services to that customer. Alternatively, the company may choose to earn a margin on special services by pricing such services above the costs of providing the service. Price surcharges could be imposed when designing and producing special variants for a customer’s particular needs. Discounts would be offered when a customer’s ordering pattern lowers the company’s cost of supplying it.

Activity-based pricing, therefore, prices orders, not products. When managers base prices on valid cost information, customers shift their ordering, shipping, and distribution patterns in ways that lower total supply-chain costs to the benefit of both suppliers and customers.

· Activity-Based Management: A cost management system tool

ABC systems not only develop more accurate costs, they also aid control of costs. Activity based management is using the output of an activity based cost accounting system to aid strategic decision making and to improve operational control of an organization. In the broadest terms, activity-based management aims to improve the value received by customers and to improve profits by identifying opportunities for improvements in strategy and operations.

Value-added cost

Value added cost is the cost of an activity that a company cannot eliminate without affecting a product’s value to the customer. Value-added costs are necessary s long as the activity that drives such costs is performed efficiently.

©  Non-value-added cost

Companies try to minimize non-value-added costs in contrast to value-added costs. Non-value-added costs mean costs that a company can eliminate without affecting a product’s value to the customer. Activities such as storing and handling inventories, transporting partly finished products from one part of the plant to another, and changing the setup of production-line operations to produce a different model of the product are all non-value-adding activities. A company can rescue, if not eliminate, them by careful redesign of the plant layout and the production process.

©  Benchmarking

Another ABC related technique that has gained popularity is benchmarking, the continuous process of comparing products, services, and activities to the best industry standards. Benchmarking is a tool to help an organization measure its competitive posture. Benchmarks can come from within the organization, from competing organizations, or from other organizations having similar processes.

Companies must exercise caution when benchmarking, especially when using financial benchmarks.

· Benefits of activity-based costing and activity-based management

Activity-based costing systems are more complex and costly than traditional systems. So companies that have relatively simple operating systems may not realize sufficient benefits and thus may not want to use ABC systems. But more and more organizations in both manufacturing and non-manufacturing industries are adopting activity-based costing systems for a variety of reasons:

1. Fierce competitive pressure has resulted in shrinking profit margins. Companies may know their overall margin, but they often do not have confidence in the accuracy of the margins for individual products or services. Some are winners and some are losers. Accurate costs are essential for these purposes.

2. Greater diversity in the types of products and services as well as customer classes results in greater business operating complexity. Therefore, the consumption of a company’s shared resources also varies substantially across products and customers.

3. New production techniques have increased the proportion of indirect costs. That is indirect costs are far more important in today’s world-class manufacturing environment than they have been in the past. In many industries automated equipment is replacing direct labor. Indirect costs are sometimes more than 50% of total cost.

4. The rapid pace of technological change has shortened product life cycles. Hence, companies do not have time to make price or cost adjustments once they discover costing errors.

5. The rapid pace of technological change has shortened product life cycles. Hence, companies do not have time to make price or cost adjustments once they discover costing errors.

6. The cost, associated with bad decisions that result from inaccurate cost determinations are substantial. Examples include bids lost due to overcosted products, hidden losses from undercosted products, and failure to detect activities that are not cost effective companies with accurate costs have a huge advantage over those with inaccurate costs

7. Computer technology has reduced the costs of developing and operating ABC systems.

· An Activity-Based Costing Model:

Like most other ABC implementations, the new ABC system would supplement, rather than replace, the existing cost accounting system, which would continue to be used for external financial reports. The new ABC system would be used to prepare special reports for management decisions such as bidding on new business.

In the above chart the accounting managers have shown the general model of ABC system. Cost objects such as products generate activities. For example, a customer order for a brass cup holder requires the activity of preparing a production order. Such an activity consumes resources. A production order uses a sheet of paper and takes time to fill out. And consumption of resources causes costs. The greater the number of sheets used to fill out production orders and the greater the amount of time devoted to filling out such orders, the greater the cost. Activity-based costing attempts to trace through these relationships to identify how products and customers affect costs.

· Design of an Activity-based cost accounting system

How do managers actually design ABC systems? A team of managers from the billing department and regional controller used the following four-step procedure to design their new cost accounting system:

· Step 1: Determine the Key Components of the Activity-Based Cost Accounting System:

They key components of an activity- based cost accounting system are cost objectives, key activities, resources, and related cost drivers. These components, together with the purpose of the new system, determine the scope of the ABC system. The system is –

a. Determine the billing department cost per account for each customer class in order to support the strategic decision regarding outsourcing accounts to the local service bureau, and

b. Enhance the managers’ understanding of key billing department activities to support operational cost control. Because the bid from the local service bureau includes performing all the activities of the department, the ABC system must include all department cost. Further, because management wants to understand the key activities and related costs, the team designed an activity-based system.

· Step 2: Determine the relationships among cost objectives, activities, and resources:

An important phase of any activity-based analysis is identifying the relationships among key activities and the resources consumed. The management team does this by interviewing personnel and analyzing various internal data.

Implementing an ABC system requires a careful study of operations. As a result, managers often discover that they can trace directly to cost objectives some previously indirect or even unallocated costs, thus improving the accuracy of product or service costs.

Process maps:

A process map is a schematic diagram with symbols that captures the inter-relationships between cost objects, activities, and resources. These maps can be efficient method to enhance managers’ understanding of operations. Many ABC teams find it useful to develop a process map.

There are two examples following, which contain the basic concepts of drawing process maps.

Let us assume that there is no way to physically trace the costs of resource A to activities 1 and 2, so we must use a cost driver to allocate the costs, making them indirect costs.

Similarly we must use cost drivers for the allocation of the costs of activities 2 and 3 to the products. In contrast, any resource cost that is used by only one activity (as for resources B and C) is direct with respect the activity cost that is required by only one product (as for activities 1 and 4). There is no ambiguity about which cost objective is responsible for these direct costs.

A process map depicts in a concise manner the same information that was gathered from interviews. Process maps can be a key tool for managers to gain an understanding of operations.

· Step 3: Collect relevant data concerning costs and the physical flow of the cost-driver units among resources and activities:

Using the process map as a guide, the managers can collect the required cost and operational data by further interviews with relevant personnel. Sources of data may include the accounting records, special studies and sometimes best estimates of managers. They can collect resource cost information from the general ledger and data on the flow of cost drivers from various operational reports.

· Step 4: Calculate and Interpret the New Activity-Based Cost Information:

After collecting all required financial and operational data, we can calculate the new activity-based information. Traditional systems generally overcost high- volume cost objects with simple processes. Which system makes more sense- the traditional allocation system that “spreads” all support costs to customer classes based solely on the number of inquiries, or the activity-based costing system that identifies key activities and assign costs based on the consumption of units of cost drivers for each key activity can be measured from ABC systems.

· Steps for Implementing Activity-Based Costing:

· Step 1: Identify and difine activities and activity cost pools:

The first major step in imolementing an ABC system is to identify the activities that will form the foundation for the system. A common procedure is for the individuals on the ABC imolementation team to interview people who work in overhead departments and ask themto describe their major activities.

A useful way to think about activities and how to combine them is to organize them into five general levels:

1. Unit level activities:

These are performed each time a unit is produces. The costs of unit-level activities should be proportional to the number of units produced. For example, providing power to run processing equipment would be a unit-level activity since power tends to be consumed in proportion to the number of units produced.

2. Batch-level activities:

These are performed each time a batch is handled or processed, regardless of how many units are in the batch. For example, tasks such as placing purchase orders, setting up equipment and arranging for shipments ot customers are batch-level activities. They are incurred once for each batch (or customer order). Costs at the batch level depend on the number of batches processed rather than on the number of units produced, the number of units sold, or other measures of volume. For example, the cost of setting up a machine for batch processing is the same regardless of whether the batch contains one or thousands of items.

3. Product-level activities:

These are related to specific products and typically must be carried out regardless of how many batches are run or units of product are produced or sold. For example, activities such as designing a product, advertising a product, and maintaining a product manager and staff are all product-level activities.

4. Customer-level activities:

These are related to specific customers and include activities such as sales calls, catalog mailings, and general technical support that are not tied to any specific product.

5. Organization-sustaining activities:

These are carried out regardless of which customers are served, which products are produced, how many batches are run, or how many units are made. This category includes activities such as heating the factory, cleaning executive offices, providing a computer network, arranging for loans, preparing annual reports to shareholders and so on.

System of combining activities to ABC:

Activities should be grouped together at the appropriate level while combining activities in an ABC system. Batch-level activities should not be combined with unit-level activities or product-level activities with batch-level activities and so on. In general, it is best to combine only those activities that are highly correlated with each other within a level. And it can only be possible when they tend to move in tandem.

Activity Cost Pool:

It is a bucket in which costs are accumulated that relate to a single activity measure in the ABC system.

© The Product Design Cost Pool:

The product design cost pool will be assigned all costs of resources consumed by designing products. The activity measure for this cost pool is the number of products designed. This is a product-level activity, since the amount of design work on a new product does not depend on the number of units ultimately.

©  Order Size Cost Pool:

The order size cost pool will be assigned all costs of resources consumed as a consequence of the number of units produced, including the costs of miscellaneous factory supplies, power to run machines, and some equipment depreciation. This is unit-level activity since each unit requires some of these resources.

©  Customer Relations cost pool:

The customer relations cost pool will be assigned all costs associated with maintaining relations with customers, including the costs of sales calls and the costs of entertaining customers.

©  Other cost pool:

The other cost pool will be assigned all overhead costs that are not associated with customer orders, product design, the size of the orders, or customer relations. These costs mainly consist of organization-sustaining costs and the costs of unused, idle capacity.

· Step 2: Whenever possible, directly trace overhead costs to activities and cost objects:

The second step in implementing an ABC system is to directly trace as many overhead costs as possible to the ultimate cost objects. Let us assume, a company’s cost objects are products, customer orders and customers. In the ABC system at this company, all the annual manufacturing overhead and selling, general and administrative costs are considered to be overhead and will be assigned to cost objects where appropriate.

· Step 3: Assign costs to activity cost pools:

For example, if the ABC system has an activity called purchase order processing, then all of the costs of the purchasing department could probably be traced to that activity. To the extent possible, costs should be traced directly to be activity cost pools. But it is quite common for an overhead department to be involved in several of the activities that are tracked in the ABC system. In such situations, the costs of the department are divided among the activity cost pools via an allocation process called first-stage allocation. It is the process by which overhead costs are assigned to activity cost pools.

The immediate problem is to figure out how to divide. The point of activity-based costing is to determine the resources consumed by cost objects. Soften, the best way to get this kind of information is to ask the people who are directly involved. Members of the ABC team may interview the workers related to the resources. Those who are interviewed must thoroughly understand what the activities encompass and what is expected of them in the interview.

· Step 4: Calculate Activity Rates

The next step is to calculate activity rates that will be used for assigning overhead costs to products and customers. The activity rates are computed by dividing the total cost for each activity by its total activity. But the activity rates will not be computed for the other category of costs. This is because the other cost pool consists of organization-sustaining costs and costs of idle capacity that are not allocated to products and customers.

· Step 5: Assign costs to cost objects:

The fifth step in the implementation of activity-based costing is called second-stage allocation. In the second-stage allocation, activity rates are used to apply cots to products and customers.

· Step 6: Prepare Management Reports:

And the last step for implementing ABC system is to prepare a report showing activity-based costing margins from an activity view. Such customer analyses can be easily accomplished by adding together the product margins for each of the products a customer has ordered and then subtracting the average charge for customer relations.

· Managing Relationships:

Companies can transform unprofitable customers into profitable ones by persuading such customers to use a greater scope of the company’s products and services. The margins from increased purchases contribute to covering customer-sustaining costs. Let us consider a commercial bank with a basic entry-level product: commercial loans. The interest spread on such loans-the difference between the bank’s effective borrowing rate and the rate it charges the customers-may be insufficient to cover the bank’s cost of making and sustaining the loan because of intense competition and the customer’s low use of the lending relationship. However, the bank may make enough profit on other services that the customer uses- for example, investment banking services and corporate money management-that in aggregate the customer is a highly profitable one. Alternatively, however, a small borrower who uses no other commercial banking or investment banking services may be quite unprofitable. In this case, the bank would ask the customer to expand its use of the loan facility, such as to borrow more, and use other and more profitable services offered by the bank’s services. If these efforts fail, the bank may then contemplate “firing” the customer by encouraging it to take its demands for a commercial loan to another institution.

Implementation issues:

Although activity-based costing has provided managers in many companies with valuable information about the cost of their activities, processes, products, services and customers, not all ABC systems have been sustained or have contributed to higher profitability for the company. Companies have experienced difficulties and frustrations in building and using activity-based cost and profitability models. Here are some pitfalls that have occurred and suggest ways to avoid them.

· Lack of clear Business Purpose:

Often, the ABC project is initiated out of the finance or accounting department and is touted as “a more accurate cost system”. The project team gets resources for the project, builds an initial ABC model, and then becomes disappointed and disillusioned when no one else looks at or acts upon the new ABC cost and profitability information.

To avoid these problems, all ABC projects should be launched with a specific business purpose in mind, the purpose could be to redesign or improve processes, to influence product design decisions, to rationalize the product mix, or to better manage customer relationships. By defining the business purpose at the start, the team will identify the line manager or department whose behavior and decisions are expected to change as a consequence of the information. The decision maker could be the manufacturing or operations manager (for process improvement), the engineering manager (for product design decisions), the sales organization (for managing customer relationships), or the marketing department (for decisions about pricing and product mix).

Many ABC projects were aborted when they did not provide operating managers with frequent feedback on the costs and expenses under their responsibility. These operating managers needed a feedback system, in addition to the ABC system, that could be specifically designed for the purpose of providing operational feedback on process efficiencies. Some projects foundered because the company expected its new ABC system model to also be the basis for costing inventory for financial reporting. Such companies failed to realize that their traditional costing system already worked fine for external reporting and did not need to be replaced right away with the ABC system. Companies should allow some experimentation and flexibility with their first ABC system, customizing its design for maximum managerial benefits, before imposing the additional burden of also satisfying external, regulatory reporting.

For decisions about pricing, customer relationships and product mix, the ABC model should be simpler, using fewer than 50 activities and with data readily available for all the important activity cost drivers. A model intended for product designers and engineers should use activity cost drivers that would be meaningful to them. Drivers such as number of parts placements, number of unique parts and number of unique vendors are understandable and actionable to product designers.

· Lack of senior management commitment:

The most successful ABC projects occur when clear business purpose exists for building the ABC model and this purpose is led, or at least understood and fully supported by, senior line managers in the organization. A steering committee of senior managers from various functional groups and business units provides guidance and oversight, meeting monthly to review project progress, make suggestions on how to enhance the model, and prepare for the decisions that will be made once the model has been completed.

Even when the ABC project is initiated from the finance group, a multifunctional project team should be formed. The team should include, in addition to a management accountant or other finance group representative, members from operations, marketing/sales, engineering, and systems. In this way, the expertise from diverse groups can be incorporated into the model design and each team member can build support for the project within his or her department and group.

· Delegating the project to consultants:

Some projects may fail when they were outsourced to an external consulting company. Constants may have considerable experience with ABC but not the needed familiarity with a company’s operations and business problems. Nor can they build management consensus and support within the organization either to make decisions with the ABC information or to maintain and update the model.

The companies may use the software but it cannot provide the thinking required to build a cost effective ABC model.

ABC consultants and ABC software can play valuable roles for many companies, but they are not substitutes for leadership and sponsorship and a dedicated, multifunctional internal project team. These functions cannot be bypassed just because external consultants and prepackaged software have also been purchased.

· Poor ABC Model Design:

Sometimes, even with strong management support and sponsorship, the project team gets lost in the details and develops an ABC model that is both too complicated to build and maintain and too complex for managers to understand and act upon. ABC model design should be like any design or engineering project. It should be regularly evaluated, with continual appropriate trade-offs to enable the essential function of the system to be accomplished at minimal additional cost. If the ABC project team keeps end-users clearly in mind and gets good advice from its senior management steering committee, it should make good cost-effective design decisions along the way. These decisions can help avoid the problem of having an over complex system or misidentified casual relationships between cost objects (products and customers), activities and resources.

· Individual and organizational resistance to change:

Not all managers welcome technically superior solutions. Individuals often resist new ideas and change and organizations have great inertia. The resistance to a new ABC model may not be overt. Managers can politely sit though an ABC presentation about product and customer profitability but continue to behave just as they have in the past. Or they will ask the project team to re-estimate the model, using a more recent period or at another company site. Sometimes, however, the resistance is more overt. Managers may exclaim the company has been successful in the past with its existing cost system. Or, if it has been a finance-led project, they may accuse the finance people of not understanding the complexity of the business or wanting to run the company.

· Activity Based Costing – Pros & Cons:

· Pros:

Identifies Non-Value Added Activities

Identifies cost savings opportunities (untraceable costs)

Provides very detailed cost/profitability information

Differentiates complex versus simple processes

More data can lead to more information = better decisions

· Cons:

Very costly to implement and maintain

Historical in nature (same as traditional absorption costing)

Detail versus Accuracy

Discourages novel approach’s to processes

Encourages activity

Assumes equal and proportionate benefits result from common activity

Conclusion

ABC systems drive the cost of indirect and support resources-manufacturing resources in factories and marketing, selling, distribution and administrative resources-to the activities they perform and then to the cost objects-the products, services and customers- that generate the demand for the activities.

To develop an ABC model, management accountants should estimate activity cost driver rates using the practical capacity of the resources supplied. They should also make appropriate trade-offs in the design of the model, balancing the cost of more accurate measurement for more complex models, with the benefits from the greater accuracy. Managers use the information on activity costs to improve profitability. They can identify high-cost and inefficient processes that are prime candidates for operational improvements projects. By driving activity costs down to cost objects, managers identify profitable and unprofitable products, services and customer. They can make better decisions on pricing, product mix, product design, customer and supplier relationships and technology that transforms unprofitable products and customers into profitable ones. These are examples of activity-based management in action.

Despite the apparent attraction of increased accuracy and managerial relevance from activity-based costing, individual and organizational resistance can arise to block the effective use of these systems. Management accountants must be sensitive to the conditions that cause such resistance to arise and devise good countermeasures to overcome them.

 

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Credit Management of Dhaka Bank Ltd

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Introduction:

Banking business is associated with risks. In order to remove or minimize risks, banks follow some rules and regulations. Rules and policies are adopted to ensure less risk for every banking business. Dhaka Bank is a fast growing private sector bank. One of the strongest sides of Dhaka Bank is that it has a big market share of loans and advances. This means, this bank gives or sanctions a big amount of loans to corporate and retail customers each year. Before sanctioning loans, bank does proper judgment of the customer. Dhaka Bank takes every measure to minimize risks. But, many loans become classified every year. Bangladesh Bank has imposed some rules and regulations of credit, which must be maintained by every bank. Bangladesh bank is very eager to bring discipline in the banking sector and improve the loan quality of every bank. Dhaka Bank also has its own credit policy which helps the bank to maintain quality of loans.

 

The importance of Securities in Credit:

Securities play a vital role in sanctioning credit. Security means things deposited as a guarantee of the undertaking or loan to be forfeited in case of failure to repay the same. The customer/ guarantor should own it. In other words, the assets against which banks allow credits are called Securities. Good and strong securities help a bank to take decision about sanctioning credit. It also minimizes the risk. The type of securities offered may be, Government bonds, share, assignment of book debt or bills receivables, raw material and finished goods, fixed deposit receipts, land, factory building and other movable and immovable assets of the borrower. If a borrower becomes unable to adjust his loan, then bank can recover the loan amount by selling securities. That is why the role of securities is very important in credit system.

 

Classification of Credit Facilities:

Credit or loans can be classified broadly into two categories:

? Funded Credit Facilities;

 Non Funded Credit Facilities.

 

Funded Credit facilities:

All type of credit facility which involve direct outflow of Bank’s fund on account of the borrower, is termed as funded credit facility. Funded credit facility can be classified into four categories-

Loans:

When a lender lends money to a borrower imposing interest for the lended money, for a given time period and which is repayable in fixed monthly installments is called loan. Loan is allowed for a single purpose where the entire amount may be recovered at a time or in a number of installments within a period of short span. After disbursement of the entire loan amount, there will be only repayment by the borrower. A loan once repaid in full or in part, cannot be drawn again by the borrower.

Types of Bank Loans:

Every bank has a credit portfolio. Banks can give loans and invest according to the limit of portfolio. Banks can lend half or more of their total assets and about half to two third of their revenues. Risks in banking tend to be concentrated in the loan portfolio. When a bank gets into serious financial trouble, its problems usually spring from loans that have become uncollectible due to mismanagement, illegal manipulation of loans, ineffective lending policies or an unexpected economic down turn. The banks make a wide variety of loans to a wide variety of customers for many different purposes- for purchasing automobiles, buying new furniture, taking dream vacations, constructing homes and for other corporate and project loans. Bank loans may be divided into the following broad categories of loans, delineated by their purpose:

 

Loan against Work Order: Sometimes, govt. development work like road construction, bridge construction, setting of sewerage line, setting of underground pipeline takes place. Govt. invites tender and the lowest rate giver wins the work order. But the contractor needs money to start the work on. Then the contractor submits his work order to a bank and takes loan against of that.

 

Demand Loan: Demand loan is payable on demand which is allowed for a short period to meet short term working capital need. This type of loan can take only banks existing clients, with whom bank has a good relation and maintains good transaction over his account

 

Consumer loans: this loan is given to individual customers for the purchase of automobiles, homes, electrical appliances, for vacation and for other personal purposes, which is extended directly to the individual.

 

Working Capital Loan: This type of loan is given to industries ranging from small to medium for the time span of one year. This type of loan is most often used to fund the purchase of inventories, raw material, etc. Working capital loan is designed to cover seasonal peaks in the business customer’s production levels and credit needs

Lease financing:  Under this loan scheme, bank buys equipment or vehicles and leases them to its customers. Customers pay the loan installments and after full adjusting the loan, bank gives the ownership of the vehicle or asset to the respective customer.

 

Asset based Loans: this kind of loan is secured by a business firm’s assets, particularly stocks, inventories and accounts receivables.

  Other Loans: other loans in the funded loan category are Real Estate Loans, Financial institutions loans, agricultural loans, installment loans, etc.

Cash Credit:

Cash Credit facilities are allowed against pledge or hypothecation of goods. Under this arrangement the borrower can borrow any time within the agreed limit and can deposit money to adjust whenever he does have surplus cash in hand. All the nationalized banks allow cash credit both hypothecation and pledge facilities.

Overdraft: Overdraft is withdrawing money from an account even if the account holder does not have that much amount of balance in his account. Bank gives this money as loans. This is a credit facility against any securities. The customer of the bank who have any savings account or DPS in the bank, can get overdraft facilities from the bank against these securities. The customer can withdraw a certain limit of amount within a fixed period of time. The interest amount is calculated on the actual debit balance.

Bills Discounted and purchased:

Discount: Banks allow advances to the clients by discounting bill of exchange or promissory note which matures after a fixed tenure. This way, the bank calculates and realizes the interest at a prefixed rate and credit the amount after deducting the interest from the amount of instrument.

Purchase of Bill: Banks also make advances by purchasing bills, instead of discounting, which are accompanied by documents of the title of goods such as bill of lading or railway receipts, etc. In this case the bank becomes the purchaser of such bills which are treated as security for the advance. This allowed primarily relying on the credit worthiness of the client.  

Non Funded Credit Facilities:

Though these types of credit facilities are primarily non funded in nature but at times it may turn into funded facilities. As such, liabilities against this type of credit facilities are termed as contingent liabilities. The facilities are:

 

What does Credit Department do?

Sanctioning loans is the most important and sensitive part of every banks. Interest from credits is the big income of a bank. Loans and advances comprise a large portion of bank’s total assets. The strength of a bank is primarily judged by the soundness of its loans and advances. So, credit department is the most important department of a bank.

The main functions of this department are:

o To manage the credit portfolio of Dhaka Bank Ltd;

o Receive credit proposal from retail or corporate customers;

o Processing of the proposal and approval from head office;

o Monitor and follow up of the loans and advances;

o Takes necessary steps to recover classified and default loans;

o Time to time adjustment of the rates of  loans and advances;

o Prepare various statements to submit to Bangladesh Bank;

o Makes part and full adjust of loans;

o Gives balance outstanding statements to customers.

Credit department is fully responsible for analyzing and making recommendations on the fate of most loan applications. Banks need income from business. But at the same time, bank must ensure the safety of the invested amount, which is done by this department. Before sanctioning credits to customers, banks must consider some of the following things:

 

The Creditworthiness of the borrower:

The credit department must assess and analyze that whether the customer will be able to give installments after taking the loans. To assess this, credit department must consider the following things:

¯ Character: very genuine purpose for loan request and serious intention to repay.

¯ Capacity: proper authority to request for loan and legal standing to sign agreement.

¯ Cash: ability to generate enough cash flow in the customer’s business.

¯ Collateral: assets of the customer or business given as security.

¯ Conditions: borrowers present activity and economic condition.

¯ Control: ability of borrower to meet any unexpected circumstance in favor of bank.

 

Loan quality: Credit department must ensure that the loan is properly structured and documented in order to protect respective bank. The drafting of a loan agreement that meets the borrower’s needs for funds with a comfortable repayment schedule. The borrower must be able to comfortably handle any required loan payments, because the bank’s success depends fundamentally on the success of its customers. If any borrower gets into trouble, the bank may find itself in serious trouble as well. So the credit department must play the role of a financial counselor to customers. A properly structured loan agreement must also protect the bank by imposing certain restrictions on the borrower’s activities when these activities could threaten the recovery of the bank funds. So, this department must ensure the good loan quality in terms of the smoothness of loan recovery.

Proper Security: Keeping proper security is a very important task for this department. Security or collateral minimizes risk of the bank. If the borrower cannot pay the loan, the collateral gives the lender the right to seize and sell those assets using the proceeds of sale to cover what the borrower did not pay. It also gives the lender a psychological advantage

over the borrower. If the borrower don’t repay, his assets will be seized. That is why, the borrower will try heart and soul to repay the loan anyhow. He will avoid loosing his valuable asset. The most popular assets pledged as collateral for bank loans are, Real property, Personal guarantee, Third party guarantee, Inventory, Accounts Receivable, etc.

That is why, credit department must take steps very carefully in case of sanctioning loans, meeting the benefit of customers and obviously, reserving the benefit and security of the bank.

 

Credit Policy of Dhaka Bank Ltd:

 

Loans and advances is an important function of every commercial bank. Banks earn a big amount of interest from sanctioning and creating loans. So Credit Department is the most important department of a bank. The surplus money, specially the deposit of individuals is invested to the deficit sector. And the difference between these two interest rates is the profit of banks. Credit policy is very important. A strict credit policy can lead to lesser amount loan disbursed and low rate of bad loan. Again a flexible credit policy can lead to high amount of loan default and high amount of loan disbursed. Credit policy is like a guiding light of every loans and advances. A wise and prudent credit policy creates healthy loan, earns money and provide safety of the invested money. Dhaka Bank also has credit policy. Credit policy of DBL generally aims at:

Sanctioning healthy loan assets to ensure interest earning of the Bank.

Ensuring safety through judicious selection of banks.

 

The credit policy of Dhaka Bank Ltd. has been formulated of the plan of “All New loans to be Good Loans” The plan was taken on the basis of the following objectives:

Form: CIB 05 (Guarantor information)

Form: CIB 1A (Inquiry form)

Form: CIB 2A (Owner Information)

Form: CIB 3A (Information of group)

CIB undertaking: Contains Name, Address, and Sister Concern of borrower.

Form SC 8.

Form: CIB 01 (Segment 5)

Company Letterhead form.

Form (XII): This form contains the information of all the directors of the company. This form is needed to submit at the time of enlistment as a limited company at RJSC (Register of Joint Stock Companies). But in case of giving loan to customers this form is essentially kept by bank for the purpose of getting director’s information and reporting to CIB. Through this form, bank can get the information- who are the directors, number of directors, etc. If any director resigns and any new director joins in, then this information must be submitted by the company to the bank within two weeks.

Schedule (X): This form contains the information about the sponsor shareholders of a firm. Directors can also hold shares of the company. So, this form informs, who the shareholders are, if any director is holding shares, what percentage of share a director is holding of the total share, etc. This information helps the respective bank to take any decision about that company in the future. If the company fails to repay the loan, bank will claim money to all the directors according to the percentage of their shares.

 

3. Report to Bangladesh Bank:

Bank sends all the CIB forms to Bangladesh Bank in order to inform Bangladesh Bank about the borrower. Along with the forms, Bank sends soft copy of the information of the borrower. Bank sends the soft copy in four formats prescribed by Bangladesh Bank:

 

Security details of

Bank Guarantee:

§

§

§ Duty, Vat and other port dues to be borne by the company from their own sources;

Other Conditions of Multiple Credit facilities:

§ All legal fees and other costs incurred by the bank in connection with these facilities will be drawn from borrowers account;

§ Any material or adverse change in business condition will cause the amount due to bank immediately repayable;

§ Prior notice should be given to the bank regarding any change in the ownership structure of the company and Form- XII, Schedule- X must be submitted.

§ Authorized financial statement of the company must be submitted in the bank;

§ Bank reserves the right to setoff any outstanding in one account against any other accounts held in company’s name with the bank whether in debit or credit;

§ Bank reserves the right to review and change interest rate, if required in connection with market rate;

§ Marine insurance policy in case of goods imported by ship and lorry insurance policy in case of goods imported by truck to be obtained.

 

§ All rules and regulations of import policy, guidelines of foreign exchange transactions, public notice, Bangladesh Bank and Head office circular issued from time to time must be compiled with;

§ Quality, Quantity, rates and all other details of the imported goods must be as per respective indent/ proforma invoice and the rate to be comparative as per local and international market.

Security details of Personal Loan:

§ Hypothecation of all unencumbered movable assets of the borrower;

§

§ Declaration in respect of Overdue/ Stuck up liability;

§

I. 10% margin, i.e. 5% at the time of opening L/C by keeping lien of FDR / STD accounts of sister concerns and rest 5% in the form of cash during the creation of LTR.

  II. 10% Cash margin in case of issuing B.G.

 

Security of Third Party: There exist some loans, in which security/ mortgage of third party is kept against the loan. In this case, what happens is, the original borrower do not take the repayment seriously. Because, he thinks that the security is not his asset. If borrower do not repays loan, bank will seize the security of that third party, which will cause nothing harm to the real borrower. But that third party will be affected in fact. These types of loans become classified.

Debt Buying: If a bank buys back a debt from any other bank in an intention to do business from that debt, in most of the cases, these loans become classified. A customer may have a loan in a bank. That customer requests another bank which he knows, to take that loan. Because that customer does not want to do any transactions with the loan originating bank. At this moment, the later bank buys that customer’s debt from the original bank in order to make profit from that customer. In these cases, the genuineness of the loan is very bad and the borrower do not repay loan willingly also. For these reasons, the loan becomes classified.

Significance of Classification of Loans:

Bangladesh Bank instructs that classification of a loan does in no way lessen the borrower’s responsibility to pay the full amount due, including any suspended interest whether or not entered on the loan ledger. In any court action in which a claim is made of reduced liability due to classification and provisioning, the circular of loan classification should be presented to the court as evidence that the monetary authorities instruct the banks that such responsibility is not diminished by loan classification, the making of provisions, or the suspension of interest.

 

Basis of Loan Classification:

 

Qualitative Criteria:

The loan should be classified by the lending bank whenever the bank has reason to believe the loaner may not be able to repay the loan due to a change in the circumstances under which the loan was originally sanctioned, i.e. on the basis of qualitative factors. The reasons for classification based on judgment include all criteria previously used by the inspecting departments of Bangladesh Bank in classifying loans, all of which should continue to be applied as previously. These criteria include but are not limited to more than a normal risk due to adverse financial condition (arising from loss of a part of borrowers capital), poor financial performance of the borrower (borrower’s cash flow is insufficient to service debt requirements), or due to insufficiency of security (value of security is less than the amount of the loan outstanding) or other unfavorable factors. This judgment can be made regardless of whether the loan is overdue or not. Banks are responsible for formulating specific conditions for classification on qualitative basis and forming their branches of these conditions.

 

Objective Criteria:

i. Any agricultural loan will be turned into irregular credit just after it is not repaid/ rescheduled within the prescribed time period. If the aforesaid credit lied irregular for 3 months and above but below 6 months then the credit will be classified as Sub Standard, if it lies irregular for 6 months and above but less than 12 months then it will be classified as Doubtful and if it is left unrecovered for 12 months or above then the loan will be classified as Bad Loan.

When a demand loan is left unrecovered for 3 months or above but less than 6 months from the date of the loan is claimed or from the date of compulsory credit creation, then the loan will be classified as Sub-standard loan. But when it is left unrecovered for 6 months or above but less than 12 months the loan will be classified as Doubtful and if the loan lies unrecovered for 12 months and above then it will be classified as Bad loan.

In case of fixed term loan if any installment is left unrecovered within the scheduled date, the amount falling due on account of unrecovered installment, will be classified as Overdue installment. A fixed term loan is repayable within a maximum period of 5 years. If the amount of overdue installment equals or exceeds the amount repayable within 6 months, then such credit will be classified as Sub standard. If the amount of overdue installment equals or exceeds the amount repayable within 12 months then such credit will be classified as Doubtful. If the amount of overdue installment equals or exceeds the amount repayable within 18 months then such credit will be classified as Bad Loan.

 

Classification as Sub-standard:

A loan is classified as sub standard if any one of the following conditions is met:

If an advance or any portion of an advance or interest thereon remains overdue for one year or more but less than three years then the advance is classified as substandard.

For an advance of a continuing nature, even if the loan is not overdue as much as one year, but the limit stands overdrawn by more than 50% for a period of 45 continuous days preceding the reference date for the classification, then it is classified as sub standard.

If a loan has been renewed or rescheduled at least three times but is not overdue, and any of the required payments for the required period have not been made when they fall due, then the loan is classified as sub standard.

 

Classification as Doubtful:

A loan is classified as doubtful if any one of the following conditions is met:

The advance or any portion of the advance or interest thereon remains overdue for three years or more but less than five years.

A loan classified as substandard mentioned above has remained substandard for two years or more.

Qualitative criteria based on judgment.

Legal action has been initiated.

 

Classification as Bad or Loss:

A loan is classified as bad if any one of the following conditions is met:

The advance or any portion of an advance or interest thereon remains overdue for five years or more.

A loan classified as doubtful mentioned above has remained doubtful for two years or more.

If legal action has been initiated and no court decision has been obtained within five years of initiation of action then the loan is classified as bad.

Qualitative criteria based on judgment.

 

Accounting Procedure of interest of Classified Loan:

If any credit or advance is classified as substandard or doubtful, the interest will be imposed on that credit account but such interest will not be transferred to the income account. Total interest imposed on substandard or doubtful account will be kept in interest suspense.

If any credit or advance is classified as Bad or loss, imposition of interest on that account will be suspended forthwith. If any suit is required to be filed for recovery of such credit, the suit will be filed on the total amount of principal including interest calculated upto the period before the suit is filed. Such interest will be kept on interest suspense. In case of any other special reason if interest is imposed on Bad and Loss account then such interest will be recovered in interest suspense account.

If any classified loan or part of thereof is recovered, i.e. actual deposit on account of recovery is made in the credit account, then recovery of non imposed as well as imposed interest will be made first from such deposit. Then original loan will be adjusted.

 Classification of loans according to overdue period:

 

Classification status

1st Phase

2nd Phase

3rd Phase

4th Phase

5th Phase

Length of overdue

Length of overdue

Length of overdue

Length of overdue

Length of overdue

Unclassified

Less than 12 months.

Less than 9 months.

Less than 9 months.

Less than 6 months.

Less than 3 months.

Substandard

12 months or more but less than 36 months.

9 months or more but less than 24 months.

9 months or more but less than 24 months.

6 months or more but less than 12 months.

3 months or more but less than 6 months.

Doubtful

36 months or more but less than 48 months.

24 months or more but less than 36 months.

24 months or more but less than 36 months.

12 months or more but less than 24 months.

6 months or more but less than 12 months.

Bad/Loss

48 months or more.

36 months or more.

36 months or more.

24 months or more.

12 months or more.

 

Credit Management Procedure of Dhaka Bank Ltd:

Loans and Advances is the major business of any banks. Banks receive idle money or Deposit from a source and lend this money to others. Bank gives interest on deposit and receives interest from lended amount. Obviously, the lending rate is higher than the interest paid on deposit. So, bank gains from this trade off. Like any other banks, credit department is the most important division of Dhaka Bank. Because, credit department sanctions loans and it is the major business of this bank. We can say that this is the life blood of Dhaka Bank Ltd. So, it is very important to direct this division very carefully. Credit management is the process by which Dhaka Bank can direct the department as well as can control each and every steps of loan sanction and disbursement. Credit management procedure also helps to monitor and supervise the sanctioned loan. Sanctioning a loan is important. But the more important is to monitor and supervise that loan so that it is smoothly repaid by the borrower. Bangladesh Bank also has been playing an important role for bringing out discipline and dynamism in the banking sector of the country. Due to stringent supervision and control exercised by the central bank, there had been a significant progress in the reduction of percentage of classified loans in the banking sector. The guidelines introduced by Bangladesh Bank influences the Credit management of Dhaka Bank. The Credit management procedure of Dhaka Bank is discussed below:

 

¯ Reporting to Credit Information Bureau (CIB): When a corporate or retail customer applies for a loan, it is mandatory for a bank to inform about that customer to CIB of Bangladesh Bank and obtain CIB report about that customer also. This has been made mandatory by Bangladesh Bank to all the Bank and financial institutions. Bank has to inform the CIB about the existing borrowers also. The schedule for informing CIB about the borrowers is:

 

· Good – (GD) – 2

o Strong repayment capacity of the borrower

o The borrower has excellent liquidity and low leverage. 

o The company demonstrates consistently strong earnings and cash flow.

o Borrower has well established, strong market share.

o Good management skill & expertise.

o All security documentation should be in place.

o Credit facilities fully covered by the guarantee of a top tier local Bank. 

o Aggregate Score of 85 or greater based on the Risk Grade Score Sheet

o

· Special Mention – (SM) – 5

o This grade has potential weaknesses that deserve management’s close attention.  If left uncorrected, these weaknesses may result in a deterioration of the repayment prospects of the borrower.

o Severe management problems exist.

o Facilities should be downgraded to this grade if sustained deterioration in financial condition is noted (consecutive losses, negative net worth, excessive leverage),

o An Aggregate Score of 55-64 based on the Risk Grade Score Sheet.

o

· Substandard – (SS) – 6

o Financial condition is weak and capacity or inclination to repay is in doubt.

o These weaknesses jeopardize the full settlement of loans.

o Bangladesh Bank criteria for sub-standard credit shall apply. 

o An Aggregate Score of 45-54 based on the Risk Grade Score Sheet.

o

· Doubtful – (DF) – 7

o Full repayment of principal and interest is unlikely and the possibility of loss is extremely high.

o However, due to specifically identifiable pending factors, such as litigation, liquidation procedures or capital injection, the asset is not yet classified as Bad & Loss.

o Bangladesh Bank criteria for doubtful credit shall apply.

o An Aggregate Score of 35-44 based on the Risk Grade Score Sheet.

 

·

b) After adjustment of interest suspense and value of eligible securities from outstanding balance of classified credit- the reservation of provisions will be kept on the calculated balance. General provisions will also be kept at a rate of 1% on unclassified loans.

In respect of Short Term Agricultural Loan and Micro Credit, the reservation of provision will be made as under:

  i. Credits other than Bad Loan (Doubtful, Substandard and regular)= 5%

ii. In case of Bad Loan =100%

 

¯ Loan Rescheduling:

After classification of a loan, if the borrower appears to the bank and states that due to some unavoidable reasons he was unable to adjust the loan. Now the borrower wants to adjust the loan and requests the bank to give a new schedule against his loan. This is called Rescheduling of Loan. In this circumstance, the customer promises to ensure full adjustment of loan in the bank’s prescribed way. In order to reschedule a loan, the borrower must pay 15% down payment of the outstanding balance of the loan at first. If a loan is rescheduled, then the rate of interest increases. The rate of interest increases by 1% in each quarter. If a borrower applies to the bank to reschedule his loan after depositing a specific down payment in order to make his loan regular, then the bank must take decision about rescheduling the loan within three months from the date of receiving the application. The Inter Bank Committee for Loan Rescheduling and Restructure will measure the possibility of rescheduling this loan and will accept the rescheduling in possible terms. In order to measure the loan reschedule proposal, External Consultants could be appointed.

 

¯ Suspense Account:

According to the Bangladesh Bank regulation, when a loan becomes classified, the interest relating that loan is suspended. Therefore, the respective bank or financial institution cannot take the interest amount from that loan. For this reason, an account is created called Suspense Account. In this account, all the interests of classified loans are kept. If the loan becomes regular, then the bank can take the interest charged against that loan. So, the bank has to wait until the loan becomes regular. The main reason of creating this account is, if bank continuously charges interest on a classified loan, it will put extra pressure on the borrower. Then the borrower will not be interested to adjust that loan. In order to reduce the pressure from the borrower, Bangladesh Bank introduces this account. On the other hand, bank suffers for this account. Bank is not getting the interest income. This is a loss for the bank. Banks are made deprived of getting interest and they have to wait for a long period of time for the loan to be regular. And this is very much uncertain that whether the loan will be regular or not.

 

DB-3

Within 10th of the following month

2.

CIB Form-01: (Tk. One Crore or above)

 

Within 5th of the following month

3.

Identification of Agro based industries.

ACSPD

Within 15th of the following month

B.

Quarterly

1.

New loan disbursed in the year for last five years.

DB-13

Within 15th of the following month

2.

Statement of irregular loan Disbursed.

DB-14

Within 15th of the following month

3.

 

BR-2

Within 10th of the following month

5.

 

 

Within 15th of the following month.

C.

 

BR-16

Within 10th of the following month

6.

Loans and Advances secured by financial obligation

 

Within 7th of the following month

D.

Yearly

1.

 

Overdrafts

Demand Loan

Cash Credit

House Building Loan

Transport Loan

Term Loan

Loan against Trust Receipt

Payment against Documents

Loan against Imported Merchandise

Loan against Accepted Bills

Packing Credit

Lease Finance

Credit Card

Personal/ Car Loan

Other loans

2004 2003   2002

 

Agricultural Industries

Pharmaceutical Industries

Textile and Garment industries

Chemical Industries

 

 

 

Service Industries.

Other Industries

4.4

535.82

1889.28

524.14

2262.23

640.63

407.46

1963.39

2340.41

100.00

54.00

5817.03

2.57

212.69

896.82

652.09

2216.63

535.27

239.31

1787.65

1626.50

94.78

11.11

4611.21

4.49

180.89

669.36

432.63

1812.23

470.52

178.45

1486.52

1358.12

81.25

9.52

3821.25

Total

16538.80

12886.68

11211.39

 

From the above table we can see the industry wise loan outstanding of Dhaka Bank of the year 2002, 2003 and 2004. The above table shows that Engineering & Metal and Food & Allied industries are given most priority for giving loans. Textile, Housing and Pharmaceutical industries are also sanctioned a good amount of loan during those years. But Agricultural industries are given less amount of loan. The reason for that is, factory for agricultural based products in our country is low. Though our country is an agricultural country and agricultural products are vastly traded all over the country, but because of less scope of agricultural based industries in our country, the sanctioned loan is low in this sector.

Geographical Location wise Loans & Advances: (fig. in million Tk.)

16,267,406,911

271,398,230

[57,929,342]

[13,543,991]

[199,924,897]

12,466,735,973

419,952,586

[198,069,371]

[15,857,567]

[206,025,648]

10,943,531,009

267,862,776

[12,905,213]

[3,331,549]

[251,626,014]

Total=

16,538,805,141

12,886,688,559

11,211,393,785

2,677

13,861

2,029

10,857

1,622

8,694

106668947

52413100

159082047

1,932,456

1,219,988

1,281,196

" 89,"

Credit Risk Management (CRM) Of Dhaka Bank Limited

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Credit Risk Management (CRM) Of Dhaka Bank Limited

CHAPTER 1:

INTRODUCTION

1.1 Introduction

Financial services firms are in the business of accepting risk. Primary aims of any financial services firm are collect and manage risks on behalf of their customers and make a profit for its shareholders. We may define ‘Risks’ as uncertainties resulting in adverse outcome, adverse in relation to planned objective or expectations. In the financial arena, enterprise risks can be broadly categorized as credit risk, operational risk, market risk and other risk. Credit risk is the oldest and important risk which banks exposure and important of credit risk and credit risk management are increasing with time because of some reasons like economic crises and stagnation, company bankruptcies, infraction of rules in company accounting and audits, growth of off-balance sheet derivatives, declining and volatile values of collateral, borrowing more easily of small firms, financial globalization and BIS risk-based capital requirements.

Credit risk can be defined as the risk of losses caused by the default of borrowers. Default occurs when a borrower can not meet his financial obligations. Credit risk can alternatively be defined as the risk that a borrower deteriorates in credit quality. This definition also includes the default of the borrower as the most extreme deterioration in credit quality. Credit risk is managed at both the transaction and portfolio levels. But, banks increasingly measure and manage the credit risk on a portfolio basis instead of on a loan-by-loan. In credit risk management banks use various methods such as credit limits, taking collateral, divers Dhaka location, loan selling, syndicated loans, credit insurance, securitization and credit derivatives. Credit risk is considered as a critical factor that needs to be managed by the banks and financial institutions. \

Credit Risk Management process permits the banks to proactively manage loan portfolios in order to minimize losses and earn a satisfactory level of return for shareholders. It includes detection, measurement, matching mitigations, supervision and control of the credit risk exposure. The purpose of credit risk management is to ensure that individuals taking the risk have full knowledge about it, the bank or financial institution is exposed to an approved risk limit, the risk related decisions are in line with the business strategies, the compensation for the risk is adequate and sufficient capital support is there to buffer the risks. Credit Risk Management process includes Credit Investigation, Financial Analysis, Credit Assessment, Credit Approval, Documentation, Monitoring ( Follow up, Supervision and Control) and Credit Recovery procedures.

Banks and Financial Institutions have high exposure to credit risk and DHAKA Bank was initially emerged in the Banking scenario of the then East Pakistan as Eastern Mercantile Bank Limited at the initiative of some Bangle entrepreneurs in the year 1959 under Bank Companies Act 1913 . After independence of Bangladesh in 1972 this Bank was nationalized as per policy of the Government and renamed as DHAKA Bank. The bank is pledge-bound to serve the customers and the community with utmost dedication. The prime focus is on efficiency, transparency, precision, and motivation with the spirit and conviction to excel in both value and image. In this respect, DHAKA Bank has established its own credit policy which will guide them in achieving their target of maximum value addition through an efficient and effective credit risk management.

1.2 Objectives of the study

The objectives of this study are as follows:

i) To have a sound understanding of credit risk management system and procedure followed in the Dhaka Bank Limited.

ii) To gain knowledge about the credit related operations and maintenance in this bank.

iii) To analyze in detail the credit risk management process of the bank and to make recommendations if needed.

iv) To focus on the credit risk grading system for analyzing the credit assessment procedure of Dhaka Bank Limited.

v) To have a general idea about the credit risk management performance of this bank.

1.3 Methodology of the study

The methodology includes the sample selection, sources of data and method of data analysis.

1.3.1 Sample selection

The organization to be discussed is Dhaka Bank Limited. All the departments and functional areas will be covered with more emphasis on credit division.

1.3.2 Sources of data

The study is conducted on the basis of both primary and secondary data.

1.3.2.1 Primary Data

The primary data are collected from all the departments of Dhaka Bank Limited by interviewing personnel of the respective departments. The heads of the departments or senior executives have been interviewed. However, the analysis and the explanation are the authors’ own.

1.3.2.2. Secondary Data:

The secondary data of the study are based on a review of existing brochures, documents and database of Dhaka Bank Limited. The industry best practices are largely based on Bangladesh Bank manual, guidelines and databases. Books and published articles on this topic have also been consulted.

1.3.3 Data analysis

The credit risk management data of Dhaka Bank Limited will be analyzed in a descriptive manner.

1.4 Scope of the study

The scope of the study is entire Dhaka Bank Limited. This report is a descriptive study which tries to focus on the theories and practices of credit risk management in the context of the financial institutions in Bangladesh. It will not focus on the comparable credit practices of other banks. In connection with this effort, a case study has been conducted on Dhaka Bank Limited giving more emphasis on the credit side of the institution compared to the other sides.

1.5 Just Dhaka Location of the study

In recent days, people are becoming more aware about the management of their resources. As the banks do business by lending their depositors’ money, they have even more responsibility to manage their credit portfolio smoothly. Bank’s reputation is a critical factor for its success and therefore modern banks must follow appropriate guidelines, policies and relevant manuals regarding credit extension and recovery. The usage of banking service for any type of financial activities is increasing day by day. People are taking loans to start different types of businesses. It is now very important to know the internal processes of the banks and financial institutions to make informed decisions regarding their integrity, scope, ability and capacity.

Management of credit portfolio is one of the major operations of the banks. Therefore, as a 1st generation bank, Dhaka Bank Limited should give much attention to this area and this study will attempt to analyze their efforts and draw a complete picture of their practices.

1.5 Limitations of the study

The limitations of the study are as follows:

i) The credit policies and manuals of PBL are of confidential nature and thus it is difficult to collect the necessary literature and documents within this short time.

ii) The bank officials though helpful in every respect do not have much time to explain the internal procedures.

iii) Many operations relating to the credit extension run simultaneously by different credit officials and it is difficult to capture the sequence of any particular credit proposal.

iv) A structured filing procedure is often neglected which also poses difficulty in understanding the sequential procedure.

v) Borrowers do not often have the time to cooperate in the information gathering process.

Chapter 2:

Credit Risk Management:

A Theoretical Framework

2.0 Credit Risk Management: A Theoretical Framework

Part: A

Contemporary banking organizations are exposed to a diverse set of market and non-market risks, and the management of risk has accordingly become a core function within banks. Banks have invested in risk management for the good economic reason that their shareholders and creditors demand it. But bank supervisors, such as the Bangladesh Bank, also have an obvious interest in promoting strong risk management at banking organizations because a safe and sound banking system is critical to economic growth and to the stability of financial markets. Indeed, identifying, assessing, and promoting sound risk management practices have become central elements of good supervisory practice.

2.1 What is credit?

In banking terminology, credit refers to the loans and advances made by the bank to its customers or borrowers. Bank credit is a credit by which a person who has given the required security to a bank has liberty to draw to a certain extent agreed upon. It is an arrangement for deferred payment of a loan or purchase. (Wikipedia dictionary)

Credit means a provision of, or commitment to provide, funds or substitutes for funds, to a borrower, including off-balance sheet transactions, customers’ lines of credit, overdrafts, bills purchased and discounted, and finance leases. (Guideline on credit risk management, Bank of Mauritius)

2.2 What is credit risk?

Risk means the exposure to a chance of loss or damage. Risk is the element of uncertainty or possibility of loss that exist in any business transaction. Credit risk is the likelihood that a borrower or counter party will be unsuccessful to meet its obligation in accordance with agreed terms and conditions. (Wikipedia dictionary)

Credit risk means the risk of credit loss those results from the failure of a borrower to honor the borrower’s credit obligation to the financial institution. (Guideline on credit risk management, Bank of Mauritius). Credit risk is most simply defined as the potential that a bank borrower or counterparty will fail to meet its obligations in accordance with agreed terms (Basel Committee on Banking Supervision,2000).

The constituent elements of credit risk can be viewed from the following flowchart:

Figure 2.1: Flowchart of credit risk

What is the risk that the bank does not fully recover the loan?

Credit risk
What is the risk that the business fails to generate sufficient cash to repay the loan?

Business risk

Source: Chowdhury, L.R., (2002), A Text Book on Banker’s Advances, 2nd edition

2.3 What is credit risk management?

Risk management contains

2.3.1. Ident Dhaka location,

2.3.2. Measurement,

2.3.3. Aggregation,

2.3.4. Planning and management,

2.3.5. as well as monitoring of the risks arising in a bank’s overall business. (Guidelines on credit risk management, 2005, Oesterreichische National bank)

Risk management is thus a continuous process to increase transparency and to manage risks.

2.3.1. Indents Dhaka location

A bank’s risks have to be identified before they can be measured and managed.

Typically banks distinguish the following risk categories:

— Credit risk

— Market risk

— Operational risk

2.3.2. Measurement

The consistent assessment of the three types of risks is an essential prerequisite for successful risk management. While the development of concepts for the assessment of market risks has shown considerable progress, the methods to measure credit risks and operational risks are not as sophisticated yet due to the limited availability of historical data.

2.3.2.1 Calculation of Credit risk

Credit risk is calculated on the basis of possible losses from the credit portfolio. Potential losses in the credit business can be divided into two types:

— expected losses and

— unexpected losses

(Credit Approval Process and Credit Risk Management, 2005, Oesterreichische National bank)

Expected losses are derived from the borrower’s expected probability of default and the predicted exposure at default less the recovery rate, i.e. all expected cash flows, especially from the realization of collateral. The expected losses should be accounted for in income planning and included as standard risk costs in the credit conditions.

Unexpected losses result from deviations in losses from the expected loss. Unexpected losses are taken into account only indirectly via equity cost in the course of income planning and setting of credit conditions. They have to be secured by the risk coverage. (Credit Approval Process and Credit Risk Management, 2005, Oesterreichische National bank)

2.3.3 Aggregation

When aggregating risks, it is important to take into account correlation effects which cause a bank’s overall risk to differ from the sum of the individual risks. This applies to risks both within a risk category as well as across different risk categories.

2.3.4. Planning and management

Furthermore, risk management has the function of planning the bank’s overall risk position and actively managing the risks based on these plans.

The most commonly used management tools include:

— Risk-adjusted pricing of individual loan transactions

— Setting of risk limits for individual positions or portfolios

— Use of guarantees and credit insurance

— Securitization of risks

— Buying and selling of assets

2.3.5. Monitoring

Risk monitoring is used to check whether the risks actually incurred lie within the prescribed limits, thus ensuring an institution’s capacity to bear these risks. In addition, the effectiveness of the measures implemented in risk controlling is measured, and new impulses are generated if necessary. (Basel Committee on Banking Supervision, 2000)

Source: (Credit Approval Process and Credit Risk Management, 2005, Oesterreichische National bank)

2.4 PRISM Model of credit risk management

PRISM model is a contemporary model used in the credit risk management in modern world. It is called PRISM, an acronym for –

P = Perspective

R = Repayment

I = Intention

S = Safeguards

M = Management

Management, a PRISM component, centers on what the borrower is all about, including history and prospects. Intention or loan purpose serves as the basis for repayment. Repayment focuses on internal and external sources of cash. Internal operations and asset sales produce internal cash, whereas new debt or equity injections provide external cash sources. Internal safeguards originate from the quality and soundness of financial statements, while collateral guarantees and covenants provide external safeguards. The final component, Perspective, pulls other sections together: the deal’s risks and rewards and the operating and financing strategies that are broad enough to have a positive impact on shareholder value while enabling the borrower to repay the loan (Morton Glantz 2004).

2.5 Prerequisites for Efficient Risk Management

In order to implement efficient risk management, sound and consistent

2.5.1 Methods

2.5.2 Processes and organizational structures and

2.5.3 IT systems and an IT infrastructure are required for all five components of the control cycle. (Credit Approval Process and Credit Risk Management, 2005, Oesterreichische National bank)

2.5.1 Methods

The methods used show how risks are captured, measured, and aggregated into a risk position for the bank as a whole. In order to choose suitable management processes, the methods should be used to determine the risk limits, measure the effect of management instruments on the bank’s risk position, and monitor the risk positions in terms of observing the defined limits and other requirements.

2.5.2 Processes and organizational structures

Processes and organizational structures have to make sure that risks are measured in a timely manner that risk positions are always matched with the defined limits, and that risk mitigation measures are taken in time if these limits are exceeded. Concerning the processes, it is necessary to determine how risk measurement can be combined with determining the limits, risk controlling, as well as monitoring. Furthermore, reporting processes have to be introduced. The organizational structure should ensure that those areas which cause risks are strictly separated from those areas which measure, plan, manage, and control these risks.

2.5.3 IT systems and an IT infrastructure

IT systems and an IT infrastructure are the basis for effective risk management.

Among other things, the IT system should allow

— The timely provision and administration of data;

— The aggregation of information to obtain values relevant to risk controlling;

— as well as an automated warning mechanism prior to reaching critical risk limits.

2.6 Why manage credit risk?

The reasons behind managing credit risks are as follows (Amitabh Bhargava,2004):

a) Increase shareholder value

— Value creation

— Value preservation

— Capital optimization

b) Instill confidence in the market place

c) Alleviate regulatory constraints and distortions thereof.

2.7 Risk Strategy

A successful, bank-wide risk management requires the definition of a risk strategy which is derived from the bank’s business policy and its risk-bearing capacity. Risk strategy is defined as

— The definition of a general framework such as principles to be followed in dealing with risks and the design of processes as well as technical-organizational structures; and

— The definition of operational indicators such as core business, risk targets, and limits.

The risk strategy in an operational sense should be prepared at least every year, with risk management and sales cooperating by balancing risk and sales strategies. The sales units contribute their perspective concerning market requirements and the possible implementation of the risk strategy. The proposal for a risk strategy thus worked out will be presented to the executive board, and following their approval, passed on to the supervisory board for their information. The risk strategy serves to establish an operational link between business orientation and risk-bearing capacity. It contains operational indicators which guide business decisions. (Credit Approval Process and Credit Risk Management, 2005, Oesterreichische National bank)

2.8 Limits

The definition of limits is necessary to curb the risks associated with bank’s activities. It is intended to ensure that the risks can always be absorbed by the predefined coverage capital. When the limits are exceeded, risks must be reduced by taking such steps as reducing exposures or using financial instruments.

2.8.1 Methods of Defining Limits

The risk limits in the bank’s individual business units are based on the bank’s business orientation, its strategy, and the capital allocation method selected. A consistent limit management system should be installed to define, monitor, and control the limits. Such a system has to meet the following requirements:

— The parameters used to determine the risks and define the limits should be taken from existing systems. The parameters should be combined using automated interfaces. This ensures that errors due to manual entry cannot occur during the data collection process.

— The defined indicators should be used consistently throughout the bank. The data should be consistent with the indicators used in sales and risk controlling.

— Employees should be able to understand how and why the indicators are determined and interpreted. This is intended to ensure acceptance of the data and the required measures, e.g. when limits are exceeded.

— In order to guarantee effective risk management, it is essential to monitor risks continuously and to initiate clear control processes in time. Therefore, credit decision and credit portfolio management should be closely linked to limit monitoring. (Bernanke, 2006)

2.8.2 Limit Structure

The maximum risk limit is determined by the capital allocated to cover credit risks in the planning process. The bank’s organizational structure has a sign Dhaka ant impact on the way in which the limits are designed. One important success factor in the effective use of limits for risk controlling purposes is that a unit or an employee has the appropriate responsibility for an organizational unit which is assigned a limit. This is the only way to ensure that compliance with the limits is monitored and suitable measures are taken. (Bernanke, 2006)

Besides the types of limits mentioned above, there are further limit categories:

2.8.2.1 Product, business area, country, and industry limits

2.8.2.2 Risk class limits

2.8.2.3 Limits on unsecured portions

2.8.2.4 Individual customer limits

2.8.2.1 Product, business area, country, and industry limits

Product limits can be defined, among other things, for loans to retail and corporate customers, for real estate loans, as well as for project finance. Banks with an international focus can also define country limits in order to manage their risks arising from transactions in other regions. They also define industry limits in order to avoid a concentration of risks in individual industries that are subject to a degree of risk depending on the business cycle. (Bernanke, 2006)

2.8.2.2 Risk class limits

Monitoring and limiting the concentration of exposures in certain risk classes is necessary to be able to detect a deterioration of the portfolio in time, and thus to be able to avoid losses as far as possible by withdrawing from certain exposures. (Bernanke, 2006)

2.8.2.3 Limits on unsecured portions

The definition of limits for unsecured portions restricts loans that are granted without the provision of collateral or which are collateralized only partly. These limits allow banks to manage their maximum risks efficiently, as it is easy to determine and monitor unsecured portions.

2.8.2.4 Individual customer limits

Limits for individual borrowers represent the most detailed level of risk controlling. The main purpose for their application is the prevention of cluster risks in the credit portfolio. The more precisely the limits are defined; the more likely they are to yield control impulses that can be taken into account already at the time of approval of individual loans. (Bernanke, 2006)

2.8.3 Rigidity of Limits

In order to allow the use of limits to manage risks, it is necessary to define how strictly these limits should be applied. In practice, the rigidity of limits varies in terms of their impact on a bank’s business activities.

— Certain limits are defined rigidly and must never be exceeded, as otherwise the viability of the bank as a whole would be endangered.

— In addition, there are early warning indicators that indicate the risk of exceeding limits ahead of time.

This differentiation ensures that control signals are sent out not only after the (rigid) limits has been exceeded, but that early warning indicators point out the risk of exceeding a rigid limit in time to make sure that appropriate countermeasures can be taken immediately (Burns and Stanley, 2001)

2.8.4 Limit Monitoring and Procedures Used When Limits Are Exceeded

The stipulated limits can have a direct impact on the credit approval. It needs to be determined if compliance with the limits should be examined before or after the credit decision is taken. In practice, this compliance is usually checked ex-post after the credit approval based on the portfolio under review, and is not a component of the individual loan decision. The credit decision is taken based on the borrower’s credit standing and any collateral, but independently of the portfolio risk. Such ex-post observation can result in a relatively high number of cases in which limits are exceeded, thus reducing the effectiveness of the limit stipulations. (Amitabh Bhargava, 2004)

Some banks check the compliance with the limits immediately during the credit approval process. Prior to the credit decision, compliance with the relevant limits is checked in case the credit is approved. Bringing limit monitoring into play at this early stage is also referred to as ex-ante monitoring. This helps prevent the defined limits from being exceeded in the course of approving new loans. Ex-ante monitoring is quite complex.

Figure 2.3 Responsibilities in case of excess over limit

Source: (Credit Approval Process and Credit Risk Management, 2005, Oesterreichische National bank)

The limit utilization has to be documented in the credit risk report. Processes and responsibilities concerning measures to be taken when limits are exceeded have to be defined clearly. The decision makers responsible have to be informed depending on the extent to which the limits are exceeded and the approach taken to remedy the situation.

Part: B

2.9 Credit Risk Management Process

Credit risk management process should cover the entire credit cycle starting from the origination of the credit in a financial institution’s books to the point the credit is extinguished from the books (Morton Glantz, 2002). It should provide for sound practices in:

2.9.1 Credit processing/appraisal

2.9.2 Credit approval/sanction

2.9.3 Credit documentation

2.9.4 Credit administration

2.9.5 Disbursement

2.9.6 Monitoring and control of individual credits

2.9.7 Monitoring the overall credit portfolio (stress testing)

2.9.8 Credit class Dhaka ation and

2.9.9 Managing problem credits/recovery

2.9.1 Credit Processing/Appraisal

Credit processing is the stage where all required information on credit is gathered and applications are screened. Credit application forms should be sufficiently detailed to permit gathering of all information needed for credit assessment at the outset. In this connection, financial institutions should have a checklist to ensure that all required information is, in fact, collected. Financial institutions should set out pre-qual Dhaka screening criteria, which would act as a guideline for their officers to determine the types of credit that are acceptable. For instance, the criteria may include rejecting applications from blacklisted customers. These criteria would help institutions avoid processing and screening applications that would be later rejected.

Moreover, all credits should be for legitimate purposes and adequate processes should be established to ensure that financial institutions are not used for fraudulent activities or activities that are prohibited by law or are of such nature that if permitted would contravene the provisions of law. Institutions must not expose themselves to reputational risk associated with granting credit to customers of questionable repute and integrity.

The next stage to credit screening is credit appraisal where the financial institution assesses the customer’s ability to meet his obligations. Institutions should establish well designed credit appraisal criteria to ensure that facilities are granted only to creditworthy customers who can make repayments from reasonably determinable sources of cash flow on a timely basis (Morton Glantz, 2002).

Financial institutions usually require collateral or guarantees in support of a credit in order to mitigate risk. It must be recognized that collateral and guarantees are merely instruments of risk mitigation. They are, by no means, substitutes for a customer’s ability to generate sufficient cash flows to honor his contractual repayment obligations. Collateral and guarantees cannot obviate or minimize the need for a comprehensive assessment of the customer’s ability to observe repayment schedule nor should they be allowed to compensate for insufficient information from the customer.

Care should be taken that working capital financing is not based entirely on the existence of collateral or guarantees. Such financing must be supported by a proper analysis of projected levels of sales and cost of sales, prudential working capital ratio, past experience of working capital financing, and contributions to such capital by the borrower itself.

Financial institutions must have a policy for valuing collateral, taking into account the requirements of the Bangladesh Bank guidelines dealing with the matter. Such a policy shall, among other things, provide for acceptability of various forms of collateral, their periodic valuation, process for ensuring their continuing legal enforceability and realization value (Morton Glantz, 2002).

In the case of loan syndication, a participating financial institution should have a policy to ensure that it does not place undue reliance on the credit risk analysis carried out by the lead underwriter. The institution must carry out its own due diligence, including credit risk analysis and an assessment of the terms and conditions of the syndication. As a general rule, the appraisal criteria will focus on:

— amount and purpose of facilities and sources of repayment;

— integrity and reputation of the applicant as well as his legal capacity to assume the credit obligation;

— risk profile of the borrower and the sensitivity of the applicable industry sector to economic fluctuations;

— performance of the borrower in any credit previously granted by the financial institution, and other institutions,in which case a credit report should be sought from them;

— the borrower’s capacity to repay based on his business plan, if relevant, and projected cash flows using different scenarios;

— cumulative exposure of the borrower to different institutions;

— physical inspection of the borrower’s business premises as well as the facility that is the subject of the proposed financing;

— borrower’s business expertise;

— adequacy and enforceability of collateral or guarantees, taking into account the existence of any previous charges of other institutions on the collateral;

— current and forecast operating environment of the borrower;

— background information on shareholders, directors and beneficial owners for corporate customers; and

— management capacity of corporate customers (L.R.Chowdhury,2004).

2.9.2 Credit-approval/Sanction

A financial institution must have in place written guidelines on the credit approval process and the approval authorities of individuals or committees as well as the basis of those decisions. Approval authorities should be sanctioned by the board of directors. Approval authorities will cover new credit approvals, renewals of existing credits, and changes in terms and conditions of previously approved credits, particularly credit restructuring, all of which should be fully documented and recorded. Prudent credit practice requires that persons empowered with the credit approval authority should not also have the customer relationship responsibility.

Approval authorities of individuals should be commensurate to their positions within management ranks as well as their expertise. Depending on the nature and size of credit, it would be prudent to require approval of two officers on a credit application, in accordance with the Board’s policy. The approval process should be based on a system of checks and balances. Some approval authorities will be reserved for the credit committee in view of the size and complexity of the credit transaction.

Depending on the size of the financial institution, it should develop a corps of credit risk specialists who have high level expertise and experience and demonstrated judgment in assessing, approving and managing credit risk. An accountability regime should be established for the decision-making process, accompanied by a clear audit trail of decisions taken, with proper identDhaka ation of individuals/committees involved. All this must be properly documented.

Figure 2.4: Credit Approval Process

Source: (Credit Approval Process and Credit Risk Management, 2005, Oesterreichische National bank)

2.9.3 Credit Documentation

Documentation is an essential part of the credit process and is required for each phase of the credit cycle, including credit application, credit analysis, credit approval, credit monitoring, collateral valuation, impairment recognition, foreclosure of impaired loan and realization of security. The format of credit files must be standardized and files neatly maintained with an appropriate system of cross-indexing to facilitate review and follow up.

The Bangladesh Bank will pay particular attention to the quality of files and the systems in place for their maintenance. Documentation establishes the relationship between the financial institution and the borrower and forms the basis for any legal action in a court of law. Institutions must ensure that contractual agreements with their borrowers are vetted by their legal advisers (L. R. Chowdhury, 2004).

Credit applications must be documented regardless of their approval or rejection. All documentation should be available for examination by the Bangladesh Bank. Financial institutions must establish policies on information to be documented at each stage of the credit cycle. The depth and detail of information from a customer will depend on the nature of the facility and his prior performance with the institution. A separate credit file should be maintained for each customer. If a subsidiary file is created, it should be properly cross-indexed to the main credit file (L. R. Chowdhury, 2004).

For security reasons, financial institutions should consider keeping only the copies of critical documents (those of legal value, facility letters, signed loan agreements) in credit files while retaining the originals in more secure custody. Credit files should also be stored in fire-proof cabinets and should not be removed from the institution’s premises.

Financial institutions should maintain a checklist that can show that all their policies and procedures ranging from receiving the credit application to the disbursement of funds have been complied with. The checklist should also include the identity of individual(s) and/or committee(s) involved in the decision-making process (Morton Glantz, 2002).

Figure 2.5: Credit documentation

Source: (Credit Approval Process and Credit Risk Management, 2005, Oesterreichische National bank)

2.9.4 Credit Administration

Financial institutions must ensure that their credit portfolio is properly administered, that is, loan agreements are duly prepared, renewal notices are sent systematically and credit files are regularly updated. An institution may allocate its credit administration function to a separate department or to designated individuals in credit operations, depending on the size and complexity of its credit portfolio (Credit Risk Management: Industry Best Practices2005, Bangladesh Bank).

A financial institution’s credit administration function should, as a minimum, ensure that:

— credit files are neatly organized, cross-indexed, and their removal from the premises is not permitted;

— the borrower has registered the required insurance policy in favor of the bank and is regularly paying the premiums;

— the borrower is making timely repayments of lease rents in respect of charged leasehold properties;

— credit facilities are disbursed only after all the contractual terms and conditions have been met and all the required documents have been received;

— collateral value is regularly monitored;

— the borrower is making timely repayments on interest, principal and any agreed to fees and commissions;

— information provided to management is both accurate and timely;

— responsibilities within the financial institution are adequately segregated;

— funds disbursed under the credit agreement are, in fact, used for the purpose for which they were granted;

— “back office” operations are properly controlled;

— the established policies and procedures as well as relevant laws and regulations are complied with; and

— on-site inspection visits of the borrower’s business are regularly conducted and assessments documented (L.R.Chowdhury,2004).

Figure 2.4: Functions of credit administration department

Source: (Credit Risk Management: Industry Best Practices2005, Bangladesh Bank)

2.9.5 Disbursement

Once the credit is approved, the customer should be advised of the terms and conditions of the credit by way of a letter of offer. The duplicate of this letter should be duly signed and returned to the institution by the customer. The facility disbursement process should start only upon receipt of this letter and should involve, inter alia, the completion of formalities regarding documentation, the registration of collateral, insurance cover in the institution’s favour and the vetting of documents by a legal expert. Under no circumstances shall funds be released prior to compliance with pre-disbursement conditions and approval by the relevant authorities in the financial institution (L.R.Chowdhury,2004).

2.9.6 Monitoring and Control of Individual Credits

To safeguard financial institutions against potential losses, problem facilities need to be identified early. A proper credit monitoring system will provide the basis for taking prompt corrective actions when warning signs point to a deterioration in the financial health of the borrower. Examples of such warning signs include unauthorised drawings, arrears in capital and interest and a deterioration in the borrower’s operating environment (Morton Glantz, 2002). Financial institutions must have a system in place to formally review the status of the credit and the financial health of the borrower at least once a year. More frequent reviews (e.g at least quarterly) should be carried out of large credits, problem credits or when the operating environment of the customer is undergoing signDhaka ant changes.

In broad terms, the monitoring activity of the institution will ensure that:

— funds advanced are used only for the purpose stated in the customer’s credit application;

— financial condition of a borrower is regularly tracked and management advised in a timely fashion;

— borrowers are complying with contractual covenants;

— collateral coverage is regularly assessed and related to the borrower’s financial health;

— the institution’s internal risk ratings reflect the current condition of the customer;

— contractual payment delinquencies are identified and emerging problem credits are classified on a timely basis; and

— problem credits are promptly directed to management for remedial actions.

More especially Dhaka, the above monitoring will include a review of up-to-date information on the borrower, encompassing:

— opinions from other financial institutions with whom the customer deals;

— findings of site visits;

— audited financial statements and latest management accounts;

— details of customers’ business plans;

— financial budgets and cash flow projections; and

— any relevant board resolutions for corporate customers.

The borrower should be asked to explain any major variances in projections provided in support of his credit application and the actual performance, in particular variances respecting projected cash flows and sales turnover (Credit Risk Management: Industry Best Practices 2005, Bangladesh Bank).

2.9.7 Monitoring the Overall Credit Portfolio (Stress Testing)

An important element of sound credit risk management is analyzing what could potentially go wrong with individual credits and the overall credit portfolio if conditions/environment in which borrowers operate change signantly Dhaka. The results of this analysis should then be factored into the assessment of the adequacy of provisioning and capital of the institution. Such stress analysis can reveal previously undetected areas of potential credit risk exposure that could arise in times of crisis (Morton Glantz, 2002).

Possible scenarios that financial institutions should consider in carrying out stress testing include:

— Signant Dhaka economic or industry sector downturns;

— Adverse market-risk events; and

— Unfavorable liquidity conditions.

Figure 2.6: Early Warning Systems

Source: (Credit Approval Process and Credit Risk Management, 2005, Oesterreichische National bank)

Financial institutions should have industry profiles in respect of all industries where they have signDhaka ant exposures. Such profiles must be reviewed /updated every year. Each stress test should be followed by a contingency plan as regards recommended corrective actions. Senior management must regularly review the results of stress tests and contingency plans. The results must serve as an important input into a review of credit risk management framework and setting limits and provisioning levels (Morton Glantz, 2002).

2.9.8 Classification Dhaka of credit

It is required for the board of directors of a financial institution to establish credit risk management policy, and credit impairment recognition and measurement policy, the associated internal controls, documentation processes and information systems.

Credit classification Dhakaprocess grades individual credits in terms of the expected degree of recoverability. Financial institutions must have in place the processes and controls to implement the board approved policies, which will, in turn, be in accord with the proposed guideline. They should have appropriate criteria for credit provisioning and write off. International Accounting Standard 39 requires that financial institutions shall, in addition to individual credit provisioning, assess credit impairment and ensuing provisioning on a credit portfolio basis. Financial institutions must, therefore, establish appropriate systems and processes to identify credits with similar characteristics in order to assess the degree of their recoverability on a portfolio basis.

Financial institutions should establish appropriate systems and controls to ensure that collateral continues to be legally valid and enforceable and its net realizable value is properly determined. This is particularly important for any delinquent credits, before netting off the collateral’s value against the outstanding amount of the credit for determining provision. As to any guarantees given in support of credits, financial institutions must establish procedures for verifying periodically the net worth of the guarantor.

2.9.9 Managing Problem Credits/Recovery

A financial institution’s credit risk policy should clearly set out how problem credits are to be managed. The positioning of this responsibility in the credit department of an institution may depend on the size and complexity of credit operations. The monitoring unit will follow all aspects of the problem credit, including rehabilitation of the borrower, restructuring of credit, monitoring the value of applicable collateral, scrutiny of legal documents, and dealing with receiver/manager until the recovery matters are finalized.

The collection process for personal loans starts when the account holder has failed to meet one or more contractual payment (Installment). It therefore becomes the duty of the Collection Department to minimize the outstanding delinquent receivable and credit losses. This procedure has been designed to enable the collection staff to systematically recover the dues and identify/prevent potential losses, while maintaining a high standard of service and retaining good relations with the customers. It is therefore essential and critical, that collection people are familiar with the computerized system, procedures and maintain effective liaison with other departments within the bank (Prudential regulations for consumer financing 2004, Bangladesh Bank).

2.9.9.1 Collection objectives

The collector’s responsibility will commence from the time an account becomes delinquent until it is regularized by means of payment or closed with full payment amount collected. The goal of the collection process is to obtain payments promptly while minimizing collection expense and write-off costs as well as maintaining the customer’s goodwill by a high standard of service. For this reason it is important that the collector should endeavor to resolve the account at the first time worked. Collection also protects the assets of the bank. This can be achieved by identifying early signals of delinquency and thus minimizing losses. The customers who do not respond to collection efforts – represent a financial risk to the institution. The Collector’s role is to collect so that the institution can keep the loan on its books and does not have to write-off / charge off.

2.9.9.2 Identificatin Dhaka and allocation of accounts

When a customer fails to pay the minimum amount due or installment by the payment due date, the account is considered in arrears or delinquent. When accounts are delinquent, collection procedures are instituted to regularize the accounts without losing the customer’s goodwill whilst ensuring that the bank’s interests are protected.

2.9.9.3 Collection Steps

To identify and manage arrears, the following aging classification Dhakais adopted:

For all products other than credit cards

Table 2.1: Credit recovery steps

Days Past Due (DPD) Collection Action
1-14 Letter, Follow up & Persuasion over phone (Annexure V)
15-29 1st Reminder letter & Sl. No. 1 follows
30-44 2nd reminder letter + Single visit
45-59 · 3rd reminder letter (Annexure VI)

· Group visit by team member

· Follow up over phone

· Letters to Guarantor, Employer, Reference all above effort follows

· Warning on legal action by next 15 days
60-89 · Call up loan (Annexure VII)

· Final Reminder & Serve legal notice

· legal proceedings begin

· Repossession starts
90 and above · Telephone calls/Legal proceedings continue

· Collection effort continues by officer & agent

· Letter to different banks/Association

Source: (Prudential regulations for consumer financing 2004, Bangladesh Bank)

For credit cards:

Table 2.2: Credit recovery steps for credit card

Days Past Due (DPD) Collection Action
X · Letter reminding payment past due

· Soft call requesting payment
30-59 · Block card with “decline” response

· Call insisting payment

· Letter advising account status (blocked)
60-89 · Block card with “decline” response

· Call insisting payment

· Letter advising a/c status (blocked) and threatening card cancellation if not regularized
90-119 · Call insisting immediate payment

· Letter advising cancellation & surrender of card

· Hot-list & circulate within the merchants

· Employ recovery agent where appropriate
120-149 · Call threatening litigation

· Threatening letter to employer (for salaried only)

· Publish name & photograph in newspaper

· Personal visitation by recovery agent

· Set-off SCB Account(s), if any

· Serve legal notice where appropriate
150+ · Bad debt allocation

· Account handed over to recovery agency

· Stop interest accrual

· Personal visitation by recovery agent

· Legal action

Source: (Prudential regulations for consumer financing 2004, Bangladesh Bank)

Legal actions could be taken on the basis of Artha Rin Adalat Ain 2003 which has been enacted to encourage speedy settlement of legal cases. It provides support for both the financial institutions and the borrower.

Chapter 3

3.0 Dhaka Bank Limited: Organization

3.1 Role of Banks in the modern Economy

The prosperity of a country depends upon its economic activities. Like any other sphere of modern socio-economic activities, banking is a powerful medium of bringing about socio-economic changes of a developing country. Agriculture, Commerce and Industry provide the bulk of a country’s wealth. Without adequate banking facility these three cannot flourish. For a rapid economic growth a fully developed banking system can provide the necessary boost. The whole economy of a country is linked up with its banking system.

3.2 Functions of a bank

The functions of the bank are now wide and diverse. Of all the functions of modern bank, lending is by far the most important. They provide both short-term and long-term credits. The customers come from all walks of life, from a small business to a multi-national corporation having its business activities all around the world. The banks have to satisfy requirements of different customers belonging to different social groups. The banking business has, therefore, become complex and requires specialized skills. They function as a catalytic agent for bringing about economic, industrial and agricultural growth and prosperity of the country. The banking can, therefore, be convinced a sector of economy on the one hand and as a lubricant for the whole economy on the other. As a result different types of banks have come into existence to suit Dhaka requirements.(L.R. Chowdhury,2004)

Figure 3.1 Types of Banks

Source: A Textbook on banker’s loans and advances, L.R.Chowdhury

3.3 Company Profile of Dhaka Bank Limited

The Bank was initially emerged in the Banking scenario of the then East Pakistan as Eastern Mercantile Bank Limited at the initiative of some Bangalee enterpreneurs in the year 1959 under Bank Companies Act 1913 . After independence of Bangladesh in 1972 this Bank was nationalised as per policy of the Government and renamed as DHAKA Bank. Subsequently due to changed circumstances this Bank was denationalised in the year 1983 as a private bank and renamed as Dhaka Bank Limited. The Government of the People’s Republic of Bangladesh handed over all assets and liabilities of the then Dhaka Bank to the Dhaka Bank Limited. Since then Dhaka Bank Limited has been rendering all sorts of Commercial Banking services as the largest bank in private sector through its branch network all over the country.

3.3.1 Corporate Vision and Mission

Vision Statement

Economic Advancement in Traditional Way.

Mission Statement

3.3.2 Products and Services

Service of the Professional Personal

The officers of Dhaka Bank Limited have to their credit, decades of banking experience with national / international banks at home and abroad. They are suitably equipped to meet customer expectations and are available at all times to provide a single-window customized and confidential service.

A State-Of-The-Art Technology Banking

The Bank will provide a state-of-the-art technology banking such as Any Branch Banking, ATM Services, Home-Banking, Tele-Banking, Mobile-Banking etc.

Retail Banking

Bank limited offers individuals the best services, including the following, to provide complete customer satisfaction:

Institutional Banking

Dhaka Bank Limited will offer various services to foreign missions, NGOs and voluntary organizations, consultants, airlines, shipping lines, contractors, schools, colleges and universities. The services include mainly the following:

Corporate Banking

Dhaka Bank Limited caters to the needs of the corporate clients and provides a comprehensive range of financial services, which includes:

" 90,"

CRITICALLY CONSIDER LIBERAL ACCOUNTS OF THE ‘UNDERCLASS’

","

1970s has given rise to such terms as social exclusion, new poverty, and the underclass to describe the consequent negative effects on the more vulnerable populationsin these countries. Such phenomena also intensified the debate over the adequacy ofuniversal social protection policies and fuelled growing concern about the distributivefairness of employment and income patterns. Used first in France (Yepez-del-Castillo 1994), the concept spread quickly to the United Kingdom and throughoutthe European Union. Social exclusion theorists are concerned with the dissolution of social bonds, theincomplete extension of social rights and protections to all groups, and the linksbetween the idea of exclusion and more conventional understandings of inequality.They draw on theories of poverty, inequality, and disadvantage. In this context policiesto aid the excluded have focused on subsidizing jobs and wages, providing housing, and responding to urbanization. The value added of these discussions derivesfrom their focus on the multifaceted nature of deprivation and on analysis of themechanisms and institutions that function to exclude people (de Haan 1998). Theconcept of social exclusion has encouraged scholars to consider simultaneously theeconomic, social, and political dimensions of deprivation. As Bhalla and Lapeyre(1997) stress, this concept encompasses the notion of poverty broadly defined, butis more general in that it explicitly emphasizes poverty’s relational as well as its distributionalaspects.

Social Exclusion is another term for the lower strata poor. This implies that this is more than just about the straight poor but instead about behaviour which has created a lifestyle which is permanently dislocated from the habits and way of life of the majority. The concept of the underclass has been widely contested today. It has many links with social exclusion, the notion of a cycle of deprivation and cultural theories. During the course of this essay a number of different areas will be looked at. The focal point of this essay will rest by and large in the culture of binge drinking which is apparent across a significant area of the population. This part of the population has been named in many different ways by the media and social theorists alike from Chavs to the deprived to the socially excluded, all of which lead us to the same concept ‘The Underclass’. It will then discuss different perspectives on the ‘underclass’ both into whether it truly exists and whether it is the individuals or the welfare states fault. This essay will interrogate Murray’s claims about the ‘underclass’ and explain how he is right on a descriptive level but totally wrong on an explanatory level. Furthermore it will look at media accounts of the urban poor and the fact that they are overwhelmingly liberal in orientation. Lastly it will look at the rise of neo-liberalism and the effect it has had on the poor in Britain.

There have been many theorists which have researched the concept of the ‘underclass’ one of which who is highly recognised across Britain and the US is Charles Murray. Murray came to the UK in 1989 in search of an underclass and wrote an article in The Sunday Times about there being the foundations of an ‘underclass’ in British Society, this was widely contested amongst British sociologists and rejected. However this concept has now been widely researched and there has been increasing truth to Murray’s (1990) article ‘The Emerging British Underclass’. This article wrote in quite general terms about the ‘underclass’ and related it to trends of illegitimacy, crime and unemployment. His second essay written in 1996 ‘Underclass: The crisis deepens’ was preoccupied with illegitimacy, marriage and the state of the British Family. The concept of a traditional nuclear family reducing the chances of a child turning to crime has been one which has been researched heavily. Although no conclusion has been reached it is still widely believed to be true. The term ‘underclass’ was derived by Ken Auletta in the 1980’s to emphasise the behaviour and values of those deemed to be lower class. Murray (1996) attempts in great detail to show that he does not apply the term ‘underclass’ to all poor , only to those;

‘distinguished by there undesirable behaviour, including drug taking, illegitimacy, failure to hold down a job, truancy from school and casual violence,’.

Murray believes illegitimacy is the best indicator of an underclass in the making and the rising trend in illegitimacy therefore alarms him. He places a special focus on issues of violence as it becomes increasingly difficult to raise children to be un-aggressive when whole towns fall prey to criminality. However Alan walker offers a liberal view. He believes that Murray ‘blames the victim’ and thus diverts our attention from blaming the mechanisms through which resources are distributed. Victim blaming is the attitude which walker believes to have been at the root of many measures from Elizabethan Poor Law to today’s ‘YTS’ and ‘restart’ programmes. There is the belief by Murray that there are two types of poor people, one of whom live on low incomes and another who don’t just lack money .

‘There homes were littered and un-kept. The men in the family were unable to hold a job for more than a few weeks at a time. Drunkenness was common. The children grew up ill schooled and contributed a disproportionate share of the local juvenile delinquents.’

There are many other arguments about the underclass. Robert Moore suggested that despite his own misgivings;

‘a collective term such as the ‘underclass’ may be needed to refer to that group of marginalised migrant workers, refugees and asylum seekers, inner city ethnic minority populations and the very poorest who typically have little or no control over goods and skills either within or outside a given economic order’.

This coincides with Ralf Darendorf’s view that the term ‘underclass’ is a ‘phenomenon of race’ here as well as the US. These are all rather liberal accounts of the underclasses and a view is taken that the majority of underclasses in both the UK and the US are ethnic minorities many of which are first r secong generation immigrants who have little or no understanding of the British Culture. Many of these minorities will live in poorer areas in which there children will fall victim to the culture of the ‘underclass.’ This culture includes getting involved with gangs, binge drinking and often leads to unprotected sex which would continue the cycle of the ‘underclass’.

The liberal accounts of the ‘underclass’ tend to focus on the pathological individual. This is that if they are poor and don’t have a job it is there fault. Part of the pathological explanation suggests that it is the behaviour and attitudes of the underclass that have cut them off from normal society – Murray being a strong advocate of this view, argues that welfare dependency has created a counter-cultural attitude that there is no need to work if one can instead receive state benefits or turn to crime instead. The opposing position suggests that the lack of full employment in the economy results in the unemployed and hence poverty. Here it is the failure of the structure rather than the individual themselves who can be blamed for the emergence of an underclass.

Auletta refers to the underclass as a group who do not “assimilate” (1982: xvi quoted in Morris, 1994: 81), identifying four main groups:

In identifying these groups it can be seen that perhaps a different explanation for the underclass can be given for each grouping. However, in all four cases it could be argued that the underlying reason for the exclusion from society could be either pathological or structural. For example it could be argued that the ‘passive poor’ are so because they hold the attitude that there is no need for work. The same group could also be said to exist because there are not enough jobs available in the economy for them to work.

‘The underclass’ as a phrase has shifted in emphasis since the 80’s and this shift is partly in response to liberal commentators who suggested that the poor of the contemporary period are idle, jobless and criminal. ‘The underclass’ as a phrase became associated with blaming the poor for their marginalised social situation. Murray’s claims are partly right at the descriptive level, but totally wrong at the explanatory level. There are many different reasons which could offer a far more reasonable explanation on the concentration of urban marginality today. Firstly the changing economy provides us with a number of reasons into why there is an underclass in the UK. Liberals and conservatives today tend to stress values like individual responsibility when considering such issues such as drugs, violence, teen pregnancy, family formation and the work ethic. Some critics readily blame welfare for poverty and find it hard to see how anybody even the poor would deliberately deviate from mainstream culture. With widespread joblessness many inner city people become stressed and there communities become distressed, poor people adapt to these circumstances as best they know, meeting the exigencies of there situation as best they can. The kinds of problems which cause moral outrage begin to emerge; teen pregnancy, welfare dependency and the underground economy. Its cottage industries of drugs, prostitution, welfare scams and other rackets pick up the economic slack. It is this underground economy which provides a means for these people as the regular economy cannot.

Since 1997, the New Labour government has developed and administered contemporary social policy around the ideals of social inclusion. The Social Exclusion Unit (SEU), Welfare to Work and New Deal Programmes (1998) provide the chief manifestations of socially-inclusive policy. The SEU describes social exclusion as the ‘short hand for what can happen when people or areas are suffering from a combination of linked problems such as unemployment, poor skills, low incomes, poor housing, high crime, bad health and family breakdown’ (SEU, 2001: 10). The shift to social inclusion policy is a response to the need to prevent individuals at risk of exclusion from becoming excluded, according to the SEU: a need it proposes to address by, for example, resolving to reverse the growth in family breakups, teenage pregnancies and crime, and to reduce possible restrictions to an individual’s ‘economic opportunity’. And, where necessary, policy should be designed with the aim of reintegrating those already excluded socially, through programmes such as the New Deal and Welfare to Work (ibid: 29). Bauman argues that the shift in social policy towards the language of social inclusion is a result of key economic trends in the West, leading to the growth of a population that has become surplus to labour-market requirements. Byrne argues that social-inclusion rhetoric is the surface-froth of the more fundamental shift to Post-Fordist patterns of capital accumulation, where those at the margins of inclusion and exclusion serve as part of the reconstitution of a reserve army of labour power.

Clearly, Bauman and Byrne differ in their explanations: Bauman viewing the ‘excluded’ as an unwanted surplus to the expansion of capital, and Byrne viewing the excluded as vital to capitalist expansion. For Bauman, contemporary changes in social policy are part of the wider shift of the welfare state away from policy directed at supporting the re-commodification of labour power. Capital accumulation up until the 1985 required the state to play its role in the provision of key resources, including housing, education, health and, when necessary, welfare payments to the unemployed. This, for Bauman, ensured the re-commodification of quality labour power and also secured a viable reserve army; both of which were essential for post-war capitalist expansion. Since the 1980’s, argues Bauman, capital accumulation has become increasingly premised on the rationalisation of the use of labour power, and thus on the shedding of the labour force. As a consequence, the role of the welfare state has changed, moving towards means-tested and targeted benefits, and towards-via training and employment policies-catering for capitalism’s need for insecure, low-quality labour power, and the disciplining of a growing surplus population. As Bauman observes,

‘The present-day stream-lined, downsized, capital-and knowledge-intensive industry casts labour as a constraint on the rise of productivity to such a degree that economic growth and the rise of employment are, for all practical intents, at cross-purposes; technological progress is measured by the replacement and elimination of labour’ (Bauman, 1998: 65).

The shift in welfare-state priorities towards social inclusion signifies deeper changes in the re-commodification of labour power. In this context, the issue of social exclusion and the rhetoric of social-inclusion policy signifies the emergence of a surplus population which is no longer required by capital as a reserve army of labour. To be sure, a reserve army of labour still exists in non-Western, industrialised areas of the world. For the West, though, capital no longer requires a welfare state committed to the universal provision of key services and social needs, because the maintenance of a reserve army is no longer functional to capital accumulation. For Bauman;

‘The welfare state will become increasingly residual as social policy confines itself to organising the control and administration of a population increasingly isolated from the capitalist labour market. Government is haunted by the prospect of the homeless and disinherited flocking in and capital flocking out’. (Bauman, 1998: 54)

This, for Bauman, is the reason why social exclusion and social-inclusion policy predominates discourses on welfare.

Bauman’s argument provides a useful explanation of the shift in social policy towards social inclusion. However, the hard-and-fast equating of social exclusion with a surplus labour force playing no role as a reserve army is both empirically and theoretically suspect. Bauman ignores the day-to-day realities of the capitalist system in the West, where the links between capital’s demand for labour power and a surplus of unemployed remain of crucial importance. For Bauman’s proposition to hold, one must assume that those experiencing social exclusion have no connection with the labour market and the status of wage labour. Yet evidence does not support such a view. Evidence suggests

‘A degree of complexity, with people variously experiencing exclusion with no labour-market attachment, exclusion with some labour-market attachment, and inclusion with weak and/or strong labour-market attachments (Labour Market Trends: 2002).

In other words the experience of exclusion is as likely to be one premised on the poor, unstable employment as it is as on unemployment and ‘unemployability’ (Levitas, 1999). Evidence, suggests that labour power continues to function as a reserve army of labour, however attenuated this function might be. A more realistic proposition for Bauman to make might be that the surplus population is growing at a faster rate relative to its function as a reserve army of labour. In this case, those experiencing this situation have little choice, within the constraints of contemporary capitalism, but to remain unemployed and consequently, as Dinerstein suggests;

‘suffer the humiliation of having to beg for work and be in a permanent state of readiness to offer their labour power as a commodity’. (Dinerstein, 2002)

Media accounts of the urban poor are overwhelmingly ‘liberal’ in orientation. Many of which, are talking about dole cheats and young women getting pregnant for council houses. The Suns ‘shop a dole cheat’ campaign hails from the same intellectual tradition as Murray. Many media campaigns have victimised the poor and paved the way for the ‘Chav’ culture. This has been ridiculed and reported on in the press and on television. A number of attacks have been launched on television channels and there treatment of Britain’s working classes. It was seen to be not only patronising and offensive but also potentially dangerous. Reality television shows such as Wife Swap, Big Brother and the confessional Jeremy Kyle Show, which tend to rely on working-class participants in search of fame or fortune, were the focus of most criticism. But the portrayal of the working classes in comedy programmes such as Little Britain and dramas like Shameless were also debated.

Ethnic minority groups are ‘excluded’ as a result of their position in the new economy. In this sense, marginalised whites have a lot in common with marginalised blacks. There is however the associated dynamic of discrimination- the most notable example is the place of Muslims in a post 9/11 western world- however, understanding the position of these groups is more about ‘moral panics’ and fear of otherness. The economic literature on discrimination tends to focus on the different treatment of individuals-based on race, gender, or ethnicity in labour, credit, and consumer goods markets. This is obviously a serious matter, and there is ample evidence in the United States and elsewhere that such disparities are real and quantitatively important as a source of inter group economic inequalities (Modood and others 1997; Wilson 1996). Nevertheless, when considering ethnic group inequality, economists should look beyond what happens in markets. Of course, economists tend to focus on how markets work or fail. Economic theory suggests that discrimination based on gender or racial identity should be arbitraged away in markets of competitive sellers, employers, and lenders. But such discrimination is readily observed in society, and this anomaly attracts attention. Critics of neoclassical economics seize on it, and defenders of that orthodoxy seek to explain it away. Thus evidence that wage differences between the races or sexes have declined, after controlling for worker productivity, is supposed to vindicate the economist’s belief in market forces. This way of approaching the problem is too narrow. With wages, for example, the usual focus is on the demand side of the labour market-employers either have a “taste” for discrimination or use race as a proxy for unobserved variables that imply lower productivity for minorities. The primary normative claim in this approach is that such discrimination is morally offensive, a legitimate object of regulatory intervention, and a significant contributor to racial and gender inequality. But implicit in this claim is the notion that if inequality were due to supply-side differences-in the Glenn C. Loury 233 skills presented to employers by blacks and whites, for example-the resulting disparity would not raise the same moral issues or give a comparable warrant for intervention. There is a comparable view in housing markets-that residential segregation induced by the discriminatory behaviour of realtors is a bigger problem than segregation that comes about because of the freely made decisions of market participants. I propose a shift in emphasis. In the United States market discrimination against blacks still exists, but such discrimination is not as significant an explanation for racial inequality as in decades past. This calls into question the conventional wisdom on equal opportunity policy-that eliminating racial discrimination in markets will eventually resolve racial economic inequality. Much evidence supports the view that the substantial gap in skills between blacks and whites is a key factor accounting for racial inequality in the labour market. Yet this skills gap is itself the result of social exclusion processes that deserve explicit study and policy remediation.

‘The gap reflects social and cultural factors-geographic segregation, deleterious social norms and peer influences, poor education- that have a racial dimension’ (Cutler and Glaeser 1997; Akerlof 1997)

Group inequality such as that between blacks and whites in the United States cannot be fully understood, or remedied, with a focus on market discrimination alone.

Liberals like Murray look at cultural characteristics of the poor as a means of explaining ‘social exclusion’. They say the poor is poor because they are lazy, because they don’t try at school, because they don’t get married. In my opinion the real reason the poor are poor is because; There aren’t any meaningful jobs anymore for these social groups. The economy no longer needs everyone to work. The successive governments have allowed our welfare state to slowly degenerate. Mainstream society have been conned into believing that these people bring it on themselves.

Charles Murray in 1989 used drop out from the labour force among young males, violent crime and births from unmarried women would all be associated with the growth of a class of violent unsocialised people who if they become sufficiently numerous will fundamentally degrade the life of society. This can be seen to be happening today with the creation of ‘chav culture’. These ‘Chavs’ are usually working class and live on council estates and dress in sportswear hoodies, tracksuits and caps. They wear excessive gold jewellery and are seen to be aggressive and uneducated. There was a dramatic increase in unemployed males between 1989 and 1999 from 20.5% to 31.2% which has continued to till today. Drop out in the labour force was largest in the group who had the least excuses to work these were from ages 20 to 24. The economy was not to be blamed fully as overall national employment was lower in 1999 than in 1989. The percentage of men in school did not change appreciatiably and increases of people in higher education have been concentrated among young women and people of both sexes over the age of 30. Since 1994 the number of men in higher education has actually decrease and crime both violent and property are higher than of that in America since 1996.

From the mid 19th century to the first ¾ of this century Britain enjoyed being seen as the most civilised country on earth. The US in this same period was seen as a violent and unruly society with high levels of personal freedom but lower levels of civility. Other continents had low crime rates but a high level of authoritarian control, however Britain is now another high crime industrialised country. Violent crime is seen as impulsive behaviour by those who seek instant gratification of there desires which is part of a general lack of socialisation and is the hallmark of the ‘underclass’. Over the last two decades British children have not been socialised to norms of self control, consideration of others, and the concept that actions have consequences. Murray states;

‘One of the leading reasons that they are not being socialised is that larger numbers of British children are not being raised by two mature married adults’.

He believes that there is not alternative form of family which comes close to the traditional nuclear family of two married parents. He believed that children of two married biological parents were found to do much better than the children of single parents and the children of divorced mothers were found to do better than the children of never married mothers. Illegitimacy is overwhelmingly a lower class phenomenon. However Melanie Phillips argues that it is in fact the overclass’ fault that we have a lower strata poor.

Children from deprived areas sometimes don’t know how to use a knife and fork; they don’t know what an alarm clock is; because they have no sense of an ordered day. Primary school children who have no idea how to make social relationships but who are aggressive foul mouthed or withdrawn. The government has ambitious plans and programmes on how to tackle social exclusion, turning out papers on truancy, teenage pregnancies, repairing shattered communities. All of which are commendable however this all presents the socially excluded as a breed apart, as an underclass and if there behaviour is somehow different from the rest of society. Government advisors and officials and advisors talk about drugs for instance and they assume that the higher strata can handle cannibas and cocaine but the poor cannot. On education they say there is nothing wrong with the top 2% of schools the problems are with separate sink schools with high levels of truancy and low levels of basic literacy. On family they say ‘I’m cohabit, I’m a lone parent’ so there is nothing wrong with the changing family. It’s the poor who are the problem. This is not only hypocritical and unpleasant but it fails to see how culture works: that signals matter, that they work top down and that what is supportive behaviour by the upper classes can have a disastrous impact on the poor who do not have the soft cushioning of money and privilege to fall back on. The culture of being a lone parent is in some ways created by the elites who lead by example through judges who generally give custody to women and demand monthly child support paid to single mothers who are now also receiving extra benefits and this is done through an increase in taxes on married couples. Surely reducing the males role to nothing but a walking wallet and sperm donor is causing men who are poor to run away from marriage.

To understand the underclass is imperative in understanding poverty as a whole. But perhaps more important is the understanding that the underclass is simply a collective term used to refer to a group of individuals. By grouping these individuals together it is far too easy to make stereotypical judgements and statements which, whilst certainly applying to various members of the group, by no means hold true for each individual within. Indeed, it is with little doubt that many members of the underclass do cut themselves off from society due to their behaviours and attitudes, but there will be many who do not. Some people are born more disadvantaged than others – take the disabled and elderly for example. Both of these groups can fall within a definition of the underclass – they are often dependent upon the state and are in many ways excluded from certain aspects of society. It would take a radical commentator to suggest that either of these groups, and hence the whole of the underclass, are so due to their behaviour and attitudes.

" 91,"

CRITIQUE ON DEATH PENALTY IN BANGLADESH PERSPECTIVE

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Where there is a crime, there should be a punishment. Because of one should be escaped from law. The purpose of punishment to make the society safer for its people. In fact punishing the offenders is a primary function of all civil stales. The way and purpose of punishment may be of different types. But where the matter of the offence is very severe, obviously punishment should be very severe. But that not is death sentence. Death sentence has been used an on effective weapon of retributive Justice for centuries. The Justification advanced is that it is lawful to forfeit the life of a person who takes a way another’s life. But it is wrong for the stake to kill in order to show that it is wrong to kill, because, the stale than commits the same crime. In almost all stales that perform executive, the death penalty is limit led to cheeses involving aggravated murder. In Bangladesh we also exercise death penalty as carted punishment. But this is too much inhumane and barbaric and can never be accessed in a civilized society. We can never permit taking a war one’s life and claim us a civilized one. In this regard our decision will hold and we discus about death penalty as much as possible.

OBJECTIVES

The objectives of the study are as follows:

1. To discuss the basic ideas on punishment.

2. To know about the provisions of Capital Punishment in our Country.

3. To illustrate Methods of executing death penalty.

4. To discuss the arguments of people regarding Death Penalty.

5. To analyze the effects of Death Penalty in the protection of human rights.

METHODOLOGY

Every research involves a method by which the desired result

can be achieved. For completing this research work both primary and secondary methods have been followed. Data have been collected through Penal Code, 1860, newspapers, websites, discussion with resource person, basic documents etc.

PUNISHMENT

Definition of Punishment.

The punishment to which offenders are liable under the provisions of this Code are_

First, _ Death;

Secondly, _ Imprisonment for life;

Thirdly, _ [Replaced by Act XVII of 1949.]

Fourthly, _ Imprisonment, which is two descriptions, namely;

(1)  Rigorous, that is, with hard labor;

(2)  Simple;

Fifthly, _ Forfeiture of property;

Sixthly, _ Fine.                            (PENAL CODE, 1860)

Different types of Punishment.

There are five kinds of punishment. These are,

(1)  Death;

(2)  Imprisonment for life;

(3)  Imprisonment;

(4)  Forfeiture;

(5)  Fine.

(1)  Death:

Death punishment is awarded for murder in rarest of the rare cases. It may be awarded as punishment for the following offences:-

(1)  Waging war against the Government of Bangladesh.

(2)  Abetting mutiny actually committed.

(3)  Murder.

(4)  Dacoits accompanied with murder.

(2)  Imprisonment for life;

Imprisonment for life is now substituted for transportation. “Imprisonment for life” in the Code means “rigorous imprisonment for life” and not “simple imprisonment for life”.

(3)  Imprisonment;

Imprisonment is two kinds;

a. Rigorous: In the case of rigorous imprisonment the offender is put to hard labor such as grinding corn, digging earth, drawing water, cutting fire-wood, bowing wool, etc.

b. Simple: In the case of simple imprisonment the offender is confided to jail and is not put to any kind of work. Imposition of hard labor on prisoners undergoing rigorous imprisonment has been held to be legal.

(4)  Forfeiture:

The punishment of absolute forfeiture of all property of the offender is now abolished. Sections 61 and 62 of the Penal Code dealing with such forfeiture are repealed by Act XVI of 1921.

(5)  Fine:

Fine is the only punishment in the following cases:

  1. The person for whose benefit a riot has been committed not having duly endeavored to prevent it.
  2. The agent or manager of such person under like circumstances.
  3. Illegal payments in connection with an election.
  4. False statement in connection with an election.
  5. Failure to keep election accounts.

Capital Punishment in Bangladesh

In Bangladesh we exercise death penalty as capital punishment to execute the murderer or a convict of vital crime from ancient time. From which time we exercise it didn’t know. Though the sentences of death penalty pass frequently from the courts but the executions of those sentences are not frequent as well. Every year very few convicts are executed in Bangladesh. Some times the Government of the country releases the convict by showing political issue.

In Bangladesh penal provisions have been mad in Penal Code* 1860.The following eight types of offences is punishable with death:

Murder    :   Sec-302

Murder by life convict: Sec-303

Abatement of suicide of child or insane person: Sec-305

Attempt to murder by life convict causing hurt: Sec-307

Dacoit with murder: Sec-396

Giving or fabricating false evidence with to procure conviction of capital offence: Sec-194

Waging or attempting to wage war against Bangladesh: Sec-121

Abatement of mutiny: Sec-131

 Other Laws in Bangladesh which Deal with Capital Punishment

Section 19A of the Arms Act, 1878, deals with capital punishment. Section 25 B of the Special Powers Act permits death penalty. Provisions of the Section, 7-9 of the Nari-O-Shishu Nirjatan Daman Ain, 2003 permits capital punishment for the criminals under this Act. Besides these some provisions of some other laws deal with capital punishment in Bangladesh. Acid Santras Ain is one of the most important Acts in this category.

Famous Cases of Death Penalty

Ershed AH Sikder vs. State

Fact

The case of the prosecution is brief, is that over the Khulna ferny great affairs condemned prisoner Ershed Ali sikder called Monir to come to a meeting scheduled to be held at Ghat No-4 adjacent to Ice Factory of condemned prisoner Ershed Ali Sikder. Monir along with his companions haled, Mohammad All proceeded towards the ghat. When Monir disclosed his identify, he was allowed to precede to wands the Ice factory. Then Ershed Ali Sikder and his companies attracted Monir. Ershed Ali Sikder with is cut rifle blow on the head of Monir who fell down on the innocent. He then ordered to finish him. Monir was seriously grievous injuries on his person. When lie confirm that Monir is dead than he assailed Khaled with Shabul hammer, parson etc. Condemned prisoner Enshed Ali Sikder danced on Khaled’s chest. Khaled was taken to KhulnaSadarHospital where the succumbed to his in Junes.

Judgment

The Additional session Judge, 1st court of Khulna on consideration of the evidence and materials on record the facts and circumstance of the case convicted and sentenced Ershed Ali Sikder death penalty. The learned court also sentenced two others to death sentence two others to imprisonment for life and other accused 7 years rigorous imprisonment and to a fine take 5000/- and for default to out of 1 years rigorous as punishment. The petitioner is Earshed Ali Sikder. Then leave to Appeal in the High Court Division. But the high court division on correct consideration of the evidence of prosecution witness and all other materials on record reject the leave to Appeal.

Rofiqul Islam Mollah vs. State

Fact

Salma Begum, daughter of Pachu Sharif, given in marriage with sole accused Rafiqul Islam Mollah. Pachu Sharif received information that his daughter had died in the house of his son-in-law in the night. He went there and saw the dead body of his daughter lying on the floor of the verandah of the dwelling house of the accused. He then went to Gopalgonj Police station and made statement to the above effect. The charge officer of Thana went to the place of occurrence and prepared inquest on the dead body of victim of Salma Begum and sent the same to morgue for pos-mortem examination. On receipt of the post-mortem report, the aforesaid charge officer entrusted SI Md. Mojibur Rahman with investigation. The investigation officers investigate in to the cash and submitted Charge-Sheet against Md. Rafiqul Islam Mollah husband of victim Salma Begum.

Judgment

The Additional session Judge of Gopalgonj on consideration of the evidence and maleness on record and the facts and circumstance of the case convicted and sentence Rafiqual Islam Mollah under section 302 of the penal code death penalty. Now the question remains, whether the learned Additional Sessions Judge was legally justified in inflicting the sentence of death instead of sentence of imprisonment for life on the accused. The fact of the case does not show that the accused used any heavy or sharp cutting or lethal weapon or even acted with cruelty in committing murder of the victim. There is also nothing on record that the murder was preplanned and cold blooded. In such view of the matter we hold that it will meet the ends of justice if the sentence of death inflicted upon the condemned accused is reduced to imprisonment for life.

In the result, the death reference is rejected and the accused appellant is sentenced to suffer imprisonment for life for the offence under section 302 of the Penal Code.

Methods of Executing Death Penalty

The ancient and modern methods of execution are discussed here under this topic:

Ancient methods

An appraisal of the administration of criminal justice of ancient times reveals that death penalty was commonly used in cases of heinous crimes. However, there was great divergence as to the mode of its execution. The common mode of inflicting death sentence on the offender were fructification, drowning burning, boiling. Behead throwing before wild beasts, flaying or skinning off alive, hurling the offender from rock, stoning, straining, and amputating. Shooting by gun or strives him to death. These draconic and barbarous methods of punishing criminals to death were justified on the ground that they were the quickest and easiest modes of punishment and at the same time carried with them an element of deterrence and retribution. They have, however, fallen into disuse with the advance of time and modern humanitarian approach to penology.

Modern methods

There are eight main methods of execution in current use worldwide:

i. Beheading

Only two countries execute people by chopping their head off: Saudi Arabia and Iraq.

ii. Electric chair

(US only) Nobody knows how quickly a person dies from the electric shock, or what they experience. The ACLU describes two cases where prisoners apparently lived for 4 to 10 minutes before finally expiring.

iii. Firing squad

The prisoner is bound and shot through the heart by multiple marksmen. Death appears to be quick, assuming the killers don’t miss. In the U.S., only Utah used this method. It was abandoned in favor of lethal injection on 2004-MAR-15, except for four convicted killers on death row who had previously chosen death by firing squad. This is used in Belarus, China, Somalia, Taiwan, Uzbekistan, Vietnam, and others.

iv. Guillotine

A famous French invention not used in North America. It severs the neck. Death comes very quickly.

v. Hanging

If properly conducted, this is a humane method. The neck is broken and death comes quickly. However, if the free-fall distance is inadequate, the prisoner ends up slowly being strangled to death. If it is too great, the rope will tear his/her head off. This method is used in Egypt, Iran, Japan, Jordan, Pakistan, Singapore and others.

vi. Lethal injection

Lethal drugs are injected into the prisoner while he lays strapped down to a table. Typically, sodium pectoral is injected to make the prisoner unconscious. Then pancuronium bromide is injected. It terminates breathing and paralyzes the individual finally; potassium chloride is injected to stop the heart. If properly conducted, the prisoner fades quickly into unconsciousness. If the dosage of drugs is too low, the person may linger for many minutes, experiencing paralysis. Executions in the U.S. are gradually shifting to this method. This technique has been challenged recently by those who feel that the prisoner may not be rendered unconscious by the drugs. Some suggest that this method can be extremely painful. After a botched execution of Angel Nieves Diaz in Florida during 2006-DEC, Florida and nine other states have placed a hold on executions. This method is used in China, Guatemala, Philippines, Thailand, and the U.S.

vii. Poison gas

Cyanide capsules are dropped into acid producing Hydrogen Cyanide, a deadly gas. This takes many minutes of agony before a person dies.

viii. Stoning

The prisoner is often buried up to her or his neck and pelted with rocks until they eventually die. The rocks are chosen so that they are large enough to cause significant injury to the victim, but are not so large that a single rock will kill the prisoner. Used in North Afghanistan and Iran, as a penalty for murder, adultery, blasphemy, and other crimes.

Speech of Qualified Medical Professionals about Execution of Capital Punishment

The American Medical Association ethical guidelines state that “a physician should not be a participant in a legally authorized execution” and provides a list of actions that are prohibited. The American Nursing Association states that “participation in executions is… contrary to the fundamental goals and ethical traditions of the profession.” Also lethal injection-the intravenous administration of a tranquilizer, a muscle relaxant, and cardiologic agent for the purpose of judicial execution-is the standard method of capital punishment in the United States. Since 2001, lethal injection has been used in 189 of 191 (99%) executions and is the chief method of execution in 37 of the 38 states that have the death penalty, as well as for the federal government and military. The American Medical Association’s (AMA) opinion on capital punishment is found in section E-2.06 of its Code of Medical Ethics. The AMA states that “A physician, as a member of a profession dedicated to preserving life when there is hope of doing so, should not be a participant in a legally authorized execution.” Participation is defined to include “monitoring vital signs on site or remotely (including monitoring electrocardiograms); attending or observing an execution as a physician; and rendering of technical advice regarding execution.” Because pronouncing death requires a physician to monitor an inmate’s vital signs, either via electrocardiogram or stethoscope, it is, therefore, forbidden by the code. Certifying death, which does not require monitoring but does require the physician to sign a death certificate, is allowed in the AMA guidelines. Opinion 2.06 also makes specific reference to lethal injection, and forbids the following: “selecting injection sites; starting intravenous lines as a port for a lethal injection device; prescribing, preparing, administering, or supervising injection drugs or their doses or types; inspecting, testing, or maintaining lethal injection devices; and consulting with or supervising lethal injection personnel.

ARGUMENTS OR CAPITAL PUNISHMENT

Arguments in Favor of Capital Punishment

Many persons argued many things in favor of the Capital Punishment. Some of those arguments in favor of the Capital Punishment are discussed here under this heading.

Retributive Arguments Concerning Capital Punishment

The retributive notion of punishment in general is that (a) as a foundational matter of justice, criminals deserve punishment, and (b) punishment should be equal to the harm done. In determining what counts as “punishment equal to harm,” theorists further distinguish between two types of retributive punishment. First, lex talionis retribution involves punishment in kind and is commonly expressed in the expression “an eye for an eye.” Second, lex saiica retribution involves punishment through compensation, and the harm inflicted can be repaired by payment or atonement. Historically, capital punishment is most often associated lex talionis retribution. One of the earliest written statements of capital punishment from the lex talionis or “eye for an eye” perspective is from the 18th century BCE Babylonian Law of Hammurabi: If a builder builds a house for someone, and does not construct it properly, and the house which he built falls in and kills its owner, then that

builder shall be put to death. If it kills the son of the owner, then the son of that builder shall be put to death.

Critics of classic lex talionis quieted capital punishment point out several problems with this view. First, as a practical matter, lex talionis retribution cannot be uniformly applied to every harm of committed. The second sentence in the above quote from the Law of Hammurabi shows the inherent absurdity of consistent application: “If it [i.e., a collapsed house] kills the son of the owner, then the son of the builder shall be put to death.” Second, as a strict formula of retribution, lex talionis punishment may even be inadequate. For example, if a terrorist or mass murderer kills ten people, then taking his single life is technically not punishment in kind. Third, foundational beliefs in general have the unfortunate consequence of appearing arbitrary. If a belief in lex talionis retribution is foundational. Then, by definition, it cannot be defended by appealing to a prior set of reasons. The arbitrary nature of this is particularly clear when we see that there is an alternative retributive view of punishment which is equally foundational, yet which does not require capital punishment, namely lex silica retribution.

Finally, critics of capital punishment argue that the true basis of retributive justifications of capital punishment is not at all foundational but instead rooted in psychological feelings of vengeance. Even if we grant that vengeance is a natural human emotion, critics argue that it is an impulse which should be tempered, just as we do natural feelings of fear, lust, and greed. Laws about punishment, then, should not be grounded in our extreme feelings, but should instead be based on our more tempered ones. When we moderate our natural feelings of vengeance, there should be little inclination to execute criminals. Immanuel Kant offered an alternative retributive justification of capital punishment which is not rooted in vengeance. Instead, for Kant, capital punishment is based on the idea that every person is a valuable and worthy of respect because of their ability to make rational and free choices. The murder, too, is worthy of respect: we. Thus, show him respect by treating him the same way he declares that people are to be treated. Accordingly, we execute the murderer. A key problem with Kant’s justification of capital punishment is that it tells us what to do with only ideally rational killers, although many killers are not rational.

Deferent Effect of Capital Punishment, Incapacitation of the criminal

The fear of being condemned to death is perhaps the greatest deterrent, which keeps an offender away from criminality. Death penalty in case of murder serves as an effective deterrent to remind the murderer about the severity of law towards this heinous crime and this certainly helps in reducing the incidence of homicide. The old methods of public execution though abandoned today, were directed to make the sentence as frightening as possible. The present trend, however, is to keep the number of offences punishable by death to a minimum and avoid death penalty as far as possible although its retention in the statute book is favored even to this day.

Capital punishment permanently removes the worst criminals from society and should prove much cheaper and safer for the rest of us than long term or permanent incarceration. It is self evident that dead criminals can not commit any further crimes. There are a number of incontrovertible arguments against the death penalty. The most important one is the virtual certainty that genuinely innocent people will be executed and that there is no possible way of compensating them for this miscarriage of justice. There is also another significant danger here. The person convicted of the murder may have actually killed the victim and may even admit having done so but does not agree that the killing was murder. Often the only people who know what really happened are the accused and the deceased. It then comes down to the skill of the prosecution and defense lawyers as to whether there will be a conviction for murder or for manslaughter. It is thus highly probable that people are convicted of murder when they should really have only been convicted of manslaughter. A second reason, that is often overlooked, is the hell the innocent family and friends of criminals must also go through in the time leading up to and during the execution and which will often cause them serious trauma for years afterwards. It is often very difficult for people to come to terms with the fact that their loved one could be guilty of a serious crime and no doubt even more difficult to crone to terms with their death in this form. However strongly you may support capital punishment two wrongs do not make one right. One cannot and should not deny the suffering of the victim’s family in a murder case but the suffering of the murderer’s family is surely equally valid. There must always be the concern that the state can administer the death penalty justly, most countries have a very poor record on this. In America a prisoner can be on death row for many years on average eleven years 2004 figure awaiting the outcome of numerous appeals and -their chances of escaping execution are better if they are wealthy and/or white rather than poor and/or black irrespective of the actual crimes they have committed which may have been largely forgotten by the time the final decision is taken. Although racism is claimed in the administration of the death penalty in America, statistics show that white prisoners are more liable to be sentenced to death on conviction for first degree murder and are also less likely to have their sentences commuted than black defendants. It must be remembered that criminals are real people too. Who have life and with it the capacity to feel pain, fear and the loss of their loved ones and all the other emotions that the rest of us are capable of feeling. It is easier to put this thought on one side when discussing the most awful multiple murderers but less so when discussing, say. An eighteen year old girl convicted of drug trafficking. (Singapore hanged two girls for this crime in 1995 who were both only eighteen at the time of their offences and China shot an 18 year old girl for the same offence in 1998.)There is no such thing as a humane method of putting a person to death irrespective of what the State may claim (see later). Every form of execution causes the prisoner suffering, some methods perhaps cause less than others, but be in no doubt that being executed is a terrifying and gruesome ordeal for the criminal. What is also often overlooked is the extreme mental torture that the criminal suffers in the time leading up to the execution. How would you feel knowing that you were going to die tomorrow morning at 8.00 a.m.? There may be a brutalizing effect upon society by carrying out executions – this was apparent in this country during the seventeenth and eighteenth centuries when people turned out to enjoy the spectacle. They still do today in those countries where executions are carried out in public. It is hard to prove this one way or the other – people slop and look at car crashes but it doesn’t make them go and have an accident to see what it is like. I mink there is a natural voyeurism in most people. The death penalty is the bluntest of “blunt instruments” it removes the individual’s humanity and with it any chance of rehabilitation and their giving something back to society. In the case of the worst criminals this may be acceptable but is more questionable in the case of less awful crimes. There within prison or after escaping or being released from it.

Other Arguments for Capital Punishment

The Bible

The Bible requires the death penalty for a wide variety of crimes, including sex before marriage, adultery, homosexual behavior, doing work on Saturday and murder. It even calls for some criminals e.g. prostitutes who are the daughters of priests to be tortured to death is being burned alive. Most Christians, with the exception of those in the Reconstructions movement, feel that many of these grounds for the death penalties no long apply to Christian societies. U.S. However, Bible passages are still used to promote the retention of capital punishment for murderers; some advocate that homosexuals also are executed.

Justice/Vengeance

Many people feel that killing convicted murderers will satisfy their need for justice and vengeance. They feel that certain crimes are so heinous that executing the criminal is the only reasonable response.

Cost

Once a convicted murder is executed and buried, there are no further maintenance costs to the state. This appears to be invalid; the cost to the state paying for multiple appeals is greater than the cost of imprisoning an inmate.

Public safety

Once a convicted murderer is executed, there is no chance that be will break out of jail and kill or injure someone.

Arguments against Capital Punishment Effect on society 

Effect on Society

Some feel that permitting premeditated murder is totally unacceptable, even if done by the state. Capital punishment lowers the value of human life as seen by the general population and brutalizes society. It is based on a need for revenge. It “violates our belief in the human capacity for change…. It powerfully reinforces the idea that killing can be a proper way of responding to those who have wronged us. We do not believe that reinforcement of that idea can lead to healthier and safer communities.”

Lack of Deterrence

The death penalty has not been shown to be effective in the reduction of the homicide rate. There are some indications that executions actually increase the murder rate.

Value of human life

Human life has intrinsic value, even if a person has murdered another individual. The death penalty denies the sacredness of human life. Live is so precious that nobody should ever be killed, even by the state.

Cost

The costs to the state of funding appeals by convicted murderers would more than pay for their permanent incarceration.

Chance of Error

Many convicted murderers are later found innocent, and have been pardoned. It is impossible to pardon a corpse. In 1987, a study was published by the Stanford Law Review. They found some evidence that suggested that at least 350 people between 1900 and 1985 in America might have been innocent of the crime for which they were convicted, and could have been sentenced to death. 139 “were sentenced to death and as many as 23 were executed.”

The family of the executed

Is victimized and punished by having their loved one murdered by the state. Yet the family is usually innocent of any crime.

Lack of jury convictions

Some jury members are reluctant to convict in murder trials because of the possibility of executing an innocent person. Thus, many killers go free and are never punished.

Uselessness

Killing a murderer does not bring his victim back to life. It achieves nothing but the death of still another person.

Unfairness

The mentally ill, poor, males and racial minorities are over-represented among those executed. One pilot study of over 2 dozen convicted criminals on death row found that all had been so seriously abused during childhood that they probably all suffered from brain damage. Women convicted of murder are almost never executed; that is a penalty that is almost entirely reserved for men. A 1986 study in Georgia showed that persons who killed “whites were four times more likely to be sentenced to death than convicted killers of non-whites.” The Texas Civil Rights Project issued a report in 2000-SHP which was critical of the justice system in Texas. They made the following criticisms which could probably apply to most of the states in the U.S. which still execute prisoners:

The defense lawyers are often incompetent. Judges sometimes appoint friends or political associates. Other times, no competent lawyer is willing to accept the case because of the poor compensation paid.

District attorney is given “unrestricted discretion” in deciding whether to seek the death penalty. Poor people and members of minority groups are more likely to be targeted because of prejudice and bigotry.

Jurors, who may support the death penalty, but have reservation about its use, are eliminated from jury duty. Jurors are often not given the option of a life-without-parole sentence in murder cases. The appeal process has “burdensome, if not impossible, procedures.” The process seems designed to speed cases along rather than grant justice. The rules appear to be in flux: the highest appeals court in the state reversed about one out of every three capital sentences prior to 1995. Since 1995, this has reduced to less than 3%. . The operation of the Board of Pardons and Paroles in Texas is severely flawed. They do not meet as a group to study evidence and discuss a case. Individual members are sent stacks of documents, and make their decisions via telephone or fax.

CAPITAL PUNISHMENT AND PROTECTION OF HUMAN RIGHTS

In the aftermath of World War II, the Un/Ted Nations General Assembly adopted the Universal Declaration of Human Rights Yrhis 1948 doctrine proclaimed a “right to life” in an absolute fashion, any limitations being only implicit. Knowing that international abolition of the death penalty was not yet a realistic goal in the years following the Universal Declaration, the United Nations shifted its focus to limiting the scope of the death penalty to protect juveniles, pregnant women, and the elderly. During the 1950s and 1960s subsequent international human rights treaties were drafted, including the International Covenant on Civil and Political Rights, the European Convention on Human Rights, and the American Convention on Human Rights. Despite this exception, many nations throughout Western Europe stopped using capital punishment, even if they did not, technically, abolish it. As a result, this de facto abolition became the norm in Western Europe by the 1980s. (Schabas, 1997) In April 1999, the United Nations Human Rights Commission passed the Resolution Supporting Worldwide Moratorium on Executions. The resolution calls on countries which have not abolished the death penalty to restrict its use of the death penalty, including not imposing it on juvenile offenders and limiting the number of offenses for which it can be imposed. Ten countries are including the United States, China and Pakistan. Rwanda and Sudan voted against the resolution. (New York Times. 4/29/99). Each year since 1997, the United Nations Commission on Human Rights has passed a resolution calling on countries that have not abolished the death penalty to establish a moratorium on executions. In April 2004, the resolution was passed by 76 UN member states. (Amnesty International, 2004). In the United States numbers of death sentences are steadily declining from 300 in 1998 to 143 in 2003.

Obviously this should not exist as such, because some 800,000 people die each year in Britain alone. Perhaps then it should be re-designated as the “right not to have one’s life arbitrarily terminated by the state”. Even this more realistic definition does not really apply in Britain and is probably not entirely possible. The death penalty ended EST. In 1964 and since then nobody in Britain has been executed by the state. However the state does still kill a few of its citizens each year. The police shoot a small number of people and a few more die due to being restrained whilst resisting arrest. In none of these cases has there been what the Americans call “Due Process” .Some 900 people are murdered every year – does the government do enough to prevent this? We also allow abortion, effectively on demand, and some   180,000 lives are terminated annually through this means. Then there is the withholding of health care due to the decisions of officials that normally go unchallenged. The most high profile case of this recently was 11 year old Jamie Bowen who suffered from leukemia and whose health authority declined to pay for further treatment. Her father took them to court and the case entered the public arena. Jamie was a very courageous and articulate young lady who won massive public support for her case.   Had she been an unattractive old woman would anybody have cared? I have heard the arguments on both sides in her case and do not know who was right and who was wrong but I do know that we do not guarantee the citizens of this country the right to life particularly where it is going to cost a lot of money.

Presently, more than half of the countries in the international community have abolished the death penalty completely, de facto, or for ordinary crimes. However, over 78 countries retain the death penalty, including China, Iran, the United States, and Vietnam all of which rank among the highest for international executions in 2003. (Amnesty International, 2004).

Constitutional Prohibition of Capital Punishment in Various Countries

The Republic of Ireland became one of the first countries in the world to constitutionally band the Capital punishment as death penalty by popular referendum in 2001 with the approval of the Twenty-first Amendment to the Irish constitution.

The Federal Republic of Germany prohibited death penalty in its Basic Law in 1949. Costa Rica abolished death penalty in 1877 and its 1949 constitution states: human life is inviolable.” and “No one may be subjected to cruel or degrading treatment or to life imprisonment, or to the penalty of confiscation.” Presumably, death penalty is also prohibited by this statement.

Even Czechoslovakia (now divided into CzechRepublic and Slovakia) abolished death penalty in 1990 after the Velvet Revolution, and prohibited its use in the constitution in 1991 (by adoption of the Charter of Fundamental Rights and Freedoms). See 1960 Constitution of Czechoslovakia. This is the constitution of the CzechRepublic.

To sum up, Ireland is nowhere near the first country to ban death penalty in the constitution. Amnesty International lists constitutional prohibitions of the death penalty; as of 1999, 38 countries have done so. (If my count is correct, 42 countries do today according to Use of death penalty worldwide.) – Mike Resift 28 June, 2005; 13:53 (UTC).

The Adaptability of the Capital Punishment in Various Religions

Christianity

Since its origins, Christianity presented ambiguity about death penalty. Substantially excluded in Mt 5,44 (“love your enemies and pray for those who persecute you”), in LC 6, 35-37 (“…don’t judge and you won’t be judged; don’t condemn and you won’t be condemned; forgive and you will be forgiven”) and in GV 8, 1-11 (in the adulteress’s episode), that punishment becomes admissible in the Paul’s epistle to the Romans about the submission to authority and a similar ambiguity can be seen in apologists’ and Church fathers1 texts, from Tertullian (De Idolatria) and Lactations (Divine Institutions), against death penalty, to Augustan, who admits in some circumstances the “Sword right”.

In biblical law, death penalty is commentated, among other crimes, for premeditated murder (Es 21, 12; LV 24, 7). Kidnapping and selling a person (Es 21, 16; DT 24. 7). Witchcraft (Es 22, 17), violation of sabbatical rest (Es 35, 2), human sacrifice (LV 20, 2). Abuse and strokes to one’s parents (ES 21, 15; LV 20, 9), adultery and incest (LV 20, 1 0-12; DT 22, 22), idolatry (DT 17, 2-5; 19, 17-18).

Nowadays, Catholic Church has a precise attitude: fighting against death penalty, in every case. Pope has more than once made appeals to avoid imminent executions: the case of Joseph O’Dell, sentenced to death in 1997, which caused outcry and reactions by all the world’s governments, is an example of that.

However, death penalty is theoretically still in force in the Vatican City, only in case of attempt on Pope’s life, wellbeing or freedom or in case of attempt on a foreign head of state, when the law of this country provides for this penalty (Vatican law 7th June. 1929. Nr. 11, paragraph 4). In Vatican last executions date back to Pius IX’s papacy (1846-78).2

Islam

In Islamic law death penalty and its application into criminal and political field have had a long and contradictory history, mostly because of the overlapping of religious society and political society and because of the variety of historical periods. The Koran, basic point of reference, summarizes Prophet Mohammed’s religious and social action. Also the ‘URF (local consuetudinary law) and the Shari’ a (system of the juridical-religious laws fixed on the foundations of the Koran, of the real prophetical traditions – Hadith -, of the commentary consent Islam’ -, of the reasoning conducted likewise the Koran’s laws and of the tradition). The Koran provides the retaliation law for the murderers, the death penalty for the adulterous women (which must be shut at home without food or lapidated).

Still nowadays, Jaw of Islamic countries (like Yemen, Saudi Arabia, and Iran) follows the Shari’ a, a very hard law which provides death penalty in many cases and which is strictly applied. Inequalities among Muslims and non-Muslims in law application and variety of punishments can be explained not with racism, but with the religious principle that bases the hierarchy of juridical people on the Shari’ a. The highest grade of responsibility before the law is for the Muslim man sound of mind and legally married: his life is protected with precedence by the legal system. Then comes the free Muslim woman legally named. The Muslim slave-man, the Muslim slave-woman and the infidels.

Judges, depending to their opinion, can choose whether applying the Shari’ a or privileging punishments like imprisonment or penalty; rural people, instead, apply, for sexual crimes which involve the honors of a family, the ‘URF. Authorities are harder when they have to remove the old right of revenge which brings useless bloodshed.”

 Judaism

In religious Jewish communities, the ones derived from the Diaspora, there isn’t a hierarchic structure that imposes moral choices to anyone; all ethnic groups have a head rabbi and the Jerusalem rabbi has maximum authority (however, he is a primus inter pares), but each rabbi is independent and his judgments are a point of reference for the community.

For orthodox Jews, Mosaic law of “a life for a life, an eye for an eye, a tooth for a tooth, a hand for a hand, a foot for a foot”, codified in the 617 precepts of Leviticus and Deuteronomy, according to which death penalty is a lawful punishment is still valid. The crimes which it punishes are murder, adultery, incest, homosexual intercourse, blasphemy, idolatry, violation of Saturday, divorce (only for women); methods to execute the sentence are stoning, stake, hanging to wood, stroke with sword, strangling and administering white-hot lead drops in sentence’s throat. Actually nowadays these rules are inapplicable in tote or for some crimes and in the traditional form of stoning, as they contrast with the law of the countries where Jews communities are; like in Israel, which is a lay State whose civilian law is independent from religion, though there is death penalty for military crimes and genocide. So, a Jews doesn’t find reasons against death penalty in his religion, but only in his conscience.

 Abolitionist and Receptionist Countries

More than half the countries in the world have now abolished the death penalty in law or practice. The numbers are as follows:

Abolitionist for all crimes: 88

Abolitionist for ordinary” crimes only: 11

Abolitionist in practice: 29

Total abolitionist in law or practice: 128

Receptionist: 69

Following are lists of countries in the four categories: abolitionist for all crimes, abolitionist for ordinary crimes only, abolitionist in practice and Receptionist. At the end is a list of countries which have abolished the death penalty since 1 976. It shows that in the past decade, an average of over three countries a year have abolished the death penalty in law or, having done so for ordinary offences, have gone on to abolish it for all offences.

Abolitionist for all Crimes

Countries whose laws do not provide for the death penalty for any crime Andorra, Angola, Armenia, Australia, Austria Azerbaijan, Belgium. Bhutan, Bosnia-Herzegovina, Bulgaria, Cambodia, Canada, Capeverde, Colombia, Costa Rica, Cote Divorce, Croatia, Cyprus, Czech Republic. Denmark, Djibouti, Dominican Republic. Ecuador. Estonia, Finland, France. Georgia, Germany, Greece, Guiana, BissauHaiti. Honduras, Hungary. Iceland, Ireland. Italy, Kiribati. Liberia. Liechtenstein, Lithuania. Luxembourg, Macedonia (former YugoslavRepublic), Malta, Marshall Islands. Mauritius, Mexico, Micronesia (Federated States), Moldova, Monaco. Montenegro. The Mozambique, Namibia, Nepal, Netherlands, New Zealand, Nicaragua, Niue, Norway and Palau. Panama, Paraguay. The Philippines, Poland, Portugal, Romania, Samoa and San Marino. The Sao Tome and Principe, Senegal, Serbia, Seychelles, and SlovakRepublic. Slovenia. The Solomon Islands, South Africa, Spain, Sweden, Switzerland, Timor-lasted, Turkey, Turkmenistan, Tuvalu, Ukraine, United Kingdom, Uruguay, Vanuatu. Vatican City State, Venezuela.

 Abolitionist for Ordinary Crimes Only

Countries whose laws provide for the death penalty only for exceptional crimes such as crimes under military law or crimes committed in exceptional circumstances Albania. The Argentina, Bolivia, Brazil, Chile, Cook Island, El Salvador. Fiji, Israel. Latvia, Peru.

 Abolitionist in Practice

Countries which retain the death penalty for ordinary crimes such as murder but can be considered abolitionist in practice in that they have not executed anyone during the past 10 years and are believed to have a policy or established practice of not carrying out executions. The list also includes countries which have made an international commitment not to use the death penalty25Algeria, Benin. Brunei Darussalam. Burkina Faso, Central African Republic, Congo (Republic), Gabon, Gambia, Ghana, Grenada. Kenya, Kyrgyzstan, Madagascar, Malawi, Maldives. Mali, Mauritania. Morocco, Myanmar, Nauru, Niger, Papua New Guinea. Russian Federation, Sri Lanka. Suriname. Swaziland, Togo. Tonga, Tunisia ^

Extortionists 

Countries and territories which retain the death penalty for ordinary crimes Afghanistan, Antigua And Barbuda, Bahamas, Bahrain, Bangladesh. Barbados, Belarus. Belize. The Botswana, Burundi, Cameroon, Chad, China, Comoros, Congo (Democratic Republic), Eritrea, Ethiopia, Guatemala. Guinea, Guyana, India, Indonesia. Iran, Iraq, Jamaica, Japan, Jordan, Kazakhstan, Korea (North), Korea (South), Kuwait. Laos. Lebanon, Lesotho. Libya, Malaysia, Mongolia. Nigeria. The Oman, Pakistan, Palestinian Authority, Qatar, Rwanda, Saint Christopher&Nevis, Saint Lucia. The Saint Vincent&Grenadines, Saudi Arabia, Sierra Leone, Singapore, Somalia. Sudan, Syria, Taiwan, Tajikistan, Tanzania, Thailand, Trinidad and Tobago.

Findings

The summery of findings is:

1.     Death Penalty degrades the value of human life and brutalizes society.

2.    Sometimes it is found that the man who has been convicted and sentenced to death has been innocent of the said crime.

3.     Death Penalty is an impediment to the reformation of the convicted person according to reformative theory.

4.     Death Penalty denies the sacredness of human life.

Conclusion

God gives the life and He alone can take it. Man has no right to take away the life of any other person even though he is a murderer.  For this I strongly confused against the death penalty as capital punishment. With the death penalty there is the unavoidable fact that some innocent will be executed and that there is no possible way of compensating them for this miscarriage of justice. The death plenty is inhumane and barbaric and can never be accepted in a civilized society. We can never permit taking away one’s life and claim us a civilized one. It is wrong for the state to kill in order to show that it is wrong to kill. Because, the state that commits the same crime. As a capital punishment death sentence is not acceptable for two reasons. One objects of defined punishment over interrupted resulting from law and disorder of law. So from my views death sentence should be abolished as a capital punishment. Life long imprisonment with rigorous is executed as an alternate of death sentence for this objectives we should improve the infrastructure of custody system.

Recommendations

     The recommendations the studies are as follows:

  1. Life is so precious that nobody should ever be killed, even by the state as it is against human rights.
  2. The convicted persons should be given an opportunity to reform themselves according to reformative theory.
  3. The execution of Death Penalty to innocent persons should not be repeated. For this, human rights commission should be aware of this.
  4. Death sentence should be abolished as a capital punishment. Life long rigorous imprisonment should be executed as an alternative of death sentence. For this, we should improve the infrastructure of custody system.
" 92,"

CRM in Banking Industry of Bangladesh A BASIC Bank Study

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“CRM in Banking Industry of Bangladesh A BASIC Bank Study”

Chapter 01

1. Introduction

Let’s close our eyes and think about a government owned commercial bank. We will surely start to think of a very clumsy place filled up with a lot of old people working very slowly and the image will be accompanied with the image of a very dirty place. Actually that’s what we can see when we go to any bank like Sonali Bank in Motijheel or any other government bank in Bangladesh. BASIC is a bank with a lot of differences from this situation. In this report we will try to find out how it differs and what’s in common.

1.1 Origin of the Study

There are many sources of the information used all over this report. Due to the secrecy bond attached with the appointment letter from BASIC Bank Limited it is impossible to define all the sources and also all the experiences too. The following list contains only the sources that can be used without conflicting with the company’s terms and conditions.

1.1.1 Primary Sources:

· Face-to-face conversation with the respective officers and staffs of the branch and head office.

· Face-to-face conversation with clients visited the branch.

· Practical work experience in the different desk of the department of the branch covered.

1.1.2 Secondary Sources:

· Annual report of BASIC Bank Limited.

· Website of the BASIC Bank Limited.

· Desk report of the related department.

· Different circulars sent by head office or BASIC Bank Limited and Bangladesh bank.

1.2 Objectives of the Study:

Every task has its respective goals or objectives without which the work is meaningless. Keeping the following objectives:

· To gain practical exposures in different banking activities

· To get familiar with the working environment in bank.

· Analyzing the performance of the bank through the uniform bank performance report.

· Finding out how the bank is exposed to different kinds of risks.

· To apply theoretical knowledge in the practical field.

· To observe and analyze the performance of the specific branch and the bank as a whole.

· To be acquainted with day to day functioning of service oriented banking business and its marketing

· To study existing banker customer relationship.

1.2.1 Data collection method:

Pertinent data for this report has been collected primarily by direct investigations of different records, papers, documents, operation process and different personnel. The interviews were administered mostly in informal sessions due to the busy schedules of the key personals. They often feel uneasy due to the secrecy policies of the bank in case of answering some questions.

1.2.2 Data sources:

The information and data for this report have been collected from the primary and secondary sources.

1.2.3 Data Collection:

Data was collected from the primary and secondary sources. The data was supplied by many publications forms etc.

1.2.4 Data analysis and interpretation:

Qualitative approach has been adopted for data analysis and interpretation taking the processed data as the base.

1.3 Limitations:

The report has some weak points also that have evolved due to the following causes:

· Secrecy policies of the bank.

· First time working experience in Bank of the report writer.

· Very Busy schedules of the bankers and the clients also.

· Lack of Printed Documents

1.4 Job Schedule:

Joined BASIC Bank Limited, Rajshahi Branch; as an Assistant Manager on the 15th of November and have been working there for all these four months as a credit officer. Due to being a credit officer I have always enjoyed the opportunity to meet the customer base directly and because of them being the primary customer of the bank it was easier for me to find out the real true bond that creates the Banker Customer Relation which works very importantly in the banking world for retaining the old customer.

Job Place BASIC Bank Limited, Rajshahi Branch
Job Designation Assistant Manager, (Credit)
Experience 15th November 2009 ~ up to date

Chapter 02

2. Company Profile

This part of the report will try to explain the current financial condition of the BASIC Bank Limited as well as the corporate values too. It is a very important instrument for any bank because this is used to compare one with others.

2.1 History of the Bank:

The BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited) was established as a banking company under the companies Act 1913 on the 2nd of August, 1988 & it launched its operations on 21st of January, 1989. It is governed by the Banking Companies Act 1913.The Bank was established as the policy makers of the country felt the urgency for a bank in the private sector for financing Small Scale Industries (SSIs). At the outset, the Bank started as a joint venture enterprise of the BCC Foundation with 70 percent shares and the Government of Bangladesh (GOB) with the remaining 30 percent shares. The BCC Foundation being non functional following the closure of the BCCI, the Government of Bangladesh took over 100 percent ownership of BASIC on 4th June 1992. BASIC Bank Limited is unique in its objective. It is a blend of development and commercial banks.

The bank has 30 branches across the country and a wide network of correspondents all over the world. The bank has plans to open more branches in the current fiscal year to expand the network.

Serving people for progress is the motto of BASIC Bank Limited. Whether in personal, corporate, treasury or trade transactions BASIC Bank Limited is committed to provide the best. Meeting the demand of their discerning customers is not their sole objectives. The bank ventures to deliver a quality that makes every transaction a pleasurable experience. The bank has already been in the process of implementing centralized On-line banking system. Customer is the core of everything that the bank does. The services are regularly upgraded and realigned to fulfill customer expectation. Delivery standards are constantly monitored and improved to assure the highest satisfaction.

2.2 2008 at Glance

2008 was one of the worst years for the bank but good for the Rajshahi branch of BASIC Bank Limited. The bank faced a severe drop in profit this year. The Rajshahi branch stood first in case of earning profit between all the branches situated in the North-Bengal. It earned 93 lacs of taka all alone. The following table shows the situation of the total organization:

Amount in Lac
Authorized Capital 2000.00
Paid-Up Capital 1247.40
Total Deposits 31947.48
Total Assets 38773.91
Loans & Advances 2263.65

2.3 Corporate Strategy:

· Steady and sustainable growth through appropriate use of resources.

· Investment in a cautious way.

· Profit maximization.

· Establishing small industries.

2.4 Organizational Goals:

· Develop a realistic deposit mobilization plan.

· Develop appropriate lending risk assessment system.

· Develop capital plan.

· Develop a system to make good advances.

· Develop e a recruitment, compensation, training and orientation plan.

· Develop a plan for offering better customer service.

· Develop appropriate management structure, systems, procedure and approaches.

· Develop scientific MIS to monitor bank’s activities.

2.5 Financial Resources:

2.5.1 Property and Assets:

During the year 2008, total assets of the bank increased by 31 .81 % to Taka 38773.91 million from taka 29417.09 million in 2006. As expected, loans and advances comprised the largest share in the assets portfolio of the Bank constituting 57.41 percent. Balances with other banks and financial institutions and Investment were the second and the third largest constituents being 17.89 percent and 13.67 percent of the assets portfolio respectively. Money at call and short notice came next in size with 3.40 percent of total assets.

2.5.2 Loans and Advances:

Loans and advances consist of industrial loans, micro credit, commercial loans and bills increased by 17.18 percent to Taka 22,263.34 million compared to Taka 19,000.00 million in 2006.

2.5.3 Industrial Loans:

The industrial loan reflected a significant growth of 13.54 percent over the previous year. Total outstanding industrial loans including term and working capital stood at Taka 13,901.40 million at the end of 2008 compared to Taka 12,243.56 million of 2006. Total outstanding term loan stood at Taka 5,055.58 million as on December 31, 2008 compared to Taka 3,897.12 million in 2006 reflecting a growth of 29.72 percent. The outstanding working capital finance extended to industrial units stood at Taka 9,525.98 million at the end of the reporting period compared to Taka 8,346.44 million in 2006. Growth

2.5.4 Micro credit:

BASIC Bank also provides micro credit to the poor for generation of employment and income on a sustainable basis, particularly in urban and suburban areas. At the end of 2008, total amount of Taka 680.13 million remained outstanding as against Taka 359.24 million in 2006. Recovery rate during this period remained at a highly satisfactory level of 100.00 percent.

2.5.5 Commercial Credit:

The Bank also supports development of trade, business and other commercial activities in the country. It covers the full range of services to the exporters and importers extending various facilities such as cash credit, export cash credit, packing credit, short term loans, local and foreign bills purchase facilities. As on December 31 2008, total outstanding commercial loans stood at Taka 7,681.74 million compared to Taka 6,391.21 million in 2006.

2.5.6 Non-performing loan:

Classified (non-performing) loans and advances was 4.25 percent at the end of the year under review which was 3.70 percent in 2006. In absolute term classified loans and advances stood at Taka 723.23 million in 2008 from Taka 703.27 million in 2006. Additional

2.5.7 Export/Import:

The bank achieved substantial growth in both import and export in 2008. The Bank handled total import business of Taka 21,266.53 million and export business of Taka 16,794.96 million in 2008. The import and export business grew by 19.45 percent and 8.61 percent respectively. Major items of exports were ready made knit & woven garments, sweater, jute & jute products, leather and leather goods, handicrafts etc. Items of import included mainly industrial raw materials, garments accessories, capital machinery, raw cotton, electronic consumer goods, chemicals, tyre and tubes, reconditioned vehicles, bicycle spare parts, food items such as rice, wheat, garlic, onion, sugar, chilly and other essential commodities.

2.5.8 Investment and Placements:

Investment at the end of 2008 was for Taka 5,303.39 million, compared to Taka 3,270.87 million in previous year. Investment was concentrated in approved securities such as Government treasury bills, Treasury bond, reverse repo and a few debentures and shares. During the year 2008 treasury bills, Treasury bond including reverse repo had the largest share (98.98%) in the investment portfolio. Debentures, shares in listed and unlisted companies and prize bond altogether constituted 1.02 percent. BASIC’s placement in different Banks in Bangladesh and outside Bangladesh was Taka 6,937.53 million in 2008 compared to Tk 4,191.37 million in 2006.

2.5.9 Fixed assets and other receivables:

At the end of 2008 the fixed assets increased by 26.90 percent to Taka 196.12 million from Taka 154.52 million in 2006 and other assets increased to Taka 579.14 million from Taka 498.75 million in the previous year. Fixed assets included vehicles, equipment and computer, furniture and fixtures and leased assets. On the other hand, other assets included advance income tax, stock of stationery, security deposits, sundry debtors, and suspense account.

2.6 Liabilities & Shareholder’s Equity:

2.6.1 Deposit:

Deposit constitutes the core of BASIC Bank’s fund mobilization. Total deposit of the Bank at the end of 2008 stood at Taka 31,947.98 million (82.40% of Total liabilities) compared to Taka 24,084.65 million (81.87% of Total liabilities) in 2006. The growth of deposit was 32.65 percent. During 2008, the fixed term deposit increased to Taka 27,903.72 million from Taka 20,467.17 million in 2006. Savings bank deposit decreased to Taka 886.30 million in 2008 compared to Taka 1007.79 million in 2006. Deposit in current and other accounts including bills payable increased to Taka 2,867.19 million in 2008 from Taka 2,370.45 million in 2006.

2.6.2 Borrowings:

Borrowings were made from various sources for long term funding specially for financing development-banking activities. The Bank enjoys a credit line facility from KFW, a German development bank for financing micro-credit scheme and small-scale industries. It has also utilized an ADB credit line for financing small industries. Another loan of Tk 325.56 million was also received from ADB for financing Agro business development. Ministry of Finance (GOB) and Bangladesh Bank are the other sources of finance. Total outstanding borrowing against utilization of funds from the above sources in 2008 was Taka 1,385.81 million against Taka 830.06 million in 2006. An amount of Tk 600.00 million was allocated by the GOB and disbursed to BASIC Bank to finance Agro-based industry. BASIC Bank was included in this scheme for its outstanding performance.

2.6.3 Equity:

The bank started its journey with paid-up capital of Tk. 80.00 million in 1989 and the same had increased to Taka 1,247.40 million in 2008. The bank has decided to issue 1 bonus share for every 20 shares and the paid-up capital of the bank would thus be raised to Taka 1,336.77 million if the proposed bonus share is approved. Cash dividend of Tk 62.37 million has also been proposed for the year 2008. With this cash dividend, total cumulative cash dividend of Tk 538.00 million would be paid to the government.

2.6.4 Statutory Reserve:

As per section 24 of the Bank Company Act­1991, 20% of profit before tax needs to be transferred to statutory reserve until the total Statutory Reserve becomes equal to Paid-up Capital. Accordingly, the statutory reserve of the bank will stand at Taka 1045.08 million after transfer of an amount of Taka 161.62 million from the profit of 2008. Shareholders’ equity of the Bank would increase by Taka 357.59 million to Taka 2,596.58 million in 2008 from Taka 2,238.99 million in 2006 registering a sustainable growth rate of 15.97 percent.

2.7 Operating Results:

2.7.1 Income:

The Bank’s total income was 23.66 percent higher than that of previous year. Interest income from loans and advances increased by 25.81 percent while other operating income increased by 38.18 percent over 2006. Commission income was higher by 34.85 percent.

2.7.2 Expenses:

The total expenditure was 47.52 percent higher than that of 2006 due to increase of interest expenses as a consequence of increase of deposit substantially. Salary and allowances to employees increased by13.57percent mainly due to annual increment, dearness allowance, promotion of existing employees and fresh recruitment. General and administrative expenses (excluding salary and allowances) increased by 14.72 percent. Hiring of additional space for Head Office mainly contributed to this increase.

2.7.3 Contribution to Government Exchequer:

From the very inception, BASIC Bank has been posting profit and paying income tax to the Government. The cumulative figure of contribution to the Government exchequer by way of corporate tax up to December 31, 2008 amounted to Taka 2,790.98 million, which is almost 35 times the amount of original paid-up capital of the Bank.

2.8 Other Activities:

2.8.1 Human resources:

BASIC Bank has a well-diversified pool of human resource, which is composed of personnel with high academic background. Also, there is a positive demographic characteristic. Most employees are comparatively young in age yet mature in experience. As at end of 2008 the total employee strength was 820.

The Bank follows a strict recruitment policy in order to ensure that only the best people are recruited. The Bank, so far, has recruited five batches of entry-level management staff, all of whom have got excellent academic background.

Intensive training program, on a regular basis, is being imparted to employees of both management and non-management levels to meet the challenges in the banking industry and to help employees to adapt the changes and new working conditions. Human resource is the main driving force and quality human resources are the key sources for the success of today’s banking business. Keeping this view in mind and recognizing the importance of training for professional excellence BASIC Bank Ltd. established its own training cell in 2005 with modern facilities. In 2008 the cell arranged 22 training courses and provided training to as many as 360 employees of the bank. The bank also sends its employees to BIBM and other local and foreign institutions with a view to sharpening their knowledge base. During the year 2008 a total of 379 employees of the Bank were provided with training in various fields. Out of them 16 employees participated in training courses held abroad.

In 2008 total 122 employees of various stages were given promotion which is almost 17.00 percent of total employees of the bank.

2.8.2 Automation:

The Bank has been providing off-line computerized banking service to all its customers since its inception. To accelerate the speedy and accurate account ledger maintained and to make available all potential international banking products, the bank has already been in the process of implementing centralized On-line Banking system. It is expected that within the end of 2008 the bank will be able to serve its customers through the new system including ATM and Internet banking facilities.

2.8.3 Branch Network:

A great deal of investment for developing the physical resource base of the Bank has been made. BASIC Bank has its presence in all the major industrial and commercial centers of Bangladesh in order to cater to the need of industry and trade. At the end of 2009, there were thirty two conveniently located branches throughout Bangladesh­; eleven branches in the capital city of Dhaka, seven in Chittagong and one each in Narayanganj, Narsingdi, Rahshahi, Saidpur, Bogra, Khulna, Jessore, Sylhet, Moulvibazar, Comilla, Barisal and Sirajganj. Besides these, the bank has three bill collection booths at Ramna, Sher-e-Bangla Nagar and Gulshan exchange Office of BTTB, Dhaka. A Foreign Exchange booth was opened at Osmani Int’l Airport, Sylhet in April ’05 for mobilizing foreign exchange. This is one of the areas where BASIC Bank is relatively lagging behind. The Bank has already signed an agreement with Placid NK Corporation, USA and MoneyGram International, Minneapolis, USA for obtaining foreign currency remittances. The bank is expected to sign agreement with Tele Money transfer, London, UK and some similar agreement with companies located in Saudi Arabia and UAE are going to be finalized shortly.

2.9 Functional division of BASIC Bank Limited:

The bank has 30 branches, 6 Zones spread throughout the country. At the head office level there are 12 divisions most of which have more than one functional department which are headed by DGM and Training institute by a director with the rank of CGM. The divisions are as follows:

· Human Resources Division

· Establishment & Common Service Division.

· Secretary’s Division (Aboard Division).

· Commercial Credit Division

. Industrial Credit Division

· Trade Finance Division

· Balance sheet & Back Office Division

· Audits an inspection division.

· R&D Division

· Computer system and procedures division. And

· Law division.

These are the different division of BASIC bank that are serving their services to the bank as well as to the country with great efforts according to their respective fields.

3. Basic Bank Rajshahi Branch:

It was the working place of mine for all these months from where I learned a lot about the banking functions. While preparing this report feel it’s necessary to tell a few words about it. There are almost 20 people working in this branch heart and soul to earn for the organization and to provide best possible services. There are two different departments in the branch. It is their cumulative hard work that makes it one of the biggest money spinners for BASIC Bank Limited in the North Bengal Zone. The very interior design even shows that how much control is there in the branch. The boss can go through surveillance from his very table on every employee either directly or through CC TV.

The departments that work in the branch are General banking & Loans & Advance Section. The general banking performs the very common task of creating; collecting; circulating; control the liquid money of the Bank. It also helps with Pay Orders and various sorts of Drafts too.

The Loans & Advance Department performs the function related to loan disbursement and collection of loans. It also issues Bank Guaranties. In the changing banking world it is becoming harder everyday to work in this section by following all the rules stated by Bangladesh Bank.

3.1

D.G.M

Branch In-Charge
A.M

Branch Operation, 2nd Officer & In-Charge General Banking
A.M

In-Charge

Loans & Advances and Foreign Exchange
A.M

Loans & Advances
A.M

Loans & Advances
A.M

General Banking
Assistant Officer

Cash
Officer

Cash
Officer

Cash
Assistant Officer

Cash
Armed Guard
Guard-Cum-Messenger
Guard-Cum-Messenger
Armed Guard
Driver
D.G.M – 1 GCM -2

A.M. -5

Officer -2

A.O -2

Armed Guard-2

Organizational Chart:

3.2 List of Employee of Rajshahi Branch as on 31-01-2010:

Sl. No Name Designation Education qualification
01 A.K.M. Masudur Rahman Deputy General Manager B.A. (Hons), Economics, M.A, Economics
02 Md. Shamsuzzaman Assistant Manager M.A
03 A.T.G.M. Golam Faruque Assistant Manager MBA
04 Dinu Pramanik Assistant Manager MBA (Acc), BBA (Hon’s)
05 Md. Manirul Islam Assistant Manager MA
06 Md. Musarrat Hossain Assistant Manager BBA, DU
07 Md. Syed Ahmed Officer (Cash) M.A
08 Md. Moshiur Rahman Officer (Cash) B.A (Hons), M.A
09 Ms. Sanjeda Tamanna Assistant Officer (Cash) MSS, MBA

3.3 Comparative Position of Deposit, Advance, Foreign Trade & Profit from 2007-2009:

(Amount in lac)

Name of item 2008 2009 2010

[up to 31-01-2010]
Target Achievement Target Achievement Target Achievement
Amt. % Amt. % Amt. %
Deposit 4600.00 4675.70 101.65% 5000.00 5442.41 108.85% 5600.00 5506.37 98.32%
Advance 4200.00 3370.26 80.24% 4500.00 4008.99 89.09% 4700.00 4167.92 88.68%
Foreign Trade (Import) 300.00 56.49 18.83% 200.00 69.79 34.90% 200.00 — 00%
Profit 80.00 47.37 59.21% 100.00 91.57 91.57% — 5.51 —

3.4 List of Top 10(ten) Industrial Projects with their limits:

Sl. No Name of the project Proprietor/ Authorized person Limit details
01 M/S. Natore Jute Mills Mr. Shyam Sunder Agarwala (B.Com) CC(H) Limit- Tk.150.00 lac

TL Limit – Tk.150.00 lac

TL Limit – Tk.130.00 lac

STL Limit- Tk.100.00 lac

BG Limit- Tk.27.50 lac
02 M/S. Uttoran Offset PS Plate Industries Ltd. Mr. S.M. Ayub, M.D

Most. Shamsun Nahar,Director

Sadia Afroza, Director

S.M. Ahsan Habib, Director.

 CC(H) Limit- Tk.65.00 lac

TL Limit – Tk.335.00 lac

PAD- Tk.5.00 lac
03 M/S. Xylia Medicare Dr. Md. Rabiul Islam Khan [MBBS, DTM&H, M.Sc. (Paed.)] CC(H) Limit- Tk.14.00 lac

TL Limit – Tk.80.00 lac

TL Limit – Tk.30.00 lac

TL (HBL)- Tk.70.00 lac
04 M/S. Rajshahi Silk Fashion Mr. Md. Abdul Kader Munna CC(H) Limit- Tk.15.00 lac

Adhoc CC(H)- Tk.5.00 lac
05 M/S. M.N.I & Co. Mr. Md. Nazrul Islam CC(H) Limit- Tk.25.00 lac

STL Limit- Tk.15.00 lac

SOD (M) Limit- Tk.24.00 lac
06 M/S. Khan Rice Mills Mr. Md. Mozemmal Haque Khan CC(H) Limit- Tk.20.00 lac

STL Limit- Tk.5.00 lac
07 M/S. Mukta Farms Mr. Md. Obaidul Muktadir CC(H) Limit- Tk.40.00 lac

STL Limit- Tk.10.00 lac
08 The Bengal Board Mills Mr. Md. Mosfiqur Rahman CC(H) Limit- Tk.7.00 lac

STL Limit- Tk.20.00 lac
09 Laser Diagnostic Center Mr. Md. Rashed Hossain TL Limit – Tk.10.00 lac

TL Limit – Tk.15.00 lac

TL Limit- Tk.150.00 lac
10 M/S. Alimuddin & Co. Md. Alimuddin SOD Limit- Tk.25.00 lac

TL (HBL)- Tk.20.00 lac

3.5 List of Top 10(ten) Trading concern with their limits:

Sl. No Name of the project Proprietor/ Authorized person Limit details
01 M/s. Usha Construction Mr. Munzur Faruk Choudhury, B.SC.(Ag) in Agri. Engg i. BG (Bid Bond)- Tk.250.00 lac

ii. BG (PG)- Tk.300.00 lac

iii. STL – Tk.300.00 lac

iv. SOD Tk.100.00 lac
02 M/s. J.K. Enterprise Mr. Md. Shamsur Rahman i. BG- Tk.200.00 lac

ii. STL – Tk.300.00 lac

iii. SOD- Tk.20.00 lac
03 Md. Anisur Rahman Md. Anisur Rahman i. SOD- Tk.40.00 lac

ii. TL(HBL)- Tk.100.00 lac
04 M/S. Biscuit Biponi Mr. Md. Ali Ashraf i. SOD- Tk.15.00 lac

ii. CC(H)- Tk.15.00 lac
05 M/s. Rajshahi Stationery Md. Moniruzzman Lucky i. CC(H)- Tk.40.00 lac
06 M/s. Safa General Store Mr. Md. Saidur Rahman i. CC(H)- Tk.30.00 lac
07 M/S. Kamaluddin Khan & Sons Mr. Md. Akram Khan i. CC(H)- Tk.25.00 lac
08 M/s. Belal Hardware Mr. Md. Belal i. CC(H)- Tk.75.00 lac
09 M/s. New Modern Furniture. Mr. Md. Robiul Alam i. CC(H)- Tk.30.00 lac
10 M/s. Mukta Hardware Mr. Md. Obaidul Wazid i. CC(H)- Tk.30.00 lac

ii. TL (HBL)- Tk.20.00 lac

4. CRM in BASIC Bank Limited:

Traditionally, few people changed their banks unless serious problems occurred. In the past there was, to certain extent, a committed, often inherited relationship between a customer and his/her bank. The philosophy, culture and organization of financial institutions were grounded in this assumption and reflected in their marketing policies, which were produced and transaction-oriented, reactionary, focused on discrete rather than continuous activities.

Today, financial institutions can no longer rely on these committed relationships or established marketing techniques to attract and retain customers. As markets break down into heterogeneous segments, a more precisely targeted marketing technique is required, which creates a dialogue with smaller groups of customers and identifies individual needs.

Also, before the Internet revolution, consumers largely selected their banks based on how convenient the location of bank’s branches was to their homes or offices. With the advent of new technologies in the business of bank, such as Internet banking and ATMs, now customers can freely chose any bank for their transactions. Thus, the customer base of banks has increased, and so has the choices of customers for selecting the banks. This situation coupled with the pressures of competitive and dynamic markets has contributed to the growth of CRM in the Financial Services Sector.

4.1 Customer Relationship Management: The Concept

Customer Relationship Management is the establishment, development, maintenance and optimization of long-term mutually valuable relationships between consumers and the organizations. Successful customer relationship management focuses on understanding the needs and desires of the customers and is achieved by placing these needs at the heart of the business by integrating them with the organization’s strategy, people, technology and business processes.

At the heart of a perfect CRM strategy is the creation of mutual value for all the parties involved in the business process. It is about creating a sustainable competitive advantage by being the best at understanding, communicating, delivering and developing existing customer relationships in addition to creating and keeping new customers. So the concept of product life cycle is giving way to the concept of customer life cycle focusing on the development of products and services that anticipate the future need of the existing customers and creating additional services that extend existing customer relationships beyond transactions.

4.1.1 Need of CRM in the Banking Industry:

A relationship-based marketing approach has the following benefits:

Over time, retail bank customers tend to increase their holding of the other products from across the range of financial products / services available. Long-term customers are more likely to become a referral source.

The longer a relationship continues, the better a bank can understand the customer and his/her needs & preferences and so greater the opportunity to tailor products & services and cross-sell the product / service range.

Customers in long-term relationships are more comfortable with the service, the organization, methods and procedures. This helps reduce operating costs and costs arising out of customer error.

With the increasing number of banks, products and services and practically null switching costs, customers are easily switching banks whenever they find better services and products. Banks are finding it tough to get new customers, and more importantly, retain existing customers.

According to a research by Reichheld and Sasser in the Harvard Business Review, 5% increase in customer retention can increase profitability by 35% in banking business, 50% in insurance and brokerage, and 125% in the consumer credit card market. Therefore, banks are now stressing on retaining customers and increasing market share.

4.1.2 Private Banking and CRM:

Private Banks have traditionally viewed themselves as exceedingly ‘Customer Centric’ offering what they believe to be highly personalized services to the High Net Worth Customers. However, changes in the customer behavior and accumulation of wealth are resulting in the needs of HNW customers becoming more diverse and complex in terms of the sorts of products they want, the channels through which they want to access them and the associated range of advice. The wealthier the customers, the more demanding they are and the clients expect more and more from their banks. Competition for “Supremely elite” is increasing

4.1.3 Customer Experiences:

HNW Customers:
Advise & Expertise:

Give me independent advice specific to my needs.
Performances:

Provide me with best possible return on my assets.
High Quality Services:

Provide Consistent error free high quality services.
Personal Relationship:

Provide me with a single adviser to manage my affairs.

The first step towards successfully winning, retaining and growing the profitability of private banking customers is to understand what their wants and needs are, so that the organization can be built around serving those needs. Only when an organization has done this and incorporated this into its strategy can it start to design its value proposition and a customer experience that will enable it to achieve a differentiated competitive position in the private banking market and more importantly, do so in an economically viable way.

There is a basic ‘generic’ customer experience that many private banking customers are seeking. To be a credible player in the market, a private bank must be able to deliver this ‘base’ experience. This represents a common set of needs that are shared by most HNW customers. Therefore, the private bank must have the capabilities required to meet these needs for the majority of its customer base.

All customers, regardless of wealth levels, have similar emotional needs, which drive their need for advice and their purchase of products. Different wealth levels impose different priorities on meeting these needs and open up new avenues for doing so.

Figure 1

The Basic HNW Customer Experience: Rohit Perera & Tamsin Brew- CRM in F.S

Take a simple example, HNW customers can afford on it to fund their retirement, so their priorities may be associated with growing wealth, rather than preserving it, allowing them to choose a product option with a higher risk/reward ratio.

If this is true, it means all HNW customers start with a basic, common set of what they want and need from a bank, which might include:

· Personal, long-term relationship

· Advice combining industry expertise and knowledge of personal circumstances

· High quality, consistent quality

· Security, privacy, confidentiality

At this basic level, grouping together these core wants and needs produces a set of generic characteristics that an HNW individual seeks from an organization before he or she will even consider placing any of his or her wealth with it.

Underlying these generic characteristics is a set of capabilities covering organization, process and technology, which the private bank must process to operate in the high net worth market.

4.1.4 The Segment-Specific Experience:

HNW Customers:
Advise & Expertise:

Give me independent advice specific to my needs.
Performances:

Provide me with best possible return on my assets.
High Quality Services:

Provide Consistent error free high quality services.
Personal Relationship:

Provide me with a single adviser to manage my affairs.
Flexibility:

Cope with me.
Discretion:

Treat my affairs with utmost discretion.

To build this ‘base’ experience, private banks also need to consider the segment-specific needs of their target customers. This in itself requires a capability to identify and justify target customers and understand their needs beyond banking, to ensure that their emotional needs are met. It is here that the customer is made to feel like an individual, but it is also at this point that costs and infrastructure spiral, as customers’ need start to diverge.

The segmentation process identifies groups of customers with similar wants and needs, who are seeking a similar experience from the provider. Importantly, from the organizations’ viewpoint, this means that they can also be served by similar sets of capabilities.

The channel preferences of each segment and associated channel experience – for example, a self-directed group of customers will use internet for transacting, information gathering and even for some advice, whereas advice seekers and less financially sophisticated segments require more access to an adviser / relationship manager and a more basic experience over the Internet.

The product and service preferences of that segment – for example, the more sophisticated customers are most likely to demand more complex products such as alternative investments, whilst others may prefer discretionary portfolio management.

The new components are added to the experience and the ‘base’ experiences elements become defined in more depth, according to the specific needs of the customer segment.

Once the segment experiences have been defined, the associated capabilities must again be identified. The hierarchical approach to defining customer experiences helps filter these capabilities as: –

· It is possible to identify experienced elements that are common to more than one segment – this will carry a higher priority for development as they will benefit more customers;

· The segmentation exercise will provide comparative sizing for the target segments.

· Capabilities required for the larger, more profitable segments take precedence over those needed for smaller segments.

4.1.5 The Organization-Specific Experience:

Having identified the base and segment specific elements of HNW customer experience, the final step is to identify how the experience that each organization offers its customers is distinct from other banks. Now this would mean that one has to distinctly identify the components of the experience that are not only associated with a particular bank but also be the key differentiator.

This process will define: –

· Elements of the organization style and culture.

· Products and Services to be provided.

In the same way, every brand is different, so is the experience.

their finances can be a complex matter. The challenges faced by banks and their customers are many but the trick lies in de-mystifying complex financial relationships.

HNW Customers:
Advise & Expertise:

Give me independent advice specific to my needs.
Performances:

Provide me with best possible return on my assets.
High Quality Services:

Provide Consistent error free high quality services
Personal Relationship:

Provide me with a single adviser to manage my affairs.
Flexibility:

Cope with me.
Discretion:

Treat my affairs with utmost discretion.
Brand:

Modern innovative image that suits my image.
Global:

Global accessibility.

Technical solutions deployed by banks today are flexible, user-friendly and meant to facilitate specific workflow and requirements in implementation processes. In order to simplify lives, banks have begun to implement end-to-end technologies through all departments with the intention of removing human error from processes. Previously existing manual environments could not have been adequate for future visions, growth plans and strategies.

In this day and age, customers enjoy complete luxury in terms of customized technical solutions and banks use the same to cement long-term, mutually-beneficial relationships.

4.2 CRM in Practice in BASIC Bank Limited:

In Bangladesh banking is not yet a very developed industry and that has happened due to various strict rules and regulation set by the central authority of banks, the central bank. Due to the weak infrastructural condition and economic vulnerability the central bank often has to play a very protective role and has to play it safe.

In my short experience in BASIC, I have found a very interesting thing and that is huge use of CRM tools. Although this methods are not formally used as CRM tools but the goal they pursue are similar to those of the CRM goals, building and maintaining profitable relationships. The CRM practice is mainly in customer experience level as the dealing customers are not of a very qualified level. Some of the tools used in bank’s CRM are as follows

4.2.1 Advice & Expertise:

A banker’s job is not only to develop his or her bank’s asset base or profit but to ensure sustainable development of all the parties he or she is going to serve. This is a huge dilemma for any banker that which one he should choose between the clients benefit or the bank’s one.

Bankers of BASIC Bank Limited have always given importance on ensuring their clients’ maximum benefit until it harms the rules and regulations of the bank. The organization believes that if a client is served with a good advice then sooner or later the thing is going to pay back and will create a long term relationship with the bank.

4.2.1.1 Advices:

The clients often expect good and logical advises from the bankers as they believe that the bankers know better than them about which of the loan scheme is going to give him maximum benefit or which one is going to ensure them maximum return on their asset in case of depositing.

There are several aspects where a client can be advised on:

1. Selection of appropriate loan packages:

There are various types of loans available in the bank which serves different purpose. It is often hard for the clients to find out which one is the best one for them. In such a case it very important for the banker to help the client to find out the most profitable loan package for him. Such as a client needs a certain amount for 4 months, in this circumstances the clients can achieve the fund by taking a CC(H) loan for one year on the other hand the banker can advice him to go for a STL limit for the short period of time which will save him money and will also save hassle.

2. Selection of appropriate investment packages:

There are a lot of people who have enough idle money but can’t invest due to their other problems, in this situation bank borrow that idle money from them and then lend them to others. The principle of banking is to transfer money from the surplus unit to deficit unit. An investor can invest in different ways; a banker helps him to select the most profitable investment opportunity available for him in the bank.

3. Selection of appropriate loan repayment method:

After disbursal of loan, it needs to be repaid. Generally the clients select the loan repayment method. A loan can be repaid through monthly installments or just through daily transactions. Even in some cases the loan can be repaid just by completing a work order and receiving a bill against it. The bankers will advice to select the best possible loan repayment method that suits the customers’ business type and loan size.

4. Tax redemption:

There are several ways to get tax redemption in the national Tax rule and the bankers help the client to take necessary action to ensure lesser tax.

5. Cost cutting:

There are several cost attached to the loan disbursal process which can often be reduced just because of the bankers good will. Ensuring the availability of all the services at a cheaper rate will easily cut the cost of the loan and thus the EIR and will ensure delighted customers.

4.2.1.2 Expertise:

A banker can lend his expertise in the following sections:

1. Preparing financial statements

2. Preparing stock reports

3. Preparing valuation reports

4. Planning financial plans

5. Preparing financial projections

6. Preparing L/C applications and other applications

4.2.2 Personal Relationship:

Personal relationship is very important for any banker-customer relationship. There is always a sense of belonging in the clients mind because of the long term association with the bank.

In the banks it is always tried that the customers always face the same officer as it makes the process of relationship building easier. There are benefits of this sort of personal relationship because this saves both time and effort of both the parties. The person who deals with the same client comes to know nooks and corners of the clients taken benefits and his business criteria also. It becomes much easier for him to get hold of the problem that the client might face.

Client
Banker
Faster Service
Better Service
Error Free Service
Long term bonding

On the other hand, the client feels comfortable about the person who is dealing with all the problems as he knows that the person sitting in front of him knows a detail view of all his loans, advances or deposits.

The interpersonal bond helps the parties to discuss matters more freely and to reach a solution instead of just getting into a dead block which can become very fatal for both of them.

4.2.3 Performance:

There is no alternative of high quality performance in bank as the organization is a strictly service based organization. This specific CRM tool is useful in case of the deposit making customers. They always demand a very high quality performance in investing their hard earned money. The customers expect performance in the following sectors.

1. Safe fund management

2. Profitable investment

3. Investment in sustainable development sectors

Customer’s Assets
High Performance Banking
Higher return
Higher Satisfaction

The bank just can’t collect deposit from the depositors but it also must ensure that the bank is going to invest the hard earned depositor’s money in sectors where it will earn most achievable value.

4.2.4 Quality Service:

" 93,"

CURRENT BANKING SCENARIO OF ESTERN BANK LIMITED (EBL) IN BANGLADESH

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CHAPTER-1

1.1
INTRODUCTION

From the beginning of the year 2004,
the entire banking industry in Bangladesh started facing stiff competition to
procure business, under the changed circumstances of the policy of Bangladesh
bank to lower the rates of interest in lending and to go for syndication
against large loan portfolios with the objective to ensure better operation and
control of all functions of the bank.

Despite such situation the year was a
remarkable one for Eastern Bank Limited (EBL) when the bank finally completed
the introduction of a state-of-the art IT technology platform of Flexcube, a
world class banking software. All of bank’s 22 branches were connected to this
IT platform giving an enviable opportunity to all the EBL customers to obtain
the most coveted services that no other bank could offer them yet.

Keeping in mind such changed
circumstances the bank concentrated not only on wholesale banking but also on
other alternatives. For example, introducing new products; diversifying Bank’s
activities in consumer and retail banking; simultaneously securing low cost
deposits to sustain profitability, increase shareholders’ wealth; rationalizing
the expenses and optimizing fruitful use of the funds. The cost to operating
income ratio of the bank in 2004 was at the lowest bracket compared with other
banks.

1.2. FORMATION

In pursuance of the “Bank of Credit
and Commerce International (Overseas) Limited in Bangladesh (Reconstruction)
Scheme, 1992”, framed by the Bangladesh Bank and approved by the Government of
Bangladesh, the Eastern Bank Limited was formed as a public limited company
incorporated in Bangladesh with primary objective to carry on all kinds of
banking business in and outside the country. Eastern Bank Limited had also
taken over the business, assets and liabilities of erstwhile Bank of Credit and
Commerce International (Overseas) Limited branches in Bangladesh with effect
from 16th August, 1992.

1.3 VISION OF EBL

‘To become the bank of choice by
transforming the way we do business and developing a truly unique financial
institution that delivers superior growth and financial performance and be the
most recognizable brand in the financial services in Bangladesh.’

EBL dreams to become the bank of
choice of the general public including both the consumer and the corporate
clients. It has adopted a new logo that looks very dynamic in its attractive
colors that reflect all the changes that are taking place in EBL.

1.4 MISSION OF EBL

CHAPTER-2

PERFORMANCE OF EBL IN RECENT YEARS

2.1. PERFORMANCE OF EBL IN RECENT
YEARS

Eastern bank limited began its
stressful journey in 1992 and shaped itself to this position as a healthy
financial institution and enjoy today commendable reputation in all circles in
the country as well as abroad due to transparency in all layers of its
transactions following the rules of business set by the Finance Ministry and
Bangladesh Bank without any lapse. It has thus culminated a spirit of honest
teamwork amongst the management and staff to produce strong balance sheets,
quality portfolios, maintain high capital adequacy, paid up capital and
reserves.

Eastern Bank Limited today has a
strongly motivated and dedicated management and staffs that are the pathfinders
for introduction of sophisticated products. It has introduce the Automated
Teller Machine (ATM), Point of Sales, Internet Banking, Phone Banking, Debit
Card, etc. and also new products. Already it has introduced 3 ATM Machines in 3
of its branches. Debit Card has also been launched. Clients can also do their
business transactions through Internet Banking. For example, they can pay their
utility bills through Internet Banking. 
These positive things shall broaden its customer base and enable the
bank to have a competitive edge on other banks.

2.1.1 REVIEW OF BANK’S OPERATION

As on 31st December 2004 total assets
(including contingencies) went up to Taka 23,043 million from Taka 18,445
million of 2002. During the same period operating profit has increased to Taka
892.4 million from Taka 730.7 million of 2002.

2.1.2 SHAREHOLDERS’ EQUITY

Eastern Bank Limited, as one of the
largest capital based banks in Bangladesh with an Authorized Capital of Taka
1,000 million, maintained a strong capital position in the year 2004. At the
end of the year under review, the total shareholders’ equity of the bank was
Taka 2,630 million. Detail breakdown of changes in shareholders’ equity are
given below:

(Taka
in Million)

Particulars

2004

2003

2002

Paid
up Capital

Reserve
Fund & Other Reserves

Retained Earnings

Less:
Pre-takeover loss of BCCI

828

2733

358

(1298)

828

2,560

230

(1,298)

720

2,448

252

(1,309)

Total
Equity

2630

2,320

2,111

Bank’s Capital Adequacy Ratio (CAR)
on the basis of Risk Weighted Assets (RWA as per Bangladesh Bank guidelines),
both in terms of Tier-I & Tier-II was 14.82% as on December 31, 2004 as compared
to 18.27% in the year 2003. Compared to the minimum requirement of CAR 9%, the
Bank had sufficient surplus capital for growth and development.

Figure: Shareholders’ Equity (Taka in
Million)

Figure:
Paid-up Capital Structure


Figure:
Capital Adequacy Ratio

2.1.3
DEPOSITS

The bank, a policy, discouraged
high-cost term deposits and focused on reducing cost of funds by increasing
low-cost deposits. Rates of interest were revised from time to time in response
to internal as well as external market conditions. Even under these extreme
situations deposit base has increased to TK 15,649 million (2004) from TK
11,952 (2003). 

Figure:
Growth of Deposits

2.1.4 ASSETS

Total assets of the bank stood at
taka 23,048 million as on December 31, 2004 as against taka 18, 445 million as
on December 31, 2002.

Figure:
Growth of Assets

Total loans and advances of the bank
stood at TK 14,973 million indicating an increase of 32.64% as against TK
11,288 million of preceding year. The advance to deposit ratio as on December
31, 2004 was 95.68%.

Figure:
Growth of Loans & Advances

2.1.6 INCOME, EXPENSES,AND PROFIT

Figure:
Income, Expenses & Profit

Figure:
Return on Equity

Figure:
Cost to Income Ratio

2.1.7 DIVIDEND

The Board of Directors recommended
payment of Taka 43 as cash dividend for the year ended December 31, 2004 for
each ordinary share of Taka 100 on total paid-up capital of 828 million as
compared to 20% cash dividend per share of 2003, showing a growth of 115%.

2.2. CORPORATE GOVERNANCE &
REGULATORY COMPLIANCE

Eastern Bank Limited practiced the
principles of good corporate governance over the years that covered compliance
of regulatory requirements, responsive to various stakeholders. Spirit of
corporate governance also included practicing of the corporate culture within
the organization and shared this by the employees.

Eastern Bank Limited complied with
all the regulatory guidelines prescribed by the Banking Companies Act,
Bangladesh Bank, National Board of Revenue and Securities & Exchange
Commission, International Accounting Standards, etc.

Table: EBL at a Glance: (2000- 2004) (figures in
millions)

Particulars

2000

2001

2002

2003

2004

Authorized
Capital

Paid-up
Capital

Reserve

Deposit
& Other Accounts

Loans
& Advances

Export

Import

1,000

600

2,260

12,375

8,141

7,281

12,533

1,000

720

2,322

13,277

9,946

5,402

11,415

1,000

720

2,448

13,661

10,891

4,358

12,642

1,000

828

2,560

11,952

11,288

3,533

16,256

1000

828

2,733

15,649

14,973

8,303

24,414

Table:
EBL at a Glance: (2000- 2004) (figures
in million)

(Continued…)

Particulars

2000

2001

2002

2003

2004

Book
Value per share (Taka)

Market
values per share (Taka)

Earning
per share (Taka)

Dividend
per share (Taka)

Return
on Equity (Average)

Return
on Assets (Average)

Classified
loan as a % of total Loans

Capital
Adequacy Ratio

Cost:
Income Ratio

Net
Interest Margin

Number
of Branches

Number
of Employees

266.07

186.00

40.91

30.00

15.38%

1.57%

8.21%

24.17%

28.74%

3.44%

21

652

265.02

291.00

44.86

30.00

16.93%

1.84%

11.52%

22.49%

29.30%

3.46%

22

492

295.29

303.00

51.49

35.00

17.44%

2.04%

13.46%

22.32%

27.91%

3.44%

22

484

281.87

382.00

43.21

20.00

15.33%

1.94%

13.61%

18.27%

28.17%

2.43%

22

495

317.73

780.00

58.38

43.00

18.44%

2.32%

7.19%

14.82%

30.93%

3.26%

22

522

CHAPTER-3

CREDIT
SANCTION PROCEDURE OF EBL

3.1
CREDIT SANCTION PROCEDURE OF EBL

Credit Risk Management is one of the
most crucial components of the dynamics of bank management as credit lending is
the principal activity for the commercial banks. In this segment of the report
Credit Risk management practice of Eastern Bank Limited will be thoroughly
discussed and then it will be compared and contrasted with Prudential
Guidelines of Bangladesh Bank. Then two of the key credit management practices:
Handling of Non-performing loans and procedures for loan classification will be
discussed simultaneously. 

3.2 CREDIT RISK

Risk is inherent in all aspects of a
commercial operation; however for banks and financial institutions, credit risk
is an essential factor that needs to be managed. Credit risk is the possibility
that a borrower or counter party will fail to meet its obligations in
accordance with agreed terms. Credit risk, therefore, arises from the bank’s
dealings with or lending to corporate, individuals and other banks or financial
institutions.

Eastern Bank Limited has categorized
its credit risks into four broad categories for its risk management purpose.
Each class of risk has their unique management technique. Following are the
four broad categories of risks defined internally by the bank:

Class- A

Class- B

Class- C

Class- D

3.2.1 CLASS – A:

Credit
facilities extended to clients which are secured by:

§  100% cash covered by having the funds
available in EBL’s cash margin account

§  100% EBL Fixed Deposits fully liened
& pledged in favour of the Bank

§  100% in the form of Govt. Sanchya
Patra fully liened & pledged in favour of the Bank

§  110% cash covered if credit
facilities are in different currency than that of collateral

3.2.2 CLASS – B:

Credit
facilities extended to clients which are secured by:

§  Hypothecation of business assets like
Inventory, book debts & assets, Plant & Machinery

§  Mortgage of fixed assets like Factory
Land & Building and other real assets

§  Partially cash covered or other
collateral

§  Guarantee from acceptable Financial
Institution or Lien on fixed deposits issued by them

§  Personal or Corporate Guarantees

§  Government Guarantee through Ministry
of Finance

3.2.3 CLASS – C:

Credit facilities extended to cover
or to hedge foreign currency risk against Letters of Credit are called exchange
fluctuation risk. The product, which EBL sells to its customers, is called
Forward Contract (FWD FX) and can be further explained as follows:

§  Exchange Fluctuation Risk

§  Forward Contract against Letters of
Credit

§  Hedge FX risk of EBL/Other Bank
Letters of Credit

§  Risk for Max. 180/360 days

3.2.4
CLASS – D:

This class of risk is concerned only
with risks taken on a banking financial institution and can be further
explained as follows:

§  Risk on banking financial
institutions (FI) including Bangladesh Bank

§  Call/STD/Time placement with banking
financial institutions

§  Term Exposure on banking Financial
Institutions

§  Financing against banking Financial
Institution’s acceptances

§  Negotiation of Export documents
against valid export lcees

§  Purchase of Pay Order/Demand Draft
drawn by a banking financial institutions

§  Nostro Account with other banking
Financial Institutions

§  Purchase of Treasury Bills from
Bangladesh Bank

3.3 CREDIT RISK MANAGEMENT PRACTICE

Credit lending is the principal
activity for a commercial bank. In this competitive business market it has
become very crucial for a bank to make prudential decisions while disbursing
any loan; be it in corporate sector, in SME sector or be it consumer financing.
While a bank cannot make a loan decision whimsically it also has to measure the
cost and price against disbursement of a loan. Thus credit risk management
needs to be a robust process that should enable banks to proactively manage
loan portfolio in order to minimize losses and earn an acceptable level of
return for shareholders. In this background it is very essential that a bank
maintains a credit Risk Management department and that is the case for Eastern
Bank Limited, which has a full fledged Credit Risk Management (CRM) unit
exclusively to focus on the Corporate and SME loans of the overall portfolio.

3.4 CREDIT RISK MANAGEMENT DEPARTMENT

The credit risk management department
is placed suitably in the organizational dynamics so that maximum output can be
generated from it. All corporate and SME proposals of the bank are approved
through this particular department of the bank. The activities of the
department include:

·
Oversight
of the bank’s credit policies, procedures and controls relating to all credit
risks arising from corporate/commercial/institutional banking, personal
banking, & treasury operations.

·
Oversight
of the bank’s asset quality.

·
Directly
manage all Substandard, Doubtful & Bad and Loss accounts to maximize
recovery and ensure that appropriate and timely loan loss provisions have been
made.

·
To
approve (or decline), within delegated authority, Credit Applications
recommended by RM.  Where aggregates
borrower exposure is in excess of approval limits, to provide recommendation to
MD/CEO for approval.

·
To
provide advice/assistance regarding all credit matters to line management/RMs.

·
To
ensure that lending executives have adequate experience and/or training in
order to carry out job duties effectively.


The department is well equipped to
handle all sorts of challenges of the business dynamics. Well equipped in the
sense of having sufficient manpower, and brilliant technical facilities, the
department has made its own distinctive place in the organization itself. The 7
member team is headed by its qualified team leader. The following sections will
describe the standard operating procedures of the department for SME sectors.

The departmental structure of CRM is
presented below:


Figure:
CRM organogram

3.5 RESPONSIBILITY OF SME DEPARTMENT

The SME department is primarily
responsible for bringing business to the bank. The Relationship Managers in
different branches manage the clients; they prepare the proposals in the
standard format (a specimen copy of the credit application package has been
provided in the appendix) and send them directly to the SME department at the
Head Office. The proposal is reviewed by the SME staffs for possible flaws and
other documentation checking. Then the proposal is sent to the CRM department.
Three out of the seven credit officers are assigned exclusively for the SME
proposals. Each credit officers have been allocated with specific branches. So
as per allocation of their respective branches the officers receive proposals
from the SME department.

3.6 THE PROCEDURAL DATABASE

After receiving a particular loan
proposal it is given entry into a database named ‘Log Sheet’. The principal
function of this database is to keep track of each of the proposals that are
assigned under each credit officer. Primary objective is to locate the status
of each file at any time. A weekly report from the database is provided to the
Head of CRM and also a monthly report on SME proposals is placed to the Head of
SME from it. After giving entry into the database, proposals are placed to
respective credit officers.


The credit officers then start to
review the loan proposal. The basic intention is to measure the exact financial
need of the customer and disburse the amount accordingly and to minimize the
risk exposure of the bank in the process. In terms of regularity the proposals
may be broadly classified as one time and regular. One time proposals include
LBPD, FBPD, LC, Bank Guarantee and so on. The regular proposals refers to
approval for fresh credit like Cash Credit, Demand Loan, Time loan Pay order,
Time loan work order, restructuring of existing facilities etc. On an average
following is the time needed by each of the officers to review these two broad
types of proposals:

Proposal
Type

Required
Review Time (Days)

One
time

2

Regular

9

: The data have been colleted from
the previous 3 months review performance as is recorded in the ‘Log Sheet’
Database.

Within these periods the officers
review the files as per standard operating procedures.

3.7
A SIMPLE WORKFLOW

The officer receives the loan
proposal, he analyzes it. If there are any observations or queries that are not
available in the proposal then he sends queries to the respective RM. After receiving
the answers of queries he prepares his analysis and based on this prepares the
recommendation for the proposal. The recommendation first needs to be approved
by the immediate  supervisor of the
officer, after the supervisor gives his approval then the officer places the
recommendation with the loan proposal to the HOCRM. HOCRM after reviewing the
proposals gives his decision. Then the credit officer prepares a sanction
letter in the standard format of the bank and forwards the documents to the Credit
Administration Department. The Credit Administration department then loads the
limit into

the system. This is a typical loan
review activity of a credit officer which is presented in the figure below:




3.8 ANALYSIS OF A RENEWAL PROPOSAL (A
CASE STUDY)

Renewal is a kind of proposal in
which the existing relationship is renewed for a further period of time. The
previous relationship was approved for a certain period of time for example,
for one year. After the stipulated time period if the client wants to continue
with the relation, he or she contacts the RM of the concerned branch. The RM
then as per standard format prepares the renewal proposal. It is to be
mentioned here that when the previous limit is to be increased for the current
year then it is called ‘Renewal with enhancement’ when the previous limit is to
be reduced then it is termed as ‘Renewal with reduction’ and when the previous
proposal is to be restructured then it is called ‘Restructure and renewal’.
Following is a case presentation of how renewal proposals are reviewed by a
credit officer for Cash Credit (Hypo) facility.

At first the credit officer matches
the ‘facilities table’ in the Credit Memorandum (CM) and Application for Limit
(AFL) of the current proposal with those of previous proposal to see whether
there is any deviation. If there is any, he gets the flaw corrected by RM or by
himself.

CM 2005

CM
2006

The
figure shows the state of the facilities box. The facility under proposed
column (2005) was approved for 31st March 2006, should coincide with
the existing column (2006), as it is now an existing facility. Any mismatch in
this case should be corrected by the credit officer at the very outset of the
evaluation procedure of the proposal. 

After
checking the facilities box is complete the next task is to match the
collateral box. This is done to find whether there is any mismatch between
information regarding registered mortgage of the properties and so on. It is
expected that the Collateral box and description of the scheduled property
within will exactly be the same unless stated otherwise.

CM
2005


The
description of the collateral should be exactly the same if not mentioned
otherwise. So the officer should ensure their accuracy as any deviation
would bring serious legal consequences

 

CM
2006

These are the major checklists for
the credit officer. However, a detailed check list would be provided in the
later section of the report.

In case of evaluating renewal
proposal the main focal point of the officer remains is the account performance
of the customer. As this is a tested client the officer will not analyze the
business dynamics as elaborately as before, when he sanctioned the proposed
limit for the first time. Regarding the evaluation of account performance the
officer tries to identify whether the account statements reflect the
operational performance of the client. There are some ratios to consider in
this case. These are:

3.8.1 a. Deposit Ratio

Deposit ratio is defined as Credit
Summation to Sales. The credit summation figure is readily available in the
account profitability part of the CM package. This can also be verified from the
account statement of the client. The purpose of this ratio is to measure how
much amount was deposited in the account out of the entire sales proceeds
during the stated period. It is expected that the client regularly deposit his
money into the account.

3.8.2 b. Average Utilization Ratio

Average utilization ratio captures
whether the client is utilizing the sanctioned limit properly. If the
utilization ratio is good then it is evident that he is doing so and vice
versa. Average utilization is arrived by dividing the interest income for the
year with respective interest rate. This amount is then divided by the total
limit.

Apart form these ratios account
statement of the client is strictly scrutinized to find if there are any
irregularities. The account statement should reflect the operations of the
business for the client. The monthly credit summation should coincide with the
average monthly sales figures. Also the officers check the source of the debit
and credit transaction and their regularities. Also any window dressing in the
account performance are tried to be figured out.

The call report of the CM package
states the current business position of the client and his business needs in
detail. It is prepared by the RM disclosing his experience during his visit to
the clients’ premises. The portfolio review basically provides a periodical
statement of the financial health of the business. Also some queries regarding
the operations of the business is reported in this part of the proposal.

Stock inspection report is another
important section of the proposal, which is to be strictly monitored in case of
a renewal proposal. The report mentions the date of stock inspection, the break
up of stocks and book debt as on that date, total value of security, amount of
excess security and so on.

3.8.3 Calculation of excess security:

Funding Outstanding as on stock
inspection date: XXX

Drawing power: (Security value) X
Drawing power (70%)

Excess Security = Funding outstanding
– Drawing power.

Finally based on the data from the CM
package the officers calculate the working capital requirement of the business
and check whether it supports the proposed limit.

On an average these are the things
that are being analyzed for approving a renewal proposal of a client. These
parts are addressed at its very basic if not anything more for the stated
purpose. However, the analysis may not follow the same chronological order as
is mentioned above. Following is the checklist that is pursued during the
evaluation process (figure represents the excel model used to do the tasks):

Whether the proposal is placed
within expiry date (If not, collect a time extension proposal)

The existing proposal has a
stipulated time period for which it was sanctioned previously. After that date
the limit will become past due if not settled fully. This would be detrimental
for the client, as it will be reported in the CIB report of Bangladesh Bank. So
it is very much necessary that the renewal proposal be submitted well within
the existing expiry date. However, if there are any issues like mortgage
modification or so on, a time extension proposal may be approved for the client
to avoid the embarrassment.

Insurance coverage (do we have renewed insurance policy?

The bank needs to have adequate
insurance coverage on its security against fire, flood and other risks. The
specific amount of insurance is 110% of the security value. It is to be checked
during evaluation whether the insurance coverage has been renewed with the
company.

The minimum interest rate is revised
from time to time. For example current slab for interest rate in EBL is 15% for
the regular SME clients. So the officer must make sure whether stated interest
rate is as per regulation of the bank. Also the reduction of interest rate
requires approval from higher authority so it is also to be checked whether
interest rate is being reduced or not.

Check the correspondence

The address of the customer is
usually mentioned but the officer needs to check whether there is any change in
it or nonetheless it is mentioned or not.

Declaration from Credit Admin

Another important component of
checklist is to look for any declaration from Credit Administration Department.
The declaration regarding documentation and other procedures needs to be in
place before sanction of the limit. So the officer checks whether all the
declarations are in place or not. The declaration of the Credit Administration
regarding the proposals are as following:

CIB report obtained?

Another important thing is to check
is whether CIB report has been obtained or not. This is very important because
from this report status of client’s all loans can be identified. It is a
standard practice that current CIB report (not older than 6 months) should
accompany a loan proposal.

Account Statement with other banks

If the client has other loan
relationships then the account statements of other banks needs to be obtained.

3.8.4 CONCLUSION

After all the analysis if the credit
officer is satisfied with the justification of limit he prepares his
recommendation. The recommendations are then submitted to his immediate
supervisor for his approval.  Finally all
the documents are submitted to HOCRM for his approval. After getting the
approval from HOCRM the officer then prepares a sanction letter as per standard
format of the bank. One copy of the sanction letter is sent to the Credit
Administration department (this department is responsible for loading the limit
into the system so that the clients gets his loan) and another copy (original
documents) is then stored in the Credit File of the client. This is how the
credit officer carries out a typical renewal analysis.

CHAPTER-4

NON-PERFORMING LOAN CLASSIFICATION
CRITERION

4.1 NON-PERFORMING LOAN
CLASSIFICATION CRITERION

NPL (Non-performing Loans) include
those loans, which are showing signs of weakness in the credit quality of the
loans. When the quality of a loan deteriorates, the first signal comes as
irregularity in client’s loan repayment. Often a loan account starts having
past dues. International best practices require that a loan be classified as
non-performing if its principal and/or interest are three months or more in
arrears. Banks in Bangladesh are allowed to classify non-performing loans based
on a time frame of three months. Early recognition of non-performing loans
stimulates collection efforts and helps reduce the possibility of loss of such
assets.

4.2 NON-PERFORMING LOAN: ELABORATION

Loans
may be termed as Non-Performing both from the objective and subjective
judgment. Objective criteria for loan classification are grossly set by
Bangladesh Bank. Subjective judgment by the bank officials are guided by the
Instruction Circulars from the top management.

The
following objective criteria were prescribed by Bangladesh Bank for loan
classification vide BRPD Circular No. 16, dated 06 December, 1998 with
subsequent amendments vide BRPD Circular No. 9 of 2001, BRPD Circular No.02 dated
15 February, 2005 and BRPD Circular No. 09 dated 20 August, 2005.

Type
of Loan

Overdue
period

Classification

Continuous
Loan

?
90 days

?
180 days

SS

?
270 days

DF

?
1 year

BL

Demand
Loan

?
90 days

?
180 days

SS

?
270 days

DF

?
1 year

BL

Fixed
Term Loan (? 5 Years)

?
90 days [Equivalent Installments]

?
180 days [Equivalent Installments]

SS

?
270 days [Equivalent Installments]

DF

?
1 year [Equivalent Installments]

BL

**SM = Special Mention, SS = Sub Standard, DF = Doubtful, BL
= Bad & Loss

Besides the objective criteria, EBL
uses the following subjective criteria to classify loans. It can be noted here
that, loans are classified primarily by objective criteria. However, officials
are encouraged to follow the subjective criteria side-by-side the objective
criteria. Brief descriptions of the four classification categories are provided
in the following table.

Special Mention (SM)

Special Mention assets have
potential weaknesses that deserve management’s close attention.  If left uncorrected, these weaknesses may
result in a deterioration of the repayment prospects of the borrower.  Facilities should be downgraded to SM if
sustained deterioration in financial condition is noted (consecutive losses,
negative net worth, excessive leverage), or if a significant petition or
claim is lodged against the borrower. 
Full repayment of facilities is still expected

Substandard (SS)

Financial condition is weak and
capacity or inclination to repay is in doubt. 
These weaknesses jeopardize the full settlement of loans.  Loans should be downgraded to SS if the customer
intends to create a lender group for debt restructuring purposes, the
operation has ceased trading or any indication suggesting the winding up or
closure of the borrower is discovered. 
The correction of the deficiencies may result in an improved condition.

Doubtful (DF)

Full repayment of principal and
interest is unlikely and the possibility of loss is extremely high.  However, due to specifically identifiable
pending factors, such as litigation, liquidation procedures or capital
injection, the asset is not yet classified as BL.  Assets should be downgraded to DF if the
client is non-cooperative after recurrent requests for regularizing payment.
The bank should pursue legal options to enforce security to obtain repayment
or negotiate an appropriate loan rescheduling.  In all cases, the requirements of
Bangladesh Bank in CIB reporting, loan rescheduling and provisioning must be
followed. 

Assets graded BL are long
outstanding with no progress in obtaining repayment or in the late stages of
wind up / liquidation. The prospect of recovery is poor and legal options
have been pursued. The proceeds expected from the liquidation or realization
of security may be awaited. The continuance of the loan as a bankable asset
is not warranted, and the anticipated loss should have been provided for.
This classification reflects that it is not practical or desirable to defer
writing off this basically worthless asset even though partial recovery may
be affected in the future.  Bangladesh
Bank guidelines for timely write off of bad loans must be adhered to.

 

A brief description of the activities
of different departments other than CRM for better understanding of the NPL
management function is presented below. Besides these departments, Relationship
Managers of Corporate Banking Units and SME units (Small & Medium
Enterprises) also play an active role in the NPL management.

4.3 CREDIT ADMINISTRATION DEPARTMENT
(CAD)

Activities of Credit Administration
Department include the following at its very basic:

a.
Documentation
of loans

b.
Disbursement
of loans

c.
Credit
Monitoring

d.
Early
Alert process

e.
Reporting
to Bangladesh Bank

4.4 SPECIAL ASSET MANAGEMENT
DEPARTMENT (SAMD)

Special Asset Management Department
is responsible for all accounts classified in the bank’s loan portfolio. The
three types of classification maintained by the department are given below:

 
Doubtful
and

SAMD’s responsibility sectors:

a.
Monitoring
and controlling the classified accounts through monthly reporting and quarterly
review/update.

b.
Actively
follow up with the borrowers for recovery,

c.
Negotiating
and restructuring/rescheduling debts wherever feasible, on its own and /or in
association with the concerned Relationship Manager/ Unit Head/Area Head/Line
of Business and Head Office Credit Risk Management.

d.
Review
for reschedule/restructure/waiver/write-off is presented by SAMD with, if
deemed necessary, inputs from the related unit or branch/line of business.
Proposal is placed as per the format with all relevant support/documents/
information to facilitate the process for approval from the appropriate
authority duly recommended by Head of Credit Risk Management and Managing
Director & CEO.

e.
Advise
client the reschedule / restructure / waiver letter after proper approval from
the EBL Board.

f.  
Head
Office Credit Risk Management releases the approved restructure
/reschedule/waive/write-off proposal to Credit Administration Department who
are responsible for communicating the decision jointly with Head of SAMD to
client as well as initiating action on the books of account of the unit or the
branch.

g.
Follow?up
responsibility on such waiver/reschedule /write?off loans is assigned to SAMD.

SAMD also prepares a Consolidated
Report of all bad loans written?off on a quarterly basis and submit the report
to the Head of Credit Risk management and Managing Director & CEO.

4.5 DETECTION PROCESS OF NPL

First and foremost requirement for
any and all Relationship Managers / Sales & Service Managers and Credit
Managers is to identify a problem credit in its earliest stages by recognizing
the signs of deterioration. Such signs include, but not limited to, the
following:

i) Non?payment of
interest or principal or both on due dates or past?dues beyond a reasonable
period or recurring past dues.

ii) In case of
Overdrafts, (or Cash?Credits or similar facility), no movement in the account
beyond a reasonable period.

v) Death or withdrawal of key owner(s) or
management personnel.

vi)
Company filing for bankruptcy or
voluntary dissolution.

 
Adverse
market report about the company itself or its principal owners.

4.6 STEPS TO FOLLOW FOR
CLASSIFICATION

Steps to follow in such
situations are:

i) CAD rechecks the account, for all
outstanding, including any outstanding in allied or sister company or in
owner’s or partners’ or directors personal name(s).

ii) CAD
thoroughly reviews loan documentation to confirm that “the bank has what the
bank needs”, documents are in proper form, properly executed and current
(i.e. not time barred). A review of the documentation serves as a good reminder
of the Bank’s legal rights against the debtor, principal owner/guarantors etc.

iii)  CAD
obtains current figures to review these on strict liquidation basis, to take a
close look at the assets and liabilities to determine who has the preferential
right or prior lien to what assets. For Limited Liability companies, a title
search at the RJSC office where all charges are filed is carried out.

iv)  If
Guarantors are involved, CAD looks closely at the net worth statement and take
steps to protect EBL’s interests’ vis-à-vis other creditors. In other words, if
possible, perfect liens on Guarantor’s assets or give demand notice to
guarantor.

v) Concurrently with the assessment of situation,
once the account is classified Sub?standard, credit lines are frozen with
notice to all concerned, on a “damage?control” concept.

vii)  A
full assessment of the problem situation surrounding the account leads the
reviewer to decide options available to the bank: viz

[
Work?out,
with no rescheduling

[
Work?out,
with rescheduling, under proper rescheduling agreement and if needed with fresh
documentation and renegotiated collateral security.

[
Legal
action, which if situation so warrant, is taken immediately (with prior
approval from appropriate approving authority) when the need is recognized to
pre?empt any dissipation or transfer of the assets of the borrower or the
guarantor.

4.7 CLASSIFICATION PROCESS

For the purpose of
determining the “Classified” status of an account, following
guidelines are observed

i) The
process of Classification of an account starts with strict application of the
risk rating assessment that is compulsory for each borrowing relationship.
Account deemed to be classified are subject to Portfolio Review Form submission
or a direct classification by Head Office Credit Risk Management:

[  Special Mention

[  Sub?standard

[  Doubtful

[  ii) However, unpaid
Interest or Principal or Expired Limit for a period of 90 days or more or
recurring past dues (of Principal) remain the most significant Rules of Thumb
triggering the classification.

4.8 DOWN?GRADING/UPGRADING CLASSIFIED
ACCOUNTS

The followings are the procedures for
upgrading or downgrading the classified accounts:


Primary
responsibility lies with the concerned Relationship Manager to initiate the
classification by submitting the Portfolio Review Form in a timely manner.


This responsibility first moves laterally to
Relationship Managers and escalates upwards to Unit Head/Sales & Service
Manager, if anyone having responsibility for the account in the layers fail to
identify and report a classified name.


If
and when a Portfolio Review Form is submitted, the concerned Relationship
Manager/Unit Head/Area Head, Head of Line of Business, reviews it promptly. The
latter finally recommends the category or severity of classification along with
Action Plan to upgrade/recover outstanding. Head of Credit Risk Management and
Managing Director & CEO reviews and agrees to the classification and the
related Action Plan for recovery/upgrade.

Head Office Credit Risk Management is responsible to release
and distribute copies of approved Portfolio Review Form to:

Head of Special Asset Management
Department


Head
Office Credit Risk Management may also independently classify an account in the
normal course of inspection of a branch or unit’s loan portfolio. In such
event, the Portfolio Review Form will then be filled in by Head Office Credit
Risk Management and will be referred to the respective Relationship Manager /
Unit Head / Area Corporate Head / Head of Line of Business and/or Head of
Special Asset Management Department for information. Action Plan for
recovery/upgrade will then be presented by Head of Special Asset Management
Department in consultation with RM / Unit Head / Area Head / Head of Line of
Business to the Head of Credit Risk Management & Managing Director &
CEO for approval.


Such
classification may be superseded by a more severe classification i.e. down
grading, by the regulatory body (Bangladesh Bank).


Wherever
required an independent assessment of the classified credit may be conducted by
Head Office Credit Risk Management or by internal auditor documenting as to why
the credit deteriorated and what were the lapses.


Only
the Head of Credit Risk Management & Managing Director & CEO is
empowered to up?grade a classified account but the recommendation has to
originate from the Head of Special Asset Management Department. Continuation of
business strategy (if any) for the upgraded account will require the consent of
Area Head – Corporate Banking / Head of Line of Business with proper
justification.


Upgrading
of a classified account has to be well justified diligently and objectively by
all recommending officers. Essentially, complete removal of the reason(s) for
classification should be the basis of any upgrading.

 
Classified
Accounts are passed on to Special Asset Management Department in the following
manner:

[  Any and all accounts, which
have been downgraded to Sub Standard status.

[  Any and all accounts, which
have been downgraded to Doubtful or Bad & Loss status.

[  Within 7 days of an account being
downgraded to substandard (SS-5), a Request for Action and a Handover/Downgrade
Checklist are completed by the RM and forwarded to SAMD for acknowledgment. The
account is assigned to an account manager within the SAMD who will then in
consultation with concerned Relationship Managers/Unit Head/Area Head/ Head of
Line of Business prepare Action Plan for recovery or upgrade and get it
approved by Head of Credit Risk Management and Managing Director & CEO.

[  Officer in Special Asset Management
Department get the credit files transferred to their Department from Corporate
Banking/Line of Business and under their custody for account being classified
Substandard, Doubtful and Bad & Loss, and will monitor all
upgrade/downgrade.

[  Officer in Special Asset Management
Department must sign on the Loan Documentation Checklist to ensure review of
loan documentation at his/her end.

[  Officer in Special Asset Management
Department must review the Stock Report and Stock Inspection Report of
classified accounts to arrive at an effective action plan for recovery/upgrade.
Specimen of Stock Report and Stock Inspection Report attached.

[  Special Asset Management team in the
standard waiver format processes proposal for restructure/reschedule/waiver for
the classified accounts. The proposal should accompany copies of previous
approvals, recent accepted Sanction Letter by client, Lawyer’s opinion and
updated status on Loan Documentation.

 
Head
of Special Asset Management in H.O. interfaces with Head Office Credit Risk
Management & Managing Director & CEO on all up?grading/recovery efforts
in the context of

[
Recovery,

[
Loan
Loss Provision and

[
Restructure/Reschedule/Waivers/Write-offs.

 

4.9 REPORTING OF CLASSIFIED ACCOUNTS

The reporting procedure for
classified accounts have been outlined below:

i) Accounts,
which are, once classified but not up-graded or recovered are to be separately
reported on a monthly basis to Head Office Credit Risk Management and Managing
Director & CEO. Complete accuracy is to be ensured while reporting these
names. Such reports originate from Credit Administration Department.

Head
of Special Asset Management Department submits monthly results on recovery
status on all existing and newly Classified Accounts to Head Office Credit Risk
Management and Managing Director & CEO.

Head
of Special Asset Management Department submits quarterly report on Classified
Accounts to Head Office Credit Risk Management and Managing Director & CEO.

4.10 NON- EARNING LOANS

Following guidelines are strictly
observed for treatment of unpaid/uncollected interest in classified accounts:

i) If interest is over?due by more than
90 days the outstanding must be classified Special Mention ? Non?Earning or
even lower (such as Sub-standard), if not already so classified.

If
any loan is classified as Special Mention/Sub standard/Doubtful, interest is
charged on this loan, but this cannot be treated as income. All such interest
is credited to Interest Suspense (Credits) A\C. or any other account specially
designated for this purpose by Bangladesh Bank.

If
a loan is classified as Bad & Loss, charging of interest thereafter is
suspended from the date of Bad & Loss classification. A contingent/memo
entry is taken up for the interest being suspended which is reversed/brought
back as actual liability at the time of suit being filed for recovery or if
restructure/waiver/settlement takes place. Head of Special Asset Management
Department ensures that these contingent/memo items are monitored and reported
on a quarterly basis to Head of Credit Risk Management and Managing Director
& CEO.

v) Sometimes,
Sub?standard loans may be restructured or rescheduled, with the stipulation
that as part of the rescheduling, accrued unpaid interest be capitalized. Only
in these situations, exceptions to the foregoing rule may be allowed but
strictly on the following conditions:

The restructuring or rescheduling is
approved by the appropriate approving authorities on the basis of a “Work-out”
credit proposal.

  The interest to be capitalized with
principal is reserved from interest suspense accounts only after full
completion of documentation related to rescheduling and compliance of all
conditions precedent related to rescheduling.

Borrower displays sustained repayment
performance in accordance with the repayment plan.

  All principal and interest amounts
contractually due are assured of repayment within a reasonable period.

However, return of such
accounts to earning status on this pretext must have Head Office Credit Risk
Management’s pre?fact concurrence.

 
Earlier,
accounts which have been classified by Bangladesh Bank auditors during their
course of inspection would require pre-fact approval from Bangladesh Bank for
declassification/upgrade as per their requirement. But in a recent amendment
from BB states that the board of directors of the bank can de-classify an
account. In this case, however, this phenomenon has to be reported to BB.

4.11 APPLICATION OF PAYMENTS INTO CLASSIFIED LOANS

If a classified loan or part of any
classified loan is collected than accrued interest and suspended interest
should be settled first any residual will be applied for settlement of
Principal Loan.

 

4.12 REVIEW OF CLASSIFIED ACCOUNTS

Classified Accounts (like Sub?standard,
Doubtful and Bad & Loss) are reviewed on a quarterly basis in the manner
and as stipulated in the Obligor Risk Rating (ORR) guidelines of the bank.

If Relationship Manager feels that
due to irregularities or over?dues, etc., regular lines should not be renewed
but existing outstanding should be placed on liquidation basis (i.e. adjustment
purpose), a renewal work?out CM covering

a) The outstanding, with
specific maturities,

b) Anticipated date of
liquidation (or expiry of the facilities) and

c) Action plan to either
up?grade or complete recovery

must be submitted in the normal
manner & account should be rated Special Mention – 4.

If up-to-date financials are not
available, Relationship Manager should submit renewals based on latest
available ones. More than perfunctory trade/bank checking must accompany the
CM.

 

4.13 CREATION OF LOAN LOSS PROVISION

As part of pragmatic and conservative
approach to sustain the quality of the Bank’s loan portfolio and hence, the
earning stream, Loan Loss Provision exercise is being made mandatory for all
Line of Business and Head of Special Asset Management of the Bank.

Such exercise is dictated by: a)
generally accepted banking practice, b) conservative approach to assess the
quality of Risk Assets whereby the most accurate health of the Loan Portfolio
is reflected on the books of the Bank and c) to be guided by Bangladesh Bank
instructions/guidelines on provisioning.

Following guidelines are observed:

i) The
prudential Provision Practice dictates that rather than wait until the close of
the fiscal year; provision exercise would be an on?going one, with the needed
provision created, when an account is classified and continues to remain
classified. The provision exercise is to be carried out by each quarter end,
based on reports on Classified Accounts related to previous quarter.

ii) Bangladesh
Bank instructions/guidelines are followed for the purpose of Loan Loss
Provision exercise.


Unless
otherwise enhanced by Bangladesh Bank regulatory body, Loan Loss provision
policy

as per the matrix given below is adopted and followed by the line of
Business and Special

Asset Management Department of the Bank.

Obligor Risk

Rating

Past Due O/S

Expired Credit

(CRITERIA)

Classification
Status

Provision to be held against Net Loan Value

4

5

6

7

90
days

180
days

270
days

360
days

Special
Mention

Substandard

Doubtful

Bad
& Loss

5%

20%

50%

100%

Following formula is applied in determining the
required amount of provision:



1. Gross
Outstanding  XXX

2. Less: (i) Cash
margin held or Fixed

Deposits/SP
under lien.   ( XXX )

3. Loan
Value

(For
which provision is to be created before considering

estimated
realizable value of other security/collateral held) XXX

4. Less:
Estimated salvage value of security/collateral held   ( XXX )

Net
Loan Value
XXX

For the purpose of provision against
classified loans, “Eligible Securities” mean the following

100% of deposit under deposit against
the loan

100% of the market value of gold or
gold ornaments pledged with the Bank

100% of the value of Govt. bond/Sanchayapatra
under lien

50% of the market value of easily
marketable commodity kept under the control of the bank

50% of the market value of land and
building mortgaged with the bank

50% of the average market value for
last 06 months or 50% of the face value whichever is less, of the shares traded
in stock exchange

The amount of required provision may, in
some circumstances, be reduced by an estimated realizable forced sale value of
(i.e. Salvage Value) of any tangible collateral held (viz: mortgage of property,
pledged goods / or hypothecated goods repossessed by the bank, pledged readily
marketable securities etc). Hence, in these situations, it will be advisable to
evaluate such collateral, estimate the most realistic sale value under duress
and net?off the value against the outstanding before determining the Net Loan
value for provision purposes. Conservative approach is taken to arrive at
provision requirement and Bangladesh Bank guideline to be properly followed.

Provided:


The
classification criteria are strictly and objectively applied and

Therefore, the process of’
classification should trigger the Prudential Loan Loss Provision exercise.

The action is not completely a “blind
faith” one, since unique circumstances and recovery prospects may still lead
the assessor to provide for less than the prudential level. Judgmental
evaluation should accordingly play the desired role and final decision
for the extent of loss provision will rest with the Head of Credit Risk
Management and Managing Director & CEO.

iv) However, only the Managing Director
& CEO can approve the Loan Loss Provision, whether specific (against
each classified account) or general reserves on the strength of recommendation
from Special Assets Management and Head of Credit Risk Management.

4.14 PROBABLE LOSS

Only for the purpose of Prudential
Provision Exercise “Probable Loss” category of rating is to be determined.
In general, accounts which are already classified “Doubtful” but have
not been down?graded to ‘Loss” should be evaluated from the “Probable
Loss” perspective.

To determine this, following factors
should be reviewed and score be assigned against each (High score will mean
higher probability of Loss and vice versa).

HIGH RISK

Known history of defaults by
borrowers in the particular industry or business segment

Attitude of borrower: Cooperative
& willing to work with bank or non-cooperative & unwilling

Life of account in doubtful
category (a period 270 days or more is a strong contender of higher risk and
loss probability)

Past recovery efforts and success
rate (account with less that 25% success rate of recovery of gross O/S is a
strong contender of loss probability)

Tangible Collateral/Securities held:

 i. clear priority of lien, or charge
viz 1st registered mortgage
(lack of this : higher risk)

ii.  perfected documentation allowing
smooth attachment process through legal means.

iii.  historical time from to obtain
attachment orders (longer expected action time will mean higher probability
of loss) lily
of loss)

iv.  Readily saleable prospects at
market value (Higher % of realizable value will mean lower. risk and vice
versa)

 

: An
account scoring more than 50% may qualify to be high as a “Probable Loss” and
would despite being classified “Doubtful may deserve a higher provision on a
Net Loan value basis.

 

4.15 RECOVERY PROBABILITY CATEGORIES
TO BE ASSIGNED TO ALL CLASSIFIED LOANS

A.   Loans determined to have high
probability of recovery within 6 months; recovery efforts to continue on an on?going
basis.


Banking
practice,

[
Legal
and tax implication and

[
Status
of each individual credit.

CHAPTER-5

5.1 CRM POLICIES RECOMMENDED BY
BANGLADESH BANK

 

This section details fundamental
credit risk management policies that are recommended for adoption by all banks
in Bangladesh by Bangladesh Bank and EBL’s compliance status with these
guidelines. The guidelines outline general principles that are designed to
govern the implementation of more detailed lending procedures within individual
banks. EBL’s practice regarding general credit risk management has been
explained in the following section with their congruence with the regulatory
guidelines.

5.2 LENDING GUIDELINES

The bank has its established Credit
Policies (“Lending Guidelines”) that clearly outline the senior management’s
view of business development priorities and the terms and conditions that
should be adhered to in order for loans to be approved.  The Lending Guidelines is updated at least
annually to reflect changes in the economic outlook and the evolution of the
bank’s loan portfolio, and is distributed to all lending/marketing officers.
The Lending Guidelines is approved by the Managing Director/CEO & Board of
Directors of the bank based on the endorsement of the bank’s Head of Credit
Risk Management and the Head of Corporate/Commercial Banking.

Any departure or deviation from the
Lending Guidelines is explicitly identified in credit applications and a justification
for approval is provided. The Lending Guidelines provides the key foundations
for Relationship Managers (RM) to formulate their recommendations for approval,
and includes the following:

5.3 INDUSTRY AND BUSINESS SEGMENT
FOCUS

The Lending Guidelines clearly
identify the business/industry sectors that should constitute the majority of
the bank’s loan portfolio. This will provide necessary direction to the bank’s
marketing staff.

5.4 TYPES OF LOAN FACILITIES

The type of loans that are permitted
is clearly indicated and defined, such as Working Capital, Trade Finance, Term
Loan, etc. A full list of EBL credit products for SME and consumer clients has
been attached in the appendix.

5.5 SINGLE BORROWER/GROUP LIMITS

In case of single borrower exposure
limit the bank strictly follows Bangladesh Bank guidelines. The regulations
regarding the stated purpose communicated vide BRPD circular no 5 dated April
09, 2005 is provided below:

“As a result of increase in capital
of almost all the banks, now it has been decided to reduce the single borrower
exposure limit from 50% to 35%, thus:

The total outstanding financing
facilities by a bank to any single person or enterprise or organization of a
group shall not at any point of time exceed 35% of the bank’s total capital
subject to the condition that the maximum outstanding against fund based
financing facilities (funded facilities) do not exceed 15% of the total
capital.

Non funded credit facilities e.g.
letter of credit, guarantee etc. can be provided to a single large borrower.
But under no circumstances, the total amount of the funded and non-funded
credit facilities shall exceed 35% of a bank’s total capital.

However, in case of export sector
single borrower exposure limit shall remain unchanged at 50% of the bank’s
total capital. But funded facilities in case of export credit shall also not
exceed 15% of the total capital.”

5.6 DISCOURAGED BUSINESS TYPES

The BB guideline advices that banks
should outline industries or lending activities that are discouraged. As a
minimum, the following should be discouraged:

  • Military
    Equipment/Weapons Finance
  • Highly
    Leveraged Transactions
  • Finance
    of Speculative Investments
  • Logging,
    Mineral Extraction/Mining, or other activity that is ethically or
    environmentally sensitive
  • Lending
    to companies listed on CIB black list or known defaulters
  • Counterparties
    in countries subject to UN sanctions
  • Share
    Lending
  • Taking
    an Equity Stake in Borrowers
  • Lending
    to Holding Companies
  • Bridge
    Loans relying on equity/debt issuance as a source of repayment.

Eastern bank limited follows the
guideline and also in addition they have a list of the discouraged business of
their own which cannot be printed for the sake of confidentiality.

5.7 LOAN FACILITY PARAMETERS

Facility parameter (e.g., maximum
size, maximum tenor, and covenant and security requirements) is clearly
stated. As a minimum, the following
parameters (mentioned in the guideline) is adopted:

Ø  Bank does not grant facilities where
the bank’s security position is inferior to that of any other financial
institution.

Ø  Assets pledged as security is always
properly insured. In fact, EBL ensures 110% insurance on the hypothecated
security for a particular facility. The bank also has its own list of insurance
companies from which the client can take insurance.

Ø  Valuations of property taken as
security is performed prior to loans being granted. Also recognized 3rd party
professional valuation firm is appointed to conduct the valuations.

5.8 CREDIT ASSESSMENT

A thorough credit and risk assessment
is conducted prior to the granting of loans, and at least annually thereafter
for all facilities.  The results of this
assessment are presented in a Credit Application that originates from the
relationship manager/account officer (“RM”), and is approved by Credit Risk
Management (CRM). The RM is the owner of the customer relationship, and is held
responsible to ensure the accuracy of the entire credit application submitted
for approval.  RMs are familiar with the bank’s
Lending Guidelines and should conduct due diligence on new borrowers,
principals, and guarantors. 

It is essential that RMs know their
customers and conduct due diligence on new borrowers, principals, and
guarantors to ensure such parties are in fact who they represent themselves to
be. The bank has their established Know Your Customer (KYC) and Money
Laundering guideline which is adhered to at all times.

Credit Applications summarize the
results of the RMs risk assessment and include, as a minimum, the following
details:

Ø  Amount and type of loan(s) proposed.

Ø  Purpose of loans.

Ø  Loan Structure (Tenor, Covenants,
Repayment Schedule, Interest)

Ø  Security Arrangements

In addition, the following risk areas
are also addressed:

5.8.1 Borrower Analysis

The majority shareholders, management
team and group or affiliate companies is assessed.  Any issues regarding lack of management
depth, complicated ownership structures or inter-group transactions are
addressed, and risks mitigated. 

 

5.8.2 Industry Analysis

The key risk factors of the
borrower’s industry are assessed by the RM. Any issues regarding the borrower’s
position in the industry, overall industry concerns or competitive forces is
addressed and the strengths and weaknesses of the borrower relative to its
competition should be identified.

5.8.3 Supplier/Buyer Analysis

Any customer or supplier
concentration is reported in the credit application, as these could have a
significant impact on the future viability of the borrower.

5.8.4 Historical Financial Analysis

An analysis of a minimum of 3 years
historical financial statements of the borrower is presented in bank’s
specified format. The analysis should address the quality and sustainability of
earnings, cash flow and the strength of the borrower’s balance sheet.  Specifically, cash flow, leverage and
profitability must be analyzed.

5.8.5 Adherence to Lending Guidelines

Credit Applications should clearly
state whether or not the proposed application is in compliance with the bank’s
Lending Guidelines. 

Mitigating factors for risks
identified in the credit assessment is identified and reported in the
application. 

5.8.7 Loan Structure

The RM makes sure that the amounts
and tenors of proposed financing are justified based on the projected repayment
ability and loan purpose.  Excessive
tenor or amount relative to business needs increases the risk of fund diversion
and may adversely impact the borrower’s repayment ability.

5.8.8 Security

A current valuation of collateral is
obtained and the quality and priority of security being proposed is
assessed.  Loans are not granted based
solely on security. Adequacy and the extent of the insurance coverage are also
taken into consideration.

5.8.9 Name Lending

In this case bank also follows the
prudential guidelines which says “Credit proposals should not be unduly
influenced by an over reliance on the sponsoring principal’s reputation,
reported independent means, or their perceived willingness to inject funds into
various business enterprises in case of need. 
These situations should be discouraged and treated with great
caution.  Rather, credit proposals and
the granting of loans should be based on sound fundamentals, supported by a
thorough financial and risk analysis”. 

5.9 APPROVAL AUTHORITY

The prudential guidelines regarding
approval authority by BB is stated below:

“The authority to sanction/approve
loans must be clearly delegated to senior credit executives by the Managing
Director/CEO & Board based on the executive’s knowledge and
experience.  Approval authority should be
delegated to individual executives and not to committees to ensure
accountability in the approval process. The following guidelines should apply
in the approval/sanctioning of loans:

  • Credit
    approval authority must be delegated in writing from the MD/CEO &
    Board (as appropriate), acknowledged by recipients, and records of all
    delegation retained in CRM.
  • Delegated
    approval authorities must be reviewed annually by MD/CEO/Board.
  • The
    credit approval function should be separate from the marketing/relationship
    management (RM) function. The role of Credit Committee may be restricted
    to only review of proposals i.e. recommendations or review of bank’s loan
    portfolios.
  • Approvals
    must be evidenced in writing, or by electronic signature.  Approval records must be kept on file
    with the Credit Applications. All credit risks must be authorized by
    executives within the authority limit delegated to them by the
    MD/CEO. The “pooling” or combining
    of authority limits should not be permitted.
  • Credit
    approval should be centralized within the CRM function.  Regional credit centers may be
    established, however, all large loans must be approved by the Head of
    Credit and Risk Management or Managing Director/CEO/Board or delegated
    Head Office credit executive.
  • The
    aggregate exposure to any borrower or borrowing group must be used to
    determine the approval authority required.
  • Any
    credit proposal that does not comply with Lending Guidelines, regardless
    of amount, should be referred to Head Office for Approval
  • MD/Head
    of Credit Risk Management must approve and monitor any cross-border
    exposure risk.
  • Any
    breaches of lending authority should be reported to MD/CEO, Head of
    Internal Control, and Head of CRM.

A monthly summary of all new
facilities approved, renewed, enhanced, and a list of proposals declined
stating reasons thereof should be reported by CRM to the CEO/MD”.

The bank tries to follow the above
guidelines as perfectly as possible. The existing approval authority for
approving credit proposals is summarized below:

Type of Credit

Amount

Tenor

Approving Authority

Funded/ Non-funded

Up to TK 1.00 Crore

12 month

Head of CRM

Funded/ Non-funded

Up to TK 1.50 Crore

12 month

Funded/ Non-funded

Up to TK 3.00 Crore

12 month

DMD (singly)

Funded/ Non-funded

Up to TK 5.00 Crore

60 month

Cash Against Security

(Class A- EBL FDRs)

Up to TK 25.00 Crore

60 month

Cash Against Security

(Class B- FDRs/other bank)

Up to TK 10.00 Crore

60 month

Consumer Banking

All products (Exceptions)

60 month

5.10 SEGREGATION OF DUTIES

EBL segregates the following lending
functions:

  • Credit
    Approval/Risk Management
  • Relationship
    Management/Marketing
  • Credit
    Administration

The purpose of the segregation is to
improve the knowledge levels and expertise in each department, to impose
controls over the disbursement of authorized loan facilities and obtain an
objective and independent judgment of credit proposals.

5.11 PREFERRED ORGANISATIONAL
STRUCTURE & RESPONSIBILITIES

The guideline proposes that
appropriate organizational structure must be in place to support the adoption
of the policies of the guidelines.  The
key feature is the segregation of the Marketing/Relationship Management
function from Approval/Risk Management/Administration functions. It also
proposes credit approval should be centralized within the CRM function.  Regional credit centers may be established,
however, all applications must be approved by the Head of Credit and Risk
Management or Managing Director/CEO/Board or delegated Head Office credit
executive.

The organizational structure of EBL
(credit related) is compared below with that of the BB guideline. EBL ensures
that all credit approvals are centralized within the CRM function. There are
three regional corporate bases two in Dhaka and the other one in chittagong,
however, all applications are submitted to CRM of Dhaka Head office and
approved by the Board, MD/DMD or HOCRM as appropriate. For the SME sector, all
proposals come to Dhaka SME center and then approved through CRM.



The following chart represents
the preferred management structure in the BB guideline:


The credit related structure of EBL
is as follows:


5.11.1 Key Responsibilities:

Key responsibilities of concerned
parties as mentioned in the prudential guidelines are discussed below:

Credit Risk Management (CRM)

  • Oversight
    of the bank’s credit policies, procedures and controls relating to all
    credit risks arising from corporate/commercial/institutional banking,
    personal banking, & treasury operations.

  • Oversight
    of the bank’s asset quality.

  • Directly
    manage all Substandard, Doubtful & Bad and Loss accounts to maximize
    recovery and ensure that appropriate and timely loan loss provisions have
    been made.

  • To
    approve (or decline), within delegated authority, Credit Applications
    recommended by RM.  Where aggregate
    borrower exposure is in excess of approval limits, to provide
    recommendation to MD/CEO for approval.

  • To
    provide advice/assistance regarding all credit matters to line
    management/RMs.

  • To
    ensure that lending executives have adequate experience and/or training in
    order to carry out job duties effectively.

 

Credit Administration

Ø  To ensure that all security
documentation complies with the terms of approval and is enforceable.

Ø  To monitor insurance coverage to
ensure appropriate coverage is in place over assets pledged as collateral, and
is properly assigned to the bank.

Ø  To control loan disbursements only
after all terms and conditions of approval have been met, and all security
documentation is in place.

Ø  To maintain control over all security
documentation.

Ø  To monitor borrower’s compliance with
covenants and agreed terms and conditions, and general monitoring of account
conduct/performance.

Relationship Management/Marketing
(RM)

  • To
    act as the primary bank contact with borrowers.

  • To
    maintain thorough knowledge of borrower’s business and industry through
    regular contact, factory/warehouse inspections, etc.  RMs should proactively monitor the
    financial performance and account conduct of borrowers.

  • To be
    responsible for the timely and accurate submission of Credit Applications
    for new proposals and annual reviews,
  • To
    highlight any deterioration in borrower’s financial standing and amend the
    borrower’s Risk Grade in a timely manner. 
    Changes in Risk Grades should be advised to and approved by CRM.

5.12 APPROVAL PROCESS

The approval process segregates the
work of Relationship Management/Marketing from the approving authority.  The responsibility for preparing the Credit
Application rests with the RM within the corporate/SME banking department.  Credit Applications are recommended for
approval by the RM team and forwarded to the approval team within CRM and
approved by individual executives.

The recommending or approving
executives take responsibility for and are held accountable for their
recommendations or approval. 

5.12.1 Approving SME proposals

The RM first sends the credit
application to the SME center in Head office Dhaka. The SME center then checks
the documents and make sure they are well within the lending guidelines of the
bank. They also provide additional condition for sanction as appropriate. After
reviewing they send the proposal to the CRM department. The respective credit
officers review the proposal and get the approval from the approving authority.

The routing process of credit
proposals and its approvals can be summarized as follows:

Recommendation by
RM

 


Central
SME center (Reviewed by SME officials)

 

CRM
(Analyzed by officers of CRM)

 

Approved
by HOCRM/DMD/MD

 


The following diagram illustrates the
preferred approval process by BB:

Credit
Application

Recommended By RM
/ Marketing

 




Head of Credit
(HOC) &

Head of Corporate
Banking (HOCB) 

 



Managing Director

 



5.13 CREDIT MONITORING

To minimize credit losses, monitoring
procedures and systems are in place that provides an early indication of the
deteriorating financial health of a borrower. 
At a minimum, systems are in place to report the following exceptions to
relevant executives in CRM and RM team:

  • Past
    due principal or interest payments, past due trade bills, account
    excesses, and breach of loan covenants;

  • Loan
    terms and conditions are monitored, financial statements are received on a
    regular basis, and any covenant breaches or exceptions are referred to CRM
    and the RM team for timely follow-up.

  • Timely
    corrective action is taken to address findings of any internal, external
    or regulator inspection/audit.

  • All
    borrower relationships/loan facilities are reviewed and approved through
    the submission of a Credit Application at least annually.

EBL has an excellent IT backbone,
which produces the above information for central/head office as well as local
review.

5.14 CONCLUSION

Compliance with the guidelines of BB
circulars or directions is a must for all the scheduled banks in the country.
EBL is no exception is this case. All the circulars related to credit are
properly filed in the department. It is made sure from the top management that
each and every credit officer understands all the circulars and directions and
exercise due diligence during operation regarding the stated issue. The
following section discusses a similar topic, which necessarily requires bank’s
strong compliance regarding it.  

CHAPTER-6

Credit risk grading is an important
tool for credit risk management as it helps the Banks & financial
institutions to understand various dimensions of risk involved in different
credit transactions. The aggregation of such grading across the borrowers,
activities and the lines of business can provide better assessment of the
quality of credit portfolio of a bank or a branch. The credit risk grading
system is vital to take decisions both at the pre-sanction stage as well as
post-sanction stage.

At the pre-sanction stage, credit
grading helps the sanctioning authority to decide whether to lend or not to
lend, what should be the loan price, what should be the extent of exposure,
what should be the appropriate credit facility, what are the various
facilities, what are the various risk mitigation tools to put a cap on the risk
level.

At the post-sanction stage, the bank
can decide about the depth of the review or renewal, frequency of review,
periodicity of the grading, and other precautions to be taken.

6.2 DEVELOPMENT OF THE SCORE CARD

The Lending Risk Analysis (LRA)
manual introduced in 1993 by the Bangladesh Bank has been in practice for
mandatory use by the Banks & financial institutions for loan size of BDT
1.00 crore and above. However, the LRA manual suffers from a lot of
subjectivity, sometimes creating confusion to the lending Bankers in terms of
selection of credit proposals on the basis of risk exposure. Meanwhile, in 2003
end Bangladesh Bank provided guidelines for credit risk management of Banks
wherein it recommended, interalia, the introduction of Risk Grade Score Card
for risk assessment of credit proposals.

Since the two credit risk models are
presently in vogue, the Governing Board of Bangladesh Institute of Bank
Management (BIBM) under the chairmanship of the Governor, Bangladesh Bank
decided that an integrated Credit Risk Grading Model be developed incorporating
the significant features of the above mentioned models with a view to render a
need based simplified and user friendly model for application by the Banks and
financial institutions in processing credit decisions and evaluating the
magnitude of risk involved therein.

6.3 DEFINITION OF CREDIT RISK GRADING
(CRG)

The Credit Risk Grading (CRG) is a
collective definition based on the pre-specified scale and reflects the
underlying credit-risk for a given exposure.

A Credit Risk Grading deploys a
number/ alphabet/ symbol as a primary summary indicator of risks associated
with a credit exposure.

Credit Risk Grading is the basic
module for developing a Credit Risk Management system.

6.4 FUNCTIONS OF CREDIT RISK GRADING

Well-managed credit risk grading
systems promote bank safety and soundness by facilitating informed
decision-making. Grading systems measure credit risk and differentiate individual
credits and groups of credits by the risk they pose. This allows bank
management and examiners to monitor changes and trends in risk levels. The
process also allows bank management to manage risk to optimize returns.

6.5 USE OF CREDIT RISK GRADING

The Credit Risk Grading matrix allows
application of uniform standards to credits to ensure a common standardized
approach to assess the quality of individual obligor, credit portfolio of a
unit, line of business, the branch or the Bank as a whole. As evident, the CRG
outputs would be relevant for individual credit selection, wherein either a
borrower or a particular exposure/facility is rated. The other decisions would
be related to pricing (credit-spread) and specific features of the credit
facility. These would largely constitute obligor level analysis. Risk grading
would also be relevant for surveillance and monitoring, internal MIS and
assessing the aggregate risk profile of a Bank. It is also relevant for
portfolio level analysis.

6.6 NUMBERS AND SHORT NAME OF GRADES
USED IN THE CRG

The proposed CRG scale consists of 8
categories, of which categories 1 to 5 represent various grades of acceptable
credit risk and categories 6 to 8 represent unacceptable levels of credit risk.

GRADING

SHORT NAME

NUMBER

Superior

SUP

1

Good

GD

2

Acceptable

ACCPT

3

Marginal/Watchlist

MG/WL

4

Special Mention

SM

5

Sub standard

SS

6

Doubtful

DF

7

BL

8

6.7 RISK DEFINITIONS

Bangladesh bank has set different
criteria for risk grading definitions. However, they can be broadly categorized
as:

a) Acceptable
Credit Risk and 

b)
Unacceptable Credit Risk

Following is a detailed discussion of
these two broad categories of risks.

6.8 ACCEPTABLE CREDIT RISK

The following 5 categories are
considered as acceptable credit risk. The respective risk category features
have been provided below:

Superior – (SUP) – 1

Ø  Credit facilities, which are fully
secured i.e. fully cash covered.

Ø  Credit facilities fully covered by
government guarantee.

Ø  Credit facilities fully covered by the
guarantee of a top tier international Bank. 

Good – (GD) -2

  • Strong
    repayment capacity of the borrower
  • The
    borrower has excellent liquidity and low leverage. 
  • The
    company demonstrates consistently strong earnings and cash flow.
  • Borrower
    has well established, strong market share.
  • Very
    good management skill & expertise.
  • All
    security documentation should be in place.
  • Credit
    facilities fully covered by the guarantee of a top tier local Bank. 

Aggregate Score of 85 or greater
based on the Risk Grade Score Sheet 

  • These
    borrowers are not as strong as GOOD Grade borrowers, but still demonstrate
    consistent earnings, cash flow and have a good track record. 
  • Borrowers
    have adequate liquidity, cash flow and earnings.
  • Credit
    in this grade would normally be secured by acceptable collateral (1st
    charge over inventory / receivables / equipment / property). 
  • Acceptable
    management
  • Acceptable
    parent/sister company guarantee

    • Aggregate Score of 75-84 based on the
    Risk Grade Score Sheet

    Marginal/Watchlist – (MG/WL) -4

    • This
      grade warrants greater attention due to conditions affecting the borrower,
      the industry or the economic environment.
    • These
      borrowers have an above average risk due to strained liquidity, higher
      than normal leverage, thin cash flow and/or inconsistent earnings.
    • Weaker
      business credit & early warning signals of emerging business credit
      detected.
    • The
      borrower incurs a loss
    • Loan
      repayments routinely fall past due
    • Account
      conduct is poor, or other untoward factors are present. 
    • Credit
      requires attention

    Aggregate Score of 65-74 based on the
    Risk Grade Score Sheet 

    Special Mention – (SM) -5

    ·
    This
    grade has potential weaknesses that deserve management’s close attention.  If left uncorrected, these weaknesses may
    result in a deterioration of the repayment prospects of the borrower.

    ·
    Severe
    management problems exist.

    ·
    Facilities
    should be downgraded to this grade if sustained deterioration in financial  condition is noted (consecutive losses,
    negative net worth, excessive leverage),

    An Aggregate Score of 55-64 based on
    the Risk Grade Score Sheet.

    6.9 UNACCEPTABLE CREDIT RISK

    The following 3 categories are
    considered as unacceptable credit risk. The respective risk category features
    have been provided below:

    Substandard- (SS) – 6

    • Financial
      condition is weak and capacity or inclination to repay is in doubt.
    • These
      weaknesses jeopardize the full settlement of loans.
    • Bangladesh
      Bank criteria for sub-standard credit shall apply. 

    An Aggregate Score of 45-54 based on
    the Risk Grade Score Sheet.

    Doubtful- (DF) – 7

    • Full
      repayment of principal and interest is unlikely and the possibility of
      loss is extremely high.
    • However,
      due to specifically identifiable pending factors, such as litigation,
      liquidation procedures or capital injection, the asset is not yet
      classified as Bad & Loss.
    • Bangladesh
      Bank criteria for doubtful credit shall apply.

    An Aggregate Score of 35-44 based on
    the Risk Grade Score Sheet.

    Bad/Loss- (BL) -8

    • Credit
      of this grade has long outstanding with no progress in obtaining repayment
      or on the verge of wind up/liquidation.
    • Prospect
      of recovery is poor and legal options have been pursued.
    • Proceeds
      expected from the liquidation or realization of security may be
      awaited.  The continuance of the
      loan as a bankable asset is not warranted, and the anticipated loss should
      have been provided for.
    • This
      classification reflects that it is not practical or desirable to defer
      writing off this basically valueless asset even though partial recovery
      may be affected in the future. 
      Bangladesh Bank guidelines for timely write off of bad loans must
      be adhered to. Legal procedures/suit initiated.
    • Bangladesh
      Bank criteria for bad & loss credit shall apply.

    An Aggregate Score of less than 35
    based on the Risk Grade Score Sheet.

    6.10 REGULATORY DEFINITION ON GRADING
    OF CLASSIFIED ACCOUNTS 

    Irrespective of credit score obtained
    by a particular obligor, grading of the classified names should be in line with
    Bangladesh Bank guidelines on classified accounts, which presently are:

    • Sub
      standard – if any loan is past due/overdue for 180 days and above.
    • Doubtful
      – if any loan is past due/overdue for 270 days and above.
    • Bad
      & Loss – if any loan is past due/overdue for 360 days and above.

    6.11 PROCEDURE FOR COMPUTING CREDIT
    RISK GRADING

    The following step-wise activities
    outline the detail process for arriving at credit risk grading.

    6.11.1 STEP I: IDENTIFYING ALL THE
    PRINCIPALS RISK COMPONENTS

    Credit risk for counterparty arises
    from an aggregation of the following:

    • Financial
      Risk
    • Business/Industry
      Risk
    • Management
      Risk
    • Security
      Risk
    • Relationship
      Risk

    Each of the above mentioned key risk
    areas require to be evaluated and aggregated to arrive at an overall risk
    grading measure.

    Evaluation of Financial Risk:

    Risk that counterparties will fail to
    meet obligation due to financial distress. This typically entails analysis of
    financials i.e. analysis of leverage, liquidity, profitability & interest
    coverage ratios. To conclude, this capitalizes on the risk of high leverage,
    poor liquidity, low profitability & insufficient cash flow.

    Evaluation of Business/Industry Risk:

    Risk that adverse industry situation
    or unfavorable business condition will impact borrowers’ capacity to meet
    obligation. The evaluation of this category of risk looks at parameters such as
    business outlook, size of business, industry growth, market competition &
    barriers to entry/exit. To conclude, this capitalizes on the risk of failure
    due to low market share & poor industry growth.

    Evaluation of Management Risk:

    Risk that counterparties may default
    as a result of poor managerial ability including experience of the management,
    its succession plan and team work.

    Evaluation of Security Risk:

    Risk that the bank might be exposed
    due to poor quality or strength of the security in case of default. This may
    entail strength of security & collateral, location of collateral and
    support.

     

    Evaluation of Relationship Risk:

    These risk areas cover evaluation of
    limits utilization, account performance, conditions/covenants compliance by the
    borrower and deposit relationship.




    6.11.2 STEP II: ALLOCATING WEIGHT TO
    PRINCIPAL RISK COMPONENTS

    According to the importance of risk
    profile, the following weights are proposed in guideline for corresponding
    principal risks. 

    Principal Risk Components:
      Weight:

    Business/Industry Risk 15%

    Security Risk 10%

    Relationship Risk 10%

    6.11.3 STEPIII: ESTABLISHING KEY
    PARAMETERS

    Principal Risk Components:

    Key Parameters:

    Leverage, Liquidity, Profitability
    & Coverage ratio.

    Business/Industry Risk

    Size of Business, Business Outlook,
    Industry Growth,

    Management Risk

    Security Risk

    Security Coverage, Collateral
    Coverage and Support

    Relationship Risk

    Utilization of Limit, Account
    Conduct, Compliance of

    6.11.4 STEP IV: ASSIGNING WEIGHT TO
    EACH OF THE KEY PARAMETERS

    Principal Risk Components:

    Key Parameters:

    Financial Risk

    50%

    Liquidity

    15%

    Profitability

    15%

    Coverage

    5%

    Business/Industry Risk

    Size of Business

    5%

    Business Outlook

    3%

    Industry growth

    3%

    Market Competition

    2%

    Entry/Exit Barriers

    2%

    Management Risk

    Experience

    5%

    Succession

    5%

    Team Work

    5%

    Security coverage

    4%

    Collateral coverage

    4%

    Support

    2%

    Relationship Risk

    10%

    Utilization of limit

    3%

    Account conduct

    3%

    Compliance of covenants

    2%

    Personal deposit

    2%

    6.11.5 STEP V: GIVING ENTRY TO THE
    MODEL TO ARRIVE AT SCORE   

    This report provides a well
    programmed MS Excel based credit risk scoring sheet (developed by Bangladesh
    Bank) to arrive at a total score on each borrower. The excel program requires
    inputting data accurately in particular cells for input and will automatically
    calculate the risk grade for a particular borrower based on the total score
    obtained. The following steps are to be followed while using the MS Excel
    program.

    Open the MS XL file named, CRG_SCORE_SHEET

    The entire XL sheet named, CRG
    is protected except the particular cells to input data.

    Input data accurately in the cells
    which are BORDERED & are colored YELLOW.

    Some input cells contain DROP DOWN
    LIST     for some criteria corresponding to the Key Parameters. Click to the
    input cell and select the appropriate parameters from the DROP DOWN LIST as
    shown below.

    6.11.6 STEP VI: ARRIVING AT THE
    CREDIT RISK GRADING BASED ON TOTAL SCORE

    The following is the proposed Credit
    Risk Grade matrix based on the total score obtained by an obligor.

    Number

    Risk Grading

    Short Name

    Score

    1

    Superior

    SUP

    100% cash covered

    Government guarantee

    International Bank guarantees

    2

    Good

    GD

    85+

    3

    Acceptable

    ACCPT

    75-84

    4

    Marginal/Watchlist

    MG/WL

    65-74

    5

    Special Mention

    SM

    55-64

    6

    Sub-standard

    SS

    45-54

    7

    Doubtful

    DF

    35-44

    8

    BL

    6.12 CREDIT RISK GRADING PROCESS

    The followings are the directives
    forwarded by Bangladesh Bank regarding the risk grading process:

    ‘Credit Risk Grading should be
    completed by a Bank for all of its clients whose credit limit is BDT 1.00 crore
    and above. For Superior Risk Grading (SUP-1) the score sheet is not
    applicable. This will be guided by the criterion mentioned for superior grade account
    i.e. 100% cash covered, covered by government & bank guarantee.

    Credit risk grading matrix would be
    useful in analyzing credit proposal, new or renewal for regular limits or
    specific transactions, if basic information on a borrowing client to determine
    the degree of each factor is a) readily available, b) current, c) dependable,
    and d) parameters/risk factors are assessed judiciously and objectively.

    Risk factors are to be evaluated and
    weighted very carefully, on the basis of most up-to-date and reliable data and
    complete objectivity must be ensured to assign the correct grading.

    Credit risk grading exercise should
    be originated by Relationship Manager and should be an on-going and continuous
    process. Relationship Manager shall complete the Credit Risk Grading Score
    Sheet and shall arrive at a risk grading in consultation with a Senior
    Relationship Manager and document it as per Credit Risk Grading Form, which
    shall then be concurred by the Credit Officer in consultation with a Senior
    Credit Officer.

    All credit proposals whether new,
    renewal or specific facility should consist of a) Data Collection Checklist, b)
    Limit Utilization Form c) Credit Risk Grading Score Sheet, and d) Credit Risk
    Grading Form.

    The credit officers then would pass
    the approved Credit Risk Grading Form to Credit Administration Department and
    Corporate Banking/Line of Business/Recovery Unit for updating their MIS/record.

    The appropriate approving authority
    through the same Credit Risk Grading Form shall approve any subsequent
    change/revision i.e. upgrade or downgrade in credit risk grade.’

    6.13 EARLY WARNING SIGNALS (EWS)

    Early Warning
    Signals (EWS) indicate risks or potential weaknesses of an exposure requiring
    monitoring, supervision, or close attention by management. If these weaknesses
    are left uncorrected, they may result in deterioration of the repayment
    prospects in the Bank’s assets at some future date with a likely prospect of
    being downgraded to classified assets.

    Early
    identification, prompt reporting and proactive management of Early Warning
    Accounts are prime credit responsibilities of all Relationship Managers and
    must be undertaken on a continuous basis. Despite a prudent credit approval
    process, loans may still become troubled. Therefore, it is essential that early
    identification and prompt reporting of deteriorating credit signs be done to
    ensure swift action to protect the Bank’s interest.

    Irrespective of credit score obtained
    by any obligor as per the proposed risk grade score sheet, the grading of the account
    highlighted as Early Warning Signals (EWS) accounts shall have the following
    risk symptoms.

    if –

    Any loan is past due/overdue for 90
    days and above.

    Frequent drop in security value or
    shortfall in drawing power exists.

    if –

    Any loan is past due/overdue for 120
    days and above

    Major document deficiency prevails
    (such deficiencies include but not limited to; board resolution for borrowing
    not obtained, sanction letter not accepted by client, charges/hypothecation
    over assets favoring bank not filed with Registrar, Joint Stock Companies,
    mortgage not in place, guarantees not obtained, etc.)

    A significant petition or claim is
    lodged against the borrower. 

    The Credit Risk Grading Form of
    accounts having Early Warning Signals should be completed by the Relationship
    Manager and sent to the approving authority in Credit Risk Management
    Department. The Credit Risk Grade should be updated as soon as possible and no
    delay should be there in referring Early Warning Signal accounts or any problem
    accounts to the Credit Risk Management Department for their early involvement
    and assistance in recovery.

    6.14 CREDIT RISK GRADING REVIEW

    Credit Risk Grading for each borrower
    should be assigned at the inception of lending and should be periodically
    updated. Frequencies of the review of the credit risk grading are mentioned
    below;

    Number

    Risk Grading

    Short

    Review frequency (at least)

    1

    Superior

    SUP

    Annually

    2

    Good

    GD

    Annually

    3

    Acceptable

    ACCPT

    Annually

    4

    Marginal/Watchlist

    MG/WL

    Half yearly

    5

    Special Mention

    SM

    Quarterly

    6

    Sub-standard

    SS

    Quarterly

    7

    Doubtful

    DF

    Quarterly

    8

    BL

    Quarterly

    6.15 RATING SYSTEM OF EASTERN BANK
    LIMITED

    EBL has its own its risk rating
    methodology. Each corporate and SME client of the bank has their own ratings.
    It is termed as Obligor Risk Rating (ORR). Once a rating is given it is closely
    monitored in each quarter/ half yearly to justify its status or for upgrading
    or downgrading purpose of the same.

    Obligor Risk Rating

    The following table provides the
    rating and the features necessary for the assignment of rating to each of the
    obligor. It also states the preferred strategy to be followed for the rated
    clients. Once an obligor is awarded with a rating then it is reviewed on a
    quarterly basis. All the clients are closely monitored to see whether there are
    any violations of the conditions and covenants, deterioration of security, all
    the performance parameters are reviewed be the respective credit officer based on
    the quarterly report named ‘portfolio review’ and other excerpts as necessary.
    Then he recommends the rating to higher authority and if those are approved the
    new ratings are assigned to each client.

    RATING

    Short

    No

    CRITERIA

    STRATEGY

    GOOD

    GD

    1

    Growing Industry (Growth 15%+)

    Among top 20 in the Industry

    Strong management with succession

    Steady growth in financial
    performance

    Satisfactory payment record/account
    turnover

    Liquidity 3X and above

    Leverage 0.5X and below

    Timely submission of financial
    information

    Strong Parent/Sister Office
    Guarantee

    Good collateral

    OR

    100% cash covered

    Retain and grow with client

    Sell multi products

    ACCEPTABLE

    ACCEP

    2

    Growing Industry (Growth 10%+)

    Acceptable player in the market

    Good management with succession

    Acceptable growth in financial
    performance

    Satisfactory payment record/account
    turnover

    Liquidity 1.5X and above

    Leverage 1.5X and below

    Timely submission of financial
    information

    Acceptable Parent/Sister Office
    Guarantee

    Acceptable collateral

    Retain and grow with client

    Sell multi products

    MARGINAL/WATCHLIST

    MG/WL

    3

    Problem in Industry

    Loosing market share

    Thin management with no succession

    Unreliable sales/operating profit.

    Unsatisfactory payment
    record/account turnover

    Liquidity below 1X

    High Leverage

    Perpetual delay in submission of
    financial information

    Incomplete Loan Documentation

    Drop in collateral value or
    collateral shortfall

    Past due over 60 days

    No increase in credit limit

    Close monitoring thru clear action
    plan

    Ensure 100% completion of loan doc.

    Semi-annual review

    Follow up for settlement of past
    dues

    RATING

    Short

    No

    CRITERIA

    STRATEGY

    SPECIAL MENTION

    SM

    4

    Problem in Industry

    Loosing market share

    Severe management problem

    Company operating at losses with
    sales going down.

    Unsatisfactory payment
    record/account turnover

    Liquidity below 1X / insufficient
    cash flow

    High Leverage

    Financial Information not available

    Incomplete Loan Documentation

    Drop in collateral value or
    collateral shortfall

    Diversion of fund

    Past due over 90 days

    Possible exit/reduction of credit
    limit

    Close monitoring thru clear action
    plan

    Ensure 100% completion of loan doc.

    Quarterly review

    Follow up for settlement of past
    dues

    SUB STANDARD

    SS

    5

    All criteria of Special Mention

    Past due over 180 days

    Credit limit for adjustment purpose

    Clear exit plan to be in place

    Quarterly review

    Follow up for settlement of past
    dues

    DOUBTFUL

    DF

    6

    All criteria of Substandard

    Client out of business

    Past due over 270 days

    Credit limit for adjustment purpose

    Quarterly review

    Follow up for settlement of past
    dues

    Legal action

    BL

    7

    All criteria of Doubtful

    Past due over 360 days

    Credit limit for adjustment purpose

    Quarterly review

    Follow up for settlement of past
    dues

    Legal action

    Recently Bangladesh Bank has provided
    a circular mentioning the classification category for the SME sector vide BRPD
    circular no 20, dated December 20, 2005 (to be implemented from April 2006) in
    which it has proposed the following category:

    • Superior
      (SUP)
    • Good
      (GD)
    • Acceptable
      (Acceptable)
    • Marginal/
      watch list (MG/WL)
    • Special
      Mention Account (SMA)
    • Substandard
      (SS)
    • Doubtful
      (DF)
    • Loss
      (BL)

    The original circular is provided in
    the appendix section of the report.

    CHAPTER-7

    FINDINGS AND CONCLUSOION

    7. 1 FINDINGS

    Eastern Bank Limited follows a Credit
    Risk Management Practice that complies with the rules and regulation set by
    Bangladesh Bank. Eastern Bank has set extensive procedures both at the
    pre-sanction stage of credit proposal assessment and also at the post –sanction
    stage. The procedures are transparent, accountable and decentralized in such
    manner that they ensure maximum effectiveness in risk assessment of credit
    proposal. Thorough analysis of eastern Bank’s credit assessment procedure and
    extensive interpretation of Bangladesh Bank circulars regarding credit
    assessment and risk grading procedure helped in the comparison of the two
    systems. Eastern Bank’s process hardly deviates from that dictated by
    Bangladesh Bank.

    • Bangladesh
      Bank credit risk management policies requires bank to set lending
      guidelines which EBL does and reviews on annual basis. As per BB
      requirement it is set by top management.
    • EBL’s
      detailed product definition shows that each product falls under Bangladesh
      Bank broad classification of loan products.
    • Eastern
      bank Limited follows the BB guideline regarding discouraged lending
      activities and also in addition they have a list of the discouraged
      business of their own.
    • The
      Bank tries to adhere to the prudential guidelines regarding approval
      authority set by Bangladesh bank as perfectly as possible.
    • Eastern
      Bank’s organization structure and delegation of responsibility is in line
      with the structure proposed by Bangladesh Bank.
    • Bangladesh
      Bank requires all commercial banks to use risk grade score card for risk
      assessment of credit proposals. The Credit Risk Grading matrix allows
      application of uniform standards to credits to ensure a common
      standardized approach to assess the quality of individual obligor, credit
      portfolio of a unit, line of business, the branch or the Bank as a whole.
      The Credit Risk Grading scale consists of 8 categories which can be
      broadly classified into two categories that of acceptable and
      non-acceptable credit proposals. EBL’s obligor risk rating system has 7
      categories, each of which is a reflection of the scales provided under
      CRG, except with that of Superior Credit. EBL’s rating starts from good.
      The criteria for rating matches more or less with that of CRG only in
      EBL’s case the outlook is more conservative.

    7. 2 RECOMMENDATION

    EBL’s approach to credit is more
    conservative than that proposed by Bangladesh Bank. Although this approach
    might seem more prudent, however in face of increasing competition from new
    generation banks, EBL needs carry out the following:

    • Develop
      more customized parameters for credit approval process under the general
      guidelines of Bangladesh Bank to increase its market.
    • Data
      used for assessment of credit proposals should be checked for authenticity
      and accuracy.
    • CRG
      score depends heavily on the financial data provided by potential
      borrower. Therefore steps should be taken to make those data more
      reliable.
    • EBL’s
      RM should be more aware of manipulative qualitative data than business
      development. There should be procedures and parameters to identify and eliminate
      such manipulation.
    • Continuous
      improvement of the lending procedure would reduce the default risk of the
      bank and increase its profitability.

    Bangladesh’s banking system is
    heavily affected by bad loans. This not only makes bank more conservative,
    contracts the lending system, it discourages investment. As a result growth of
    the economy is impeded. One major reason for default loan is banks’
    ineffectiveness of assessing credit risk of a proposed investment. With time,
    Bangladesh Bank has set rules and general guidelines to help bank assess risk
    and mitigate their credit risk. In spite of that many banks fail to attract
    good credit and run profitably. Thus it is not only the guidelines provided by
    Bangladesh Bank that a commercial lending institution need to follow but it own
    lending policies should be in place to ensure maximum effectiveness of credit
    assessment. With this perspective in mind the report has attempted to analyze
    the lending procedures of Eastern Bank especially in the SME sector and check
    whether it complies with that of Bangladesh Bank. In doing so the standard
    operating procedures of the bank have been delineated in details along with a
    case study to present a picture of the operation carried out in the field. The
    report has also discussed banks procedures for managing its non-performing
    loans and loan classification procedures and cross checked those with the
    central bank guidelines. The newly proposed Credit Risk Grading Score sheet by
    Bangladesh Bank has also been discussed in the report with Eastern bank’s very
    own risk rating system. Above all, the report provides a detailed discussion of
    some the crucial issues of credit risk management and tries to focus on the
    practice of Eastern Bank Limited in this regard under the regulatory framework
    prevailing in the country. The report finds that EBL not maintains its
    guidelines and procedures in compliance with the Bangladesh bank directives but
    has a more conservative look to credit risk than that required by Bangladesh
    Bank. This conservative approach has its pros and cons. Therefore some
    suggestions has been made at the end to increase the profitability of the bank
    while still maintaining its appreciative position in credit risk assessment.

     

     
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    Customer satisfaction Analysis on the basis of Distribution channel of Grameen Distribution Ltd.

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    Customer satisfaction Analysis on the basis of Distribution channel of Grameen Distribution Ltd.

    Customer satisfaction Analysis on the basis of Distribution channel of Grameen Distribution Ltd.

    Overview of Grameen Distribution Ltd

    Grameen Telecom (GTC) is one of the respected and reputed business houses in Bangladesh. It was established in 1995.

    Grameen Distribution Ltd Established in 2009 as a Sister concern of Grameen Telecom. Grameen Distribution was successfully set up the strategies to accelerate the Nokia handsets business across the country. Grameen Distribution is a profitable company set up at the initiative of Grameen Telecom. Grameen Telecom hold 95% share and Grameen Kalyan holds the rest 5% of Grameen Distribution Ltd. GDL is entrusted with the Service of Distributing telecommunication accessories. Grameen distribution has a purpose, to contribute the economic development of Bangladesh where telecommunications can play a critical role. This is why Grameen Distribution is aiming to distribute quality product related Information and Communication technology (ICT).

    2.1 Company Vision and Mission

    Vision: Vision represents a challenging portrait of what the organization and its member can be- a possible, desirable and future. Grameen Distribution ltd. corporate vision is to provide telecommunication services to the rural inhabitants in the 68,000 villages in Bangladesh.

    Mission: An organization also typically creates a mission statement, which identifies the business it is in, the market niches it tries to serve, the types of customers it is likely to have and the reasons for its existence.

    2.2 Company Product:

    The product of Grameen distribution is Nokia handset. This business gets from its ancestor company Grameen telecom.

    Grameen Distribution Ltd. is a major distributor of Nokia handsets in Bangladesh. GDL import the handsets on the basis of market demand with having 30-days buffer stock for uninterrupted distribution through dealers. Now Grameen Distribution Ltd. operates a very good network to maintain NOKIA distribution.

    2.3 The Board of Directors:

    Board of Directors of GTC consists of ten members, with Professor Muhammad Yunus as its Chairman. The Board during 2009 consisted of the following:

    (i) NURJAHAN BEGUM Chairman
    (ii) Mr. Sheikh Abdud Daiyan Managing Director, Grameen Fund
    (iii) Mr. Md. Shahjahan General Manager, Grameen Bank
    (iv) Mr. Md. Siddiqur Rahman General Manager (Audit), Grameen Bank
    (v) Mr. Hossain Ali Deputy General Manager, Grameen Bank
    (vi) Mr. Mohammad Ashraful Hasan Managing Director, Grameen Knitwear
    (vii) Mohammad Imamus Sultan Director, Grameen Bank

    The formation and functioning of the board is governed by the Articles of Association of the company. While the general body is the supreme body of Grameen Distribution, the Board of Directors is responsible for general supervision and all operational polices of the company. The Board can also delegate its powers and functions to the Chairman or the Managing Director or any other officer of Grameen Distribution, as it may consider necessary and proper.

    2.4 Organogram:

    2.5 Grameen Distribution Sales Center

    GDL has an own sales centre at Grameen Bank Component, Mirpur-2 and selling out the authorized Nokia handsets to the customers as per guideline of Nokia. And another sales center in Mirpur 11 is under construction. Most of the model is available in this sales centre. Sales Officers are putting extra care to deal with sophisticated Customers while selling the products.

    Nevertheless, Nokia is providing after sales service with 1(one) year warrantee by the technically sound engineers.

    2.6 Grameen Distribution and Nokia relationship

    Grameen Distribution (GDL) and NOKIA have a very good relationship. NOKIA appointed a country care manager last year in Bangladesh. Before that NOKIA India had provided guideline to Bangladesh which was a very painful situation. Now Grameen Distribution and NOKIA are working very closely that customer get the best care service.

    2.7 Purchase & Procurement

    Procurement, storage, distribution have become increasingly important functions of Grameen Distribution. A Purchase Manualwas formulated for the first time and a top level Purchase Committee, was constituted, and chaired by the Chief of Technical Services (CTS), for major purchase decisions on a competitive and cost effective, basis. The main procurement activity revolved around import GSM handsets & spare parts from Nokia. Grameen Distribution Ltd. is one of the main distributors of Nokia in Bangladesh. In accordance with the indents received from the Sales & Marketing Department, purchase orders are processed, letters of credit obtained from the banks and imports by air were handled expeditiously. From September 09 to January 10, five months review a total of 198580 pcs Nokia handsets were imported by GDL, with an invoice value of US$ 5.38 million.

    Grameen Distribution procured stationeries, computers, printers, accessories & equipment regularly for its operations. The main responsibilities of this section were to collect quotations, catalogues and proposals, invitations for tenders, evaluation of tender documents, preparation of contracts & service agreements, issuance of work-orders, bills and vouchers and finally process payment advice against goods and services procured.

    2.8 Event Management

    Grameen Distribution Ltd. is a distributor of Nokia handsets and they sales Nokia handsets on dealer price. So, it is a sales organization. Event management is very important for the smooth operation of its business. The firm is properly maintaining its even management through meeting, tanning program, and conference.

    2.9 Monthly Sales Meeting

    Monthly sales meeting is held on the basis of weekly sales. The overall monthly sales turnover has been discussed in this meeting. All of the members are present of this meeting to increase the sales volume of this sales organization.

    2.10 Management

    The Board of Directors appoints a Management Team consisting of a Managing Director and other senior mangers across the various divisions of Grameen Distribution Ltd. These Division Heads (position termed as functional Director) represent respective divisions and always endeavor to achieve Company’s mission and guidelines provided by the Board of Directors.

    The Management Team is guided in accordance with the vision which is broken down into strategies of the company which are reviewed and approved by the Board of Directors. In addition to this the Management Team is obligated to refer every issue to the Board if there is any deviation in implementing business plan, budget, borrowing, capital expenditure, pledging, etc. from the approved plan.

    2.11 Human Resources

    Grameen Distribution Ltd. places a high value on human resources development and the contributions made by its employees. We persevere to maintain a productive and harmonious working environment. Grameen Distribution Ltd. has successfully hired some key managers who were recruited on the basis of their professional expertise and experience. In order to cope up with dynamic of the company’s business, initiatives were taken to restructure and reorganized the existing set up. At the same time Grameen Distribution Ltd. continued with its effort to improve the efficiency of its employees and align them to the right positions with well-defined responsibilities.

    2.12 Reward System

    Grameen Distribution Ltd. provide the reward among the employee through their individual performance and as well as based on company performance. It may be financial or may be promotional.

    2.13 Internal Control

    In short, the internal controls systems have been strengthened, well-defined management system have been developed and the total workforce is now geared up towards achieving the business objectives of the company. Therefore we are now more transparent, better organized and managing our internal staff and financial resources with higher efficiency.

    2.14 Role of Distribution

    The role of distribution of Grameen Distribution Ltd. (GDL) is to supply the products to the defined out lets within a certain time. The firm has strong channel of distribution by which it can easily distribute the products on time. So, GDL can supply to the retailer (RDS) timely according to ordered goods. Here is given some RDS point.

    SL Name & Address SL Name & Address
    01 M/S. Razzak Brothers

    Kali Bari Road, Khulna-9100

    Phone # 041-720543

    Mobile # 01711385224

    		 02 Prime Media

    Alam Market,Shahid kajol Sarani

    Polashpole, 1st floor, Satkhira.

    Mobile: 01715166888
    03 Nahil International

    5, Karmakar Potty(1st floor)

    Bagerhat-9300

    Mobile- 01721673767

    		 04 Ice World

    Moslim-uddin Plaza (1st Floor), Chowrangi, Gopalgonj-810000.

    Mobile # 01713338426
    05 M/s. Siraj & Co.

    508,Jess Tower,4th floor,

    M.K. Road, Jessore

    Phone:0421-63849

    Mobile:01711805320

    		 06 Labiba International

    305 Ishaque Sharok

    Shankarpur, jessore.

    Phone-0421-68085

    Mobile: 01711217961
    07 Hello Prithibi

    Hospital Road, Narail

    Mobile # 01711448844

    		 08 Hossain Trade Link

    39,H.S.S Road, Jhenaidah

    Phone # 0451-62360

    Mobile # 01711800657
    09 Mallik Enterprise

    Mallik Bhaban, Syed Atar Ali Road,

    Magura

    Mobile # 01712990127

    		 10 Sureka Enterprise

    21, Rajarhat Road, Kustia-7001

    Phone # 071-62188/53687

    Mobile # 01714052554
    11 Hello Faridpur

    2, Himalaya Trading center, Hazratola, Goalchamot,Faridpur

    Mobile # 01715935555

    		 12 AK Traders

    Bazar Road, Barisal

    Phone # 0431-64320

    Mobile # 01715040636
    13 Silicon Telecom

    Al- Marzan Shopping Mall

    Kumar potty Road

    Jhalokathi.

    Mobile-0192438288

    		 14 Mobile Plaza

    1st Floor, Talukder Bhaban, Sadar road, Bhola

    Phone # 0158-326687

    Mobile # 01715213478
    15 Sree Guru Bhandar

    Pro. Amal krisno Banik, Bazar Road, Pirojpur.

    		 16 Baral Traders

    Sadar Road, Notun Bazar, Patuakhali

    Phone # 0441-62540

    Mobile # 01712895567
    17 M/s. Zaman Electronics

    Sadar road, Barguna

    Mobile # 0171755223

    		 18 AA International

    Karim Bhaban, Kulpuddi Sarak,

    Madaripur.
    Grameen Distribution Ltd.
    Sales Status
    Particulars October/09 November/09 December/09 January/10
    Retail Distribution Stock age 34622 pcs 46900 pcs 35853 pcs 34729 pcs
    Corporate Sale 387 pcs 261 pcs 319 pcs 308 pcs
    Outlet Sales 621 pcs 784 pcs 547 pcs 568 pcs
    GPCO 820 pcs 671 pcs 707 pcs 721 pcs

    2.15 Distributing Area:

    Grameen Distribution Ltd. (GDL) distributes products in different place across the country. The firm has divided their marketing area in four zones, like-Khulna, Jessore, Faridpur and Barisal. Each zone of the firm has Area Sales Manager (ASM) and Territory Sales Officer (TSO) who are doing their job very well. In addition, there is a proper communication channel of every zone with the head office (Grameen Distribution Ltd).

    2.16 Distribution Process:

    To streamline the distribution process, Grameen Distribution has recruited 4 (Four) Area Sale Managers (ASM) & 9 (Fourteen) Territory Sales Officers (TSO) for closely monitoring the retails sales and distribution in different place across the country. ASM are responsible to deal with dealers and TSO is responsible to deal with retailers. Both are also responsible to report CMO regularly to update the sales trend and competitor activities in respective territory and taking corrective action accordingly. Also set up 37(thirty seven) sales representative and 18(eighteen) MIS teams for reporting & keeping track of sales growth.

    Grameen Distribution Ltd. has some major distribution channels–

    Grameen Distribution ltd main objective is regarding distribution “Supply Right

    Products in Right place at Right time”. They are completely captured this districts of Bangladesh.

    2.17 Selling Process:

    Grameen Distribution Ltd. is an importer and distributor of famous multinational company product, and they are distributor of Nokia handsets. Selling process of this trading business is in the systematic way.

    At first, the firm takes the steps of stocking products. Then the firm is taking orders from retailers through their sales personal appointed by Grameen Distribution Ltd. Finally, the distributors are arranging for supply the products to the outlets. In this way, Grameen Distribution Ltd. is doing its selling process.

    2.18 Sales Negotiation Process:

    Grameen Distribution Ltd. provides a systematic and understanding of the negotiation process with the retailers, customers and every member who are working to this company. Here each of the sales officers and employees are given proper briefing about negotiation. That is how to negotiate effectively and in such a meaningful way so that both of entities come up with their demands. Sales negotiation process is the basic elements of trading business. In this regard a comprehensive training session is being arranged to develop ‘know how’ method as well as successfully close the sales call.

    2.19 Process Involves:

    1. Planning and Preparation

    2. Opening the call

    3. Product Audit and Merchandising

    4. Presentation

    5. Objection Handling

    6. Closing the Call

    7. Administration

    2.20 Drawbacks of Marketing & Sales:

    However, Grameen Distribution Ltd. has strong channel of distribution and skilled sales force but there are some barriers of marketing and sales. Those are as follow.

    · Competitive market situation

    · Corruption.

    · Not directly doing promotional activities

    · Some time transportation problems in terms of delivering goods

    · Lack of maintaining time schedule properly due to having unavoidable circumstances i.e. traffic system, vehicle fitness, other factors relating to goods available like- port congestion.

    2.21 Marketing Features of Grameen Distribution Ltd.:

    The marketing feature of ‘Grameen Distribution Ltd.’ at present competitive situation is very strong. All of the executives and employees have great contribution over this firm.

    · Grameen Distribution Ltd. has very strong experience sales team.

    · Grameen Distribution Ltd. cover different place across the country through around 18 retailers.

    · Grameen Distribution Ltd. has the relative capability to invest more financially and logistically according to requirements.

    · Grameen Distribution Ltd. doing its business with Nokia. This company is multinational. As a result, it has a good professional background practice.

    · Grameen Distribution Ltd. use different types of software to prepare various reports, like- sales report, store report, delivery report etc.

    · Grameen Distribution Ltd. can conduct different types of promotional scheme round the year.

    · Retailers through out the country have a very good relation with Grameen Distribution Ltd.

    · Grameen Distribution Ltd. has divides the whole country in to four zone.

    Part-3

    Theoretical Aspect

    3. Theoretical aspect

    Market:

    The set of actual and potential buyers of a product or service is called market.

    Marketing:

    It is a social and managerial process by which individuals and groups obtain

    What they need and want through creating and exchanging products and

    values with others.

    Needs:

    Need is states of felt deprivation. Human needs are states of felt deprivation. They include basic physical needs for food, clothing, and satisfy: social needs for belonging and affection: and individual needs for knowledge and experience.

    Wants:

    Want are the form of human needs take as shaped by cultural and individual personality.

    Demand:

    Demand is human wants that are backed by buying power.

    Market demographic:

    Dividing a market into smaller groups of buyer’s distinct needs characteristics or behavior that might require separate products or marketing mix.

    Geographic:

    Dividing a market into different geographical units such as nations, stats, regions, counties, cities or neighborhoods.

    Behavioral factor:

    Dividing a market into groups based on consumer knowledge, attitude, use or response to a product.

    Market positioning:

    Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

    Target market:

    The process of evaluating each market segments attractiveness and selecting one or more segments to enter.

    Supply chain management:

    Managing upstream and downstream value-added flows of materials, final goods and related information among suppliers, the company, resellers and final consumers.

    Customer Satisfactions:

    The extent to which a product’s perceived performance matches with buyer’s expectations. If the product’s performance falls short of expectations, the buyer is dissatisfied. It the performance matches or exceeds expectations, the buyer is satisfied or delighted (Principles of Marketing 13th edition, Philip Kotlar & Gary Armstrong).

    Customer satisfaction is the extent to which a product or service’s perceived performance matches a buyer’s expectations. If the product or service’s performance falls short of expectations, the buyer is dissatisfied. If performance matches or exceeds expectations, the buyer is satisfied or delighted.

    Expectations are based on customers past buying experiences, the opinion of friends and associates, and marketer and competitor information and promises. Marketer must be careful to set the right level of expectations. If they set expectations too low, they may satisfy those who buy but fail to attract enough buyers. In contrast, if they raise expectations too high buyers are likely to be disappointed. Dissatisfaction can arise either from a decrease in product and service quality or from an increase in customer expectations. In either case, it presents an opportunity for companies that can deliver superior customer value and satisfaction.

    Channel Differentiation:

    Companies can achieve through the way they design their distribution channels coverage, expertise and performance. Caterpillar’s success in the constructing equipment industry is based partly on superior channel development. Its dealers are found in more locations than competitors’ dealers, and they are typically better trained and perform more reliably.

    Channels:

    A number of alternate ‘channels’ of distribution may be available:

    * Distributor, who sells to retailers

    * Retailer (also called dealer or reseller), who sells to end customers

    * Advertisement typically used for consumption goods

    Part-4

    Analysis and Findings

    4. Analysis and Findings

    4.1 Marketing mix:

    An effective marketing program blends all of the marketing mix elements into a coordinated program designed to achieve the company’s marketing objectives by delivering value to consumers. The marketing mix constitutes the company’s tactical tool kit for establishing strong positioning in target markets.

    Product: Product means the goods & services combination the company offers to the target market. For Grameen distribution Ltd. The products are all kind of Nokia handset and batteries for particular Nokia handset.

    N-1202
    N-1203
    N-1208
    N-1209
    N-1616
    N-2220
    N-2323c
    N-2330c
    N-1661
    N-1680c
    N-2600
    N-2630c
    N-2680s
    N-2690
    N-2700c
    N-3600s

    3600s
    N-3120c
    N-2730c
    N-5000
    N-5130
    N-5230
    N-5310
    N-5530
    N-5630
    N-5730
    N-5800
    N-6120
    N-6300
    N-6303
    N-6500s
    N-7210c
    N-7230c
    N-6700c
    N-6720c
    N-6760s
    X6
    X3
    N79
    N81
    N85
    N95
    N97
    E52
    E66
    E63
    E72
    E71
    E75

    Price: Price is the amounts of money customers have to pay to obtain the product. The prices of Nokia handset are set by Nokia.

    Place:As above, turn the standard logic around. Think convenience of the buying experience and then relate that to a delivery mechanism. Consider all possible definitions of “convenience” as it relates to satisfying the consumer’s wants and needs. Convenience may include aspects of the physical or vertical location, access case, transaction service time and hours of availability. So the distribution channels of the Nokia handsets should be in such place which would be very much convenience to purchase the product for the users.

    Distribution channel of RDS point:

    Distribution channel of corporate client:

    Distribution Channel of ultimate customer:

    Promotion: Promotion means activities that communicate the merit of the product & persuade target customers to buy it. Nokia is renowned multinational handset company. Nokia the name itself is a symbol of quality and reliability. Grameen Distribution Ltd (GDL) itself is doing very little promotional activates for the products. Grameen Distribution Ltd. has a remarkable contribution in the process of promotional activities. The ASM, the TSO ant the Marketing department of Grameen Distribution Ltd. is taking part in this respect. The principle firm (Nokia) of these products is handling this promotional side. The principal firm is using some promotional strategy.

    Promotional Strategy:

    1. Advertising: TV, newspapers, magazines.

    2. Sales promotion: Gift, discount, free.

    3. Public Relation: Press release, product demonstration, and mobile mela.

    4. Internet marketing: website, image, make inquiries, respond to question.

    This advertisement was published in magazine of Sharodio Puja Udjapon committee.

    4.2 Company SWOT analysis:

    Grameen Distribution is one of the respected and reputed business houses in Bangladesh. It has just going to crossed years of operation. Grameen Distribution Ltd. has work as sister concern of Grameen telecom and able to transform itself from a small trading company in to a leading diversified business house. Here we tried to find out the Strength, Weakness, Opportunity and Threat for the corporate sales of Nokia handsets.

    STRENGTH:

    A comparison listing of competing company, product, or service strengths for the purpose of identifying a company or offering might have uniquely that can be leveraged of better market opportunity. Here is giving some Strength of Distribution channel of GDL Nokia handsets.

    WEAKNESS:

    A comparison listing of competing company, product, or service problems for identifying which weaknesses a company or offering might need to strengthen in order to be successful. Here is giving some weakness of Distribution on Nokia handset.

    OPPORTUNITY:

    A comparison listing of a company’s, product, or service’s greatest strengths compared to competitors strengths and weaknesses. Here is giving some Opportunity of Distribution on Nokia handsets.

    THREATS:

    A comparison listing of a company’s, products, or services greatest weaknesses compared to competitor’s strengths and weaknesses. Here is giving some Threats of Distribution on Nokia handset.

    From the above analysis, we can gain a clear idea about the environmental position of the organization comparing other competitors and understand the current position of ‘Nokia handsets Distribution’ in Grameen Distribution.

    4.3 Key Responsibility to marketing

    In this modern and advance civilization, marketers have to change their techniques in order to attract more customers, because due to globalization and technological development, the persisting market condition has been changed a lot. So, only mass marketing and product variation is no longer in the market. To be competitive an organization should segment their market effectively. To segment and target the market, it is essential to study the behavior of the customer. Company not only sales their product and services but also tries to catch the heart and mind of the consumer to stay in the market.

    GDL mode of work is Distribute Nokia handsets in different location in our country. Grameen Distribution Ltd. Sales & Marketing department maintain this area. Therefore, we can say that it is a sales organization. As a sales organization, it has some key responsibility are as follows…

    · Measuring customer satisfaction and retention

    · To ensure the better quality and service

    · To stock the products in a safer place

    · Maintain proper distribution

    · Supply the product within the time

    · To ensure the proper transportation

    · Event management

    · Handling customer feedback

    · Arranging promotional campaign

    Part-5

    Customer satisfaction analysis

    CUSTOMER SATISFACTION ANALYSIS ON DISTRIBUTION CHANNEL OF GDL

    For this part of my report I conducted a survey on the customers and retailers of GDL. There are three questionnaires. One is for the ultimate customer from their outlet, another questionnaire from corporate client and the last one from the RDS. I have found the following findings after finishing the survey:

    5.1 Demographic analysis on the responded (Customer)

    Gender Identification: The objective of this section is to identify the gender distribution o Phone users in Dhaka.

    Figure1: from the survey it is found that out of 50 respondents 60% handset users are male and 40% are female. Though in a capital city, everyone use handset. But from the figure we can say that the male user of handset is a little bit more then the female.

    Occupational types: Here I have tried to identify the occupational variety of the respondents.

    Figure – 2: From the survey it is found that, out of 50 respondents 70% of the customers are service holder and 30% are businessman.

    5.2 General analysis on overall Phone Market:

    Different Brand User:

    In this section it is identified different brand of handsets that the consumers generally use

    Figure –3: From the graph it is found that, 66% consumers use Nokia, 10% uses Samsung, 10% uses Sony Ericsson and 10% use Motorola & other.

    Factors Considered before purchasing:

    Figure 4

    Here it is tried to find out the reason for purchasing handset.

    Figure – 4: From the survey it is found that, out of 50 respondents 68% purchase handset for good quality, 16% use for less price, 10% use for attractive outlook, 4% for warranty facility and 2% for other.

    Preferred Outlet to purchase NOKIA Phone:

    .

    Figure -5:

    From the survey it is found that, out of 50 respondents 40% Preferred to purchase from Nokia outlet and others preferred from any retail outlet.

    Satisfaction related to the distribution process:

    Figure – 6:

    In this graph it expresses the ratio about preferring the distribution process by the retailer. In here 90% retailer are satisfied with distribution process of GDL.

    Role of Media

    Regular use of newspaper:

    Here it is tried to find out regular use of newspaper brand generally people read.

    Figure – 7: From the survey it is found that, out of 50 respondents 54% user reads the most popular daily news paper in Bangladesh The Prothom Alo, 10.61% The Jugantor, 7.08% The Ittefaq, 5.31% The Jonokontho, .88% The Independent and 22.12% others.

    From above information, it is clear that most of the people like to read ‘The Prothom Alo’ because it is now the most well known newspaper in our country. So advertisement in The Prothom Alo would give Nokia more coverage.

    Satisfied with the Price of available handset in market:

    Here it is tried to find out the customer satisfaction with the current price of handset in mobile phone market.

    Figure 8: From the survey it is found that, out of respondent 34% customer think that price is perfect. Every type of hand set is available in the market under the reasonable price and 66% customer think that the price is not perfect with the handset.

    Analysis on Distribution channel of GDL

    5.3 Overall satisfaction for Distribution channel of GDL (ultimate customer)

    Factors influences before buying a phone

    In this section it is tried to identify that the factors influences customer before buy.

    Figure9: From the survey it is found that, out of respondent 46% influenced by Price, 26% by feature, 20% by outlook and 8% by after sale service.

    Availability of Nokia handsets:

    In here it is found the availability of Nokia handset from view point of ultimate customer.

    Figure 10: from the survey it is found out that 75% respondent think Nokia handset are available and rest of them think it’s not.

    Preferable place to buy:

    Here it is tried to shown that the customer preferable place for buy Nokia Handsets.

    Figure 11: From the survey it is found that, out of 50 respondents 30% purchase from Nokia outlet and 70% from any retail outlet.

    Customer satisfaction level toward price:

    This graph tried to show the satisfaction ratio of respondent toward price of Nokia phone.

    Figure 12: From the graph it is found that, 56% consumer satisfied about the price and 44% consumer are not fully satisfy with the price.

    Demerits of Nokia handsets

    By this graph we can see the customer open perception over Nokia handset.

    Figure 13: 22% customer think the price is slightly high,58% think there are no problem with Nokia, 16% customer think Nokia should increase their outlet, 2% think some problem with quality and 2% customer think other.

    5.4 Overall satisfaction for Distribution channel of GDL (corporate customer)

    Preferable brand for personal use of handset:

    Most of the office personnel select their handset on the basis of handsets feature, outlook, price and quality.

    Figure 14: 50% client like Nokia handset, 14% client like the entertainment facilities of Sony Ericsson, 10% corporate customer like Motorola and 26% clients got interest on extra features of other handset brand,

    Satisfaction with the delivery time:

    Corporate client satisfaction depends on delivery time, price and quality. In this graph it is easily identified the corporate client satisfaction regarding delivery time.

    Figure 15: 86% corporate clients are satisfied with the delivery time and rest 14% thinks it should be faster.

    Interest on corporate offer:

    In this graph it is measured the client interest ratio on distributors corporate offer.

    Figure 16: 96% clients are interested to the corporate offer of distributors and rest shows no interest.

    Performance scale of Nokia handset:

    In this it is shows that the performance scale by the clients own scale (1-10) measurement.

    Figure 17: 36% goes for scale 7, 24% rate for scale 8, 18% took scale 9 and rest goes for scale 6 out of scale 10.

    Merits of Nokia handset

    By this graph it is tried to express that the Clients own reason behind Nokia handsets.

    Figure 18: 28% client prefer Nokia forCompetitive price, 64% client prefer Good quality and performance. Rest for Good after sales service

    .5.5 Overall satisfaction for Distribution channel of GDL (For RDS)

    Customer preference on Handset before purchasing:

    In this graph, it is found, the factors which influence customers before purchasing a Handset.

    Figure 19: 56% customers think about the price, 24% for quality, 12% longevity and the rest goes for outlook.

    Regularity of distribution:

    In this graph, we can find the satisfaction related to regular distribution of Nokia handset.

    Figure 20: Out of 18 respondents, 88.88% are satisfied with the regularity of distribution and the rest are not satisfied.

    Effectiveness of advertisement on sales:

    Figure 21: out of 18 respondents 83.33% are think that the advertisement of Nokia can increase their yearly sales ratio and rest of them think its cant take any effect on sales.

    Statement Types of

    Statement

    		 Total score Average

    Score

    		 Result
    1. I am totally dissatisfied with promotion Negative 50 2.7 Nearly medium position.(neither agree or disagree).

    Here it is tried to identify the satisfaction level reelected to promotion.

    Figure 22: According to the graph, respondents are not agreed or not disagree with this statement on the promotion of Nokia handset. So it can be said that the overall promotional policy of Matador is not satisfactory to the retailer.

    Satisfaction towards current handsets price:

    Figure 23: Most of the RDS thinks price of handset is normal and their ratio is 66.66%; other thinks that this higher then quality.

    Statement Types of

    Statement

    		 Total score Average

    Score

    		 Result
    2. I’m fully satisfied with the distribution Positive 66 3.6 Nearly agree position .

    Figure 24: From the above statement, it can be said that distribution of Nokia handset is quite satisfactory from the perspective of retailers.

    Statement Types of

    Statement

    		 Total score Average

    Score

    		 Result
    3. The quality of Nokia handset is satisfactory Positive 68 3.7 Nearly agree position.

    Figure 25: Nokia maintain their quality in their handset and RDS agree with this.

    Statement Types of

    Statement

    		 Total score Average

    Score

    		 Result
    4. I’m fully Satisfied with the pricing of handset Positive 59 3.2 Nearly agree position

    Figure 26: Their opinion toward the price of Nokia handsets are in satisfactory position.

    Overall retailer satisfaction on GDL

    Statement Types of

    Statement

    		 Total score Average

    Score

    		 Result
    1. I’m totally dissatisfied with promotion Negative (-) 50 2.7 Nearly medium position.(neither agree or disagree)
    2. I’m fully satisfied with the Distribution Positive (+) 66 3.6 Nearly agree position
    3. The Quality of Nokia handset is Satisfactory Positive

    (+)

    		 68 3.7 Nearly agree position
    4. I’m fully Satisfied with the pricing of handset Positive (+) 59 3.2 Nearly agree position

    Figure: 27

    Part-6

    Major Findings:

    From the overall market survey on “Customer satisfaction over GDL distribution channel”, I found there is an opportunity to spread their distribution channel and increase their sales in Dhaka city. In Bangladesh, there are many branding mobile phone. So, competitors are more conscious and the customers are very suspicious about selecting a product. In this situation, if

    " 95,"

    Customer satisfaction of level towards airtel call center is challenge and potentiality

    ","

    View With Charts And Images
    “Customer satisfaction of level towards airtel call center is challenge and potentiality”.

    1.1Introduction:

    Airtel Bangladesh Ltd. is a GSM-based cellular operator in Bangladesh. Airtel Bangladesh is the sixth mobile phone carrier to enter the Bangladesh market, and launched commercial operations on May 10, 2007. Warid Telecom International LLC, an Abu Dhabi based consortium, sold a majority 70% stake in the company to India’s Bharti Airtel Limited for US$300 million. Bharti Airtel Limited will take management control of the company and its board, and re-branded the company’s services under its own Airtel brand from 20th December, 2010. The Bangladesh Telecommunication Regulatory Commission approved the deal on Jan 4, 2010. In January 2010, Bharti Airtel Limited, Asia’s leading integrated telecom services provider, acquired 70% stake in Warid Telecom, Bangladesh, a subsidiary of the UAE-based Abu Dhabi Group.

    Bharti Airtel is making a fresh investment of USD 300 million to rapidly expand the operations of Warid Telecom and have management and board control of the company. This is the largest investment in Bangladesh by an Indian company. Dhabi Group continues as a strategic partner retaining 30% shareholding and has its nominees on the Board of the Company.

    The new funding is being utilized for expansion of the network, both for coverage and capacity, and introduction of innovative products and services. As a result of this additional investment, the overall investment in the company will be in the region of USD 1 billion.

    On July 19, 2007 Warid Telecom announced in major dailies of having achieved one million subscribers in the first of 70 days of operation. As of December, 2009 Warid has secured 2.99 million subscribers and is ranked fourth among the six operators.

    1.2 Origin of the report:

    To prepared this report as a part of fulfillment of my practicum which is an integral part of the BBA program under the department of Finance in the faculty of College of Business Administration of International University of Business Agriculture and Technology. This subject is 9 credit hours course and duration is four months. This report is prepared for Prof. Dr. M Alimullah Miyan, Chair, CBA, IUBAT. The main objective to do internship is gathering practical knowledge before beginning the job career. As an intern, to worked in Call Center of Airtel Bangladesh for 3 months. And during my internship period I got the opportunity to perform different task related with customers satisfaction and these broaden my own perception about the operation of the company.

    During the internship was placed in Call Center department of Airtel Bangladesh under Farhana Yasmin (Supervisor). During this period used observation capability and gained lots of practical experiences about customer satisfaction and challenges towards call center.

    1.3 Statement of the problem:

    Find out the lacking of existing marketing strategy of airtel.

    Analyzing customers in Bangladesh.

    Incompatibility of collected data from different sources

    1.4 Purpose of the study:

    The main purpose of this report is to examine the functions, performance and its challenges and potentialities of call center of Airtel Bangladesh. And also, to evaluate the potential market, market share, services, current performance s, and overview of call center of Airtel Bangladesh.

    1.5 Significance of the study:

    This study is important because from this analysis readers can be known well about key activities of call center of Airtel Bangladesh. All these information, which are included in this report, will help the management to identify various scopes and limitations of the company. This study deals with the department of call center of Airtel Bangladesh Ltd. This study will also focus management structure, different tools and techniques of call center department, asset management, and also key functional activities and so on. also focused on the past and present performances of the company.

    · To study the importance and development of tele – communication industry in today’s scenario.

    · To understand the various Marketing Strategies where Airtel has adopted to survive in highly competitive cell phone industry.

    · To make a comparative study of the major players in Bangladeshi Service Provider

    1.6 Objectives:

    The overall objective of this report is to find out the causes why airtel is not getting enough customers and finding out some new ideas that would be helpful to develop new marketing strategy to increase the number of customer as well.

    Some other specific objectives are:

    In providing an analysis of the behavior of the customers of airtel, the report’s objectives will be explored the following specific areas:

    1.7 Limitations:

    Every attempt will be taken to obtain the error free and meaningful result but as nothing in this world is 100% perfect and believe that there will still the chance for error on account of following limitations-

    (1) Respondent’s unavailability

    (2) Time pressure and fatigue on the part of respondents and interviewer.

    (3) Courtesy bias.

    (4) In few cases was not given the specific information which was very important. So I had to be initiative and use assumed information which is not 100% appropriate.

    (5) Also I faced time limitations because 3 month was not enough to prepare this report.

    1.8 Activity:

    The duration of finding out the results of customer’s satisfaction on conducted from personal interview by questionnaire shown in the pie chart.

    1.9 Company Information:

    In January 2010, Bharti Airtel Limited, Asia’s leading integrated telecom services provider, acquired 70% stake in Warid Telecom, Bangladesh, a subsidiary of the UAE-based Abu Dhabi Group.

    Bharti Airtel is making a fresh investment of USD 300 million to rapidly expand the operations of Warid Telecom and have management and board control of the company. This is the largest investment in Bangladesh by an Indian company. Dhabi Group continues as a strategic partner retaining 30% shareholding and has its nominees on the Board of the Company.

    The new funding is being utilized for expansion of the network, both for coverage and capacity, and introduction of innovative products and services. As a result of this additional investment, the overall investment in the company will be in the region of USD 1 billion.

    This is Bharti Airtel’s second operation outside of India. The company launched its mobile services in Sri Lanka in January 2009 on a state-of-the-art 3.5G network. The company crossed the 1 million customers mark within six months of launch on the back of innovative offerings as well as rapid expansion of network coverage and distribution.

    1.10. Background

    In December 2005, Warid Telecom International LLC paid US$ 50 million to obtain a GSM license from the BTRC and became the sixth mobile phone operator in Bangladesh.

    In a press conference on August 17, 2006, Warid announced that its network would be activated two months ahead of schedule, in October, 2006. Again in October, 2006 Warid Telecom put off the launch of its cell phone services in Bangladesh until April, 2007 after its major supplier Nokia walked out on an agreement over a payment dispute.

    Warid had a soft launch at the end of January 2007. It gave away complimentary subscriptions among a selected group of individuals, whose job was to make ‘test calls’ and the operator adjusted its network’s quality based on their comments.

    On May 9, 2007, Warid in an advertisement in some daily newspaper stated that it would be launching publicly on May 10, 2007. However, neither call rate nor any package details were revealed. The advertisement included an announcement for the people interested to buy Warid connections to bring the documents like ID Card, etc., to the designated franchise and customer care centers.

    On October 1, 2007, Warid Telecom expanded its network to five more districts raising total number of districts under Warid coverage to 56, said a press release. Mymensingh, Jamalpur, Sherpur, Rajbari and Narail towns were covered by Warid network.

    On November 10, 2007, 61 districts under Warid network coverage. On June 10, 2008, Warid Telecom expanded its network to 3 more districts Bandarban, Khagrachhari and Rangamati. Now all 64 districts of Bangladesh are under Warid network coverage meaning Warid Telecom now has nationwide coverage. On December 20, 2010, Warid Telecom was rebranded to airtel.

    1.11 Vision

    By 2015 Airtel will be the most loved brand, enriching the lives of millions.

    “Enriching lives means putting the customer at the heart of everything we do. We will meet their needs based on our deep understanding of their ambitions, wherever they are. By having this focus we will enrich our own lives and those of our other key stakeholders. Only then will we be thought of as exciting, innovation, on their side and a truly world class company.

    1.12 Mission:

    “We at airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more”.

    1.13 Our values:

    Customer service focus

    Empowered employees

    Innovative services

    Cost efficiency

    To be transparent and sensitive in our dealing with all stakeholders.

    Continuously improve our services.

    1.14 Company Profile:

    Airtel
    Type Private Company
    Industry Telecommunication
    Founded 2005
    Headquarters House 34, Road 19/A, Banani, Dhaka 1213, Bangladesh
    Key people Chris Tobit, CEO
    Products Telephony, EDGE, GPRS, GSM
    Revenues 117.213 billion (US$2.61 billion) (2010)
    Operating income 21.771 billion (US$485.49 million) (2010)
    Net income 18.282 billion (US$407.69 million) (2010)
    Total assets 856.142 billion (US$19.09 billion) (2010)
    Total equity 502.603 billion (US$11.21 billion) (2010)
    Parent Bharti Airtel 70% and Warid Telecom 30%
    Web site http://bd.airtel.com/

    Table 1: Short Profile of airtel

    1.15 Organizational Structure:

    Chairman and Managing Director
    CEO
    JMD & CEO
    President Enterprise Service
    Business Director
    President Mobile Service
    President Tele media Service
    Executive Director Network Service Group
    Executive Director Supply Chain
    Executive Director Human Resource
    Executive Director Finance
    Director Legal & Regulatory
    Director IT
    Director Marketing
    Director Internal Assurance
    Manager Marketing
    Manager Advertising
    Manager Promotion

    Figure 1: Organizational Structure

    1.16 Management:

    Chris Tobit, CEO

    Krish Shankar, Director, HR

    Joachim Horn, Executive director, Network

    Rubaba Dowla Matin, Marketing Manager.

    Polash Mojumder, Head of Quality Control.

    2. Marketing Mix:

    2.1 Airtel Product:

    Fig2: Classification of product of airtel.

    2.1.1. Airtel Prepaid

     In our airtel world, you are never far from what you love

    Different people love different things. To cater to all your needs, airtel offers you 4 different packages in one prepaid connection.

    ADDA

    Product Info:

    You are the kind of person who loves to keep in touch with a close group of friends. You like to browse the net when bored and make the most of your time on your phone. ‘adda’ will give you maximum fnf and all that at fantastic rates.

    To select this package:

    24 Hours Tariff

    Voice Calls Outgoing: (in Tk. per min)
    Airtel TK 0.59
    other operator TK 1.19
    airtel fnf TK 0.29
    other operator fnf TK 0.69
    SMS Calls Outgoing: (in Tk. per SMS) –
    Airtel TK 0.49
    other operator TK 0.49
    airtel fnf TK 0.29
    other operator fnf TK 0.29
    Other Facilities
    Number of FnF 8
    Pulse 30 Sec

    Table 2: Tariff of adda package

    Instant cash back
    Everyday usage Tk 5 10Tk 20Tk 40Tk
    Instant cashback Tk 1 Tk 3 Tk 6 Tk 12

    GOLPO

    If you are someone who loves making long conversations, our ‘golpo’ package with 24 hrs flat tariff to any number is something you will fall in love with. Talk to any number anytime at a fixed flat rate.

    To select the package:

    24 Hours Tariff

    Voice Calls Outgoing: (in Tk. per min)
    Airtel TK 0.77
    other operator TK 0.77
    airtel fnf N / A
    other operator fnf N / A
    SMS Calls Outgoing: (in Tk. per SMS) –
    Airtel TK 0.39
    other operator TK 0.39
    airtel fnf N / A
    other operator fnf N / A
    Other Facilities
    Number of FnF N / A
    Pulse 60 Sec
    Instant cash back
    Everyday usage Tk 5 10Tk 20Tk 40Tk
    Instant cashback Tk 1 Tk 3 Tk 6 Tk 12

    Table 3: Tariff of Golpo Package

    KOTHA

    Share every little moment with the ones you love with airtel ‘kotha’-the package plan with 1 sec pulse from the very first second.

    Activate your airtel prepaid and enjoy 1 second pulse to any operator. to select the package, type ‘K’, and send to 7353, or just dial *121*8*3#.

    24 Hours Tariff

    Voice Calls Outgoing: (in Tk. per min)
    airtel TK 0.59
    other operator TK 1.19
    airtel fnf N / A
    other operator fnf N / A
    SMS Calls Outgoing: (in Tk. per SMS) –
    airtel TK 0.29
    other operator TK 0.49
    airtel fnf N / A
    other operator fnf N / A
    Other Facilities
    Number of FnF N / A
    Pulse 1 Sec

    Table 4: Tariff of Kotha Package

    Instant cash back
    Everyday usage Tk 5 10Tk 20Tk 40Tk
    Instant cashback Tk 1 Tk 3 Tk 6 Tk 12

    Newly Launched in Airtel Prepaid

    DOLBOL

    Now join your own community & talk at the lowest rate!

    Airtel is proud to introduce to you ‘dolbol’, a one of its kind offer where you can join your own community and talk @ the lowest rate of 29 paisa/min within your community members. It also offers a bundle of other facilities that you were looking for.

    Here the offer goes:

    ‘Dolbol’ offers:

    feature tariff(excluding vat)
    community onnet Offnet
    voice call BDT 0.29 BDT 0.59 BDT 1.19
    Sms BDT 0.29 BDT O.49 BDT 0.49
    Pulse 30 seconds
    fnf feature no fnf
    Gprs 0.015paisa per kb

    Table 5: Dolbol offers

    Switching between packages

    You can switch between the packages on offer. When you switch from one option to another, the benefits under the previous option will automatically be changed to the new one.

    2.1.2 Airtel Postpaid

    Airtel exclusive

    Product Info

    Airtel exclusive brings you the highest fnf features and 1 second pulse that will enable you manage your calls efficiently.

    1. This package is available for new acquisition

    2. Regular Classic, advantage & super benefits customer will be able to migrate to this new package and also migration from Exclusive package to Classic, advantage package is possible but exclusive package to super benefits will not be possible.

    3.

    Figure 3: Classification of airtel Postpaid

    Only the customers from super benefits package will be able to migrate to exclusive package through short code 3136 at FOC (free of cost). Customer will write ‘Exclusive’ and send to 3136

    4. No use no bill policy will prevail as it is for the postpaid packages. if a postpaid customer does not make any activity during an entire bill cycle, the minimum commitment will not be applicable in the month?end invoice.

    Airtel classic

    Product Info

    Airtel classic offers you flexible tariff plans which will help you to explore a wide range of services and keep overall cost to a reasonable limit.

    Modalities:

    1. Existing customers can continue with their current packages or migrate to new packages. But migration from new package to old package will not be possible. New sales will only be made through new tariffs.
    2. Minimum usage for line rent waiver will include all types of voice, vas usage and rentals.
    3. No use no bill policy will prevail as it is for the postpaid packages. if a postpaid customer does not make any activity during an entire bill cycle, the line rent will not be applicable in the month-end invoice.
    4. Existing super benefit will remain same as they are.
    5. Tariffs which are not covered at this fact sheet will remain as they are.

    Airtel advantage

    Product Info

    Airtel advantage comes with an attractive flat tariff plan, large close calling circle which makes your communication simple.

    Modalities:

    1. Existing customers can continue with their current packages or migrate to new packages. But migration from new package to old package will not be possible. New sales will only be made through new tariffs.
    2. Minimum usage for line rent waiver will include all types of voice, vas usage and rentals.
    3. No use no bill policy will prevail as it is for the postpaid packages. If a postpaid customer does not make any activity during an entire bill cycle, the line rent will not be applicable in the month-end invoice.
    4. Existing super benefit will remain same as they are.
    5. Tariffs which are not covered at this fact sheet will remain as they are.

    Tariff:

    Service types & others Airtel advantage Airtel classic Airtel exclusive
    Tariff
    airtel to airtel bdt 0.77 bdt 0.49 bdt 0.49
    airtel to other bdt 0.77 bdt 0.94 bdt 0.89
    airtel to airtel (fnf) n/a bdt 0.25 bdt 0.25
    airtel to others (fnf) n/a bdt 0.65 bdt 0.65
    sms on-net bdt 0.45 bdt 0.49 bdt 0.49
    sms off-net bdt 0.45 bdt 0.49 bdt 0.49
    sms on-net fnf n/a bdt 0.29 bdt 0.29
    sms off-net fnf n/a bdt 0.29 bdt 0.29
    international sms bdt 2.49 bdt 2.49 bdt 2.49
    internet (per kb) bdt 0.02 bdt 0.02 bdt 0.02
    pulse (sec) 5 5 1
    no. of fnf n/a 15 25
    line rent bdt 50 bdt 50 bdt 0
    minimum usage for line rent waiver bdt 300 bdt 300 n/a
    Minimum commitment n/a n/a bdt 500

    Table 6: Tariff of airtel Postpaid

    2.2 Price

    2.2.1 Prepaid:

    startup price preloaded talk time Bonus Value added services
    BDT 149 BDT 20 500free on-net minutes from the day of 1st recharge of BDT 50 and above recharge Free my tunes & airtel dhoom subscription for 1 month.
    Table 7: Prepaid Price

    Note:

    Preloaded talk time can be checked through *778# and the bonus airtime & sms can be checked through *778*5# & *778*2# respectively.

    2.2.2 Postpaid:

    Airtel postpaid which comes with 3 packages is designed to cater to both your professional and personal communication needs.

    Service types & others airtel advantage airtel classic airtel exclusive
    Product proposition Worry free flat tariff Attractive fnf rates Highest fnf features
    Selling price bdt 650 bdt 650 bdt 1250
    Connection price bdt 150 bdt 150 bdt 150
    Non-refundable deposit bdt 500 bdt 500 bdt 1100
    Default credit limit bdt 500 bdt 500 bdt 1100

    Table 8: Postpaid Price

    2.3 Place

    AEC

    You can contact our state of the art Contact Center, 24 hours a day, 365 days a year, through the following means:

    Or you can just use your airtel live menu to get directly connected to the Contact Center by dialing “Helpline” from Help & Support menu.

    Furthermore, an extensive network of franchises, kiosks and mobile units ensure easy and convenient accessibility to a host of our products and services.

    Zone Center Info. and Location
    Dhaka Banani AEC Tazwar Center

    AEC

    House#34 Road#19/A, Banani, Dhaka 1213

    Motijheel AEC Motijheel

    AEC

    64/1, Purana Paltan Motijheel Commercial Area, Dhaka 1000

    Uttara AEC Siaam Tower

    AEC

    Hs – 15. Dhaka Mymenshing Road. Sec – 3. Uttara. Dhaka – 1230.
    Chittagong Chittagong AEC Quaderi Chember

    AEC

    37 Agrabad Commercial area, Chittagong
    Sylhet Sylhet AEC Rahman Tower

    AEC

    House#A/2 Bangabir, Naiorpool Sylhet

    Coverage Map:

    Figure 4: Coverage Map

    2.4 Promotion

    Promotion:

    Promotion is one of the marketing tools that a company uses to achieve its marketing objectives. Each promotion tools has unique characteristics to improve their total sales. Airtel are trying to do more promotional activities for their service. Airtel Marketing promotion can be classified in several steps:

    Advertisements in the national newspapers:

    Examples of advertisements published in the national newspapers:

    Advertisements through billboards:

    The billboards installed so far by airtel Bangladesh Limited are listed below:

    SL # Location Qty
    01 Kachpur- Dhaka Facing 1
    03 Saidabad bridge 1
    04 Mohakhali Flyover (Both) 1
    05 Shahabagh 1
    06 GEC Circle (Ctg) 1
    07 Gabtoli Bus Stand-Savar face 1
    08 Chittagong Railway Station 1
    09 Dhanmondi Rassel Square 1
    10 Cox’s Bazar,near sea beach 1
    11 Patanga sea beach more 1
    13 Zatrabari Moor 1
    14 Uttara, Azampur 1
    15 Asulia road, Dhaka 1
    16 Khamarbari, Farm gate 1
    17 Sheraton Hotel 1
    18 Gulshan-1, Moor 1
    19 Khilgaon Flyover 1
    20 Mohakhali, Airport 1
    21 Sat rasta 1
    22 Agrabad, SK Mujib Road 1
    23 Banani, Front of Community Center 1
    24 Malibagh Moor 1
    25 Mirpur-10 1

    Table10: Billboard installed by airtel

    Advertisement through Electronics media:

    Airtel puts their advertisement different channel as like- ntv, Rtv, Bangla vision, ATN Bangla, Chanel I, Boishakhi TV, desh Tv, Masranga, Somoy Television Etc.

    Personal Selling:

    Personal presentation by the firm’s sales forces for the purpose of making sales and building customer relationship. Airtel uses personal selling in different stages of marketing and distribution. Company distributes their product (SIM, Scratch, eazee load,) among the wholesalers and retailers by maintaining the excellent relationship. Airtel’s communicate with corporate client by its sales force building and keeping relationship with potential and existing valued customer.

    Sales promotion:

    Sales promotion includes a wide way of tools that can attract consumer’s attraction, strong incentive of purchase, free gifts, discount and several types of occasional program. Airtel sales promotion includes credit sales, commission etc. airtel arrange conference every six month among the dealers, wholesalers and retailers. They always try to influence and convince them for creating a market demand and sale their product. Here are some examples of airtel promotion that can be highlighted:

    Airtel organized a 5 days long road show. Here subscribers got the opportunity to buy SIM of different pre-paid package at 80TK, where regular offer is150TK.

    At Bangla academy “Ekusay Boi Mela” airtel distributed handbag in visitors who bought book from fair. There was slogan on handbag for raising awareness for reading book.

    Airtel distributed scarf to attract their existing and new customer at Pahela Baisakh, That scarf create brand awareness of airtel.

    Public relation is used to promote products, people, places, ideas, activities, organizations and even nations. Public relation can also influence a product sales or brand awareness. airtel arrange meeting always with the wholesalers and retailer for maintaining a good relationship with them. General people can also come to the airtel office for their queries and for expressing their concern about any telecom related factors.

    o Price-packs:

    Airtel offers Nokia 1800 handset everyday based on the highest usages.

    o Cash Back:

    Airtel is giving instant cash back and recharge bonus to motivate customer to use more.

    Blackberry on Airtel:

    Presenting the BlackBerry® smartphone – the world’s most desired integrated communication device on airtel. Now be constantly accessible on mail, talk on phone and surf the internet at the same time, schedule and coordinate appointments in the middle of meetings, raise approval request, log in orders, update business databases and stay connected to your colleagues, customers, friends and family – from anywhere, anytime.

    Blackberry Services

    BlackBerry® helps you simplify your communications and ease your lifestyle to accomplish more. We have two different services to best suit your needs.

    Pricing

    BLACKBERRY® INTERNET SERVICE (BIS)

    View emails and attachments, browse the web and use instant messaging, all on the go! BlackBerry® Internet Service (BIS) is the easiest and the most affordable way for individuals to start using BlackBerry® smartphones.

    BlackBerry® Internet Service (BIS) is an out-of-the-box service that comes ready to activate with every BlackBerry® smartphone from airtel, and when integrated with ISP mail service, it provides seamless mobile extension to your existing email service. You can be up and running in just a few steps, regardless of email account type – and without corporate IT support.

    BLACKBERRY® ENTERPRISE SERVER (BES)

    BlackBerry Enterprise Server (BES) is a unique and totally integrated service that offers corporate mail integration, secure administration, advanced wireless devices, desktop tools and more. It ensures mobility of your workplace by connecting you to your customers, colleagues, and information that drive your business. Wireless connectivity allows you to stay in touch with business contacts at both home and abroad.

    Organizations with advanced mail server like Microsoft® Exchange® can benefit from BlackBerry Enterprise Server (BES) and turn it into a complete end-to-end wireless solution.

    · Blood Donation program:

    One of prominent social contribution of airtel is in the field of Voluntary blood donation. Airtel has sponsored and directly participated in various voluntary Blood Donation Programs around the country.

    · Blanket distribution Program:

    In Rongpur district airtel distributed 500 blankets in distressed people.. In Bangladesh every year in cold prone area people died in cold related disease due to their disability to buy warm cloths.

    2.5 SWOT analysis:

    2.6 Value Added Services

    2.6.1 Vehicle Tracker

    The Vehicle Tracking Service offers minute-by-minute information on vehicles for effective management and easy recovery in case of theft.

    Features

    Vehicle tracker subscription tariff: BDT 625 + VAT / month

    Vehicle tracking device cost: BDT11,000 (Including VAT)

    2.6.2 Jobs Alert Service

    Fresher’s Job

    If you are new to job market, subscribe to Fresher’s job subscription service to receive job alerts of fresher’s job in your mobile daily.

    To start the service, subscriber needs to dial *321*413# or send ‘FRESHER’ to 3003 and opt to subscribe by replying with 1.

    Tariff:

    BDT 7 / seven days subscription

    2.6.3 Voice Portal

    Voice Portal service with Interactive Voice Response (IVR) options which allows Airtel users to dial the short code 555 and get the updated information on Sports, News, Religion, Finance, Horoscope, Time, Check, Quotes, Jokes and Food & Dinning. Subscriber just needs to just dial 555 and follow the instructions.

    2.6.4 Time check:

    Find out the exact time of any city around the world using the ‘Time Check” menu.

    To find out the time:

    2.6.5 Science & education:

    Use the science & education menu to get updates on science & education.

    Airtel menu > info zone > science & education

    Select from “Believe it, or not!” or “Did you know” to get fun and interesting facts on a variety of scientific issues.

    You can receive the information over SMS – by using the “Click to Read” menu options. Or, if your handset is GPRS/EDGE enabled, you can even choose to download video clips using the “See it, hear it” option.

    2.6.6 Fashion & Leisure

    Find out the latest trends and styles from around the globe by visiting the “Fashion & leisure” menu.

    Airtel menu > info zone > Fashion & Leisure

    Under the “click to read” menu, you’ll find tips on two aspects:

    Fashion

    giving you the latest tips from fashion experts to keep you looking trendy

    Art of Living

    giving you expert grooming advices

    The “See it, hear it” menu has exciting video clips on fashionable matters. The options on offer are:

    1. our daily expert advice on style
    2. for the ultra-cool male, the latest in men’s fashion
    3. the latest rage in ramps & fashion houses

    You can also use the “On demand” option to search out information on anything & everything on fashion that particularly interests you.

    On-Demand Fashion

    First you need to search out the ‘specific” short code for the issue you are interested in. Use the “Search Codes” menu to find out this code

    1. Gives you list of codes for ten most popular items

    2. Allows you to search for codes by alphabetical categories.

    3. Allows you to search for codes by keywords.

    2.6.7 BBC – learn English

    BBCWST- Dial 3000 to learn English with the BBC World Service

    Thanks to a partnership with the BBC World Service Trust (BBCWST), Airtel subscribers will now have access to high quality English language learning materials on their mobile phones.

    Audio services

    Airtel subscribers will be able to listen to English lessons and take English quizzes on their mobile phone through dual tone multi-frequency and interactive voice response (IVR).

    SMS services

    Airtel subscribers will be able to take English quizzes on their mobile phones through SMS push pull and

    Internet services

    Airtel subscribers will be able to download English lessons and take English quizzes on their mobile phones through the new BBCWST WAP site: bbcjanala.com/mobile

    Accessing the SMS services

    Airtel subscribers can test their English language skill by taking a weekly SMS quiz. To participate in the quiz, subscribers should send an SMS message with the word “QUIZ” to 3000. In reply, subscribers will receive an English language quiz.

    Airtel subscribers will also be able to have their say in the new BBC television series, Buzz. Each week at 9.20pm on ATN Bangla, the presenters of BBC Buzz will ask viewers their opinion on a topic. To participate, subscribers should send an SMS message with the word FEEDBACK their opinion to 3000.

    Accessing the audio (IVR) services:

    Airtel subscribers will be able to listen to the following English lessons by dialing the number 3000:

    2.6.8 Weather

    Use the Weather menu to get updates on weather from cities around the globe.

    2.6.9 Dictionary

    · The Airtel menu has its own electronic dictionary.

    · Click on “Dictionary” and type in the word which want to search out. You will shortly receive the definition over SMS

    2.6.10 Caller Tunes

    Set your favorite songs as your Caller Tunes and play your favorite songs for your callers.

    Caller Tunes Offer

    Caller Tunes Subscription

    2.6.11 Voice Adda:

    Voice Adda is a 24-hour voice based service which allows you to dial “3443” and voice chat with friends & strangers alike. It is a place where you can make new friends & talk nonstop on your favorite topics while maintaining complete confidentiality.

    Tariff Information

    Service Type Charges
    Voice Adda 1st min BDT 5/min and

    2nd min & onwards BDT 2/min

    2.6.12 Ramadan Special Services:

    Services How to subscribe Charge
    Namaz Alert Dial *321*6*1*2# Subscription Charge BDT 10.00/month
    Religious Portal Dial 515 BDT 2.00/min
    Quran Ayat Alert Dial*321*6*2*2# Subscription Charge BDT 10.00/month
    Islamic RBT/RRBT content Dial 78800 *Tune Charge: BDT 10..00

    * Browsing Charge: BDT 2.00/min
    Airtel Dhoom Dial 4848(press 1) *Subscription Charge BDT 15.00/month

    *Browsing Charge: BDT 0.29/min
    M-Radio Dial 4040 (press 10) Subscription Charge BDT 20.00/month

    *Browsing: BDT 0.29/min

    *Song Dedication:BDT 5.00/song
    Airtel live(Islamic contents) airtel live .mobi Religious wall paper,tone, Song Download Charge applicable
    Namaz Apps write namaz & send to 4646 BDT10.00 for application download

    Table 11: Ramadan Special

    2.6.13 Airtel USB Modem

    Let the things you love always be with you!!

    Fall in love with the internet all over again with airtel USB modem! our easy to use plug and play USB modem ensures a smooth internet access from any pc or laptop. From now on, you are no longer far from the things you love.

    Airtel USB modem bundle includes:

    Data card bundle packages:

    offers what you’ll get price
    prepaid data modem bundle
    • data modem E153
    • prepaid sim
    • 1GB (P6) internet free (first 30 days)
    		 tk. 2600

    (including VAT)
    postpaid data modem bundle
    • data modem E153
    • postpaid sim
    • 1GB (P8) internet free (first 30 days)
    		 tk. 3200

    (including VAT)

    Table 12: Data card bundle package

    Exclusive facilities:

    2.6.14 Data Services

    Your airtel Internet lets you connect to the web whenever you require. On the beach, on the way to a meeting, in the garden –anywhere. Just login to Airtel Internet from your mobile, laptop or PC and you’re on. Download music, check your emails or simply stay in touch with friends.

    Tariff –

    Five fantastic internet plans to choose from.

    Disclaimer:

    The information contains in this web-site is prepared for educational purpose. This site may be used by the students, faculties, independent learners and the learned advocates of all over the world. Researchers all over the world have the access to upload their writes up in this site. In consideration of the people’s participation in the Web Page, the individual, group, organization, business, spectator, or other, does hereby release and forever discharge the Lawyers & Jurists, and its officers, board, and employees, jointly and severally from any and all actions, causes of actions, claims and demands for, upon or by reason of any damage, loss or injury, which hereafter may be sustained by participating their work in the Web Page. This release extends and applies to, and also covers and includes, all unknown, unforeseen, unanticipated and unsuspected injuries, damages, loss and liability and the consequences thereof, as well as those now disclosed and known to exist.  The provisions of any state’s law providing substance that releases shall not extend to claims, demands, injuries, or damages which are known or unsuspected to exist at this time, to the person executing such release, are hereby expressly waived. However the Lawyers & Jurists makes no warranty expressed or implied or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any information, apparatus, product or process disclosed or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product process or service by trade name, trade mark, manufacturer or otherwise, does not necessarily constitute or imply its endorsement, recommendation or favouring by the Lawyers & Jurists. The views and opinions of the authors expressed in the Web site do not necessarily state or reflect those of the Lawyers & Jurists. Above all, if there is any complaint drop by any independent user to the admin for any contents of this site, the Lawyers & Jurists would remove this immediately from its site.

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    Customer Satisfaction on credit card services provided by Brac Bank

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    “Customer Satisfaction on credit card services provided by Brac Bank”

    Chapter 01

    1. Introduction

    1.1. Objectives:

    There are some objectives for the report and those are:

    1.2. Methodology:

    1.2.1. Selection of Sampling:

    It is apparent that in this study the target samples are the credit cardholders of BRAC Bank. In order to know and measure the true picture of the over all satisfaction level of customers I have chosen specific number of customers, who:

    a) Age 20 or older

    b) Have income of at least TK. 14,000 per month

    c) Have one of the credit cards

    d) Have at least one land phone

    e) Mainly resides in Dhaka city

    To obtain a representative sample of qualified individuals with in short period in low cost, a convenience sampling method is used to select the respondent from the cardholders. Among all the cardholders, meeting the five qualifications from which some have been selected and asked according to the questionnaire. The steps in the sampling design process are as follows:

    1.2.2. Target Population:

    Adults meeting the five qualifications (elements) holding credit cards of BRAC Bank mainly living in Dhaka City during the survey period.

    1.2.3. Sample Frame:

    The computer generated record of the credit card holders of BRAC Bank.

    1.2.4. Sampling Unit:

    The sample unit of this project is the age group of people from 20 to 65 years old who are involved in different professions and sufficient income to get a credit card.

    1.2.5 Sampling Techniques:

    Convenience sampling is used here. The target population has been taken from the record and has been asked questions later.

    1.2.6. Sample Size:

    For this study sampling size has been restricted to 50. The different credit card holders (Visa classic and Gold, Universal Visa classic and gold) have been questioned randomly.

    1.2.7. Data Collection Method:

    Data has been collected from two sources:

    a. Primary Sources:

    The data on the satisfaction level of customer services have been collected from the cooperative respondents through a structured questionnaire & by observation and informal discussions with the personnel of BRAC Bank. More emphasize will be given on the primary data.

    b. Secondary Sources:

    Secondary data have been collected from informal discussion with the personnel of BRAC Bank and from the internet.

    1.2.8 Data Measurement Techniques:

    To measure the satisfaction level and expectations of the card holders, the data is collected through filling up a simple questionnaire and observation, which have been analyzed with frequency distribution table, cross tabs and regression analysis by software called SPSS.

    a) Questionnaire: In the questionnaire mainly the numeric and scaling concept have been analyzed.

    b) Observation: The direct examination of behavior, the results of behavior or psychological changes.

    1.3. Scope of the Study:

    This project is dealing with the customer services of BBL. It gives more emphasis on the various satisfaction levels of the existing customers and their expectations. On top of that, it is a research on the problems which customers face regularly. As this study mainly attempts to distinguish the overall customer satisfaction of credit card holder’s of BBL, the study is limited to the credit card holders of the bank.

    1.4. Limitations:

    Chapter 02

    2. Company Profile

    2.1 Statement of the Problem:

    The new century is even more prosperous than the past, because of convenient transaction of money. The traditional shape of money is getting lost and it is now developed into different forms that satisfy the same needs executed by money. Now a day one of the very important mode of payment is the credit cards. Since free and open trade is the engine of economic development, everyone is going to be a part of it. We are living in the era of profound changes in transaction process, called the age of interdependence, it is a time of increasing expectation brought about by worldwide distribution, satellite communication, transportation system, ATMs, credit cards etc.

    Bangladesh over the thirty years of its independence has gone through lots of transition and break-through to reach at the position it is today. Bangladesh being a third world country was always dominated and suppressed by the powerful and economically well off nation. Bangladesh become an independent country in 1971 began its journey to distant dream many years ago. The country with authentic natural beauty and enormous natural resources was not able to show the auspicious sign of prosperity because of the barriers that were created both locally and internationally. The country is not advance in terms of technology and has not yet adapted modern and efficient ways of producing goods and services that would minimize cost and maximize profit. But BRAC Bank has been trying to provide the modern approach of providing services to its valuable customers and trying to make this situation better.

    Banking is one the most competitive industries of Bangladesh that has seen a huge amount of growth during the last decade. A large number of new banks have made their places in the industry and yet there are more to register in the list. In such a highly competitive service industry, the importance of customer satisfaction cannot be de-emphasized. Improved customer satisfaction and loyalty gives a firm better base than its rivals and allows it flourish in the industry.

    This project deals with the service quality and customer satisfaction of BBL’s credit card service. A survey was conducted on the credit card holders of BBL, Dhaka. The objective was to assess the level of importance the credit card holders of BBL put across various service level attributes and also to determine how well BBL was satisfying the customers on those service grounds. The results of this survey are then analyzed to determine the most important aspects of the service and discover various drivers of overall satisfaction. Various important issues of customer satisfaction are also presented in light of the findings of the survey. Lastly, the findings are examined to prescribe a set of specific recommendations to improve the overall service quality according to customers expectations and also to solve the existing problems in the whole organizational level.

    2.2. Brac Bank Ltd:

    BRAC Bank is a scheduled commercial bank established under the Banking Companies Act, 1991 and incorporated as a public company limited by shares on 20 May, 1999 under the Companies Act, 1994 in Bangladesh. The primary objective of the Bank is to carry on all kinds of banking business. The Bank could not start its operation till 03 June, 2001 since the activity of the Bank was suspended by the High Court of Bangladesh. Subsequently, the judgment of the High Court was set aside and dismissed by the Appellate Division of Supreme Court on 04 June, 2001 and accordingly, the Bank has started operations from 04 July, 2001.

    BRAC Bank has a unique institutional shareholding between BRAC, the largest DFO in the world, the International Finance Corporation (IFC), the commercial arm of the World Bank Group, and Shore Cap International, a concern of Shore Bank Corporation, America’s first and leading community development and environmental banking corporation. As a fully operational commercial bank, BRAC Bank focuses on pursuing unexplored market niches in the Small and Medium Enterprise Business, which has remained largely untapped within the country. Almost 40% of BRAC Bank’s clients had no prior experience with formal banking. The Bank has 313 regional marketing unit offices offering services in the heart of rural and urban communities and employs about 1,200 business loan officers – around 70% of total staff.

    BRAC Bank Limited, a full service commercial bank with Local and International Institutional shareholding, is primarily driven by creating opportunities and pursuing market niches not traditionally met by conventional banks. BRAC Bank has been striving to provide “best-in-the-class” services to its diverse range of customers that spread across the country under an on-line banking platform.

    The reason BRAC Bank is in business is to build a profitable and socially responsible financial institution focused on markets and businesses with growth potential, thereby assisting BRAC and stakeholders to build a “just, enlightened, healthy, democratic and poverty free Bangladesh,”which means to help make communities and economy of the country stronger and to help people achieve their dreams. We fulfill the purpose by reaching for high standards in everything we do; for our customers, our shareholders, our associates and our communities, upon which the future prosperity of our company rests. As such a career in the BRAC Bank Limited requires one to be versatile, to have genuine love and understanding towards others and to be able to take on different roles.

    Remarkably, BRAC Bank, despite being one of the newest Banks in the country, has attained a reputation for being in the forefront of the industry. Our retail business and corporate business have gained new ground over the last two years and today  BRAC Bank began it’s operations with a mind to provide formal banking services to all levels of people in the urban, semi-urban and rural spectrum through the nearly 300 unit offices across the country. The Bank has seen that goal a long way through – providing Bangladesh with a degree of services and professionalism that the traditionally underserved class could ever dream of.

    The issue manager, in addition to the issuer company, shall ensure the due compliance of the above mentioned conditions and shall submit the compliance report to the Commission within seven days of expiry of the  fifteen days time period allowed for refund the subscription money.

    Since inception in July 2001, the Bank’s footprint has grown to 26 branches, 349 SME unit offices and 37 ATM sites across the country and the customer base has expanded to 210,000 deposit and 55,000 borrowers through 2006. In the last four and half years of operation, the Bank has disbursed over BDT 2,100 crore in loans to nearly 50,000 small and medium entrepreneurs. The management of the Bank believes that this sector of the economy can contribute the most to the rapid generation of employment in Bangladesh. The Bank operates under a “double bottom line” agenda where profit and social responsibility go hand in hand as it strives towards a poverty-free, enlightened Bangladesh.

    2.2.1. Achievements:

    i. Fastest growing bank in the country for the last two years.

    ii. Leader in SME financing through 350 offices.

    iii. Biggest suit of personal banking & SME products.

    iv. Large ATMs (Automated Teller Machine) & POS (Point of Sales) network.

    2.2.2. Vision:

    BRAC Bank’ vision is to build a profitable and socially responsible financial institution focused on Markets and Businesses with growth potential, thereby assisting its stakeholders to build a just, enlightened, healthy, democratic and poverty free Bangladesh.

    2.2.3. Mission:

    2.2.4. Core Values:

    2.2.5. Major Functions of Brac Bank:

    The major functions are described below:

    2.2.5.1 Basis of Accounts:

    The financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with the first schedule (Sec 38) of the Bank Companies Act 1991, Bangladesh Accounting Standard (BAS-30), Companies Act-1994 and the forms of financial statements as prescribed by Bangladesh Bank vide BRPD circular No. 14 dated 25 June 2003.

    2.2.5.2 Loans and Advances:General provision on:

    . Unclassified loans and advances 1%

    . Small enterprise 2%

    . Consumer finance for house building loan and loans for professional setup 2%

    . Consumer finance 5%

    . Special mention account 5%

    . Specific provision on: Substandard loans and advances 20%

    . Doubtful loans and advances 50%

    . Bad/ loss loans and advances 100%

    Interest on loans and advances is calculated on daily product basis, but charged and accounted for monthly and quarterly on accrual basis.

    Provision for loans and advances is made based on the period and review by the management and the instructions contained in Bangladesh Bank BRPD Circular No. 16 dated December 6 1998, No. 09 dated May 14 2001, No. 10 dated August 20 2005, No. 19 and 20 dated December 20 2005 and No. 8 dated February 8 2006 respectively.

    Interest is calculated on classified loans and advances as per BRPD Circular No. 16 of 1998, No. 09 of 2001 and No. 10 of 2005 respectively and recognized as income on realization.

    2.2.5.3 Foreign Exchange Risk Management:

    Foreign exchange risk is defined as the potential change in profit/loss due to change in market prices. Today’s financial institutions engage in activities starting from imports, exports and remittances involving basic foreign exchange and money market to complex structured products. Within the bank, Treasury Department is vested with the responsibility to measure and minimize the risk associated with bank’s assets and liabilities.

    All treasury functions are clearly demarcated between treasury front office and back office. The front office is only involved in dealing activities and the back office is responsible for all related support and monitoring functions. Treasury front and back office personnel are guided as per BBL core risk management and their job descriptions. They are barred from performing each other’s job. As mentioned in the previous section, ‘Treasury Front Office’ and ‘Treasury Back Office” has separate and independent reporting lines to ensure segregation of duties and accountability and also helps minimizing the risk of compromise.

    Dealing room is equipped with Reuter’s information, a voice screen recorder for recording deals taking place over the phone. Counter party limit is set by the Credit Committee and monitored by Head of Treasury. Trigger levels are set for the dealers, Chief Dealer and Head of Treasury. Any increase to trigger the limit of the Head of Treasury requires approval from the MANCOM. Before entering into any deal with counter party, a dealer ensures about the counter party’s dealing style, product mix and assess whether the customer is dealing in an appropriate manner.

    2.2.5.4 Prevention of Money Laundering:

    In recognition to the fact that financial institutions are particularly vulnerable to the money launders, BRAC Bank has established Anti-Money Laundering Policy. The purpose of the Anti-Money Laundering Policy is to provide  guidelines within which to comply with the laws and regulations regarding money laundering both at country and international levels and thereby to safeguard the bank from potential compliance, financial and reputationl risk. KYC procedure has been set up with address verification. As part of monitoring account transactions, the estimated transaction profile and high value transactions are being reviewed electronically. Training has been taken as a continuous process for creating/developing awareness among the officers.

    2.2.5.5 Internal control and compliance:

    Internal Control is the mechanism in place on a permanent basis to control the activities in an organization, both at a central and at a departmental/divisional level. Management through Risk Management Department controls operational procedures of the bank. Internal Audit and Inspection team under Risk Management undertakes periodical and special audit of the branches, SME Unit Offices and Departments at Head Office for review of the operation and compliance of statutory requirements. In addition to the Internal Audit and Inspection team the Monitoring team conducts surprise inspection at the Branch, SME Unit and the Departments at Head Office as well. The Board of Audit Committee reviews the reports of the Risk Management Department periodically.

    2.2.5.6 Asset Liability Management:

    Changes in market liquidity and interest rate expose Bank’s business to the risk of loss, which may, in extreme cases, threaten the survival of the institution. As such emphasize has given so that the level of balance sheet risks are effectively managed, appropriate policies and procedures are established to control and limit these risks and proper resources are available for evaluating and controlling these risks. The Asset Liability Committee (ALCO) of the bank monitors Balance Sheet risk and liquidity risks of the Bank. Asset liability Committee (ALCO) reviews country’s over all economic position, Bank’s Liquidity position, ALM Ratios, Interest Rate Risk, Capital Adequacy, Deposit Advanced Growth, Cost of Deposit and yield on Advance, F.E. Gap, Market Interest Rate, Loan loss provision adequacy and deposit and lending pricing strategy.

    2.2.5.7 Lease rental:

    Lease hold assets have been accounted for as operating lease and accordingly lease rentals have been charged to revenue in these interim financial statements for the period 1 January 2006 to 31 March 2006. Accounting of leased assets will, however, is done as per BAS-17 “Leases” considering the leases as finance lease in preparing year end financial statements.

    2.2.6 Description of Various Functional Departments:

    BBL activities are performed through functional departmentalization. So, the departments are separated according to the functions they perform (HR, Personal Banking, etc.). There are 6 major functional departments at BBL: Human Resources, Services, Small and Medium Enterprises (SME), Retail, Corporate Banking and Cards. Within these major departments there are some other subsidiary departments that allow smooth operation of their own major departmental function. A structure of all the departments is shown in the following page. A brief functional description of these departments is discussed below:

    Functional Departments of BBL (BRAC Bank Limited):

    2.2.6.1 Human Resource Department:

    The Human resource Manager heads this department. The major functions of this department are Recruitment, Training and developments, Personnel Services and Security. The HR department is much concerned with the discipline that is set up by the BBL group. BBL group has got strict rules and regulations for each and every aspect of banking, even for non-banking purposes; i.e. The Dress Code. All these major personnel functions are integrated in the best possible way at BBL, which results in its higher productivity. The Human resource officer monitors the employee staffing and administration activities. The Training officer supervises Training, development & rotation activities. The structure of the HR department is shown below:

    Structure of Human Resource Department:

    BBL Bangladesh limited follows a standard procedure for recruitment and selection. However there is no set time period when this recruitment and selection takes place. Each Departmental Head places the requisition for recruitment to the Human resource officer, if any vacancy is created due to (1) Retirement, (2) Resignation (3) Death, or (4) Extra work load.The process for the recruitment of personnel for managerial and non-managerial level differs slightly but the basic steps are same in both the cases. The steps are:-

    1. Initial Screening
    2. Screening by Departmental Heads
    3. Filling of the BBL Job Application Form
    4. Screening on the basis of SAF
    5. Initial Interview
    6. Selection for written test
    7. Written test
    8. Evaluation of test papers
    9. Selection of Final interviewees
    10. Final interview
    11. Documentation Check
    12. Medical Examination
    13. Probationary Appointment
    14. Confirmation

    In order to enhance the efficiency of the employees, BBL gives emphasis on the both theoretical and practical training for its personnel. All the training and development programs are aimed at two basic reasons – (1) skill development (2) motivation through counseling and persuasion to change value system. For the top management or senior managers there is provision for overseeing training arranged by BBL group. For the mid-level manager or other managerial level there is provision for regional training courses. Besides, for non-management level there are training programs arranged in different institution and also with in the organization. For the operatives, various job-training programs are conducted within the company. Finally, BBL follows a performance based promotion system for all levels of its employees.

    2.2.6.2. Services Department:

    This is an integral and vital part of the bank. The Services Department ensures smooth operation and functioning within all the departments of BBL. It also provides continuous support to the core banking activities of BBL. The Manager of Services leads this department who formulates and manages various critical issues of the services function of BBL. He is followed by a group of executives who are the heads of various subsidiary divisions that operate within the services department. The services department is considered as the backbone of all other departments. The various subsidiary divisions within this department are Administration, IT, Internal Control (IC), Network Services Center (NSC), and HUB.

    (i) Administration:

    Like any other organization, the Admin departments of BBL makes sure that the organization moves on with all its departments and staffs operating according to all the rules and regulations of the company. It also prevents any bottlenecks within the work process and ensures smooth functioning. The admin department has two divisions – general administration and business support services.

    The general admin division is pretty much similar to the admin departments of other companies that ensures discipline and regulatory concerns. The business support services provide supports to the departments during employee leaves and sudden terminations so that the department can function without problems.

    (ii) IT:

    This department gives the software and hardware supports to different departments of the bank. As BBL is engaged in online banking, the role of IT is very crucial for the bank. This department is the most active department of BBL where employees always stand by to solve any problems in the system. The managers and executives of IT division work continuously to develop the total IT system of BBL so that it can be operated with ease, accuracy and speed.

    (iii) Internal Control:

    BBL has internal auditors who visit on regular basis and submit the report to the higher authority for audit purposes. This gives different departments the chance to know their mistakes and take necessary corrective actions. Again, the Bank annually administrates a wide audit program to evaluate the overall performance of the bank in Bangladesh.

    (iv) Network Service Center (NSC):

    This department can be described as the ‘Power House” of BBL Bangladesh. NSC does the back office job for the bank. The main four jobs that are performed by NSC are Clearing, Scanning of signature cards, Issuing checkbooks and Sending & receiving remittances. NSC looks after the clearing process of BBL and makes necessary contacts with the central bank for maintaining account flows. All the customers’ signatures are scanned in this department and are entered into the system. NSC also issues checkbook for new and old accounts based on requisition from various branches. ‘Remittance’ is a banking term, which means ‘Transfer of funds through banks’. When a bank remits on behalf of its customers, it is termed as outward remittance. On the other hand, when the bank receives the remittance on behalf of its customes, it is inward remittance. The following are the methods that NSC uses to remit money for customers:

    . Telegraphic Transfer (TT)

    . Demand Draft (DD) &

    . Cashier’s Order.

    2.2.6.3. Small & Medium Enterprises (SME):

    BBL has established strong infrastructure for SME financing all over the country. Date as on 31st March 2006 shows total number of zonal and unit offices stood at 51 and 285 respectively. There are 652 customer relationship managers and 7 territory Managers. BBL is the market leader in SME financing. Total number of staff in SME stood at 686 as on 31st March 2006. Disbursement in SME financing has been increasing significantly. SME five years Business Plan provides the road map of maintaining the leadership position of BBL. At present, Government and Non-Government supports for promoting SME in Bangladesh encouraged different banks for participating more in SME financing. The experience in SME financing provided BBL strategic strength to maintain its growth of assets by extending its network in untapped areas in the country.

    The most valuable natural resource of Bangladesh is its people. As a nation we struggled for our independence and now the attainment of economic uplift is the main goal. Micro lenders are working here in the financial field, providing very small amount and on the other hand regular commercial banks have been providing bigger amount of loans to larger industries and trading organizations. But the small and medium entrepreneurs were overlooked. This missing middle group is the small but striving entrepreneurs, who because of lack of fund cannot pursue their financial uplift, as they have no property to provide as equity to the commercial banks. With this end in view, BRAC Bank was opened to serve these small but hard working entrepreneurs with double bottom line vision. As a socially responsible bank, BRAC Bank wants to see the emancipation of grass-roots level to their economic height and also to make profit by serving the interest of missing middle groups. 50% of our total portfolio usually collected from urban areas, are channeled to support these entrepreneurs who in future will become the potential strength of our economy. We are the market leaders in giving loans to Small and Medium Entrepreneurs. We have been doing it for the last five years.

    (a) Small & Medium Enterprise (SME) Product Details:

    (i) Ananya:

    This business loan is offered for the expansion of small and medium sized trading, Manufacturing, Service, Agriculture, Non–farm activities, Agro-based industries etc. with a valid trade license and in operation for at least 1 year. The size of the loan amount is between Tk.3 lac to Tk.8 lac.

    (ii) Apurbo:

    This business loan is offered for the expansion of Small and Medium sized trading, Manufacturing, Service, Agriculture, Non–farm activities, Agro-based industries etc. with a valid trade license and in operation for at least 3 years. The size of the loan amount is between Tk.8lac to Tk.30lac.

    (iii) Educational institution (Pathshala):

    The loan is offered to educational institutes (School/College/ University) that has been in operation for at least 3 years, for loans up to Tk.5lac, or at least 5 years, for loan in excess of Tk.5lac. The loan is provided for the purchase of any fixed assets, infrastructure development, or shifting to a new address for any government recognized educational institution. The size of the loan amount is between Tk.3lac to Tk.30lac.

    (iv) Health service provider (Aroggo):

    This loan is provided for health service providers i.e. clinics; diagnostic centers located around the unit offices towards the purchase of relevant medical equipment. The medical centre should have permission to operate and be in operation for at least 2 years. Doctors with at least five years of experience in the profession may also apply for this loan. The size of the loan amount is Tk.3lac to Tk.30lac, of which Tk.9.5lac in loans may be disbursed collateral-free.

    (v) Digoon Rin:

    Digoon Rin is a loan facility for Small and Medium enterprises. Entrepreneurs with 2 (two) year’s experience in Small and Medium sized trading, manufacturing, service, agriculture, non-farm activities, agro-based industries etc. located surrounding the branches of BRAC Bank in Dhaka, Chittagong, Sylhet, Narayangong, Dhaka EPZ and Sonagazi (Feni) can avail this loan facility. To get the benefit of ‘Digoon Rin’ facility the enterprise has to provide 50% cash security (BRAC Bank FDR) of the loan amount. One can get the loan from Tk.5lac to Tk.30lac. The product offers terminating loan facilities for working finance and fixed asset purchase under equated monthly installment and/ or a single installment based repayment plan.

    (vi) Prothoma Rin:

    “Prothoma Rin” is a loan facility for small and medium sized trading, manufacturing, service, agriculture, non-farm activities, and agro-based industries etc. which are operated by women entrepreneur. The product offers terminating loan facilities for the purpose of working capital finance or fixed assets purchase. Eligibility for this loan are as follows:

    . Entrepreneurs aged between 18 to 55 years.

    . Entrepreneurs with minimum 2 years experience in the same line of business.

    . Minimum 1 (One) year of continuous from minimum BDT 3 lac up to maximum of BDT 10 lac.

    Retail is the most flourishing department of BBL Bangladesh. This department basically deals with the management of products and services offered to the in individual consumers. Within a span of only seven years, BBL Retail has grown tremendously and is still growing with its innovative products and service offerings. Manager of retail is the person behind the astounding growth of Retail department in BBL Bangladesh. Chief of Retail manages and supervises the Personal Banking activities of the branch network of BBL Bangladesh.

    (b) Loan Products:

    (i) Car Loan:

    Brac Bank offers easy, customer-friendly car loans for customers who wish to purchase either a brand new car or a reconditioned one. All BRAC Bank account holders aged between 21 and 65 are eligible to apply. The loan can be repaid over a maximum of 4 years through equal monthly installments (EMI).

    1. No down payment.
    2. BBL offers the highest loan amount in the market, going up to Tk. 2,000,000 in some cases.
    3. There is a low processing fee.

    (ii) Teachers Loan:

    The Teachers Loan is an “any-purpose” loan offered to a teacher permanently employed at an educational institute for at least three years. The customer is eligible for a loan up to 10 times his or her current monthly salary without a requirement for security.Repayment can be made in equal monthly installments for 1 to 4 years.

    (iii) Secured Loan/OD:

    Special schemes are offered by the Bank that allows customers to avail cash at nominal interest rates. The security is kept untouched in Bank’s custody and the value grows. All BRAC Bank account holders aged from 21 to 65, people from all income groups – salaried employees and self-employed business-persons – with security in their possession are eligible to avail these facilities.The maximum amount can go up to Tk. 5 crore, and customers may avail the facilities in single or in joint names. BBL allows loans for up to 100% of the value of the securities (conditions, however, apply). In case it is an overdraft, the customers repay only interest at quarterly intervals. In case it is a Loan, the customer is allowed to choose between the quarterly repayment option and the monthly installment option.

    (iv) Unsecured Personal Loan:

    This is a package specially designed for salaried employees- eligible customers are offered this “any-purpose” loan without any security. Employees of multinational companies or local corporate bodies; also employees of midrange companies, govt. officials and self-employed business-persons are eligible to apply. Customers may apply for up to 8 times gross salary or 5 times gross monthly income (maximum Tk.5 lacs) as loan repayable through equal monthly installments (EMI) for 1 to 4 years.

    (v) Credit Card Loan:

    Customers holding a credit card from any financial institution, for at least 1 year, may apply for this loan. Customers with a minimum credit limit of Tk. 40,000 on their credit card are being eligible for the loan. The Credit Card Loan offers loan up to 5 times the credit card limit on the card.

    2.2.6.4 Corporate Banking:

    This division of BBL provides financial services to organizational clients. Whether it is locally or around the nation, BBL offers a comprehensive range of services that can be tailored to the individual needs of the company. Two offices of BBL offers corporate banking services to corporate clients. These are the Dhaka Head Office and Chittagong office. Corporate Banking of BBL includes Corporate Institutional Banking (CIB). These sub-divisions are discussed briefly in the following sections:

    (i) Corporate Institutional Banking (CIB):

    Operating through the major centers and in close liaison with BBL Investment Bank, Corporate and Institutional Banking provides the full range of the Group’s capabilities at nationwide, with a particular focus on payments and cash management, trade and securities custody. BBL also offers local financial institutions and banks access to wide range of financial services available on countrywide. The services are tailored to suit the needs of the companies. CIB has a separate wing- Relationship management department. This is discussed below:

    (ii)  Relationship Management Department:

    The RM department consists of various relationship managers who are assigned to different corporate client to better satisfy their needs. These RM departments communicate with the clients and are solely responsible for the companies they deal in. Any information regarding a corporate client must be communicated through the respective RM assigned to that corporate client. A relationship manager may be assigned more than one company and this decision depends on the Head of Corporate Banking.

    2.2.6.5 Cards:

    This department just started its journey officially on February 6th 2007 in Bangladesh. This department has different wings – sales, customer services, credit, operations, acquiring and portfolio management. BBL Cards division is mainly operated by the Senior manger and First assistant president-Mamun Rashid. Some other mangers working under him are as follows who are in charge of different wings: Sales-Imran Habib, Acquiring-Khandaker Bappy, Customer services-Sazzad Hossain, Operations-Kabir Ahmed, Credit-Nahid Bin Zafar, Portfolio management-Masuma Yesmin. Under sales there are MIS (management information system), TELE Sales, Direct sales, retention unit.

    These are the major departments of BBL Bangladesh. Except the branches all other departments are situated at BBL Bangladesh head offices located at Annex Building 1, Shooting Club, Gulshan 1. Most of BBL’s operation and activities are operated centrally from the head office. But to deal with customers more completely, the branches are given considerable authority and they operate in a more decentralized manner but subject to verification of the respective departments.

    Chapter 03

    3. Industry Analysis

    3.1 Industry Analysis of Brac Bank:

    Industry analysis builds on customer & competitor analysis to make more strategic judgment about a market & its dynamics. Porter’s approach can be applied to an industry, but it can also be applied to a market or sub-market within the industry. The basic idea is that the attractiveness of an industry or market as measured by the long-term return investment of the average firm depends largely on five factors.

         
       
     
         

    3.1.2 Porter’s five Forces at BBL:

    (i) Rivalry among existing competitors:

    The rivalry among the competitors and the growth in the industry depends upon the intensity of competition. A high amount of competition is observed in the banking sector of Bangladesh. There are more than 50 commercial banks in Bangladesh that fight for their own share of the market. The national banks have the highest banking network in Bangladesh. They compete against the banks with their low cost of operation and government support. Again, Standard Chartered bank is the largest multinational banking network in Bangladesh that has its network in many metropolitans of Bangladesh. There are other international banks that also take part in the competition and are aggressive in nature. This high intensity of competition makes companies difficult to sustain in the long run.

    (ii) Threat of new entrants:

    The next force highlights the possibility of new competitors entering the market. Existing firms may try to discourage new competition by aggressive expansion & other types of entry barriers. The banking sector of Bangladesh seriously faces the threat of new entrants. However the threat comes from two directions. The first threat comes with the arrival of the multinational banks and its branch expansion particularly due to the booming energy sector. Secondly, the continuous entry of local banks with lower cost structure also poses a severe threat to this industry.

    In the context of BBL the various new & upcoming Banks pose a significant threat, being new entrants in the banking sector of Bangladesh. But BBL is aware of these potential competitors and is trying to expand countrywide to make the sector unattractive & to create entry barrier.

    (iii) Threat of substitute products:

    This force considers the potential impact of substitutes. New products that satisfy the same customer needs are important sources of competition including alternative products in the definition of product market structure.

    BBL continuously faces the threat of various substitute products launched by its strong competitors in the market place. For example, the launch of premiere banking by SCB poses a strong threat on BBL’s premium customer group and BBL is at a condition where it should launch an even better product. More over the various consumer credit schemes offered by various local banks with lower interest rates and cost also pose a strong threat on the BBL personal banking products. Again the lower service charges at national banks also discourage a wide group of customers to hold account in BBL. These are some of the threats posed by substitute products in the market place.

    (iv) Bargaining power of suppliers:

    The fourth force is the power of suppliers that may have impact on the producers in an industry. Companies may pursue vertical integration strategies to reduce the bargaining power of suppliers.

    In the context of BBL, suppliers are those customers and organizations that provide financing to the firm via depository schemes. If the cost of financing rises, then BBL will have to increase the interest rate that it charges to its customer in order to remain in the business. This may result in severe customer dissatisfaction & as a result poor profitability. BBL is aware of this devastating situation.

    (v) Bargaining power of buyers:

    Finally, buyers may use their purchasing power to influence the producers or service providers. Understanding which organizations have power & influence in the distribution channel provides important insight into the structure of competition.

    In the banking sector of Bangladesh, customers have a strong bargaining power since there are a large number of commercial banks providing similar services. Customers have a wide range of options in deciding where to bank. They can either go for the multinationals or turn to new local banks for getting quality service. Others may also consider the national banks for large credit facilities. Therefore banks have to pursue the customers with attractive interest rates and provide them with tailor made customized services in order to attract the customer or hunt depositors.

    In the context of BBL, the firm is more or less free from the cope of the bargaining power of the buyers. BBL has its own policies to carry out its operations & employees follow those rules to deal with the customers. But too much rigidity of the prevailing policies when to deal with the clients may under cut its client base as well as profitability. To overcome this worst scenario – a positive & personalized approach to the needs of customer has become BBL’S motto.

    3.3. SWOT Analysis of BBL:

    (i) Strengths:

    Strong Corporate Iidentity BBL is the leading provider of financial services nationwide. With its strong corporate image and identity it can better position in the minds of customers. This image has helped BBL grab the personal banking sector of Bangladesh very rapidly.
    Distinct Operating Procedures BBL is known nationwide for its distinct operating procedure. The company’s Managing for Value strategy better satisfy customers needs and also keeps the firm profitable.
    Efficient Performance The selection & recruitment of BBL emphasizes on having the skilled graduates & postgraduates who have little or no previous work experience. The logic behind is that BBL wants to avoid the problem of ‘garbage in & garbage out’. This type of young & fresh workforce stimulates the whole working environment of BBL.
    Young Enthusiastic Workforce The human resource of BBL is extremely well thought & perfectly managed. As from the very first, the top management believed in empowered employees, where they refused to put their finger in every part of the pie. This empowered environment makes BBL a better place for the employees. The employees are not suffocated with authority but are able to grow as the organization matures.
    Companionable Environment All office walls in BBL are only shoulder high partitions & there is no executive dining room. Any of the executives is likely to pop down at a table in its cafeteria & join in a lunch chat with whoever is there. One of the employees has said, “It’sexciting to know you may see & talk to the top management at any time. You feel a part of things”.
    No Communication Barriers BBL has tried hard to avoid communication barriers & structural bureaucracies. The little existence of authoritative barriers among the different level of management stimulates a feeling of importance as their work get priority over the position.
    MBO BBL also has Management by Objectives (MBO) everywhere. Each person has multiple objectives. All the employees must have to get the approval of their bosses on what they are going to do. Later they review as how well they have performed their job with their management as well as the peer group.
    Modern Equipment & Technology BBL owns the best banking and information technology equipments in Bangladesh. It ultra modern banking systems starting from terminal PC’s to HUB’s are based on the international banking standards and are the latest.

    (ii) Weaknesses:

    Absence of Strong Marketing Activities BBL currently don’t have any strong marketing activities through mass media: Television. TV ads play a vital role in awareness building. BBL has no such TV ad campaign.
    Lack of Customer Confidence As BBL is fairly new to the banking industry of Bangladesh, average customers lack the confidence in BBL and judge the bank as an average new bank.
    Too Many Contract Workers BBL has contract workers who lack the commitment with superior quality service and also are pretty dissatisfied as being a contract worker. This hampers the bank’s service quality as a whole.

    (iii) Opportunities:

    High Demand of Housing Loans Since housing is one of the basic needs of people, there is a high demand of housing loans. BBL personal banking division can focus on this category of products and grab these segments of customers.
    Distinct Operating Procedures BBL is noted for its distinct operating procedures. Repayment capacity as assessed by BBL of individual client helps to decide how much one can borrow. As the whole lending process is based on a client’s repayment capacity, the recovery rate of BBL is close to 100%. This provides BBL financial stability & gears up BBL to be remaining in the business for the long run.
    Countrywide Network The ultimate goal of BBL is to expand its operations to whole Bangladesh. Nurturing this type of vision & mission & to act as required, will not only increase BBL’s profitability but also will secure its existence in the long run.
    More Experienced Managerial The top management team of BBL is expert in banking activities. The operating policies established by them are unique & unified. They equally contributed to BBL’s superior leadership by carrying out their unique roles. They worked well together, respecting each other’s abilitie sand arguing openly without any rancor when they disagree.

    (iv) Threats:

    Upcoming Banks The upcoming private, local & multinational banks pose a serious threat to the existing banking network of BBL. It is expected that in the next few years more commercial banks will emerge. If that happens the intensity of competition will rise further and banks will have to develop strategies to compete against and win the battle of banks.
    Lose of Customers Absence of various products such as housing loans are causing various customers to detract from BBL. This is a serious threat for BBL Bangladesh.
    Moderate Levels of Customer Satisfaction BBL should continuously improve its customer service strategies and the overall service quality to win the customer satisfaction undoubtedly.
    Default Culture As BBL is a very new organization, the problem of non-performing loans or default loans is very minimum or insignificant. However, as the bank becomes older this problem will arise enormously and the bank may find itself in a more threatening environment. Thus BBL has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem.

    Chapter 04

    4. Credit Cards of BBL

    4.1. Different Credit Cards of BBL:

    BBL has offered 5 credit cards to its customers. These credit cards are:

    (i) VISA Classic

    (ii) VISA Gold

    (iii) Universal VISA Classic

    (iv) Universal VISA Gold

    (i) VISA Classic:

    Visa Credit Card is valid only in Bangladesh. It can only be used in local currency (BDT) within the country. This type of credit card has a limit ranging from BDT 10,000 to BDT 74,999.

    (ii) VISA Gold:

    This is a local Visa Credit Card which is valid only in Bangladesh and transaction currency is in BDT. The basic difference between Classic & Gold cards is that the Gold card has higher credit limit than that of classic card. Credit limit of Visa Gold Card ranges from BDT 75,000 to BDT 500,000.

    (iii) Universal Cards:

    This is a Dual Visa Currency Credit Card with worldwide acceptability. Its USD credit limit will be within approved BDT limit assigned for the cardholder. A secured dual card’s limit will be maximum USD 30,000 against lien on RFCD or ERQ account.

    As per customer request, dual card will be offered to customers against his/her Travel Quota, Residence Foreign Currency Deposit (RFCD) account and Export Retention Quota (ERQ) account. Dual card can be used in local currency within the country and foreign currency outside the country.

    Travel Quota limit is USD 1500 for SAARC Countries (India, Pakistan, Sri Lanka, Nepal, Afghanistan, Bhutan, Maldives & Myanmar) and USD 5000 for Non SAARC Countries.

    (iv) Universal VISA Classic:

    Dual Visa Credit Card is valid not only in Bangladesh but abroad as well. It can be used in local currency (BDT) within the country and foreign currency outside the country. This type of credit card has a limit ranging from BDT 10,000 to BDT 74,999.

    (v) Universal VISA Gold:

    This is a Dual Visa Credit Card which is valid both in Bangladesh as well as abroad. It can be used in local currency (BDT) within the country and foreign currency outside the country. The basic difference between Classic & Gold cards is that the Gold card has higher credit limit than that of classic card. Credit limit of Visa Gold Card ranges from BDT 75,000 to BDT 500,000.

    (vi) Co-branded Universal ICDDR,B Credit Card:

    BRAC Bank ICDDR,B co-branded Credit Card is a new variant product of the existing credit card, which is designed to leverage the high brand value of ICDDR,B, which is a renowned international institute for Health and Population research.

    This card has similar functionality as BRAC Bank Credit Card with extra advantage of donating money to ICDDR,B hospital endowment fund.

    4.2. Facilities for Credit Cards:

    BBL gives its credit card holders the following facilities:

    (i) Annual fee is your choice:

    Payment of Annual fee of the Credit Card is totally the customer’s choice. BRAC Bank allows to pay no Annual fee as long as the user transact at least 18 times (including 10 POS transactions) in a physical year.

    (ii) Card Cheque Facility:

    With BRAC Bank Credit Card customers can enjoy cheque facility against their credit card limit. They can make payment (account payee only) to any person or organization where Credit Card facility is not available. They can use 100% limit through card cheque with a minimum processing fee.

    (iii) FAST Rewards Program:

    It is a special loyalty program that allows the customers to earn some points every time they spend money through POS with Credit Card in Bangladesh. For every Tk. 50 spent through POS on credit Card, they get the opportunity to earn 1 Reward point. The accumulated Reward Points can be redeemed against exciting 74 gift items from the bank’s reward catalogue. The enrollment of this program is free.

    (iv) E-Statement Service:

    BRAC Bank has brought more convenience through e-statement that helps to receive monthly Credit Card statement via e-mail and this is absolutely free. No doubt nowadays e-statement is the fastest, reliable and efficient service, which ultimately minimizes paper work and maximizes the convenience. E-Statement will be sent maximum up to 3 (Three) e-mail addresses.

    (v) Balance Transfer:

    BRAC Bank has brought Balance Transfer facility for its Cardholders. If the customers have other bank Credit Cards then they have the option to transfer their current outstanding balance at a much cheaper rate of 22% to their BBL Credit Card. The processing fee for Balance transfer is 2% or 150 + VAT whichever is higher.

    (vi) Credit Shield Facility:

    Credit shield facility is a triple benefits Insurance Plan for the BBL Cardholders. The entire dues on the Credit Card, in the event of death or permanent total disability of BBL Credit Cardholder, will be waived and the Cardholder or his/her family will receive equal amount to meet immediate expenses. For any kind of accidental death, Gold Card holder is covered up to BDT 2 lacs and Classic Cardholder up to BDT 1 lac under Credit Shield. A very nominal charge of 0.35 paisa for every TK.100/- of your Credit Card outstanding balance will be applicable for this coverage.

    (vii) Extensive SMS Service & Transaction Alert:

    BBL SMS Service is the simplest way to find out Credit Card details through mobile. This includes Push & Pull service which can be availed free of cost. Through Pull Service customers can access to their Credit Card information from anywhere anytime within Bangladesh. Through Push service BBL provides information on BBL Card even when customers are on the move.

    BRAC Bank brings an extensive Transaction Alert Service for its Cardholders. BRAC Bank Transaction Alert – a service that allows customers to stay updated on Credit Card transactions. For each predefined transaction an alert will be generated and sent to the customer’s mobile instantly. At a nominal monthly fee of BDT 5 + VAT, card holders can enroll to the service.

     

    " 97,"

    DEFINE LAW

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    According to the oxford English Dictionary the word ‘Law’ means “rule made by authority for the proper regulation of a community or society or for correct conduct in life”. In the words of Woodrow Wilson, “Law is that portion and the established habit and thought of mankind which has gained distinct and formal regulation in the shape of uniform rules backed by the authority and power of the Government.”

    Law is the rule of conduct and ethics that guide all people. Without Law there can be no public order and policy. These can lead to chaos, malpractices, injustice, immorals and inequitable administration of justice.

    Business Law

    The term ‘Mercantile Law’ or ‘Business Law’ may be defined as that branch of law which comprises laws concerning trade, industry and commerce. It is an ever growing branch of law with the changing circumstances of trade and commerce.

    With the increasing complexities of the modern business world the scope of Mercantile Law has enormously widened. It is generally understood to include the laws relating to contracts, Sale of goods, Partnership, Companies, negotiable Instruments sale of goods, Sale of goods and Arbitration.

    Labor Law

    The term ‘Labor Law’ can be defined as that branch of law which comprises laws concerning the working conditions, wage level, working environment, job securities of the employees of any business organization. It is an ever growing branch of law with the changing circumstances of business organization to facilitate the employees of any business organization.

    " 98,"

    DEFINITION AND NATURE OF DOWER

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    Article shared by ANASHIU BHATNAGAR

    The Islamic concept of dower is unfortunately one of the most misunderstood concepts of Muhammadan law. Those who lean towards the contractual element of a Muslim marriage tend to equate it with consideration. On the other hand, those more familiar with the Indian concept of dowry, confuse it with that concept. The truth is that mahr or mehr (dower) is not a form of dowry; rather it is a significant institution in Islamic law, occupying a unique position of its own.

    Dower (mahr) is a sum of money or other property which the wife is entitled to receive from the husband, in consideration of marriage. According to Muhammadan law, marriage is a civil contract, and dower is a necessary result of it, being a part of the consideration of her agreement to become her husband’s wife by consummating the marriage.

    However, the word “consideration” is not used here in the same sense in which it is used in the Indian Contract Act. Indeed, it is not the sale-price of the bride and a Muslim marriage contract is not a commercial transaction. In fact, it would be more correct to say that under Muhammadan Law, dower is an obligation imposed upon the husband as a mark of respect for the wife.

    ADVERTISEMENTS:

    Mr. Justice Mahmood (in Abdul Kadirv. Salima, (1866) 8. All. 149) defined the term dower as under:

    “Dower, under the Muhammadan law, is a sum of money or other property promised by the husband, to be paid or delivered to the wife in consideration of the marriage, and even where no dower is expressly fixed or mentioned at the marriage ceremony, the law confers the right of dower upon the wife.”

    The amount of dower may be fixed either before, at the time of, or after marriage. The wife is competent to relinquish her dower, provided she has attained puberty at the time of the relinquishment.

    ADVERTISEMENTS:

    Recently, the All India Muslim Personal Law Board unveiled a “model nikahnama”, under which it is suggested that payment of mahr (or mehi) should be in terms of gold and silver, instead of money. The reasoning given by the Board is simple: If a bride is promised Rs. 30,000 as mehr, what remains in the value of Rs. 30,000 ten years later?

    According to the Board, mehr paid several years after the marriage loses its value if paid in currency notes because of devaluation of money. “We advise that mehr should be in gold and silver, so that the devaluation problem gets tackled on its own”, observed the Board.

    " 99,"

    DEFINITION OF PSD2

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    New security requirements for online payments will come into effect in Europe in September as part of the revised Payment Services Directive (PSD2), but they are also expected to make an impact in the US and other regions of the world. The PSD2 brings two major changes to the payments industry: It mandates stronger security requirements for online transactions through multi-factor authentication (MFA) and it forces banks and other financial institutions to give third-party payment services providers access to consumer bank accounts if account holders give their consent.

    What are the strong consumer authentication (SCA) requirements?

    According to PSD2, financial institutions that hold payment accounts will need to challenge online payments, such as card transactions, initiated by European consumers with two-factor authentication (2FA). This stronger authentication combines something the user knows, such as a password or PIN, with something the user has, such as a code generated by a smartphone app, or with a biometric identifier like a fingerprint or facial recognition. This will result in unique authentication codes for every transaction that will link the customer and the transaction amount.

    There are several exemptions from these requirements. For example, transactions under 30 euros can be exempted, as well as recurring transactions that have the same payee and amount, like those to subscription-type services. Consumers will also be able to whitelist merchants.

    Higher-value transactions can be exempted if the acquiring bank or service ensures low fraud rates through other risk analysis methods — transactions of up to 100 euros for fraud rates below 0.13%, 250 euros for fraud rates below 0.06% and 500 euros for fraud rates below 0.01%. However, according to a recent report by consulting firm Aite Group and fraud prevention company Iovation on the impact of PSD2, the average fraud rates of most acquirers is well above 0.13%, so it’s unclear if such low fraud rates are even achievable.

    While the SCA requirements technically apply only to transactions where both the card issuer and the the acquiring bank are based in the European Economic Area (EEA), in practice European issuers might apply the same rules regardless of the merchant’s location, Aite and Iovation said in their join report.

    The requirements were created to combat card-not-present (CNP) fraud that has been on the rise for the past decade following the introduction of chip-enabled cards — the EMV standard — that made cloning physical cards much harder. According to European Central Bank statistics, card-not-present fraud steadily increased every year until 2016, when it accounted to 73% of the total card fraud losses related to euro payments.

    Over the past few years, IT security firms have also observed a rise in the number of cybecriminal groups that break into online stores and inject malicious scripts with the goal of stealing payment card details as users input them on checkout pages. These are known as web skimming attacks and are another indication of criminals’ increased focus on CNP fraud.

    How will PSD2 affect the US market?

    According to Aite and Iovation, there’s a risk that once the SCA requirements come into effect in Europe, CNP fraud could increase in other regions of the world that don’t have similarly strong protections, including the US This has been the case in the past with card-present fraud after the adoption of chip-and-PIN card authentication in Europe. The good news is that the US payments industry will likely adopt strong authentication for online transactions much faster than they adopted EMV for physical cards.

    While the European regulators were working on the new directive, the payments industry was working through EMVCo, a consortium of financial companies and payment card networks, on a new authentication standard called 3-D Secure version 2 (3DS2). Their goal is to have this standard implemented around the world, not just in Europe.

    3DS2 satisfies PSD2’s authentication requirements by having support for biometrics and one-time passwords. It also integrates with mobile device authentication solutions such as Apple Pay and solves many of the issues that online merchants had with its predecessor, 3-D Secure version 1.

    The adoption of EMV in the US took many years and is still not complete because merchants had to buy new point-of-sale terminals to support chip-enabled cards and needed those terminals to support their existing customizations such as loyalty programs and alternative payment methods. It’s different with 3DS2 because its implementation involves software changes, not hardware.

    The bulk of the effort is not on merchants, but on banks, which will only need to deploy an application programming interface (API) to recognize the 3DS2 directory that’s shared by all card networks, said Tim Sloane, vice-president of payments innovation at Mercator Advisory Group, a Massachusetts-based firm that advises companies from the payments and banking industries.

    “My expectation is that large multinational companies like Amazon will adopt it in Europe this year and once they have that capability, they’ll also want to have it deployed throughout the US,” he says. “So unlike EMV, it would theoretically be possible for 3DS2 to be deployed within the US in three years.”

    According to Sloane, if online merchants start switching their payment infrastructure to 3DS2 to be compliant in Europe, it will create an impetus for US banks to support it, too. Otherwise they will face liability for fraudulent transactions. So, while 3DS2 adoption in the EU will be pushed by the new directive, adoption in the US will be driven by the liability shift.

    The success of 3DS2 in the US is going to depend on how well it addresses the issues merchants had with its predecessor. 3DS version 1 required merchants to pass cardholders over to the bank to collect information, leading to lost customers who would abandon their carts during the checkout process.

    “In the US most merchants stopped using 3DS because it was too unreliable,” Sloane says. “Consumers had to individually sign up to use it and not many took the time and effort to do that so the installed base of consumers that could use it was extremely small.”

    With 3DS2, cardholders are automatically subscribed into the service by their bank so there’s no sign-up process. Also, the new standard allows merchants to collect more information about a transaction and pass those data points through the normal payment channels to the card issuer, who can then decide if it wants to challenge that transaction. If the issuer challenges a transaction, it will do so independently of the merchant, through a code sent by SMS or through a banking app installed on the user’s phone that, for example, supports fingerprint-based authentication.

    “The challenge will come from the bank to the consumer, not from the merchant and the expectation is that this will be a much smoother implementation,” Sloane says. “If there are problems, there could be delays in adoption, but my expectation is that card networks are going to put everything they have behind this to make it work.”

    Aite and Iovation also warn in their report that the new SCA requirements might double the existing number of stepped-up authentications in Europe, which could expose merchants to loss of sales if the process is not managed properly.

    Third-party access to bank accounts

    The European regulators also aimed to create a competitive market for payment services in Europe and to allow new companies to innovate in this segment. To achieve this, PSD2 requires banks and other financial institutions that manage payment accounts for customers to provide third-party services with access to those accounts if the account owners give their consent.

    These third-party payment services providers will have the ability to check the availability of funds, to initiate payments on behalf of the account holders or to access account data, such as transaction information. Granting access can be achieved in several ways, including by redirecting customers to authenticate on the bank’s portal, but according to Aite and Iovation, the most common implementations will be though APIs provided by the banks. The problem is there’s no widely adopted standard yet for such APIs, even though several are being developed and proposed by different industry groups.

    “Banks may choose to work with these standards or develop their own RTS-compliant APIs,” Aite said in its report. “The very existence of multiple standards already means that TPPs [third-party providers] will have to work with different APIs across Europe. Further complexity is added with the realization that bank implementations of the same standard will differ as well, and the U.K. shows evidence of this.”

    Historically, fragmentation and complexity has led to implementation errors in other technology segments and there is always a risk that such errors can lead to security vulnerabilities and security breaches. While this kind of access can spur innovation and lead to the creation of new services and applications, consumers should always be wary of sharing access to their data and, in this case, personal funds, with many third parties.

    European Banking Authority clarifies authentication requirements

    In June 2019, the European Banking Authority (EBA) issued an opinion about what authentication factors would meet the Directive’s SCA requirements, which consist of multi-factor authentication using a combination of knowledge, possession and inherence factors.

    For example, acceptable inherence factors are fingerprint, retina and iris scanning, voice and vein recognition, hand and face geometry, keystroke dynamics, heart rate and body movement pattern or the angle at which the device is held. Information transmitted using a communication protocol, such as EMV’s 3-D Secure or a memorized swiping pattern do not qualify as inherence factors.

    Acceptable possession factors can be devices, cards, apps or browsers verified using one-time passwords, QR code scans, device binding or digital signature based on hardware and software tokens. The simple presence of an app on a device or the details and other elements printed on a card do not qualify as sufficient to prove possession.

    Knowledge factors can be passwords, PINs, passphrases or memorized swiping paths — that should exist and be known by the users before the transaction is initiated — but not email addresses or usernames, details printed on cards, OTP tokens received or generated on devices or from printed lists.

    “The EBA has also clarified that 3-D Secure does not qualify as an inherence factor, and does not meet SCA requirements,” fraud prevention company iovation, said in a blog post. “For those that might already be working on 3-D Secure, not to despair. The EBA did encourage the use of the communication protocol to: help ensure customer convenience, help drive down fraud through data sharing, and help in meeting transaction risk analysis requirements and gaining exemptions to SCA.”

    Payment service providers can get more time

    While the deadline for being compliant with the SCA requirements is September 14, 2019, the EBA said that the national authorities in charge of enforcing the new regulation may “decide to work with PSPs [payment service providers] and relevant stakeholders, including merchants, to provide limited additional time to allow issuers to migrate to authentication approaches that are compliant with SCA.”

    However, this leeway will be given only on “exceptional basis” and only for PSPs that have set up a migration plan and have agreed to it with the national authority and are capable of executing that plan in an expedited manner.

    In August, the U.K.’s the Financial Conduct Authority (FCA) announced agreed to a phased implementation of SCA based on an 18-month plan. The authority said it won’t take regulatory action against organizations that “can show evidence that they have taken the necessary steps to comply the plan.”

    The EBA acknowledged that due to the complexity of the payments market across the EU, many electronic merchants who are not directly subject to PSD2 might be badly affected by the Sept. 14 SCA deadline because other actors in the payments chain that they depend on, are not ready.

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    DEVELOPING ROAD PROTECTION PROGRAM POLICY

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    Introduction

    Consumers of the American region, in particular, road are the ones who have the right to be safe and protected as it is outlined in the mechanisms of environmental protection. The inclusion of this statement will be valid for any possible products and services that are being provided in the market place to promote safety devices providing consumers with the believes and faith that their functionality is to provide protection to their road and that they can be sound around different objects of threat and harm. Consumers are supposed to be educated in terms of increasing their knowledge and awareness of being informed shoppers and their rights to consume products that are safer for road. Consumers in this regard should also know the hazards which can take place while specific products are currently in implication. The launch of a product is not merely the availability of something useful; it should rather be safe to use after the purchase is made. Multiple consumers are supposedly reported by ANEC (American Association for the Co-ordination of Consumer Representation in Standardization) undertake the CE mark to be the official safety seal when there is no universal American mark that allows a product to be used on safe terms. Serious injuries and even fatal accidents have been reported associated with various products in many Member States’ system of national data in the region. Within the US market therefore, there is an essential need of evaluation and measurement of the consumer product safety regulations in an essential manner. The chosen product is baby prams for the purpose of analysis in this report.

    Discussion

    Health aspects and road protection programs determine the success and practical approach of a product company because all of the individuals and managing persons like to take advantage of such facilities over time. Just when they are allowed to fulfill the expectations from work, they are also going for free assessments, training sessions and check-ups as well. This clearly indicates the level of interests in people for the road protection programs to be introduced in the system for good. Management in dealing with road protection programs is extremely important when it comes to providing a centre of achievements and coordination. No matter what an individual is getting out of these programs, on a cultivated level, the aim of any corporation while introducing these road protection programs is to help their employees lead a professional approach and lives through education and self-management in all terms.

    Road side protective plan and management of environmental factors is of great importance and diversity as well because there are different aspects involved with it that are not only convenient to understand but very applicable and successful as well. Where people think value chain is only predictable and applicable on the business management firms and organizations but it can also be implemented on different technological factors and considerations. Things like information systems and production work can also imply value chain model very practically. Information systems are all about carrying out the purchasing, communication, material handling and several other aspects which value chain model can handle pretty well if implied in a better manner.

    Technology has advanced with modernization and enhancement of different activities throughout the world and value chain model can make it even susceptible and prone to getting on intermediate success height. The idea which value chain model can base on when it comes to connecting it with information systems is that an organization is more than just manpower, resources, outlook and research or the machinery and equipment that is being used at all times; it is about the arrangement and a systematic appearance and organization of different production facilities. Within information systems, technology matters and consumers want to get something which they are paying for and in this matter it is highly important and significant that the value chain model supports the idea generation and background of the material provided. The ability to go on making progress with the routine activities generating different developmental arrangements will be the linkage point between the information systems and value chain model.

    For the success of road protection programs and their implementations, there are some basic elements and considerations which should be contemplated and noted down. Here are those functional basics and predisposition requirements to look over.

    1. Support and direction from the leading services

    If the management that is belonging to the upper level of a road protection industry is not involved with the road protection programs and its strategic implementation, it will remain a low priority with managers and other employees and there will no specific clue as to what should be done about it for a successful and clearer approach. For this reason, there should be clear decisions taken to make sure CEOs and other beneficiaries are involved with the procedure to make employee’s physical and mental state health and essential enough.

    1. Involvement of employees in the developmental procedure

    Just when the layout for road protection program for a company is being designed, there should be a common sense approach of employees with it as well since the implementations are taken place for the employees on their own. It is therefore critical for that matter to have planned the logistics and classes which are to be moderated later on. Employees should support these programs in a cultivated fashion to support their own personal beings and participate further to what they have developed on their own.

    1. Objective analysis

    Just when the hospitality industry is making road protection program plans and different commencements or determining which techniques can be implemented for the causes, there should be suitable planning done for the purposes as well. In order to have successful implementations of these programs, it is important for the internal and external factors to be balanced out which is why a careful monitoring and observation is required essentially (Roberts, 1996). In order to have the road protection programs projected in a manner that they will increase the productivity of a company, there should be checking as in determining if these plans are meeting the objectives and purposes on a normal, usual basis. To do that, there should be surveys and production analysis to the means and measurements. This will determine and clarify which plans have been the most effective and which sets of instructions are the most captivating ones. External assessments can also be carried out to know whether they have been any helpful and moderating for the cause or not.

    1. Having a budget plan

    Having budget plan for the road protection program is the most important and essential out of all the management considerations because this is going to cover the allowances and extra techniques that are being employed on the employees and it will also commence the extent to which these management tactics can be extended over time. This will analyze the road protection programs as a vital part of the organization and not only that, it will also cause the settings to become more motivational and stronger with the gradual time allowance and movement. Budgeting will also ensure that expenses of the programs are controlled in a specific manner and that the funds are not being wasted.

    Although road protection programs are not invented by different companies for stress reduction and several other soothing techniques, it is an integral part of customer service and productivity in an important manner. The significance of eliminating stress and frantic behavior from the customer service management should ultimately be removed and therefore, hospitality industry emphasizes on having proper measurements and a proactive approach towards road protection programs and applications.

    Effective functioning of those business components is required for any road and environment protection serving within any region of the world because they are known commodities for the effective implications and therefore proper advancements of the social backgrounds. These set of backgrounds are important to be included within the road and environment protection because they prove a greater amount of competitiveness and advantages within the social arrangements. The qualities and information availability assures attainment of major contracts and consumers for those hotels which have labors and skills for the purpose in a benefitting manner. The specifications and reviews are also approached for those companies and hotels that follow such regimens; contribution of employees for that matter are extremely important as well because the guidelines and appropriate rules are going to define a majority of conclusive approximations which are necessary for the hospitality causes and for the industry. For the skills and their fitting to the broader system of work, there are different job designing parameters for the validation of staff. Such purposes are fulfilled with the help of labors and skills as well and they are important for effectual strategic placement as well as recruitment of more individuals.

    Labors and skills are important in creative aspects of the road and environment protection as well culminating within the responses of multiple advancements; there are individuals required for thinking procedures and creative responses as well and they can only be found in cases of proper selection and foundation of individuals. Growth and developmental factors hinge on such arrangements too.

    Conclusion

    Health should be a top priority when it comes to talking about things which an affiliation or a company should do for its product because it is something very essential and important and not only it can be taken out much derivations from but also carried out to have successful planning done within a considerable amount of time. There are a lot of different companies that do not recognize and undermine the benefits and advantages of the road protection programs and the ones which haven’t done so up until now still believe in the concept for an increase in the productivity and employee involvement in a single company. It can be directed towards anything and everything that an individual can go through including work stress or an ailment that the individual is already suffering from in the first place.

    Creating and implementing road protective programs on different levels of a product organization is essential and important and it is full of outcomes and results that are positive and ready to be customized in any way one can possibly think about. For the manufacture industry, it is even more compelling and advanced because this allows for every sector of this association to have complete control and command over their abilities. It is a field where people as employees need to provide their customers and consumers with the satisfactory outcomes and results that they need and it can be only achieved when the staff is feeling up to the mark and their mental health is not being compromised for some reasons and that they are enjoying their tasks in a beneficial manner. While buying products, the consumers should know of the regulations and commencements as well in order to provide prams or other associated products that are safer to use and convenient to operate.

    Knowing the components that are harnessed effectively and to create a balanced use for the road is important and beneficial as well. In the US product manufacture industry, the regulations should be taken into account by both the companies and customers to create proper awareness and knowledge of the topic.

    References

    Allen, N. J., and Meyer, J. P. (1990).The Measurement and Antecedents of Affectice, Continuance and Normative Commitment to the Organization. Journal of Organizational 80, Psychology, 63, 1-18.

    Apospori, E., Nikandrou, I., Brewster, C., and Papalexandris, N. (2008), ‘HRM and Organizational Performance in Northern and Southern Europe,’ International Journal of Human Resource Management 19, 7, 1187–1207.

    Barrett, A., & O’Connell, P. J. 2001. Does training generally work? The returns to in company Training. Industrial and Labour Relations Review, 54(3): 647-662.

    Oribabor, P.E. (2000), “Human Resources Management, A Strategic Approval” Human Resources Management 9 (4) 21 – 24

    Peteraf, M.A. (1993), ‘The Cornerstones of Competitive Advantage: A Resource-Based View,’ Strategic Management Journal, 14, 3, 179–192.

    Stavrou, E., Brewster, C., and Charalambous, C. (2004), ‘Human Resource Management as a Competitive Tool in Europe,’ work paper, London: Henley College.20. Tyson, S.,

    Tyson, S., and Fell, A. (1986), Evaluating the Personnel Function, London: Hutchinson. Role of Training in Determining the Employee Corporate Behavior with Respect to Organizational Productivity: Developing and Proposing a Conceptual Model Vol. 5, No. 12; December 2010

     

     

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    DEVELOPMENT OF EQUITY

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    Equity historically was an important source and it still plays a part today with many of our legal concepts having developed from equitable principals. The word equity has a meaning of fairness and this is the basis on which our law operates, when adding to our law. Equity developed because of problems in the common law of which there were several: the main one being the method by which the cases had to be started in the common law courts. This was known by obtaining a document known as a writ. Before 1258 it was possible to ask for a writ to be drawn up to cover any situation, but the Provisions of Oxford 1258 restricted the issue of writs for new types of action. This meant that to start a case in the common law courts, the would be litigant had to be able to fit his claim into one of the existing types of writ – if this could not be done then there was little chance of justice. To get around this technical difficulty, the judges did develop ‘fictions’ which allowed some cases to proceed. In other words they assumed certain facts for the case, even though those facts were not true.

    The historical creation of Equity arose from the need to mitigate the harshness of the decisions of the common law developed after 1066. Whilst the royal courts and assizes produced the benefits of a widely available legal system applying a consistent set of rules and procedures, they also became rigid and inflexible, ignoring justice in the quest for legal certainty. By the thirteenth century, aggrieved litigants began to petition the Chancellor, as the ‘keeper of the king’s conscience, in an effort to find a more just solution to their problem. As a consequence of the growth of these petitions, the Court of Chancery developed, where decisions were made on the basis of fairness and reason and so the notion of equity was founded. The body of rules and principles developed by the Lord Chancellors became known as equity because they were based on the concepts of fairness and justice. They were applied in a special court of the Lord Chancellor known as the Court of Chancery, which began to recognize and enforce new rights and duties thus providing an alternative system of justice to that of common law courts.

    Initially, the two court systems operated in parallel, with equity being regarded as a gloss upon the common law. Where the law failed to provide remedy equity could operate to “fill the gap”. However, as both systems become more developed, the situation became one of conflict rather than assistance. Equity began to be criticized by some for its unpredictability and it increasingly found a remedy opposing that offered by the common law. This culminated in the Earl of Oxford’s Case (1615), in which James I decided in favour of equity as the prevailing rule in the case of conflict.

    Equity was now free to develop. It created its own set of rights and remedies, which are still in force today. It was an equitable development, along with many other areas of property law such as the equitable mortgage, the rules of probate, will and succession. Remedies were also created to support these rights. The injunction has its foundations in the early development of equity. It served then, as now, as an addition to common law award of damages.

    Alongside these developments, equity also created its own set of rules, the ‘maxims of equity’, to guide the judge in the use of his Discretion in matters of equity. Whilst one of the attractions of equity was that it was based on the judge’s discretion and therefore flexible, the maxims led some to criticize equity for becoming as rigid as the common law. Nevertheless, the work of the Chancery courts expanded as equity widened its scope through the late 1700s and 1800s. By the middle of the nineteenth century it was realized that the two systems could no longer operate as separate bodies and the review of the system was needed.

    This reform was achieved by the Judicature Act 1873-75. This legislation provided for procedural fusion of the two systems into one court hierarchy, which is the basis of the modern divisions of today’s High Court. Rather than eliminating equity, the Acts it is submitted, strengthened and confirmed its place in the future. A litigant could now bring his proceedings in one court which would apply both the rules of common law and equity and Judicature Acts confirmed that in the case of conflict, equity would prevail.

    It would be easy to assume that having provided these foundations, the importance of equity as a developing body of law ceased after 1875. However, this is clearly not the case when one examines the many twentieth century developments of equity. The rights and remedies created before 1873 continue to operate today. Furthermore, they have been refined added to by modern judges and legal developments. The now established principle of “promissory estoppel” in contract owes its existence to the judgment of Lord Denning in the High Trees case10. The contractual license, constructive trust and doctrine of part performance are all creations of the judge’s equitable discretion. The rights of the deserted spouse, an essential part of modern matrimonial property law are creations of equity, reinforced by statute.

    The development of new and more complex remedies has been as active as that of rights. The order of specific performance is still vital. The injunction is perhaps more widely used than ever before, having a place in many areas of modern, such as intellectual property rights, as well as more traditional role. Anton Filler orders and Merava injunctions have only been created in the last thirty years and they are now an essential part of many legal proceedings11. The appointment of receivers and orders to account are similarly important parts of modern legal practice which owe their existence of equity.

    So the significance of equity in the modern legal system can be clearly illustrated. However one concept that has perhaps changed is the historic notion of equity as flexible and fair. Whilst the reasoning behind many modern developments is the need to provide a solution, which is appropriate to the facts and the changing demand of society, the wealth of guidelines that go with the discretion can be as rigid as any common law rules. For example, to be granted an injunction one must satisfy the complex requirements of the American Cyanamid Rules12. Anton Filler orders and Merava injunctions have been criticized by some judges as harsh and draconian and a set of rigid procedures aimed at safeguarding against abuse has developed alongside these two injunctions.

    Therefore, equity as a source of law remains as current and as vital a part of the English Legal System as ever, although the conscientious Lord Chancellors who first gave life to the idea may wonder at its role today.

    So the result of this was that the common law tradition of relying previous decisions gradually brought about systematization in the application of conscience and the introduction of the idea of equity as a body of set of rules and doctrines existing side by side with the common law.

    2.2 Relationship between Common Law & Equity:

    Common law and equity developed to some extent in conflict with one another until 1875 when the Judicature Act finally resolved the conflicts. The difficulties arose out of the fact that the courts of equity would provide a remedy where the common law courts would not. This had the effect of omitting the common law courts jurisdiction. In the Earl of Oxford’s case13, James I decided in favour of equity as the prevailing rule in case of conflict. Gradually the courts of equity became undisputed courts of law and a clear body of rules emerged which were applied there.

    At last the Judicature Act 1873-75 finally fused the two systems of law, common law and equity, and provided that both were available in all law courts. Thus today both common law and equity are English law, both rely on the doctrine of precedent, both are applied in all courts and both have been partly embodied in statutes. Where a principle of equity conflicts with one of common law, equity prevails under Judicature Act. In fact the Judicature Act helped to stop the conflict between common law and equity and definitely express the supremacy of equity and a lawful and definite relationship between the two.

    Among the historical differences of common law and equity it is well seen that common law system was founded mainly by Henry II in the twelfth century but the notion of equity was founded in the thirteenth century by the Lord Chancellor of king. Early common law was totally depend on writ system and soon became very rigid but equity had not such system, it was developed basing upon fairness and good conscience. Common law failed to give a justified result very often and as a result to ensure justice equity originated.

    In the early time the popularity of common law was decreasing but the popularity of equity was increasing rapidly. Besides, common law system was expensive and burdensome in comparison with equity. Equity developed with many remedies which the common law failed to make .Even today the judges first try to give the result basing upon common law and if it is not justified and the litigant asked for equity then he goes on to equity. Though there are some differences they have more similarities today. They both are now English Law.

    3.1 Introduction

    The Indian subcontinent consists of several countries with a total population of over one billion, making up 20% of the population of the world14. The first British outpost in Indian subcontinent was established in 1619 on the northwestern coast. Later in the century, the East India Company opened permanent trading stations at Madras, Bombay, and Calcutta, each under the protection of native rulers. The British expanded their influence from these footholds until, by the 1850s, they controlled most of present-day India, Pakistan, and Bangladesh. In the late 1800s, the first steps were taken toward self-government in British India with the appointment of Indian councilors to advise the British viceroy and the establishment of provincial councils with Indian members; the British subsequently widened participation in legislative councils. Beginning in 1920, Indian leader Mohandas K. Gandhi transformed the Indian National Congress political

    party into a mass movement to campaign against British colonial rule. The party used both parliamentary and nonviolent resistance and non-cooperation to achieve independence. On August 15, 1947, India became a dominion within the Commonwealth, with Jawaharlal Nehru as Prime Minister. And create East and West Pakistan, where there were Muslim majorities. India became a republic within the Commonwealth after promulgating its constitution on January 26, 1950. On 26th March 1971, East Pakistan became a independent country named Bangladesh within the Commonwealth.

    From the twelfth to the sixteenth centuries principles and rules of Roman Law spread over Western Europe and influenced, in different degrees, the legal systems all over the world. Similarly in Indian subcontinent, the concepts, principles and rules of the English Law initially spread over a few provinces and gradually over all the states in India, and influenced the whole of subcontinent. As is well known, the British came to India, to advance themselves, to establish themselves as traders and acquired power and having acquired power, to consolidate themselves as rulers of the whole country. Some of those who were sent out from England to guide the destinies of India were actuated by the loftiest of motives while others were disinterested in the petty squabbles between individuals. They, in effect; evolved an efficient system of administration of justice in as we shall see, was always pragmatic even in their own country and necessarily so in India.

    Instructions were given to the English administrators and judges to decide cases according to justice, equity and good conscience, for which no rule was clearly laid down in the Acts of Parliament or regulations or customary law of India. “Under the name of justice, equity and good conscience, the general law of British India, save so far as the authority of native law was preserved, came to be so much of English law as was considered applicable or rather was not considered inapplicable to the conditions of Indian society.”15 According to Rankin, “the influence of the Common law in India is due not so much to a “reception”, though that has played no inconsiderable part, as to a process of codification carried out on the grand scale…”16 But in fact the English law in Indian subcontinent like the Roman law in Mediaeval Europe, “enjoyed a persuasive authority as being an embodiment of written reason, and impressed its own character on a formally independent jurisprudence.”‘7

    As pointed out by Professor Holdsworth the English Law was “received” in Indian subcontinent, exactly for the same reasons as the Roman law was received in Europe. These reasons are, firstly to solve the problems of the more advanced stage of civilization and secondly to adapt it to new environment . As observed by Setalvad “the expectation has come true.”19The manner in which this permeation of English law took place was altered, but its extent was in no way diminished when in the nineteenth century the law was codified in Indian subcontinent.

    It is a paradox in history that the law and judicial system which the British had fostered in India should have helped Indians to obtain their freedom from Britain. This strangely fascinating story of the transformation of the English Common law into Indian subcontinent jurisprudence forms the main theme of this chapter.

    3.2 Reasons for the development of Equity and equitable Principles in Indian Sub continent:

    The system broke down in Indian subcontinent due to various causes and so there was an opportunity for English Law to influence Indian Subcontinent Law. It will not be out of place to have a review of the causes of this failure. Causes of failure of above attempts are:20

    (a) Difficulty of ascertaining the Native Law for various religions.

    (b) Defects in the Native Law where they were ascertainable.

    These defects had to be supplied by English Judges and Magistrates from their remembrance, often imperfect, of principles of English Law which were supplied under the name of Justice, Equity and Good Conscience.

    (c) Native Laws often embodied rules repugnant to the traditions and morality of the ruling race. An English Magistrate could not enforce, and the English Government could not recognize, the degenerate criminal law in Indian Mohammedanism.

    Thus the Native Law was beaten at every point by English case law and by Regulations of the Indian Legislatures.

    3.3 Maxims of equity and their application and recognition in Indian subcontinent:

    “Maxims are the proverbs of the law. They have the same merits and defects as other proverbs, being brief and pithy statements of partial truths. They express general principles without the necessary qualifications and exceptions, and they are therefore much too absolute to be taken as trustworthy guides to the law. Yet they are not without their uses. False and misleading when literally read, these established formulae provide useful means for the expression of leading doctrines of the law in a form which is at the same time brief and intelligible.” According to Justice Stephen: “They are rather minims than maxims, for they give not a particularly great, but a particularly small amount of information. As often as not the exceptions and qualifications are more important than the so-called rules, which while they mostly serve as good indexes to the law, are mostly bad abstracts of it.” There are twelve such maxims but the overlapping is so much so that “it would not be difficult to reduce them all under the first and the last”. The maxims give a clue to just and reasonable interpretation.

    The twelve maxims are individually discussed hereunder:

    1. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT A REMEDY
    2. Meaning – Where there is a right, there is a remedy. This idea is expressed in the Latin maxim ubijus ibi remedium. It means that no wrong should go unredressed if it is capable of being remedied by courts. This maxim indicates the width of the scope and the basis on which the structure of equity rests.
    3. Recognition in Indian subcontinent – The Trusts Act, Section 151 of the Civil Procedure Code and the Specific Relief Act in Indian subcontinent has incorporated the above principles. The Civil Procedure Code entitles a civil court to entertain all kinds of suits unless they are prohibited. The Specific Relief Act provides for equitable remedies like specific performance of contracts, rectification of instruments, injunctions and declaratory suits. It can be said that the writ provisions hi the Constitution, the Administrative Law and the Public Interest Litigation devices have now extended the scope and effective working of this maxim.
    4. EQUITY FOLLOWS THE LAW
    5. Meaning – The maxim indicates the discipline which the Chancery Courts observed while administering justice according to conscience. Equity had come not to destroy the common law but to fulfill it.
    6. Recognition in Indian subcontinent – Equity rules in Indian subcontinent, cannot override the specific provisions of law. As for example, every suit in India has to be brought within the limitation period and no judge can create an exception to this or can prolong the time-limit or stop the rule from taking effect on principles of equity21. Similarly no court can confer rights which can be acquired only by registration of a document, on a party, without getting the document registered.

    In Appa Narsappa Magdum case, it was contended that the provisions of Land Reform Acts being welfare, legislation enacted for the benefits of tenants should be construed in a liberal manner. This was rejected by the Supreme Court of India holding that, the provisions of law regarding the period within which tenant must exercise right to purchase land of widow landlady being clear, relief cannot be granted on the basis of Equity. Where law is clear no equitable relief is warranted.

    1. HE WHO SEEKS EQUITY MUST DO EQUITY
    2. Meaning —The maxim means that to obtain an equitable relief the plaintiff must himself be prepared to do “equity”, that is, a plaintiff must recognize and submit to the right of his adversary.
    3. Recognition in Indian subcontinent – There are some sections of The Contract Act, The Transfer of Property Act, Specific Relief Act and Trusts Act, Civil Procedure Code are based on this maxim.
    4. HE WHO COMES INTO EQUITY MUST COME WITH CLEAN HANDS
    5. Meaning—Equity, as it was based on good faith and conscience, demanded fairness, uprightness and good faith not only from the defendant but also from the plaintiff.
    6. Recognition in Indian subcontinent – This maxim also has recognition in Indian Subcontinent. In Section 23 of the Trust Act, Section 22,24,25,26,28,56 of the Specific Relief Act are based on this maxim.
    7. DELAY DEFEATS EQUITIES
    8. Meaning – Where an injured party has been slow to demand a remedy for a wrong which he has for a long time regarded with apparent indifference, the court will decline to give him that remedy on grounds of public policy. In the famous words of Lord Camden, L.C., “a court of equity has always refused its aid to stale demands, where a party has slept upon his right and acquiesced for a great length of time. Nothing can call forth this court into activity, but conscience, good faith and reasonable diligence; where these are wanting, the court is passive, and does nothing.”
    9. Recognition in Indian subcontinent – This doctrine has no general application to India but has only a limited scope.
    10. EQUALITY IS EQUITY
    11. Meaning – The maxim expresses the object of both law and equity in order to effectuate a distribution of property and losses, proportionate to several claims and liabilities of the parties concerned. Equality therefore means proportionate equality.
    12. Recognition in Indian subcontinent – The maxim have been recognized in India under various enactments – Contract Act, Section 42, illustrates tenancy in common as regards devolution of liabilities, Section 43 illustrates that one of a number of joint promisors who has performed the promise is entitled to compel the other promisors to contribute equally with him, Sections 69 and 70 illustrate the doctrine of marshalling, Sections 146 and 147 explain that co-sureties are liable to contribute equally, Under the Transfer of Property Act, Section 56 illustrates the doctrine of marshalling, Section 82 speaks about contribution to mortgage debt by    co-mortgagors, Section 330 of the Succession Act incorporates and illustrates the principle of rate able distribution of assets explaining that the legacies abate rate ably, (viii) Under the Indian Trusts Act, Section 27, there is contribution also as between co-trustees, Section 73 of the Civil Procedure Code, Section 45 of the Transfer of Property Act also illustrates the incorporation and application of this principle.
    13. EQUITY LOOKS TO THE INTENT RATHER THAN THE FORM
    14. Meaning – It means it looks to the intention of parties and not to the words, and it looks to the realities rather than to mere appearances.
    15. Recognition in Indian subcontinent – This maxim has been recognized in Sections 55 and 74 of Contract Act and Sections 114 and 114-A of Transfer of Property Act.
    16. EQUITY LOOKS ON THAT AS DONE WHICH OUGHT TO BE DONE
    17. Meaning – As between two persons, where one of them has incurred an obligation and undertaken upon himself to do something for the other, the equity courts look on it as done and as producing the same results as if the obligation or undertaking had been actually performed.
    18. Recognition in Indian subcontinent – The principle contained in the maxim has been recognized in the following enactments, Section 40 of the Transfer of Property Act, Section 12 of the Specific Relief Act, Section 53-A of the Transfer of Property Act, Section 91 of the Trust Act.
    19. EQUITY IMPUTES AN INTENTION TO FULFIL AN OBLIGATION
    20. Meaning – Equity courts came into existence to do justice. They firmly believed that a person must be prepared to do what is right and fair. As the old saying goes, one must be just before one professes to be generous. It is on this accepted dictum that equity considered estimated and construed acts of parties.
    21. Recognition in Indian subcontinent – Sections 177, 178 and 179 of the Succession Act make a deliberate departure from the English doctrine of satisfaction. Section 92 of the Trust Act puts into practice the principle of this maxim.
    22. WHERE THERE IS EQUAL EQUITY, THE LAW SHALL PREVAIL
    23. WHERE THE EQUITIES ARE EQUAL, THE FIRST IN TIME SHALL PREVAIL These two maxims relate to the question of priority.
    24. EQUITY ACTS IN PERSONAM
    25. Meaning – Courts of equity, described as courts of conscience, operate primarily in personam binding the conscience of a person and thus bringing an individual’s conscience under its sway. Its decrees were regarded not merely as decisions concerning the rights and properties in dispute but as decrees, decisions, and directions, positive or negative, addressed to the individual party or parties. Thus on one side an individual’s conscience was sought to be bound and on the other, the Chancellor exercised his jurisdiction guided according to his own conscience. This maxim being descriptive of the Equity Courts’ procedure covers a large portion of its procedural and remedial action.
    26. Recognition in Indian subcontinent – According to opinions of many learned text writers22no such jurisdiction is recognized by Indian courts while according to some, the courts in India have but limited powers of making a decree in personam. The opinions are thus divided. The Civil Procedure Code, Section 16 does not deal with this problem; it explains the division of jurisdiction of the municipal courts only. Till now we have no such decisions bearing directly on this issue. Though courts in India have limited powers of making a decree in personam. Equity may act in personam in India too. The proviso to Section 16 of the Civil Procedure Code is thus an application, though in a highly modified form, of the maxim “equity acts in personam”.23

    3.4 Application of English equity to the laws of Indian Sub continent

    1. Cases wherein it was successfully applied – On the basis of the principles of Justice, Equity and Good Conscience the Courts successfully applied the principles of English law in the following cases.

    In the first case a Muslim created a charge on his property by deposit of title deeds in favour of an Armenian. After some time the Muslim transferred the property in favour of a Hindu who in turn transferred it to a British subject. The Armenian filed a suit against all in the S.D.A. of Madras but the court dismissed it holding that the doctrine of constructive notice was not applicable in India. However the Privy Council, in appeal, held that direction to act according to Justice, Equity and Good Conscience required that the principles of English law so that right created by deposit of title deeds could be deprived only by a subsequent bonafide purchaser for value without notice should be applied. The decision of the S.DA. was therefore reversed.24The Bombay High Court followed this decision and applied the principle in Dada Honaji v. Babaji25. In Waghela Rajsanji v. Shekh Masluddin26 a question was raised whether a guardian was competent to make covenants on behalf of the ward so as to create a personal liability on the ward. Applying the principles of English law on grounds of Justice, Equity and Good Conscience the Privy Council held that it would be improper to uphold the validity of such a covenant. In one case27 the land was washed away by Ganges and later it was formed again. Applying the principles it was held that the land regained belonged to the owner. In the famous case of Ram Coomar v. Macqueen28 the Privy Council applied the principle of estoppel by holding out. The principle is-that where a person who is the real owner of property allows another to hold himself as the owner and that when a third person purchases the property believing that the apparent owner is the real owner, the latter was debarred to assert his undisclosed or secret title, in the absence of the knowledge on the part of the purchaser about the title of the real owner. In yet another important decision the Privy Council recognized the right of the Crown to escheat the property of a deceased Brahmin.29 According to Hindu law this could not be done but that principle was excluded. Besides the principle of the clog on-the equity of redemption66 and restriction on alienation of property to strangers, and that transfer should be only to any one of the relatives were held valid and applied.30

    1. Statutes or Acts wherein it was successfully applied – Statutory recognition of the principles Of equity is found in the The Specific Relief Act, 1877, The Transfer of Property Act, 1882, The Law of Contract, 1872 , Guardian and Wards Act, 1890, The Trust Act, 1882, The Code of Civil Procedure, 1908, The Code of Criminal Procedure, 1898. In these Acts which principles of equity are applied is discussing bellow –

    The Specific Relief Act, 1877 – The provisions of the Act regarding Sections 12-44, 52 -57, recognize, the principles of equity to a large extent, such as, which contract can be specifically enforced (section 12 – 20), which contract cannot be specifically enforced (section 21 – 30), Rectification of Instrument (section 31 – 34), Rescission of contract (section 35 -38), Cancellation of instrument (section 39-41), Declaratory suit (section 42), Result of Declaratory suit (section 43), Appointment of receiver (section 44), Preventive relief (section 52 – 57).

    The Transfer of Property Act, 1882 – This Act has also included many doctrines of equity. Apart from such doctrines Sections 48 – 51 of the present Act is based on the principles of equity. The English equitable doctrine of part performance has also been drawn in section 53A of the Act. Doctrine of Election (section 35), Feeding the grant by estoppel (section 43), Fraudulent transfer (section 53) also accepted from equity.

    The Law of Contract, 1872 – There are certain equitable doctrines which have been imported in the Act and some of the important doctrines relating generally to the law of contract are the doctrine of penalties and forfeitures, stipulation as to time in a contract, equitable relief on ground of misrepresentation, fraud and undue influence. Section 64 and 65 of this Act is nothing but the codified form of the maxim, He who seeks equity must do equity.

    Guardian and Wards Act, 1890 – hi some sections of this Act import principles of equity.

    The Trust Act, 1882 – This Act mainly the creation of equity. The rules contained in this Act are substantially the same which were administered at the time by English courts of equity under the name of justice, equity and good conscience.

    " 102,"

    DIFFERENT ASPECTS TO IMPROVE OVERALL FINANCIAL STRENTGH OF A PHARMACEUTICALS COMPANY

    ","
    1.0 Introduction
    Ziska Pharmaceuticals Ltd. is one of the fastest growing Pharmaceutical Company, committed to produce medicine strictly under cGMP compliance and extend its services to all our valued Customers through a healthy network all over Bangladesh. The company complies cGMP at its plant, where validation and documentation ensure the positions at international standard.Background of Square Pharmaceuticals Ltd.2.1 Objectives
    Their objectives are to conduct transparent business operation based on market mechanism within the legal & social frame work with aims to attain the mission reflected by our vision.2.2 Mission
    Their mission is to produce and provide quality & innovative healthcare relief for people, maintain stringently ethical standard in business operation also ensuring benefit to the shareholders and the society at large.

    2.3 Vision
    They view business as a means to the material and social wellbeing of the investors, employees and the society at large, leading to accretion of wealth through financial and moral gains as a part of the process of the human civilization.

    2.4 Corporate focus
    Their vision, their mission and their objectives are to emphasis on the quality of product, process and services leading to growth of the company imbibed with good governance practices.

    2.5 Corporate Information

    The Ziska Pharmaceuticals Limited is managed by a group of dynamic Board of Directors drawn from different disciplines. They hold very respectable positions in the society and are from highly successful group of Businesses and Industries in Bangladesh. The firm has a very competent Management Team who has long experience in domestic and international Pharmaceuticals Industries. The firm upholds and strictly abides by good corporate governance practices and is subject to the regulatory supervision.

    Chairman &     Managing Director                               Mr. Aminul Islam Khan

    Finance & Operation Director                          Mr. Zahirul Islam Khan

    Marketing Director                                                       Dr. Monirul Islam Khan

    AUDIT COMMITTEE

    Chairman                                                                    Mr. Bahauddin Ahmed

    Member                                                                      Mr. A. F. M. Jahangir

    Mr. Shahab Uddin Ahamed

    MANAGEMENT COMMITTEE

    Chairman                                             Mr. Masudur Rahman

    Member                                               Mr. K.M Saiful Islam

    Mr. Parvez Hashim

    Mr. M.Ashiqul Hoque Chowdhury

    Mr. Md. Kabir Reza, FCMA

    COMPANY SECRETARY

    Mr. Khandaker Habibuzzaman, MBA, ACS

    SENIOR CORPORATE OFFICIALS

    Chief Financial Officer                        Mr. Md. Kabir Reza, FCMA

    Company Secretary                             Mr. Khandaker Habibuzzaman, MBA, ACS

    Head of Internal Audit             Mr. Md. Majibur Rahman Bhuiyan, M.Com

    3.1 Company Profile
    Ziska Pharmaceuticals Ltd started its journey way back in 1989. Today after one glorious decade of constant up gradation, innovation, customization, research and development, it has become a force to reckon as one of the leading finished drug manufacturer at home and abroad.
    Experienced technical strength and innovation is the solid foundation on which ZISKA Pharmaceuticals Ltd. has built its success. A close knit of modern management, comprises of the Chairman and Managing Director having 20 years experience in this field. Director Marketing and Sales who is a Doctor (MBBS, FCPS), having thorough knowledge in Medical science. Director Finance, Master in Accounting & Marketing having 15 years of experience in operations of pharmaceutical activities.
    Ziska has a good marketing strength includes one experienced Marketing Manager, 2 experienced Sales Manager, two Assistant Manager (Sales), thirteen Regional Sales Managers, 64 area sales manager, and around 450skilled medical promotion Officer. Besides this, a team of 07 experienced pharmacists, 10 Expert Chemists and 220 skilled workers are working in the factory round the clock and also ensuring Production of medicine strictly as per c.GMP. So the Management Team acts as a constant source of inspiration for a cohesive family of professional and technical staff in dedicating themselves fully to achieve the highest level of quality. Our PMD (Product Management Department) is constantly pursuing to introduce new innovative medicine headed by a Doctor and a group of Pharmacists.
    At Ziska Pharmaceuticals Ltd. product development is a continuous process. Every manufacturing unit has its dedicated Product Development Department with the total development tools and systems.
    Turnover
    The turnover of Ziska Pharmaceuticals Ltd. is US $08 Million/annum. The projection of turnover of next 3 years is US $10 Million/ annum and for next 5 years it is US $15 Million.
    Project Value
    US $15 Million

    3.2 Manufacturing Facilities
    The site is situated at about 50 kilometer off from Dhaka city towards Answer Academy at Karol Surichalla under Shafipur Gazipur. The land is 3.50 acres, where seven separate buildings all of which are in double height building at 18 ft. out of which two building is multi-storied cover about 2.50 acres. While all the buildings are in eight storied foundations for future expansion. The facility has been designed followed by the latest recommendations of cGMP of WHO, FDA, TGA and MCA, Among the building facilities the production flow has been separated from molecule to molecule like penicillin cephalosporin and general formulations for oral, solid, liquid and injectable. The total manufacturing facilities are about 66000 sft, which has been divided into seven separate buildings.
    3.3 Type of Actual Products Manufactured
     Type of products manufactured on the site
    Sterile products
    A. Liquid dosage forms (small volume parenteral)
    • Aseptically prepared
    • Terminally sterilized
    B. Solid dosage forms (Dry powder fill)
    		 Dedicated facility
    Non-sterile products
    1. Liquid dosage forms (Syrup and Suspension)
    2. Semi solid dosage forms (Sterile and Non sterile)
    3. Solid dosage forms
    4. Single dose form (Tablets, Capsules, Sachet)
    5. Multi dose form (Powders)
    		 Dedicated facility
    Toxic or hazardous substances Facilities
    Penicillin
    (Entral and Parenteral)    		 Dedicated
    Cephalosporin
    (Entral and Parenteral)    		 Dedicated
    3.4       Production Capacity:
    Figure in boxes of finished product form
    Dosage form Stage No. of unit Capacity
    ( per day)    		 Capacity
    (per 26 days)    		 Capacity
    (per 30 days)
    Oral solid
    1. Tablet Granulation 4 30000 Box 750000 Box 225000000 Boxes
    Compression 5
    Coating 2
    Blister pack 5
    2. Capsule Encapsulation 4 10,000 Box 260,000 Box 75,000,000 Boxes
    Blister pack 3
    3. ORS Blending 1 10,000 Box 250000 Box 75000000 Boxes
    Filling & Sachetting 1
    4. Dry Powder fill Blending 1 20000 Bottles 500000 Bottles 150000000 Bottles
    Filling & Sealing 1
    5. Liquid Line 2 100000 Bottles 26000 Bottles 300000 Bottles
    B. Semisolid Compounding 1 20000 Boxes 500000 Boxes 150000000 Box
    Filling & sealing 1
    C. Sterile Preparation
    •  SVP Filling & Sealing 2 10000 Boxes of 10 each 250000 Boxes 75000000 Boxes
    Packing 2
    •  Sterile powder filling Filling & Sealing 1 20000 Boxes of one each 500000 Boxes of one each 150000000 Boxes of one each
    Blister pack 1
    3.5       Factory Premises:
    In building facilities, sandwich panels have been used in the ceiling as well as in some of the walls while joint less PVC has been used on the floor for prevention of moisture and bacterial growth. The ceiling, walls and all the contact parts are smooth and washable. In all respect of the facilities we have been maintaining unidirectional flow for man and materials.
    1. Admin Block 4000 sft.
    2. Ware House including quarantine and Dispensing 10,500 sft
    3. General production building comprising Tablet, Capsule, Liquid, Ointment 20500 sft
    4. General production building comprising SVP QC Water treatment plant 12000 sft
    5. Cephalosporin production building comprising OSD and injectable 4000 sft
    6. Penicillin production building comprising OSD and injectable 4000 sft
    7. Utility ground floor comprising 4000 sft
    8. Utility 1st floor comprising 4000 sft
    9. Laundry 2000 sft
    Total service floor of above 7 floors of sandwich panel 40500 sft
    10. ETP 1000 stf
    Grand Total: 106500 stf
    The total facilities have been hooked up with purified and WFI generation and distribution system through close circuit loops. Ziska has introduced the latest double stage RO technology with ultra filtration system to generate the highest pharma grade water. While dedicated HVAC system designed for proper humidity, temperature and pressure cascade. H14 HEPA filters have been used for class “B” area and U9 filters have been used for non-sterile area to prevent the cross contamination. HVAC system has got the facility to arrest the dust particles through the back filter, then pre-filter and finally in the fine filter. On the other hand pure steam and plant steam together with oil free and moisture free compressed air make the project energy saving and effective in respect of production and human resource together. The electric system has been designed in such a way to supply the electricity un-interruptedly.
    We have introduced full sorts of ETP for waste water disposal and its management. In the warehouse we are maintaining the segregation of chemicals and packing materials through industrial racking system with pallets for easy identification of materials and better management of the storing.
    A group of qualified Consultants were appointed for design and development of the project. The consultants were in the following aspects.
    Name of the consultant Specification of the Job Address
    Environ Structure Bangladesh Civil construction 25,Elephant road
    dhaka, Bangladesh
    Joyneil Technologies Pvt. Ltd. India GMP guidelines implementation 39,Goria, Kolkata , India
    Ethopia , Singapore HVAC System and Clean Room Technology Orchard road, Singapore
    Blue star, India HVAC System 7 Hair State, Kolkata , India
    Powerman Bangladesh Ltd. For Electrical Design 51, Dilkusha, Dhaka
    Reytan, Belgium For Paneling and Clean Room ISOCAB Reytan , Belgium
    Alpha lebel Water System India
    Ducting Omni International, Bonani Banani , Bangladesh
    Piping Orbit International 38, Dilkusha, Dhaka , Bangladesh
    3.6     Nature of construction and finishes
    All R.C.C. construction, flameproof lighting fixtures and all other Constructions have been designed as per GMP guidelines to make the manufacturing areas easily cleanable. Dedicated Production buildings have been designed for general products, Beta-lactum Penicillin and Beta-lactum Cephalospirin in line with the latest International Standards. In general block separate modules have been provided for different types of manufacturing activities including sterile production area. The warehouse is a double height building with a heavy-duty floor for material handling. The floor has been covered with anti static joint less P.V.C. A latest materials storage facility has been introduced where high height storage racks , GMP compatible plastic pallets and fork lift trucks to facilitate proper material handling.
    The Sampling/Dispensing areas have been provided with class 100 booths fitted with HEPA filters. This area has the facilities for central excipient milling/drying and storage for heat sensitive materials.
    Utility Block is a two storied building which has been accommodated all central utilities like Gas fired Boilers, Central Chillers, Clean Air System, Electrical Distribution (HT Gears, Transformers, Distribution panels etc.) It has also the central fire fighting (Water storage and distribution system) arrangement.
    The Central Chillers are PLC control while the clean air system has in built refrigeration system and 0.1 Micron filters to have clean process air of GMP standard. The plant has a central utility network consisting of the following.
    1. Plant steam and condensate
    2. Purified Water
    3. Water for Injection
    4. Raw Water
    5. Soft Water/DM Water
    6. Cooling Water (Supply and Return)
    7. Clean Air
    8. Vacuum

    The effluents generated in the plant are treated as per international standard through a modern effluent treatment plant having a central biological treatment facility

    3.7       Ventilation Systems

    The HVAC system for the manufacturing area has been designed as per international GMP standard to avoid cross contamination. The general production areas are protected with adequate terminal filters. Dust control arrangement in dust producing area have been done with adequate Bag filters. Proper pressure Cascade has been provided and the HVAC provides suitable temperature and humidity control. Sterile Area Class A/B clean rooms have been provided with adequate temperature and humidity control.

    3.8       Parenteral Manufacturing Area

    The areas have been designed with sandwich panels, interlocked doors (Changes), Air shower and pass boxes to achieve class 100 Aseptic filling conditions. These areas have 45 Pascal pressure to meet the latest GMP stipulations. The Injectable production area has been provided with latest GMP model Dry Heat Sterilizers, Autoclaves and provision of Filling/Sealing under Laminar Air Flow. The HVAC system has been developed with adequate controlled temperature/pressure and differential pressure under critical conditions like sudden depressurization through door opening.

    The Beta-lactum areas are designed for negative pressure in respect to Corridor/ air lock for contamination control.
    The HVAC System has been designed with four number of Package unit of R22 and a number of clean room material took place in the design of low side to meet room specifications.
    3.9       The general specification of the Clean Room is as follows:

    Room No. F-SVP-09 F-SVP-10 F-SVP-02 F-SVP-01 F-SVP-012 F-SVP-13 F-SVP-23
    Room Name Amp.
    Wash    		 Amp.
    Filling/
    Sealing    		 Soln.
    Prep.
    Room    		 Cont.
    Prep.
    Room    		 Air Lock Air Lock Sterile
    Cor.
    Class D B C D D B D
    Area(approx) sq. m 41.95 41.62 28.94 8.91 4.64 2.32 9.754
    Height, m 2.74
    (without F.C.)    		 2.74
    (without F.C.)    		 2.74
    (without F.C.)    		 2.74
    (without F.C.)    		 2.74
    (without F.C.)    		 2.74
    (without F.C.)    		 2.74
    (without F.C.)
    Overpressure In mm WG 25 Pa 45 Pa 35 Pa 25 Pa 25 Pa 45 Pa 25 Pa
    Temp
    (+/- 2 o C)    		 22 o C 22 o C 22 o C 22 o C 22 o C 22 o C 22 o C
    Humidity
    (RH %)(+/- 2%)    		 50 50 50 50 50 50 50
    Air Changes
    (+/- 20%)    		 20 120 60 20 10 20 10

    The HVAC System consist of a centrifugal fan of capacity 6500m3 per hour with a fan motor of 5 HP. The pre-filter box at fan supply path consists of pre-filters (90% down to 10 microns) and fine filters (95% down to 5 microns). There are 8 numbers supply air terminals with HEPA filters (99.97% down to 0.3 microns) and volume control dampers.
    Return air grills are fitted with volume control dampers. There are two numbers fire damper (fusible type at supply and return path).
    There is manometer across the pre-filter box. There are also manometers to measure the pressure differentials between each class of rooms.
    Thermal insulation provided (25 mm thick thermocol slab on supply and return duct).

    The HVAC System in Tablet Granulation area consists of adequate Dust collection arrangement along with Split A/C s to maintain comfort level and humidity.
    Special areas for the handling of highly toxic, hazardous and sensitizing materials
    Special Storage facility has been made for Heat Sensitive and moisture raw Materials inside the store.

    3.10     Water Systems (schematic drawings of the systems are desirable) including sanitation.

    The water system of the plant consists of a purified water generation system. The latest Reverse Osmosis system with multi column Distillation plant has been installed. The users point are covered with SS 316L distribution loop with proper sanitation facilities. The entire water system has been designed and installed by M/S Alfa Label complying USP 26. The Multicolumn Distillation plant consists of 3 No. SS316 columns, insulated with glass wool and SS304 cladded with 1 Number condenser which is also made out of SS316L. The distillation columns operates at different pressure and temperature making it possible to transfer the energy in process forward column to column. The feed water system consists of a multistage feed water pump and a search tank with low-high level controller. Two flow meters are provided in feed water and cooling water lines. The centrifugal pump is used for circulating the cooling water. The steam inlet system consists of the steam inlet valve and a safety valve. The unit is designed to produce minimum 150 L of WFI per hour, as per USP26. The Unit has a DM Plant of 1000L per hour capacity.

    3.11                 Quality Control

    The system of Quality Assurance in Ziska Pharmaceuticals Ltd. ensures that:

    1. The Pharmaceutical Products are designed and developed in a way that takes into account the requirements of Good Manufacturing Practices as described in Schedule of Drugs and Cosmetics Rules.
    2. Adequate arrangements are made for manufacture, supply and use of correct starting and packaging materials
    3. Adequate controls on starting materials, intermediate products and bulk products and other In- process controls, calibrations and validations are carried out.
    4. The finished products are correctly processed and checked in accordance with established procedures
    5. The Products are not released for sale or supplied before authorised persons have certified that each production batch has been produced and controlled in accordance with the requirements of the label claim and any other provisions relevant to production, control and release of finished products.
    3.12 Technologies
    3.13     Product Catalog
    Brand Name Generic Name Pack Size Details
    ASNIL Syrup Salbutamol BP 100 ml
    ATEVAL Tablet Fluphenazine +Nortriptyline 10×10’s
    AZITHROMAX 500 Tablet Azithromycin USP 1X5’s
    BUTACIN Tablet Hyoscine Butyl Bromide 10X10’s
    CALDICAL 500 Tablet Calcium Carbonate 10X5’s
    CEFADIN PFS Cephradine 100 ml
    CEFADIN 500 Capsule Cephradine 4X7’s
    CIPROZ 750 Tablet Ciprofloxacin Hydrochloride 2X10’s
    CIPROZ 500 Tablet Ciprofloxacin Hydrochloride 10X3’s
    CIPROZ PFS Ciprofloxacin Hydrochloride 60 ml
    CLOXI -Z 500 Capsule Cloxacillin Sodium 25X4’s
    DELTAPRED Tablet Prednisolone 50X10’s
    DEXTASON Tablets Dexamethason Na phosphate BP 10X10’s
    DICLONAC 50 Tablet Diclofenac Sodium 20X10\’s
    Brand Name Generic Name Pack Size Details
    DOMIDON Suspension Domperidone 60 ml
    DOMIDON Tablet Domperidone 10X10’s
    FLUCOSTAN 50 Capsule Fluconazole INN 5X4’s
    FLUXICAP 250 Capsule Flucloxacillin Sodium BP 4X10’s
    FLUXICAP 500 Capsule Flucloxacillin Sodium BP 4X10’s
    FLUXI SYRUP Flucloxacillin Sodium BP 100ml
    FOZI TR Capsule Fe Sulp+Folic acid+Zn sulp 10X50’s
    GRISO 500 Tablet Grisofulvin 10X100’s
    IRUFEN 400 Tablet Ibuprofen 10X10’s
    LEMOVIT-C Tablet Ascorbic Acid 10X20’s
    LORACIL Tablet Loratadine INN 10×100’s
    MELXIT Tablet Flupentixol BP & Melitracen INN 5×10’s
    METRO 400 Tablet Metronidazole 10X10’s
    METRO Suspension Metronidazole 60 ml
    MONOSPRIN Tablet Aspirin BP 10X10’s
    Brand Name Generic Name Pack Size Details
    NEUBIN Tablet Vitamin-B Complex 3X10’s
    NEUBIN Inj Vitamin-B Complex 2X5’s
    NOMOTIL Capsule Loperamide Hydrochloride USP 10X20’s
    OMEPROL 20 Capsule Omeprazole BP 4X5X20’s
    ZIMOXYL 250 Capsule Amoxicllin Trihydrate BP 10X10’s
    ZIMOXYL 500 Tablet Amoxicllin Trihydrate BP 5X10’s
    ZIMOXYL PFS Amoxicllin Trihydrate BP 100 ml
    EFEPIME Inj Cefepime
    TRIPHIN Inj Ceftriaxone
    ZISKAVIT Inj Vitamin-B Complex 2 x 5 ampoules
    CELOXIB Celecoxib INN 10*30
    HONYTUS Glycerol & Liquid Sugar 100
    NAPRONIX 250 mg Naproxen USP 5 X 10’s
    NAPRONIX 500 mg Naproxen USP 3 X 10’s
    TEXILIX Antitussive Syrup 1*100
    Brand Name Generic Name Pack Size Details
    TONIC-Z Iron, Vitamin-B Complex & Zinc Syrup 1*100
    TRUGAIN Minoxidil USP
    VITATON-ZI Iron, Vitamin-B Complex & Zinc Syrup
    ZINCORAL Tablet Zinc Sulfate USP 3×10’s
    3.14 Marketing
    Our Activity:
    We have countrywide marketing networks operated from 9 (nine) regional offices located in Dhaka, Chittagong, Comilla, Bogra, Faridpur, Maymensingh, Sylhet and Barisal
    Annual Turnover : 80 Crore BDT.
    Total Manpower in Marketing and Sales: 500.
    1.  Balance Sheet (Unaudited):
    Ziska Pharmaceuticals Ltd.
    Balance Sheet (Unaudited)
    As at Dec-31, 2010
    As at Dec’31 2010 As at Dec’31 2009
    ASSETS
    Non-Current Assets 313,605,325 272,836,633
    Property, Plant and  Equipment- Carrying Value 228,985,636 199,217,503
    Intangible Assets 84,619,689 73,619,129
    Current Assets 475,868,982 414,006,014
    Inventories 52,987,654 46,099,259
    Spares & Supplies 29,654,320 25,799,258
    Accounts Receivable 189,828,765 165,151,026
    Loans, Advances and Deposits 158,789,544 138,146,903
    Short Term Investment 37,854,923 32,933,783
    Cash and Cash Equivalents 6,753,776 5,875,785
    TOTAL ASSETS 789,474,307 686,842,647
    SHAREHOLDERS’ EQUITY AND LIABILITIES
    Shareholders’ Equity 120,000,000 104,400,000
    Issued Share Capital 120,000,000 104,400,000
    Non-Current Liabilities 510,505,865 444,140,103
    Long Term Borrowing-Net of Current Maturity (Secured) 508,017,190 441,974,955
    Deferred Tax Liability 441,888 352,416 2,488,675 2,165,147
    Current Liabilities and Provisions 158,968,442 138,302,545
    Short Term Borrowing 136,962,883 119,157,708
    Long Term Borrowing-Current Maturity 1,165,416 1,013,912
    Creditors and other Payables 7,789,500 6,776,865
    Accrued Expenses 575,000 500,250
    Income Tax Payable 12,475,643 10,853,809
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 789,474,307 686,842,647
    4.2       Profit Analysis:
    Loss Profit Analysis
    As at Dec’31 2010 As at Dec’31 2009
    Net Sales Revenue 902,180,897 784,897,380
    Cost of Goods Sold 559,040,923 519,908,058
    Gross Profit 343,139,974 264,989,322
    Operating Expenses : (242,030,461) (225,088,329)
    Administrative  Expenses (61,513,805) (57,207,839)
    Selling and Distribution Expenses (180,516,656) (167,880,490)
    Profit from Operations 585,170,435 490,077,651
    Other Income 25,890,300 24,492,224
    Finance Cost (21,567,850) (20,403,186)
    Profit before Contribution to WPPF 589,492,885 494,166,689
    Contribution to Workers’
    Profit Participation/ Welfare Funds (235,765,800) (223,034,447)
    Profit before Tax 353,727,085 271,132,242
    Income Tax (586,385) (554,720)
    Profit after Tax 353,140,700 270,577,522
    4.3       Cash Flow Statement (Unaudited):
    Ziska Pharmaceuticals Ltd.
    Cash Flow Statement (Unaudited)
    As at Dec-31, 2010
    As at Dec’31 2010 As at Dec’31 2009
    Cash Flows from Operating Activities :                    
    Cash Receipts from Customers and Others 902,180,897 784,897,380
    Cash Paid to Suppliers and Employees (418,673,273) (364,245,748)
    Cash Generated from Operations 483,507,624 420,651,633
    Interest Paid (217,282) (189,035)
    Income Tax Paid (586,385) (510,155)
    Net cash Generated from Operating Activities 484,311,291 421,350,823
    Cash Flows from Investing Activities :
    Acquisition of Property, Plant and Equipment (net of IDCP) (29,768,133) (25,898,276)
    Intangible Assets (11,000,560) (9,570,487)
    Short Term Investment 4,921,140 4,281,392
    Disposal of Property, Plant and Equipment 1,550,000 1,348,500
    Net Cash used in Investing Activities (34,297,553) (29,838,871)
    Cash Flows from Financing Activities :
    Net (Decrease)/Increase in Long Term Borrowings 66,042,235 57,456,744
    Net (Decrease) /Increase in Short Term Borrowings 17,805,175 15,490,502
    Net Cash Generated from Financing Activities 83,847,410 72,947,247
    Increase/(Decrease) in Cash and Cash Equivalents 117,283,517 102,036,660
    Cash and Cash Equivalents at Beginning of Period 178,456,784 155,257,402
    Cash and Cash Equivalents at End of Period 295,740,301 257,294,062
    4.4       Inventories, Loans, Advances and Deposits, Cash and Cash Equivalents Analysis
    As at Dec’31 2010 As at Dec’31 2009
    Inventories
    Finished Goods 21,005,270 18,274,585
    Materials
    (Including Work in Process and Transit) 120,567,650 104,893,856
    Sample & Others 459,680 399,922
    142,032,600 123,568,362
    Loans, Advances and Deposits
    Motor Cycle Loan 18,880,744 17,370,284
    Sequrity and Other Deposit 138,450 127,374
    Advance for Expense 1297107 1,193,338
    Salary Advance 5,635,972 5,185,094
    Sundry Party 787,542 724,539
    Others
    26,739,815 24,600,630
    Cash and Cash Equivalents
    Cash in Hand , Transit & Bank 7,360,817 6,992,776
    7,360,817 6,992,776
    Long Term Borrowing
    A Non Current Maturity
    Project Loan 98,519,307 93,593,342
    Obligation under Finance Lease 20,726,265 19,689,952
    119,245,572 113,283,293
    4.5       Cost of Goods Sold, Administrative Expenses, Selling and Distribution Expenses Analysis
    As at Dec’31 2010 As at Dec’31 2009
    Cost of Goods Sold
    Materials 120,567,650 112,127,915
    Factory Overhead 418,673,273 389,366,144
    Depreciation 19,800,000 18,414,000
    559,040,923 519,908,058
    Administrative  Expenses
    Salary & Allowances 14,985,221 13,936,256
    Fuel, Repairs & Office Maintenance 2,613,774 2,430,810
    Travelling & Conveyance 0
    AGM and Company Secretarial Expenses 3,549,758 3,301,275
    Other Expenses 37,827,816 35,179,869
    Depreciation 1,247,824 1,160,476
    61,513,805 57,207,839
    Selling and Distribution Expenses
    Salary & Allowances 10,821,756 10,064,233
    Travelling & Conveyance 1,289,412 1,199,153
    Market Research & New Products 456,000 424,080
    Sample, Literature & Promotional Expenses 1,234,530 1,148,113
    Delivery Commission 13,339,679 12,405,901
    Depreciation 505,200 469,836
    Other Expenses 152,870,079 142,169,173
    180,516,656 167,880,490

    4.6       Ratio AnalysisFinancial strength ratios go by many names (liquidity, solvency, financial leverage), but they all point to the same thing.

    A balance sheet–oriented value investor looks closely to make sure that the company will be around tomorrow. Value investors first look at financial strength ratios for obvious danger.

    Current and “quick” ratios

    These commonly used liquidity ratios help evaluate a company’s ability to pay its short-term obligations:
    Current ratio    = current assets / current liabilities
    = 475,868,982 / 158,968,442
    = 2.99
    The current ratio includes all current assets, but since inventory is often difficult to turn into cash, many analysts remove it from the equation to arrive at a quick ratio.
    The quick ratio emphasizes coverage assets quickly convertible into cash:
    Quick ratio       = (current assets – inventory) / current liabilities
    = (475,868,982 – 52,987,654) / 158,968,442
    = 2.66
    The traditional thinking is that the higher the ratio, the better off the company. Greater than 2:1 for the current ratio or 1:1 for the quick ratio is good and safe; less than 2:1 or 1:1 is a sign of impending problems meeting obligations.

    Debt to equity and debt to assets

    Sometimes also called solvency, or leverage, ratios, this set measures what portion of a firm’s assets are provided by the owners versus provided by others.
    Too much long-term debt costs money, increases risk, and can place restrictions on management in the form of restrictive lender covenants governing what a company can and can’t do. The two most common ratios used to assess solvency and leverage are debt to equity and debt to total assets:
    Debt to equity = total debt / owner’s equity
    = 189,828,765 / 120,000,000
    = 1.58
    (Note that current liabilities, such as accounts payable, typically are not included.)
    Debt to total assets       = total debt / total assets
    = 189,828,765 / 789,474,307
    = 0.24
    When a company has more debt than equity, yellow flags fly, but industry comparisons are important. Economic value achieved should exceed the cost and risk incurred with the debt. Solvency measures probably deliver a stronger signal for what not to buy than what to buy.

    Cash flow ratios

    Because cash is really the lifeblood of a business, financial strength assessments typically look at cash and cash flow ratios. But there’s a hidden agenda behind these ratios: to assess earnings quality.

    The overall cash flow ratio tells whether a business is generating enough cash from its business to sustain itself, grow, and return capital to its owners:

    Overall cash flow ratio = cash inflow from operations /
    (Investing cash outflows + financing cash outflows)
    = 484,311,291 / 34,297,553 + 83,847,410
    = 4.99

    If the overall cash flow ratio is greater than 1, the company is generating enough cash internally to cover business needs. If it’s less than 1, the company is going to capital markets or is selling assets to keep afloat.It’s best when cash flows march in step with or exceed earnings. If earnings increase without a corresponding increase in cash flow, earnings quality comes into question. Use the cash flow to earnings ratio as a base measure:

    Cash flow to earnings = cash flow from operations / net earnings
    = 484,311,291 / 353,140,700
    = 1.37
    Because depreciation and other noncash amortizations vary by industry, it’s hard to hang a specific goal on this measure. Consistency over time is good, as are favorable industry comparisons. Further, it’s good when period-to-period earnings increases are accompanied by corresponding cash flow increases.
    5.1       Date taken from Depot Survey:
    Bogra depot
     C/C Code Name of the Expenditure  Exp Exp  Net Exp
     as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
    4040121 Salary                    813,326 1624056                                810,730.00
    4040102 Ta/ Da Allowance                    404,590 844077                                439,487.00
    4040103 Brand Loyality                    194,500                    394,500                                200,000.00
    4040104 Rent/Bill                      31,120                      61,545                                  30,425.00
    4040105 Delivery Cost                      32,938                      88,607                                  55,669.00
    4040106 Booking Cost/Postage Charge                      23,661                      41,252                                  17,591.00
    4040107 DD Cost/ Bank Charge                        3,105                        4,899                                    1,794.00
    4040108 Donation/Gift                        9,600                      57,400                                  47,800.00
    4040109 Conveyance                        5,191                      10,390                                    5,199.00
    4040110 Computer Paper/Ribon                           660                           990                                       330.00
    4040111 Fuel & Tool                           742                        1,774                                    1,032.00
    4040112 Stationary & Photocopy                        6,833                        7,803                                       970.00
    4040113 Entertainment & Confer. Cost                      21,955                      25,195                                    3,240.00
    4040114 Miscelance                           803                        1,403                                       600.00
    4040115 Cash Incentive                        6,500                    102,000                                  95,500.00
    4040117 Sales Commission                    177,074                    597,941                                420,867.00
    4040118 Product Bonus                      47,330                      99,490                                  52,160.00
    4040119 Postage Charge                        1,205                        2,400                                    1,195.00
    4040120 Photocopy                           565                           937                                       372.00
    4040121 Car Maintinance                        3,730                        6,870                                    3,140.00
    4040122 Hardship Allowance                        6,510                      11,350                                    4,840.00
    4040124 Carring Outward                      10,274                      29,881                                  19,607.00
    4040125 Gold Leaf & Jute                        4,829                        9,328                                    4,499.00
    4040127 Carring Inward                      11,932                      29,779                                  17,847.00
    4040123 Loss & Damage                                               –  
    Total                 1,818,973 4053867                             2,234,894.00
    Chittagong depot
     C/C Code Name of the Expenditure  Exp Exp  Net Exp
     as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
    4040203 Brand Loyality                    234,000                    473,000                                239,000.00
    4040201 Salary                    742,890                 1,517,898                                775,008.00
    4040202 Ta/ Da Allowance                    357,199                    742,054                                384,855.00
    4040204 Rent/Bill                      28,700                      58,246                                  29,546.00
    4040205 Delivery Cost                      91,130                    137,946                                  46,816.00
    4040206 Booking Cost/Postage Charge                        4,795                      14,315                                    9,520.00
    4040207 DD Cost/ Bank Charge                        1,847                        3,058                                    1,211.00
    4040208 Donation/Gift                      46,150                      64,650                                  18,500.00
    4040209 Conveyance                        1,089                        4,079                                    2,990.00
    4040210 Computer Paper/Ribon                           850                        1,800                                       950.00
    4040211 Fuel & Lubricants                        1,800                        1,800                                               –  
    4040212 Stationary & Photocopy                        7,271                        7,950                                       679.00
    4040213 Entertainment & Confer. Cost                      21,210                      25,720                                    4,510.00
    4040214 Miscelance                      20,075                      27,940                                    7,865.00
    4040215 Cash Incentive                      13,000                      19,500                                    6,500.00
    4040217 Sales Commission                      79,417                    218,965                                139,548.00
    4040218 Product Bonus                      20,326                      44,647                                  24,321.00
    4040219 Postage Chargre                        1,090                        1,880                                       790.00
    4040220 Photocopy                           301                           426                                       125.00
    4040221 Car Maintinance                      10,300                      10,300                                               –  
    4040222 Hardship Allowance                           642                        1,212                                       570.00
    4040224 Carring Outward                      20,724                      22,147                                    1,423.00
    4040225 Gold Leaf & Jute                        4,213                        8,917                                    4,704.00
    4040226 Office Maint. 2720                                    2,720.00
    4040227 Carring Inward                        6,687                      21,227                                  14,540.00
    4040223 Loss & Damage                                               –  
    Total                 1,715,706                 3,432,397                             1,716,691.00
    Faridpur depot
     C/C Code Name of the Expenditure  Exp Exp  Net Exp
     as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
    4040303 Brand Loyality                    223,500                    491,500                                268,000.00
    4040301 Salary                    942,426                 1,931,682                                989,256.00
    4040302 Ta/ Da Allowance                    480,987                    933,104                                452,117.00
    4040304 Rent/Bill                      25,214                      50,340                                  25,126.00
    4040305 Delivery Cost                      61,240                    130,132                                  68,892.00
    4040306 Booking Cost/Postage Charge                        4,925                        8,940                                    4,015.00
    4040307 DD Cost/ Bank Charge                        1,599                        3,633                                    2,034.00
    4040308 Donation/Gift                      81,460                      81,460                                               –  
    4040309 Conveyance                        3,271                      10,159                                    6,888.00
    4040310 Computer Paper/Ribon                        1,060                        2,297                                    1,237.00
    4040311 Fuel & Lubricants                           400                        1,250                                       850.00
    4040312 Stationary & Photocopy                        9,589                      10,430                                       841.00
    4040313 Entertainment & Confer. Cost                      27,380                    125,282                                  97,902.00
    4040314 Miscelance                        4,595                        8,601                                    4,006.00
    4040315 Cash Incentive                      19,000                    102,000                                  83,000.00
    4040317 Sales Commission                    160,650                    289,787                                129,137.00
    4040318 Product Bonus                      32,172                      52,093                                  19,921.00
    4040319 Postage Charge                           285                                       285.00
    4040321 Car Maint.                           290                        2,770                                    2,480.00
    4040322 Hardship Allowance                           450                        1,750                                    1,300.00
    4040324 Carring Outward                      47,422                      84,461                                  37,039.00
    4040325 Gold Leaf & Jute                        4,681                        9,554                                    4,873.00
    4040326 Office Maint.                           500                                       500.00
    4040327 Carring Inward                      17,245                      31,332                                  14,087.00
    4040320 Photocopy                             41                                       (41.00)
    4040323 Loss & Damage                           188                                       188.00
    Total                 2,149,597                 4,363,530                             2,213,933.00
    Sylhet Depot
     C/C Code Name of the Expenditure  Exp Exp  Net Exp
     as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
    4040403 Brand Loyality                    206,000                    417,000                                211,000.00
    4040401 Salary                    470,683                    986,227                                515,544.00
    4040402 Ta/ Da Allowance                    205,458                    390,904                                185,446.00
    4040404 Rent/Bill                      30,470                      60,320                                  29,850.00
    4040405 Delivery Cost                      28,078                      62,496                                  34,418.00
    4040406 Booking Cost/Postage Charge                      22,974                      50,184                                  27,210.00
    4040407 DD Cost/ Bank Charge                           259                        1,261                                    1,002.00
    4040408 Donation/Gift                        8,495                      77,442                                  68,947.00
    4040409 Conveyance                        3,038                        4,694                                    1,656.00
    4040410 Computer Paper/Ribon                           980                        1,800                                       820.00
    4040411 Fuel & Lubricants                             45                             45                                               –  
    4040412 Stationary & Photocopy                           576                           811                                       235.00
    4040413 Entertainment & Confer. Cost                      23,672                      26,512                                    2,840.00
    4040414 Miscelance                        1,000                        1,500                                       500.00
    4040417 Sales Commission                      29,342                      68,400                                  39,058.00
    4040418 Product Bonus                        8,949                      26,767                                  17,818.00
    4040415 Cash Incentive                        2,000                                    2,000.00
    4040419 Postage Charge                           244 568                                       324.00
    4040420 Photocopy                           110                           290                                       180.00
    4040421 Car Maintinance                        5,000                        6,900                                    1,900.00
    4040424 Carring Outward                        3,724                        9,097                                    5,373.00
    4040425 Gold Leaf & Jute                        2,996                        2,996                                               –  
    4040427 Carring Inward                        9,698                                  (9,698.00)
    4040423 Loss & Damage                                               –  
    4040426 Office Maint.                           353                                       353.00
    4040427 Carring Inward                      30,862                                  30,862.00
    Total                 1,061,791                 2,229,429                             1,167,638.00
    Dhaka Depot
     C/C Code Name of the Expenditure  Exp Exp  Net Exp
     as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
    4040503 Brand Loyality                    308,300                    632,500                                324,200.00
    4040501 Salary                 1,360,318                 2,743,272                             1,382,954.00
    4040502 Ta/ Da Allowance                    665,923                 1,344,638                                678,715.00
    4040504 Rent/Bill                      66,070                    166,683                                100,613.00
    4040505 Delivery Cost                    113,090                    226,552                                113,462.00
    4040506 Booking Cost                           370                                       370.00
    4040507 Bank/DD Charge                           418                        1,113                                       695.00
    4040508 Donation/Gift                    247,052                    362,842                                115,790.00
    4040509 Conveyance                      14,285                      24,330                                  10,045.00
    4040510 Computer Paper/Ribon                        7,995                      11,395                                    3,400.00
    4040511 Fuel & Lubricants                                               –  
    4040512 Photocopy                           148                           163                                         15.00
    4040513 Postage Charge                                               –  
    4040514 Stationary                        2,125                        2,275                                       150.00
    4040415 Conference Entertainment                      62,212                      67,402                                    5,190.00
    4040517 Cash Incentive                      17,500                      23,974                                    6,474.00
    4040518 Sales Commission                    138,595                    688,023                                549,428.00
    4040519 Product Bonus                      48,373                      80,063                                  31,690.00
    4040521 Car Maintinance                        2,318                        4,118                                    1,800.00
    4040522 Hardship Allowance                        5,124                      12,794                                    7,670.00
    4040523 Loss & Damage                      41,594                      41,594                                               –  
    4040524 Carring Outward                      40,024                      67,043                                  27,019.00
    4040525 Gold Leaf & Jute                      22,135                      23,335                                    1,200.00
    4040527 Repair & Maint.                        7,048                        7,549                                       501.00
    4040529 Miscelance                        2,200                        2,200                                               –  
    Total                 3,172,847                 6,534,228                             3,361,381.00
    Barisal Depot
     C/C Code Name of the Expenditure  Exp Exp  Net Exp
     as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
    4040603 Brand Loyality                    159,160                    332,760                                173,600.00
    4040601 Salary                    440,241                    687,075                                246,834.00
    4040602 Ta/ Da Allowance                    194,481                    407,507                                213,026.00
    4040604 Rent/Bill                      20,136                      30,240                                  10,104.00
    4040605 Delivery Cost                        1,775                      60,259                                  58,484.00
    4040606 Booking Cost                      28,446                      54,519                                  26,073.00
    4040607 Bank Charge/DD Cost                           525                        1,902                                    1,377.00
    4040608 Donation/Gift                        7,900                      18,105                                  10,205.00
    4040609 Conveyance                        1,295                        3,805                                    2,510.00
    4040610 Computer Paper/Ribon                        1,082                        1,920                                       838.00
    4040612 Stationary                        4,520                        4,520                                               –  
    4040613 Entertainment & Conference Cost                      10,746                      14,087                                    3,341.00
    4040614 Misc Exps                        9,063                        9,648                                       585.00
    4040615 Cash Incentive                      13,000                      27,500                                  14,500.00
    4040617 Sales Commission                      28,769                      79,647                                  50,878.00
    4040618 Product Bonus                      20,592                                  20,592.00
    4040619 Postage Charge                           720                        1,120                                       400.00
    4040620 Photocopy                           190                           340                                       150.00
    4040622 Hardship Allowance                        2,340                                    2,340.00
    4040624 Carring Outward                        2,508                        6,478                                    3,970.00
    4040625 Gold Leaf & Jute                        4,239                        8,045                                    3,806.00
    4040623 Loss & Damage                                               –  
    Total                    928,796                 1,772,409                                843,613.00
    Comilla Depot
    A/C Code Name of the Expenditure Exp Exp Net Exp
    as on 31 Jan2011 as on 28 Feb 2011 For the month of Feb 2011
    4040701 Salary                    867,139                 1,102,169                                235,030.00
    4040702 Ta/ Da Allowance                    412,220                    786,217                                373,997.00
    4040703 Brand Loyality                    261,300                    515,100                                253,800.00
    4040704 Rent/Bill                      22,134                      42,964                                  20,830.00
    4040705 Delivery Cost                    109,272                    195,538                                  86,266.00
    4040706 Booking Cost                      74,804                    146,053                                  71,249.00
    4040707 DD Cost/ Bank Charge                           908                        1,450                                       542.00
    4040708 Donation/Gift                      28,675                      58,060                                  29,385.00
    4040709 Conveyance                        4,884                        7,527                                    2,643.00
    4040710 Computer Paper/Ribon                        5,740                      15,970                                  10,230.00
    4040711 Fuel/Tools                           820                        1,632                                       812.00
    4040712 Office Stationary                           901                        1,241                                       340.00
    4040713 Entertainment                      42,115                      47,592                                    5,477.00
    4040714 Miscelance                           355                        1,690                                    1,335.00
    4040715 Cash Incentive                        7,500                                    7,500.00
    4040717 Sales Commission                    209,978                    392,148                                182,170.00
    4040718 Product Bonus                      20,770                      36,645                                  15,875.00
    4040719 Postage Charge                           995                        2,285                                (18,485.00)
    4040720 Photocopy                           322                           619                                     (376.00)
    4040721 Car Maintinance                        2,800                      13,450                                  13,128.00
    4040722 Hardship Allowance                        1,800                        2,520                                     (280.00)
    4040724 Carring Outward                        6,765                      19,454                                  17,654.00
    4040725 Gold Leaf & Jute                        3,100                        7,550                                       785.00
    4040326 Office Maint.                           325                                       325.00
    4040727 Carring Inward                        9,236                      17,546                                    8,310.00
    Total                 2,087,033                 3,423,245                             1,336,212.00
    Mymensingh Depot
    A/C Code Name of the Expenditure Exp Exp Net Exp
    as on 31 Jan2011 as on 28 Feb 2011 For the month of Feb 2011
    4040801 Salary                    499,038                 1,035,264                                536,226.00
    4040802 Ta/ Da Allowance                    225,545                    447,323                                221,778.00
    4040803 Brand Loyality                    163,000                    317,000                                154,000.00
    4040804 Rent/Bill                      20,242                      41,914                                  21,672.00
    4040805 Delivery Cost                      30,797                      57,002                                  26,205.00
    4040806 Booking Cost                      37,080                      81,800                                  44,720.00
    4040807 DD Cost/ Bank Charge                           338                        1,699                                    1,361.00
    4040808 Donation/Gift                      13,985                      45,185                                  31,200.00
    4040809 Conveyance                        1,843                        2,858                                    1,015.00
    4040810 Computer Paper                           820                                       820.00
    4040811 Fuel                           309                                       309.00
    4040812 Office Stationary                        6,135                        7,061                                       926.00
    4040813 Entertainment                      15,043                      17,193                                    2,150.00
    4040814 Miscelance                        2,314                        3,128                                       814.00
    4040815 Cash Incentive                        2,000                        2,000                                               –  
    4040817 Sales Commission                      36,064                    191,957                                155,893.00
    4040818 Product Bonus                        9,435                      17,207                                    7,772.00
    4040819 Postage Charge                           555                           965                                       410.00
    4040820 Photocopy                           160                           254                                         94.00
    4040821 Car Maintinance                        4,645                        8,725                                    4,080.00
    4040822 Hardship Allowance                             50                             50                                               –  
    4040824 Carring Outward                           350                        8,822                                    8,472.00
    4040825 Gold Leaf & Jute                           850                           850                                               –  
    4040827 Carring Inward                        8,352                      14,608                                    6,256.00
    Total                 1,077,821                 2,303,994                              1,226,173.00
    Rangpur Depot
     C/C Code Name of the Expenditure  Exp Exp  Net Exp
     as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
    4040901 Salary                    745,621                 1,525,364                                779,743.00
    4040902 Ta/ Da Allowance                    395,387                    801,752                                406,365.00
    4040903 Brand Loyality                    272,500                    566,000                                293,500.00
    4040904 Rent/Bill                      24,017                      33,409                                    9,392.00
    4040905 Delivery Cost                      36,735                      97,093                                  60,358.00
    4040906 Booking Cost                      33,053                      79,225                                  46,172.00
    4040907 DD Cost/ Bank Charge                        6,628                      13,322                                    6,694.00
    4040908 Donation/Gift                      44,510                      57,410                                  12,900.00
    4040909 Conveyance                      13,353                      24,038                                  10,685.00
    4040910 Computer Paper/Ribon                        1,620                        3,225                                    1,605.00
    4040911 Fuel/Tools                           398                           398                                               –  
    4040912 Office Stationary                        4,182                        7,430                                    3,248.00
    4040913 Entertainment                      22,805                      27,385                                    4,580.00
    4040914 Miscelance                           508                        1,429                                       921.00
    4040915 Cash Incentive                    129,000                                129,000.00
    4040917 Sales Commission                      86,694                    232,646                                145,952.00
    4040918 Product Bonus                      14,860                      30,245                                  15,385.00
    4040919 Postage Charge                        1,054                        2,080                                    1,026.00
    4040920 Photocopy                        1,665                        3,456                                    1,791.00
    4040921 Car Maintinance                        1,091                        3,349                                    2,258.00
    4040922 Hardship Allowance                           570                        2,370                                    1,800.00
    4040924 Carring Outward                        8,529                      19,556                                  11,027.00
    4040925 Gold Leaf & Jute                        4,550                        9,575                                    5,025.00
    4040926 Office Maint.                        1,020                                  (1,020.00)
    4040927 Carring Inward                      16,230                      32,952                                  16,722.00
    Total                 1,737,580                 3,702,709                             1,965,129.00
    Total expenditure =                           16,065,664.00

    5.1       Suggestions and Recommendations
    The current ratio includes all current assets, but since inventory is often difficult to turn into cash, many analysts remove it from the equation to arrive at a quick ratio.
    The traditional thinking is that the higher the ratio, the better off the company. Greater than 2:1 for the current ratio or 1:1 for the quick ratio is good and safe; less than 2:1 or 1:1 is a sign of impending problems meeting obligations.
    Too much long-term debt costs money, increases risk, and can place restrictions on management in the form of restrictive lender covenants governing what a company can and can’t do. The two most common ratios used to assess solvency and leverage are debt to equity and debt to total assets:
    When a company has more debt than equity, yellow flags fly, but industry comparisons are important. Economic value achieved should exceed the cost and risk incurred with the debt. Solvency measures probably deliver a stronger signal for what not to buy than what to buy.
    The overall cash flow ratio tells whether a business is generating enough cash from its business to sustain itself, grow, and return capital to its owners:
    If the overall cash flow ratio is greater than 1, the company is generating enough cash internally to cover business needs. If it’s less than 1, the company is going to capital markets or is selling assets to keep afloat.
    It’s best when cash flows march in step with or exceed earnings. If earnings increase without a corresponding increase in cash flow, earnings quality comes into question. Use the cash flow to earnings ratio as a base measure:
    Because depreciation and other noncash amortizations vary by industry, it’s hard to hang a specific goal on this measure. Consistency over time is good, as are favorable industry comparisons. Further, it’s good when period-to-period earnings increases are accompanied by corresponding cash flow increases.

    5.2 CONCLUSION

    Since the introduction of the Ratio Analysis in Ziska Pharmaceuticals Limited in 2011, it has been used effectively and efficiently in the evaluation of financial strength. We conducted a study through personal collect data, survey and we tried for a through understanding of the process with its benefits as well as shortcomings. It has been found that there are some positive and negative sides of this financial strength. Positive is that its well financial security. On the other hand, the negative sides are: sometimes the frequency of evaluation is not quarterly as it was mentioned in the ratio analysis; still there is a chance of subjectivity, which the expenditure will to be reduced. But overall, the financial strength is satisfied, although not highly satisfied with the existing financial strength.

    APPENDIX B: Bibliography

    Textbooks

          Corporate Financial Analysis:
    By Francis J. Clauss – McGraw-Hill (2009)

          Financial Analysis Tools and Techniques:
    By Erich A. Helfert – McGraw-Hill (2001)

          Financial Statement Analysis:
    By Clyde P. Stickney, Paul Brown, James M. Wahlen, Stephen P. Baginski, Mark Bradshaw – Cengage Learning (2010)

          Financial Statement Analysis:
    By Steven M. Bragg – Wiley (2006)

    Other Publications

    Websites
    Some websites are visited for collecting some secondary data, which are:
    " 103,"

    DISCUSS THE RELEVANT AND IRRELEVANT LEGAL AREAS IN LEGALLY BINDING CONTRACT

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    DISCUSS THE RELEVANT AND IRRELEVANT LEGAL AREAS IN LEGALLY BINDING CONTRACT

    1. Introduction:

    Law is a system of rules and regulations, which is approved by the constitution of a nation. “Contract” is a very important aspect of law. It is mentioned in Section 2(h) of the Indian Contract Act, 1872, as- The agreement enforceable by law is a contract.[1] All contracts are agreements, but all agreements are not contracts. However, there are legally binding contracts as well. Legally binding contract is the formal contract approved by law with the agreement of the both parties. The governing Act in Bangladesh in the field of law of contract is the Contract Act, 1872. The Preamble to the Act states that the objects of the Contract Act, 1872, are-

    i. To define certain parts of the law relating to contracts, and

    ii. To amend certain parts of the law relating to contracts.

    It is about the amendment of certain parts of the law relating to contracts. The Contract Act, 1872, does not cover the case with which the Court has to deal; the Court is bound to follow the English Common Law and that is the scope of the contract. Today there are few types of contracts which are not governed by special legal rules and are subject to particular public law provisions. For making a contract, proposal and acceptance is also very important for both parties.[2] The institution of law and state are distant from the world of home and work. However, we may have legally binding contracts in our family or social matters. A legally binding contract is an agreement, which is consciously made and certain actions are either required or prohibited and both sides must know what they are agreeing to. In the context of our society, family and social value is very important. So, we are very conscious about family and social matters. There are so many issues that are necessary in family matters to make legally binding contracts to avoid unwanted circumstances.

    2. Relevant and Irrelevant Legal Areas:

    When we talk about the Legally Binding Contracts in family or social matters, so many relevant areas come to our mind. Normally, we think that, we don’t need to make any legally binding contracts with our family members or surroundings. Now, I am going to look at these contracts and their relevant and irrelevant areas:

    a. Marriage:

    Marriage is the foundation of all civilized communities and it is the oldest institutions in the history of human civilization. Considerable attention has been paid by all systems of law to the principles, rules and regulations to the contract of marriage. IT is the legally and socially sanctioned contract between two persons of the opposite sex. According to, Section 2(h), Contract Act, 1872, as adapted in Bangladesh, it involves an agreement between the husband and the wife, so that it must satisfy all the basic conditions of a contract.

    Here, a very important thing is the differences between the marriages of different religions. On the other hand, there are some very irrelevant facts in the context of marriage contracts. Let’s look at these-

    · According to Muslim Family Law, the contract of marriage follows the declaration of The Holy Quran. Islam considers marriage to be a very sacred act and a step towards a better.[3] Thus Islamic marriage is a civil contract and not a sacrament like the Hindu marriage. However, today Hindus also legalized their marriages except the Bengali Hindus. For those Hindus, It is a sacrament, not a contract.[4] Even, Christians and Buddhists also have the legally binding contract for marriage. So some Hindu marriages are totally irrelevant with the context of legal marriage.

    · Marriage of a major virgin girl without her consent is not lawful.

    · A Qadi and presence a witness is essential in Muslim marriage.

    · Marriage with a non-Muslim is unlawful according to Islam. In Hindu marriage, the parties should belong to the same caste and religion.

    · According to Quran, a Muslim widow can marry again. Shastras do not allow the marriage of a Hindu widow except in some special cases. But, the re-marriage of Hindu widow is now legalized by the Hindu widow’s Re-marriage Act-1856.

    · In Bangladesh, marriage between same sexes is not legal, though couple of years back, India has legalized this.

    b. Dissolution of Marriage, Dower and Child Custody:

    A marriage is a contract between a male and a female. This contract is made for lifetime and dissolved by death or either husband or wife. This is natural dissolution over which no party has any control. Annulment of the marriage is another procedure to procedure to declare the marriage invalid. However, in the context of our society, the most common way of dissolution of marriage is “Divorce”.

    According to the Muslim Law the dissolution of marriage can take place in following modes:

    i. By Death of Parties:

    At the death of the wife, husband can remarry immediately, but the widow has to wait for a definite period called “Iddat” (Four months ten days from the death). But if she is pregnant, it shall expire. In this case, the widow will have the custody of child or if the wife dies then the husband will have the custody. The children will get the property of their father.

    ii. By the act of the parties:

    There is several kind of Talaque in Islam, but the major two are Oral form and written form. However, today, the oral form is not the legalized from. But, if the husband gives divorce to wife he has to pay the dower to his wife and if the wife is responsible for the divorce then the husband doesn’t need to pay at all. So, in Islam, Mahr is very important, but in other religion it is not necessary. If the child is not matured, then the mother will get the custody for first few years and after that the father will get it. In some cases, the child is asked to whom he wants to live with.

    c. Will, Gift and Donation:

    Will, gift and donation to some extent overlapped together. Will varies from religion to religion, but gift varies from person to person. All these things are kind of legally binding contracts of family and social matters.

    i. Will:

    “Will” means the legal declaration of the intention of a testator with respect to his property which he desires to be carried into effect after his death. This act of Bangladesh is called Succession Act, 1925.[5]Till 2005, a person could make oral will before his death, but now it is not a legal way. In our country, generally, we follow the Muslim law. That means, children will get father’s property and the brothers will get double of the sisters. There are some exceptional as well. Normally, the family members get the property of the testator. A major principle of the will is, it becomes effective only after the death of the testator. The testator also must have some sort of qualifications to legalize the will.

    Islamic Law of Inheritance:

    Islamic law of inheritance is the most exact and scientific law and Muslim jurists laid great importance on the law of inheritance. Muslim jurists recognized only three sources of inheritance, The Holy Quran, The Hadith and Ijma. Here, the inheritance opens at the time of death and the son gets double of a daughter. The persons excluded from the right of inheritance are:

    · Homicide

    · Difference of religion

    · Illegitimacy

    · Alien enemy

    · Slavery

    However, Sunni or Shia Law of Inheritance is different in this context.

    Hindu Law of Inheritance:

    Two systems of inheritance prevail among the Hindus: the Mitakshara system and the Dayabhaga system. Normally, females do not get any property, but According to The Hindu Women’s Right to Property Act 1937, the widow along with the sons is entitled to the same share as the son and in the joint family the widow shall take the place of her husband.[6] The persons excluded from the inheritance are:

    · According to Hindu law, females are generally excluded from inheritance.

    · Irreligion

    · Moral issues (e.g. Father’s enemy)

    · mentally or physically disorder people

    Invalid will:

    a. If the testator is forcefully make the will or mentally sick or a murderer or an enemy of the nation then the will becomes invalid.

    b. According to Muslim law, a testator must be a Muslim, man of sound mind and solvent. A Muslim can validly make Wasiat in favor of any person, but if a non-Muslim who is stated of an enemy state is not valid.

    c. A bequest in future, unborn child, death of legatee etc. all is void.

    ii. Gift:

    In the case of will, it is not essential that there must be the existence of property in the time of making it. But, in the case of gift, there must be the existence of the gift at the time of making it. Gift is something that a person can willingly give it to anyone at anytime. But, a person cannot legally give a gift someone who doesn’t exist at all, for example, an unborn child, a baby in the mother’s womb, a dead person etc. In Hindu Law, if a husband wants to give anything to his wife such as jewelry, property or anything else after his death; he has to give that gift legally. Because, according to Hindu Law, a widow will not get husband’s property unless the husband gave her before death as a gift. So, this is one kind of legal gift.

    iii. Donation/Trusts:

    A trust of immoveable property must be declared by a non-testamentary instrument in writing, signed by the author of the trust or the trustee and registered.[7]Donation is that, a person willingly gives his property to a charitable trust or any needy person with the acknowledgement of his family members. This lies under The Charitable and Religious Trust Act, 1920.[8] He can’t give any donation of a property if he already makes any will of that particular property.

    d. Adoption:

    Adoption is a process of having another’s child legally pretending as own parents. There are some essentials for valid adoptions;

    · The adopter should legally capable of taking in adoption

    · The person giving in adoption must be legally competent to do so

    · The adoptee should be lawfully capable of being taken in adoption

    · Actual giving and taking

    Irrelevant facts:

    According to Vasistha, “For a sonless man there is no heavenly region” and that is the purpose of adoption in Hinduism. Hindu Shastras mention twelve kinds of sons for adoption. But, According to the Muslim law, a person cannot adopt a son, instead of daughter. However, without any legal documents a person cannot adopt anyone’s child.

    3. Conclusion:

    These are some of the legally binding contracts in our family or social life. We can’t think about our social life without these things. However, for a safe and secure social life we need to make these bindings legal. So, it is very important to legalize our family and social life. The registration of property or a company legal binding contract is totally irrelevant to these contracts. So, we have different Acts for every legal contracts regarding to family or social matters and we should follow them.

    References

    Books and Articles:

    1. Chakraborti V. Emperor(1937) 2.Cal.221

    2. Faiz-ud-din, M (2009) A TEXT BOOK ON ISLAMIC LAW, Dhaka

    3. Haque, M (2007) Law of Contract, Dhaka

    4. Routh, S (2009) Elements of Hindu Law, Dhaka

    5. Singh, A (2006) Textbook on LAW OF CONTRACT and Specific Relief, Lucknow

    Dictionary:

    6. Business Dictionary from http://www.businessdictionary.com/definition/legally-binding.html

    Encyclopedia:

    7. Wikipedia from http://en.wikipedia.org/wiki/Annulment

    [1] See Avtar Singh’s Law of Contract and specific relief, chapter 1,page1

    [2] See Muhammad Ekramul Haque’s Law of Contract, Preamble and the Formation of a Contract,page-27

    [3] Al-Quran, 7:189

    [4] See S.K Routh’s Elements of Hindu Law, p.19

    [5] See http://bdlaws.minlaw.gov.bd/print_sections_all.php?id=138

    [6] See S.K.Routh’s Elements of Hindu Law, p.66

    [7] Trust Act. Sec.5

    [8] See http://bdlaws.minlaw.gov.bd/pdf_part.php?id=119

    " 104,"

    Discussed Overall Pharmaceuticals activities of BEXIMCO Pharma LTD

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    View With Charts And Images..

    Discussed Overall Pharmaceuticals activities of BEXIMCO Pharmaceuticals LTD.

    1.2 Research Objective

    More broadly if we categorized the objective of this research to find the following objective stated below:

    · The proposal for updating about BPL products.

    · The prescription percentage of BPL products in comparison with different companies under different therapeutic class.

    · The generic percentage of BPL products under different therapeutic class.

    · To see whether central product management department in terms strategies is properly implemented the survey findings of MRT.

    Research Technique:

    For conducting and analyzing this research project the following technique are been followed which are started below:

    1.3 Sources of Information:

    Primary Sources:

    The data collected for a purpose or when the researcher investigates a particular problem at hand is known as primary data.

    Sources of Primary data:

    The necessary data and information was gathered by following sources-

    Secondary Sources:

    When an investigator uses data, which have already been collected by others for another purpose, such data is called secondary data.

    The major parts of information are collected from the secondary such as:

    Discussion with Concerned Person:

    As study related current data are not available, I had to discuss with concern persons for getting up to data information.

    1.4 Scope of the Study:

    This study will only cover Market Survey Activities of the products of BEXIMCO Pharmaceuticals Ltd.

    1.5 Limitation:

    There may some limitations behind this Report. These are –

    2.1 Beximco Group:

    Bangladesh has come a long way since its independence. It has improved key social indicators and the well being of its people. The Beximco Group of Companies has been an integral part of this progress. BEXIMCO’s philosophy is simple: In identifying opportunities, it has targeted those industries which the country needs most in order to progress and to improve living standards. Beximco is also focused on those industries, which make the most of Bangladesh’s Competitive Advantages in the international market.

    As a result of this philosophy, the Beximco Group is today Bangladesh’s largest private sector industrial conglomerate. In the course of its growth, it has created industrial and management capabilities that will serve the country for generations to come.

    Over the years since started it could gain a position to symbolize effective management, fund generation, and diversification of exploring business opportunities. Today it is one of the most known names in the country’s business arena.

    Beximco practices an appropriate combination to delegate authority and responsibility that works to motivate employees and yield better performance for the company as a whole. Recruiting the efficient and potential people, planning to develop human resources, exploring business opportunity, and information management have strengthened the effectiveness and image of the group.

    It has a turnover of Tk. 16.5 billion and employs 22,000 people. Beximco has 1,52,000 shareholders and contributes to 8% of the market capitalization of Dhaka Stock Exchange. BEXIMCO’s industrial businesses include jute, textiles, basic chemicals, ceramics, pharmaceuticals and marine foods. BEXIMCO’s non-industrial undertakings are focused on real estate and construction, engineering, media, information technology, trading and financial services.

    It is the creation and expansion of businesses critical to Bangladesh’s development, businesses, which are developed and run by Bangladeshis, businesses that develop technologies and practices specific to the needs of the country, which is the defining characteristic of the BEXIMCO story.

    The Company is a member enterprise of the Beximco conglomerate. The principal place of Business is the registered office at 17, Dhanmondi R/A, Road No.2, Dhaka-1205. The London Branch is situated at 305A Finchley Road (1st floor), London NW36DT, UK and the Wholly owned subsidiary Beximco USA Ltd. is located at 310 Selviddge Street, Dalton, Georgia-30722, USA.

    Philosophy of BEXIMCO

    “We firmly believe that in the final analysis we are accountable to each of the constituents with whom we interact; namely, our customers, our employees, our suppliers, our shareholders, and fellow citizens”.

    Vision of BEXIMCO

    The vision of BEXIMCO reflects in the Chairman following statement (Groups Annual Report 2000).

    “If there is one characteristic that has typified the BEXIMCO approach it is Vision to be the best of our nature and human resources. A vision to establish our group and country as a respected and valued regional presence.”

    Mission of BEXIMCO

    “Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact; namely; our employee, our customer, our business associates, our fellow citizens and our shareholders.”

    2.2 Group Composition:

    Beximco is a group of 34 companies and most of these are being operated through eight divisions.

    The divisions namely are as follows:

    Divisions Companies
    Textile Division § Padma Textiles Mills Ltd§ Beximco Synthetics Ltd

    § Beximco Apparels Ltd

    § Beximco Knitting Ltd

    § Beximco Textiles Ltd

    § Beximco Denims Ltd

    § Beximco Fashions Ltd

    § Beximco Fabrics Ltd
    Chemical Division § Beximco Pharmaceuticals Ltd§ Beximco Infusion Ltd

    § Pharmatek Chemicals Ltd

    § I&I Services Ltd
    Real Estate & Construction Division § Beximco Engineering Ltd§ Shinepukur Holdings Ltd
    Trading Division § Bangladesh Export Import Ltd§ Beximco Holdings Ltd
    Jute Division § New Dhaka Industries Ltd§ Sonali Ansh Ltd

    § Esses exports Ltd
    Marine Food Division § Beximco Foods Ltd§ Beximco Fisheries Ltd
    Media Division § Beximco Media Ltd
    Information Technology Division § Beximco Softech Ltd§ Beximco Systems Ltd

    § Beximco Computers Ltd

    § Bangladesh Online Ltd
    Others § Shinepukur Ceramics§ Gammatech Ltd

    Major Companies of Beximco Group

    Source: Md. Fazlul Haque, Manager, MRC Department, BPL

    Corporate Structure of Beximco Group

    Source: Md. Fazlul Haque, Manager, MRC Department

    Different Division of Beximco Group

    Source: http://www.beximco.org

    2.3 Brief of the Divisions:

    The number of companies in each division is different. The companies of Beximco group in relation to division have been elaborated as follows:

    Divisions Companies
    Textile 8
    Chemical 4
    Real Estate & Construction 2
    Trading 2
    Jute 3
    Marine Food 2
    Information Technology 4
    Media 1

    Divisions and No. of Companies of Beximco Group

    Source: http://www.beximco.org

    2.3.1 Beximco Textile Division:

    From fiber to fabric, the BEXIMCO Textile Division is a truly integrated undertaking. The Textile Division has the capability to offer a complete product range for the export and domestic textile markets. The goal of the Textile Division is to become the preferred partner for source of high quality fabrics and clothing from Bangladesh. With highly advanced technology and emphasis on developing local human resources, the Textile Division has the potential to make an important contribution to the nation’s growing ready made garments export sector. Beximco Textile divisions comprises of seven companies. They are –

    1. Padma Textile mills

    The Padma Textile Mills Ltd. (the “Company”), a member of the BEXIMCO Group, was incorporated in Bangladesh as a public limited company. It commenced commercial operation in 1990 and went for public issue of shares in 1992.

    During the year, the principal activities of the company were manufacturing of yarn (cotton, polyester and polycotton) by its textile spinning mills and sales thereof. The no. of employees at the end of 2005 is 2676.

    The registered office of the Company is located at House No.17, Road No.2, Dhanmondi Residential Area, Dhaka. The industrial units are located at Tatki of Narayanganj and at Beximco Industrial Park in Sarabo of Gazipur.

    2. Beximco Synthetics LTD

    Beximco Synthetics Limited (the “Company”), a member of the BEXIMCO Group, was incorporated in Bangladesh as a public limited company. It commenced commercial operation in July 1994 and went for public issue of shares and debentures in 1993.

    The shares of the Company are listed in the Dhaka and Chittagong stock exchanges of Bangladesh and the debentures of the Company are listed in the Dhaka Stock Exchange of Bangladesh. The registered office of the Company is located at House No.17, Road No.2, Dhanmondi Residential Area, Dhaka-1205. The industrial units are located at Kabirpur, Savar, Dhaka.

    During the year, the principal activities of the company were manufacturing of Polyester Filament Yarn namely, Partially Oriented Yarn (POY) and Drawn Texturising Yarn (DTY) and sales thereof. The company employed 495 (2000: 507) employees as of 31 December 2001.

    3. Beximco Apparels LTD

    Beximco Apparels Ltd. in short BAL, is a 100% export oriented ready-made garments manufacturing industry, which started its commercial production in March 1985 under the name of Comtrade Apparels Ltd. as a joint venture project between Comtrade Limited of Lausanne, Switzerland and Beximco Group of Companies.

    Beximco Apparels features prominently in the group’s Textile Division. Comtrade Apparels Ltd. name has been changed to Beximco Apparels Ltd. recently (Officially since January 1, 1997). Beximco Apparels has successfully come a long way and proved its strength as a leading specialist in the industry for men’s High quality.

    Dress & Casual shirts and ladies’ blouses. Since inception, the company has been operating smoothly and sales volume has been growing steady. The number of employees at the end of 2005 is 1,095

    4. Beximco Knitting LTD

    The Beximco Knitting Limited (the “Company”) was incorporated in Bangladesh as a public company with limited liability on 20 May 1993. It has commenced commercial operation in 1995 and also went into the public issue of shares and debentures in 1994. The shares of the Company are listed in the Dhaka and Chittagong Stock Exchanges of Bangladesh. The debentures of the Company is listed with Dhaka Stock Exchange.

    The Company is a member enterprise of the Beximco conglomerate and the address of the registered office of the Company is House No.17, Road No.2, Dhanmondi Residential Area, Dhaka 1205. The industrial unit (the factory) is being located at Beximco Industrial Park at Sarabo of Gazipur. The project was set up as a state of the art knit fabric knitting, dyeing and finishing facility. During the year the Company produced and sold high quality of knit fabrics and bringing forth all the latest in hard and soft technologies in knitting, dyeing and finishing of knit fabric. The number of employees at the end of the year 2005 is 551.

    5. Beximco textile LTD

    BEXIMCO Textiles Ltd. (BTL) is the most modern composite mill in the region. BTL has an installed capacity of 288 high-speed air-jet looms in its weaving section and a high-tech dyeing and finishing section with a capacity of 100,000 yards of finished fabric per day. This company is the flagship of the BEXIMCO Textile Division and is located at the Beximco Industrial Park.

    The Beximco Textiles Ltd. (the “Company”) was incorporated in Bangladesh as a Public Limited Company with limited liability on 8 March 1994 and commenced commercial operation in 1995 and also went into the public issue of shares and debentures in the same year. The shares of the Company are listed in the Dhaka and Chittagong Stock Exchanges of Bangladesh

    The project was set up as a state of the art fabric weaving, dyeing and finishing facilities for production of high quality shirting and other fabrics.

    The Company is a member enterprise of the Beximco conglomerate and the address of the registered office of the Company is House No. 17, Road No. 2, Dhanmondi Residential Area, Dhaka-1205. During the year the Company produced and sold high quality shirting and other fabric and bringing forth all the latest in hard and soft technologies in weaving and finishing of fabric. The number of employees at the end of the year was 2,079 (in 2000: 1,907).

    6. Beximco Denims LTD

    The Beximco Denims Ltd (the “Company”) was incorporated in Bangladesh as a Public Ltd Company. It has commenced commercial operation in 1995 and also went into the public issue of shares and debentures in the same year.

    The shares of the Company are listed in the Dhaka and Chittagong Stock Exchanges of Bangladesh. The Debentures is listed with Dhaka Stock Exchange. The Company is a member enterprise of the Beximco conglomerate and the address of the registered office of the Company is House No. 17, Road No. 2, Dhanmondi Residential Area, Dhaka 1205. The industrial unit (the factory) is being located at Beximco Industrial Park in Sarabo of Gazipur.

    The project was set up as a state of the art denim fabric weaving and finishing facility. During the year the Company produced and sold high quality of light and heavy denim fabric and bringing forth all the latest in hard and soft technologies in weaving and finishing of denim fabric. The number of employees at the end of the year 2005 is 200.

    7. Beximco Fashion LTD

    Beximco Fashions Limited -an unit of Beximco Textile Division is a 100% Export Oriented Garment Industry. Beximco Fashion Limited is located at Dhaka Export Processing Zone at Savar Dhaka and it has started its commercial production during the July 1997. The company is a vertically integrated garment producer using in house fabrics Beximco Fashions Limited comprises of –

    a) Beximco Fashions Limited produces over 6 million pcs of high quality dress shirts for some ladies brands and retails in USA and Europe.

    b) The Company is managed by a group of professionals including expatriates & aims at producing high quality garments through an effective quality control system right from sourcing of fabric to end product. The number of employees at the end of 2005 is 2,355.

    2.3.2 Beximco Jute Division:

    The golden fiber provided the genesis of today’s BEXIMCO Group. As one of the staple exports of Bangladesh over the years, jute has been a mainstay of the country’s economic landscape. The BEXIMCO Jute Division is the world’s largest jute yarn and twines manufacturer and exporter with 12% of the world jute and twine trade. Annual Exports are currently over 20,000 MT. BEXIMCO was the pioneer in manufacturing specialized jute yarn and twine for Ax Minister carpet and continues to explore new product and market opportunities worldwide. Until the jute business has got the setback in international market this division was one of the prime contributor to the group and the country as well.

    2.3.3 Beximco Real Estate & Construction Division:

    The two critical needs of the country for the next decade and beyond are infrastructure and housing. The Real Estate and Construction Division aims to develop service and product offerings, which are second to none in its areas of core concentration.

    BEXIMCO Engineering Ltd.(BEL) has been providing high quality civil engineering and consulting services to both the government and private sector for over a decade and was the largest sub – contractor on the historic 4.8 km. Long Jumuna Bridge. The firm is also involved in a number of road development and infrastructure projects.

    Shinepukur Holding Ltd. Real Estate Division although real-estate developers have mushroomed in Dhaka and other urban areas over the years, Shinepukur Holdings Real Estate division was begun with mission to segment the real-estate market and develop demographically specific housing projects.

    2.3.4 Marine Foods Division:

    Diversification into milk-fish production to supplement the traditional harvests of tiger prawn and sea bass has been a boon for Beximco Fisheries Ltd. With the pilot project in the coastal Cox’s Bazar area in full swing, the year has been better than the past years for the Marine Food Division. This group added significantly to the group through success in fisheries business. The turn over of the group was also boomed by the contribution of the export of marine foods to international market.

    2.3.5 Beximco Trading Division:

    This division holds the initial business trend of Beximco, indeed. It looks for the opportunity of import-export commodities that have the demand in the market. This division is really dynamic and high profit contributing to the group with a brand portfolio that includes Wartsilla SA (generation equipment), Arjo Wiggins (security & treasury papers) of France, and DuPont Inc. (chemicals), Sterling Diagnostic Imaging Inc.(film products) and Valvoline Inc.(petroleum products and industrial lubricants) of the USA. The Trading Division also represents overseas marine food buyers acting as a source of agent on their behalf and providing quality control.

    2.3.6 Beximco IT Division:

    The companies included in this division are Beximco Computers, Beximco Systems, and BOL Online. Beximco Computers Ltd. is still the nation’s largest volume re-seller of IBM PCs. With the launch of a new version of BexiBank, an integrated multi-user, multitasking banking application system. Beximco Computer Ltd.’s software is in use at over 300 branches of 15 major banks nationwide.

    Beximco’s first foray into education, Beximco Systems Ltd. is joint venture collaboration with the largest information technology institute of India, NIIT. Molded after NIIT’s highly successful training centers across India, the NIIT Centers in Bangladesh have the highest growth rate of any NIIT facility for enrollment levels in its short courses and degree programs.

    Bangladesh Online Ltd. (BOL), Beximco’s Internet Company launched its operation in August of 1998. The company has the fastest access among ISPs in Bangladesh. This division to serve group’s interest in the most booming sectors of the world that is Information Technology. Since it started operation it proceeded very fast and became the market leader soon. It is pioneer company in Bangladesh to offer complete solution of automation. It also introduces the brand IT products to this country.

    2.3.7 Beximco Media Division:

    It is involved in publication of dailies and monthlies both in English and Bengali. The publications are “The Daily Mukto Kantha”, “The Daily Independent”, fortnightly “The Ananda Bhuban”, “Shaili”, and weekly “Onneysa”. The Bengali daily newspaper has closed its operation. Although BEXIMCO’s first foray into the media field was just three years ago, its products have made significant inroads into the publishing arena. BEXIMCO has also launched a news agency, the Associated Press of Bangladesh, to provide up-to-date and news-feeds to the Bangladeshi press.

    2.3.8 Beximco Chemical Division:

    Beximco chemical division one of the part of Beximco group, is committed to preventing all forms of pollution to preventing all forms of pollution by reducing environmental damage due to the manufacturing activities to an attainable minimum level. The bulk of the profit of BEXIMCO group comes from the Chemical Division. Its quality products, services and high standard of professionalism helped to earn public recognition both home and aboard.

    Beximco Chemical Division consists of four companies and is mainly involved in pharmaceutical business so far. Products and services offered by the Chemical Division are trendsetters in the country.

    This division is involved in the following companies:

    Sub Divisions of Beximco Chemical Division

    Source: http://www.beximco.org

    2.3.8.1 Beximco Pharmaceuticals Ltd. (BPL):

    Beximco Pharmaceuticals Ltd. is the leading pharmaceutical company of Bangladesh. The commissioning of BPL’s Basic Chemicals unit in 1990 had established a very significant milestone in the history of the country’s chemical industry. With a record of the highest growth rate in the history of Bangladesh pharmaceutical industry, BPL has maintained its leadership position with the consistent growth over the year.

    2.3.8.2. Beximco Infusions Ltd. (BIL):

    Beximco Infusions Ltd. (BIL) started its commercial operations in 1993 with an annual production capacity of 6 million bottles (500 ml) of life saving I.V. fluids. BIL emerged as the fastest growing infusions Company in Bangladesh. BIL is regarded as technologically the most advanced manufacturer of IV fluids in the country. Over the years, the products of BIL have earned the trust and confidence of the customers by ensuring maximum safety & satisfaction of the users. Despite stiff competition, BIL succeeded in retaining its number one position in Bangladesh infusions market with market share of around 50%.

    2.3.8.3. Pharmatek Chemicals Ltd.:

    Pharmatek Chemicals Ltd. is the leading bulk producer of paracetamol in Bangladesh. It caters to almost 60% of the local market and supplies its products to both national and multinational companies operating in Bangladesh.

    2.3.8.4. I&I Service Ltd.:

    I & I Service Ltd. maintain large distribution network and covers 20,000 customers nationwide. A highly sophisticated order processing system, logistic facilities in terms of vehicles, depots, and a team of professional sales staff keep pace with the ever-increasing market demand for timely execution of orders and quality services.

    ** From June 2005, BPL and BIL were merged together under the name of BPL.

    2.3.8.5. Others:

    Apart from these there are some other companies being operated within the group’s corporate structure.

    3.1 Background of Pharmaceutical Industry of Bangladesh:

    The scenario of pharmaceutical industry can be described in two parts- before the Drug Policy Ordinance in 1982 and after the Drug Policy Ordinance in 1982.

    Before 1982, there were 177 licensed pharmaceutical manufacturers in the country but local production used to be dominated by the big multinational drug companies (MNCs) which manufactured the lion’s share about 75% of the products, 25 medium sized national companies manufactured another 15% of the products and 133 small local companies (LCs) produced the remaining 10%. These multinational companies were fully armed with the technical know-how for producing sophisticated essential drugs, but they were only engaged, to a large extent, in formulation of simple drugs including many unnecessary products. At that time, the unregulated drug market of the country had very favorable conditions for pharmaceuticals to over price their products. That time local firms could not compete effectively with these multinational market tycoons.

    A great change was noticeable in the pharmaceutical industry after the Drug Policy Ordinance of 1982. The total national production of pharmaceuticals has risen by a substantial 63%; the value of essential drug made in national factories has gone up by 140% over the four years following the drug policy promulgation. At present, more then 97% of the total demand of medicinal products is met by local production. Local companies (LCs) increased their share from 25% to 70% on total annual production between 1982 and 2000. In 2000, there were 210 licensed allopathic drug-manufacturing units in the country and now there are 265 registered companies are operating. Few of the multinational companies closed their business in Bangladesh, as it was difficult to make huge profit after the Drug Policy. Among the multinational companies ACI and Pfizer are now running its business in national ownership.

    After ready made garments (RMG), pharmaceutical sector has become one of the largest sectors in earning foreign currency. Meeting more than 97 percent demand of the local market, Bangladeshi drugs gained a significant position in the world’s drug market. Locally manufactured drugs are now being exported to more than 52 countries across the globe like- Vietnam, Singapore, Myanmar, Bhutan, Nepal, Sri Lanka, Pakistan, Yemen, Oman, Thailand, and some countries of Central Asia and Africa.

    1980 2007
    Local 20% 97%
    Imported 80% 3%

    Table-1: National Demand met by Local production & Imported drugs

    3.2 Top Ten Pharma Companies in Bangladesh at Present:

    Shares of Top Ten Pharma Companies:

    Ten companies are occupying more than 60 % of market share, where there are more than 250 (registered and unregistered) companies in Bangladesh Pharmaceutical Market. Out of these top ten pharmaceutical companies in Bangladesh, eight are local companies, while only two are multinational companies (MNCs). The top two domestic manufacturers, namely Square and Beximco Pharmaceuticals are having a combined market share of about 25% of the total pharmaceutical market of the country.

    Pharmaceutical Companies Market Share in Terms of Sales
    Square Pharmaceutical Ltd. 17.46%
    Beximco Pharmaceuticals Ltd 9.93%
    Incepta 8.03%
    Acme 7.09%
    Opsonin Chemical Industries Ltd. 5.23%
    SK+F 5.44%
    ACI 5.44%
    Aristo Pharma 5.70%
    Orion 3.42%
    Drug International 3.78%
    Other 28.52%

    Top Ten Pharmaceutical Companies in Bangladesh

    Shares of Top Ten Pharmaceutical Companies

    In Bangladesh, Pharmaceutical market has strong prospects (present annual growth rate is 12%-15%). The pharmaceutical business is stable because it has good cash flow, is recession proof, and the market for pharmaceutical in Bangladesh is favorable. This sector is the second largest foreign investment sector in Bangladesh (about 30%). With the development of healthcare infrastructure and increase of health awareness and the purchasing capacity of people, this industry is expected to grow at a higher rate in future.

    4.1 Beximco Pharmaceuticals Ltd. (BPL):

    Beximco Pharmaceuticals Ltd. (BPL) is a member of the Beximco Group – the largest private sector business conglomerate of Bangladesh. Beximco Pharma, the largest pharmaceutical as well as bulk drug manufacturer of Bangladesh started its journey back in 1980 with manufacturing and marketing of licensee products of Bayer AG, Germany and Upjohn Inc. of USA. After its initial years of struggle, it broke ground with the launching of its own products (Aristovit-B Complex, Napa, Lactameal, Tycil etc.) in 1983. The journey continued and barrier after barrier were crossed, challenges were faced and overcome to transform BPL into what it is at present. It went for public issue of shares in 1985. The shares of the company are listed with the Dhaka and Chittagong Stock Exchanges of Bangladesh.

    Today, BPL holds 10.0% of share in the domestic market after competing with such Multinational Giants as Novartis, Hoecsht, Rhone Poulenc Rorer, Glaxo SmithKline, Fisons etc. The total numbers of share holders are 47,811 and the total numbers of employees are 1,328. BPL manufactures and markets a high quality and cost-effective range of about 80 formulations covering all major therapeutic groups.

    BPL is the first company to receive National Export Trophy (Gold) in 1994-1995, which was the very first year of introduction of such award by the government of Bangladesh. This is the highest national recognition for excellence in Export .Beximco Pharmaceuticals Ltd. Has also been awarded National Export Trophy (Gold) recently for two consecutive years 1998-1999 & 1999-2000.It is the only company to be the record 3 times winner of this award for its outstanding export performance.

    BPL has transformed its activities, culture, style and philosophy to meet the demands of the new millennium. Business diversifications that are strategically important for sustained growth are results of its vision of the future. A multi-million dollar pharmaceutical formulation plant which will be fully up to the USFDA standard is being built. On completion, this plant would be one of the most modern plants in this region. Several new bulk drug facilities are being developed to backward integrate their high volume products. BPL’s commitment to its customers is to always offer them the best both in product quality and services

    4.2 Major Achievements of BPL

    1976 · Registration of the company.
    1980 · Started manufacturing and marketing of license products of buyer AG of Germany and Upjohn Inc. of USA.
    1983 · Launching of BPL’s own products
    1985 · Listing in the Dhaka Stock Exchange (DSE) as a Public Limited Company (PLC).
    1990 · Commissioning of Basic Chemical Unit.
    1992 · Started export operation with Active Pharmaceutical Ingredients (APIs).
    1993 · First export market operation with finished pharmaceutical products.
    1994-1995 · Achievement of National Export Trophy (Gold) as the firstpharmaceutical company of the country.

    · Introduction of 20 new products.
    1996 · Introduction of sustained release dosage form in the market.· Introduction of 12 new products.
    1997 · Commissioning of Metered Dose Inhaler (MDI) plant and introduction of suppository dosage form.· Introduction of 15 new products.
    1998 · Introduction of Metered Dose Nasal Spray.· Introduction of 13 new products.
    1999 · UNICEF approval of BPL as an enlisted supplier.· Introduction of 6 new products.
    2000 · Contract manufacturing agreement of Metered Dose Inhaler (MDI) with Glaxo SmithKline.· Introduction of 11 new products.
    2001 · Introduction of small volume parenteral products (Injectables).· Establishment of Analgesic-Anti inflammatory plan.

    · Introduction of 26 new products.
    2002 · The first Bangladeshi company to supply pharmaceuticals to Raffles Hospital- the most prestigious hospital of Singapore.
    2003 · Introduced Anti-HIV drugs for the first time in Bangladesh.· Diversification into Anti-Cancer therapeutic class.

    4.3 Board & Management

    Board of Directors
    A S F Rahman Chairman
    Salman F Rahman Vice Chairman
    Iqbal Ahamed Director
    M. A. Qasem Director
    O. K. Chowdhury Director
    Dr. Abdul Alim Khan Director
    A. B. Siddiqur Rahman Director
    Dr. Farida Huq Director
    Barrister Faheemul Huq Director
    Advocate Ahsanul Huq Director
    Executive Committee
    O. K. Chowdhury
    C. H. Rahman
    Nadim Shafiqullah
    Nazmul Hassan
    Ali Nawaz
    Management Committee
    O. K. Chowdhury
    Nazmul Hassan
    Afsar Uddin Ahmed
    Ali Nawaz
    Lutfur Rahman
    Md. Zakaria S Chowdhury
    A. R. M. Zahidur Rahman
    Jamal Ahmed Chowdhury
    Company Secretary
    Md. Asad Ullah

    Source: Annual Report of BPL, 2006

    4.4 Company Profile at a Glance

    Corporate Headquarters: 17 Dhanmondi R/A, Road No.-2Dhaka-1205, Bangladesh
    Operational Headquarters: 19 Dhanmondi R/A, Road No.-7Dhaka-1205, Bangladesh
    Factory: Auspara, Tongi , Gazipur
    Year of Establishment: 1976
    Commercial Production: 1980
    Status: Public Limited Company
    Business Line: Manufacturing and marketing of Pharmaceutical Finished products and Active Pharmaceutical Ingredients (APIs)
    Overseas Offices And Associates: UK, USA, Pakistan, Myanmar, Singapore, Kenya, Yemen, Nepal, Czech Republic, Vietnam, Cambodia and Sri Lanka.
    Export Outlets: Bhutan, Georgia, Germany, Hong Kong, Iran, Iraq, Kenya, Malaysia, Myanmar, Nepal, Pakistan, Russia, Singapore, Taiwan, Vietnam, Yemen, Czech Republic, Mozambique, Philippines, Srilanka, Thailand, Ukrain.
    Authorized Capital in Taka: 1,000 million
    Paid-up Capital in Taka: 559.76 million
    Turnover (net) in Taka of 2004: 2,402.70 million
    Number of Shareholders: 50,750 (as on Dec. 31, 2004)
    Stock Exchange Listings: Dhaka, Chittagong
    Number of Employees: 1,385

     

    Beximco Pharma’s Differential Edge

    4.5 Blockbuster Products of BPL

    · Napa Highest selling drug in Bangladesh Pharmaceutical Market in terms of unit.
    · Neoceptin-R Highest selling drug in Bangladesh Pharmaceutical Market in terms of value.
    · Bextrum / Bextrum Gold Emerged as the most admired & highest selling nutritional supplement in Bangladesh Pharmaceutical Market in just one year.
    · Amdocal Highest selling cardiovascular drug in Bangladesh Pharmaceutical Market in terms of value.
    · Tofen Highest selling oral anti-asthma drug in Bangladesh Pharmaceutical Market in terms of value.
    · Azmasol Highest selling Metered Dose Inhaler brand in Bangladesh Pharmaceutical Market in terms of value.

    4.6 Departments of BPL and their Activities:

    BPL has highly qualified professional staffs for handling all the condition of the company. Introduction of various divisions are as follows:

    4.6.1 Central Product Management (CPM):

    CPM stands for Central Product Management that takes care of the total marketing of the products. Central Product Management (CPM) is the core department of BPL. This department mainly focuses and gives emphasis on the strategies. Central Product Management includes the activities of marketing and sales promotion of both Beximco Pharmaceuticals Ltd. (BPL) and Beximco Infusion Ltd. (BIL).

    CPM plans and develops sales and promotional activities to be implemented by the Sales department as these two departments have a very close circuit relationship and each depends on the other for successful achievement of marketing and sales objective. The CPM department works in coordination with other departments. Those departments help and assist the product officers in providing them with information and designing the various promotional tools.

    Different people from different background are working in this department to flow the activity accurately. There are Business graduates, Pharmacists, Microbiologist and Doctors.

    Major functions of the CPM Department are:

    There are three sub wings under Central Product Management (CPM) Department:

    Statistics

    Designing and Desktop Publishing

    Sample Store

    4.6.2 Purchase Department:

    Purchase department interacts directly with the planning, production, and finance department. Finance department develops a cash flow budget at the beginning of the year. The sales department fixes the sales target. According to the demand, Purchase department starts their operations which are mentioned below in the sequential basis:

    4.6.3 Market Research & Statistical Cell (MRC) Department:

    Market Research & Statistical Cell (MRC) Department plays a vital role in looking for market share of the company in the industry. The whole country is divided into 829 territories under 20 regions. Headed by a manager, 30 Market Research Representatives (MRR) does the task of market survey. The department discloses the trend of increasing or decreasing market share by compiling the received data from the market.

    Responsibilities of the Market Research & Statistical Cell (MRC) Department:

    Responsibilities of the Market Research Representatives (MRR):

    · Visiting chemist shops to check out and collect the prescriptions, slips, OTC drug.

    · Filling up market research sheet where the doctors’ name, territory code, the name of the prescribed medicines is written down.

    · Make a summary of daily collected data and send to the MRC department by mail as well as to respective MPE.

    4.6.4 Sales Department:

    Sales department is forecasting the sales. The major responsibilities of this department are, preparing the strategies for expense budget through CPM, and generating the demand in the market through MPE. The main goal of sales department is sales achievement. An Executive Sales Director is the head of the department. This department consists of Sales Manager (SM), Deputy Sales Manager (DSM), Regional Sales Executives (RSE), Area Sales Executives (ASE), and Medical Promotion Executives (MPE). The department divided the whole country into 20 regions and assigned 20 Regional Sales Executives to control sales activities.

    Main activities of Sales Department are-

    Organogram of Sales Department

    4.6.5 Human Resource Department (HRD):

    There are two major types of activities have HRD. These are:

    1. Administrative functions (maintenance and protocol services)
    2. Human resource related functions

    The objectives of Human Resource Department (HRD) are-

    4.6.6 Finance and Accounts Department:

    There are three wings under the Finance & Accounts Department. These are-

    1. Treasury Accounts

    2. Financial Accounting

    3. Management Accounting

    i) Core functions of Treasury Wings:

    ii) Core functions of Financial Accounting Wings:

    iii) Core functions of Management Accounting Wings:

    4.6.7 Management Information System (MIS) Department:

    The MIS Department takes care of total automation of BPL. It supports the hardware and software network of the company and the factory. This department provides services through SNA Server, WIN NT Server, and SQL Server. BPL operational headquarters is linked to the corporate headquarters through fiber optic cable. The department also established a Wide Area Network (WAN) with the 12 depots around the country. MIS department develops the access Control & attendance monitoring System internally. The department maintains the radio-link between the factory and the head-office. The software section is to work for developing software solutions as per organizational requirements.

    4.6.8 Multimedia Department:

    BPL is the only pharmaceutical company that has a Multimedia Department. This is helping in the product promotion. It designs medical videos for the doctors. The color, size, shape, lettering, etc. of the text are carefully selected to attract the target audience easily. It has designed some Kiosks (touch screen computers) that have been placed in the medical colleges for the students to learn and be trained. The department also provides audio visual aids to other departments of the company and also assists to decorate the publications.

    Major functions of the Multimedia Department are:

    Organogram of Multimedia Department

    4.6.9 Medical Services Department (MSD):

    This department is a unique department in this industry as BPL established this first ever in order to create easy relationship through using the professional linkage with the doctors, the ultimate customer of the pharmaceutical companies. It provides services (eg. slide preparation, providing different journals, books etc.) to the health professional on different issues and receives feedback from them. It arranges seminars on different issues such diseases and their cures in different parts of the country. It publishes a special ‘Medical Newsletter’ quarterly and sends the current issues to the enlisted doctors at free of cost. The newsletter consists of important, recent medical articles. It also provides news gathered from inter-net and allows free browsing facility for the doctors. Thus it helps the medical community and at the same time increases the company image outside.

    4.6.10 Sales & Training Department:

    The Department has the responsibility of providing training to the firm’s employees and management. There one Manager and two Officers in this department. The curriculum of training varies from group to group. Training has been provided through lectures with the assistance of handout, multimedia projector, technical memorandum and training materials. The department basically offers four types of training programs.

    i) Induction Training Programs for MPEs

    ii) Supervisory Management Programs for ASEs

    iii) Advanced Supervisory Management

    iv) Refresher Training Programs for everyone in sales

    4.6.11 International Marketing Department:

    In 1991, the company took the challenge to venture into the international arena. At first it started exporting only formulation products. Then in 1996 this company first started exporting their finished goods. This department is concerned with the international promotion and marketing of BPL finished products and basic chemicals. On a continuous basis, it has to analyze certain criteria of overseas markets:

    4.6.12 BPL Factory (Works Department):

    Beximco Factory Complex (a manufacturing plant in Auspara, Tongi, Dhaka) has 7 acres of land and a total covered space of 160,000 sq. ft. Total manpower in the factory complex is 450. It has three different types of plants:

    1. Formulation Plants for pharmaceutical Products.
    2. Raw materials Plants:

    · Basic Chemical Plants: Produces raw materials of Antibiotics.

    · Pharmatek Chemicals: Produces raw materials of Paracetamol.

    1. Beximco Infusions Ltd.: Produces Intravenous (IV) Fluids.

    4.7 Departments in Factory:

    BPL has following departments:

    • Solid Department
    • Warehouse
    • Liquid, Cream & Ointment (LCO) Dept.
    • Basic Chemical Unit
    • Antibiotic Formulation Department
    • Cox-Block
    • Quality Control Department
    • Project Development Department
    • Quality Assurance Department
    • Training Department
    • Product Development (PD) Department
    • Safety, Health and Environment Dept.
    • Production Planning Department
    • Administration (Factory HRD)
    • Engineering and Maintenance Dept.
    • Financial System Department

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    DISTRIBUTION CHANNEL OF KING BRAND CEMENT 2

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    “Distribution Channel of King Brand Cement.”

    Chapter 01

    1. Executive Summary

    The topic of the report is “Distribution Channel of King Brand Cement.”

    This report is broadly categorized in three parts. In part one is Introduction. In this part purpose of the study, statement of the problem, products components, price components, place components and objectives of the study are discussed. Part two is about background of Bashundhara Group, mission statement and the group’s efforts. In part three is discussed about Bashundhara Group (MCML). In this part product components, current distribution network in Dhaka city, dealers list at Dhaka zone of the Meghna Cement Mills Ltd., discussion regarding place components are discussed. And part four is about Conclusion and Bibliography.

    1.1 Purpose of the Study:

    The main purpose of the study is to fulfill the requirement of 3 credits course.. It will help students to have the practical idea about working in corporate environment. This report is a requirement of the Business Communication. Program. But at the same time it is a great opportunity for the students to share the practical experience in the market. A theory and short-term experience doesn’t fulfill the necessity of requiring a quality of jumping in the practical job market, where it is competitive and deserve more.

    1.2 Statement of the Problem:

    King Brand Cement used to be very popular in the Dhaka Market as local cement company. The management of Meghna Cement wants to know, distribution channel needs to change or not for the Dhaka market. Therefore as a researcher, do not have enough understanding to proceed with the research project. Thus need to explore or identify the problems in current distribution channel of Meghan Cement.

    1.3 Product Components:

    • From dept interview, it is explored that end user purchase their cement based on recommendation of the architect’s opinion, retailer’s pushing and some others factors including weight, price depend on use and loyalty towards the particular brand. It also indicates that King Brand Cement has a lack of brand image.
    • Some other findings is that quality of King Brand Cement is better but  price is so much high. And for the high price it lost its market value.
    • Here, it is explored that product is not available, price is high compared to competitors price, is fluctuating every day. There is no credit facility from the company, company can not deliver product on time and factory location is so much far from the Dhaka city.
    • In context of packaging, it is explored that development of the packaging system is essential. For some reason end user think that retailers mix less quality cement with that bag and sometimes end user also think that cement weight is not accurate. It means that 50 kg cement is not there. Another problem is paper sack during rainy season cement looses its quality.

    1.4 Objectives of the study:

    The main objectives of the study are to determine distribution channel of MCML. Therefore, following issues are considered as broad objectives:

    • To find out the current problems with the products components.
    • To find out the current problems with the price components.
    • To find out the current problems with the place components.
    • To find out the current problems with the promotion components.

    To address the board objectives some specific objectives have been developed. They are as follow-

    • To know the effects of board name in selling products. Therefore, it will help to take decision for the management regarding brand image.
    • To know current packaging situation, explore problems if any. It will help to know whether the current strategy should be changed or not.
    • To know problem of the pricing policy of the product and try to find out whether it needs to be changed or not.
    • To know the approach of the sales representative towards the retailers. It will help to increase the efficiency of the sales representative.
    • To identify the problem of the existing sales promotion campaign, it will help to take necessary steps for the future promotions.
    • To know the problems of the running distribution network.

    Chapter 02

    2. Background of the Bashundhara Group

    The Bashundhara Group of Companies started off as a real-estate venture known as “Bashundhara” under the aegis of the Group’s first concern The East-West Property Development (Pvt.) Ltd. This project turned out to be very successful and had helped foster the growth of trust and confidence of the urban people in “Bashundhara”. Dhaka’s burgeoning population combined with a conspicuously slow growth of housing- led to the landmark success of Bashundhara.

    Driven by the ramifications of this success, Bashundhara geared up to invest in new fields, including manufacturing and trading. More enterprises were established in the early 1990s, covering diverse activities involving the production of cement, paper and pulp, tissue paper, steel, LPG bottling and distribution and a trading company among others. All these had happened in a span of less than 10 years. During this period, additional schemes on land development and real estate were lunched and these focused more sharply on increasing responsiveness to client needs. At present, the group employees are over 3500 people. The group’s first publicity-traded company, Meghna Cement Mills Limited, is currently listed on the two stock Exchanges of Bangladesh.

    The Group now has 14 major concerns located in different areas of the country. The most-recent addition to the Group is a multi-faceted shopping mall-cum-recreation centre called the Bashundhara City (BCDL). The BCDL is one further step in our longstanding effort to strengthen our links with the general public through the unique offering of commercial operations and recreation facilities under one roof. It houses theme parks, food courts, multi-screen cinemas, fitness centers, space for over 2800 shops, basement-level parking for over a thousand vehicles, skating and bowling rinks, a supermarket and office space spread over several floors.

    The Group has come a long way in reaching these goals by listening to client needs, learning real-time lessons from past projects, innovating and partnering. Through major investment undertakings, Bashundhara has meaningfully contributed to the economy’s stability in financial and capital markets. Underlying all of the Group’s activities are the common threads of change, flexibility and fostering closer ties with the Government, the City Corporation and our clients. Most of its projects have been success stories – this fact alone is enough to justify a sense of confidence in the Group’s future.

    2.1 Mission Statement:

    Bashundhara Group (BG) is a leading private-sector industrial conglomerate in Bangladesh. It currently has 14 on-going concerns, ranging from real estate development and management to manufacturing and services. The BG strives to work in partnership with the Government for promoting sustainable development, environment preservation, and employment-generation and poverty reduction. The BG has a particular focus on urban housing, recreation centers, and commercial ventures. Thus, the motto of the Group is “For the People, for the Country”. At the crux of all industrial processes deployed at the Group’s enterprises stands the need to ensure environmental stability. As a result, conscious efforts are made to use re-cycled material as industrial input.

    2.2 The Group’s Efforts seek to:

    • Create affordable housing (developed land & homes) for people.
    • Foster better living environments and pleasant surroundings.
    • Ensure environmental balance and sustainability.
    • Use re-cycled raw materials in industrial production.
    • Treat industrial effluents.
    • Establish recreational and shopping facilities for people.
    • Develop a meaningful partnership with others for development.
    • Provide better working conditions for its staff members.

    The BG works in close partnership with the City Corporations, the Government of Bangladesh, other private sector companies, multilateral institutions, the environment department and myriad financial institutions.

    The BG has its headquarters in Dhaka, Bangladesh. Its Chairman and a Board of Directors frame the Group’s policies. The Managing Director acts as the Chief Executive Officer.

    2.3 Projects of Bashundhara Group:

    2.3.1 East West Property Development Ltd.:

    The EWPD has two core on-going projects at this time: the Bashundhara Baridhara Land Project and the Riverview Land Project. The Baridhara Project is a sprawling residential complex covering over 3500 acres and 25,000 plots. The plots come in the following sizes: 3, 4, 5, 7.5 and 10 kathas. At the present time, the Company is offering plots in Blocks – M, N, and P (shown on map) with a very competitive pricing schemes and easy repayment methods. Most of these plots are now ready for immediate home-construction.

    After a successful take-off of the Baridhara land project, Bashundhara took the added initiative of developing an apartment project within the complex itself. This venture focuses particularly on fixed-income urban groups. Pricing and payment options are flexible and can be attuned to the financial circumstances of particular buyers. The Baridhara Apartment Project is now accepting bookings from the general public and expatriate Bangladeshis for allotment of apartments located in Blocks- A, E, G and I of the Baridhara land project. Floor measurements of these apartments range from 1100 to 2600 square-feet. It is expected that these apartments will be ready for hand-over to their owners within three years. In close proximity to these apartment blocks, construction has begun for the establishment of the following facilities: a modern hospital, an international school, two well-known universities, a super market, a sports zone, parks and a mosque. An impressive range of sizes and designs are being offered and prices range from Taka 1350 to Taka 1625 per square-feet.

    (i) Layout Map of Riverview Land Project:

    The Riverview Land Project is located by the side of the scenic River Buriganga. It is conveniently located in close proximity to the China-Bangladesh Joint Venture Bridge-1 (also known as the Buriganga Bridge-1). Thus, it is very well linked to the major roads that connect with the Dhaka city. The main business hub of Dhaka, the Motijheel Commercial Area, is no more than 3 kilometres away from the Project site, as is the popular junction the Babu Bazaar Bridge. This is a mammoth project where it is expected that vital services will be available including schools, colleges, a private university, shopping centres, a mosque and a hospital. The Project is constituted with six blocks – A, B, C, D, E, and F. The sizes of individual plots are: 3, 3.5, 4, 5, 7.5 and 10 kathas (One Katha = 66.91 square metres). This project comes as a fulfillment of a long-standing desire of the residents of “old” Dhaka City to establish a well-structured and modern residential complex, in close proximity to the river and some heritage sites of “old” Dhaka. Experts have carried out the Project’s layout and regional in-site planning. The site is now poised for rapid growth and planned habitation – at very affordable prices.

    The contact details of the Corporate Office are shown below-

    Bashundhara Group,

    Corporate Office,

    Bashundhara City

    13/ka/1 Panthapath

    Dhaka-1205

    Bangladesh

    Phone: (880-2)8158025- 34

    Fax: 880-2-9128319

    Web Site: www.bashundharagroup.com

    E-mail: bgc@bdcom.com

    Chapter 03

    3. Over View of The Bashundhara Group (MCML)

    3.1 Meghna Cement Mills Ltd.:

    The Meghna Cement Mills Limited (MCML) was the first undertaking of Bashundhara Group in the manufacturing sector. This enterprise produces world-class cement and as a testimony to this, stands the fact that the concern has been awarded the ISO-9001 certification for sustainable quality control effort. The Company markets its cement under the registered trademark of “King brand”.

    The factory of this Company is located in the south-western part of Bangladesh at Mongla Port Industrial Area, in Mongla, Bagerhat under the Khulna Division. The Mongla Port is the second-largest seaport of Bangladesh. The Jetty of this Company is situated on the eastern side of the river ‘Possur’. This river is also connected with many other rivers of the country. Given this favorable geographical scenario, it is easy to implement a year-round delivery and raw material transportation to and from the MCML factory site to remote corners of Bangladesh. The factory stands close to the Mongla-Khulna Highway as well.

    The Meghana Cement Mills Ltd. is the largest domestic cement-producing unit in Bangladesh. Its excellent quality-control standards have helped the Company acquire the ISO-9001 certification. The product of the Mill is being marketed under the trademark of ‘King Brand Cement’. This brand now has a steady market share, thanks to its consistently high quality. The Mill was set up in 1995 on 10.5 acres of land and went into commercial production in January 1996.

    It has two computerized production units and two automated packaging plants. The mill has its own jetty with facilities for speedy unloading of raw materials from ships. In addition, the unique barge loaders are capable of quick loading (capacity of 5,600 bags per hour) of the finished and bagged cement for delivery to the buyers. There are six silos within the mill premises to store clinker. These units are equipped with control elements to regulate humidity and temperature, which are vital for the shelf life of stored cement and cement-making ingredients. The Mill has two stand-by generators to provide electric power during phases of power supply failure of the national power grid. The Plant also has a well-equipped quality assurance and testing laboratory.

    Bashundhara’s “King Brand Cement” is well-known throughout Bangladesh. The weight of each marketed bag is always perfect due to the adoption of an automated packaging system. There is a laboratory, equipped with modern equipment within the Mill premises to conduct tests at each hour for every shift covering every stage of the production process. The most recent quality standards, namely BS and ASTM, have also been incorporated in this brand of cement. The factory’s environmental standards are high, thanks to regular inspections by the Company’s senior scientific staff members.

    The Company has been awarded the coveted ISO-9001 Certification in the year 2000 by the National Quality Assurance (NQA), registered by the National Accreditation of Certificate Boards, UK.

    3.2 Sales and Marketing:

    Bashundhara City, Level-16

    13/ka/1 Panthapath, Dhaka-1205, Bangladesh

    Phone : 880-2-8158025-34

    Fax : 880-2-9128319

    E-mail : bgc@bdcom.com

    3.3 Bashundhara Cement Sack Plant:

    In the 1970s, Bangladeshi cement producers had been using simple multi-wall paper sacks for packaging cement. Scarcity of basic raw materials for manufacturing cement such as lime stone, gypsum and inadequate industrial infrastructure had forced the country to import almost 90% of its requirement of cement till the late nineties, most of which used to come in paper sacks. With the commissioning of Meghna Cement Mills Ltd., a concern of the Bashundhara Group, the largest domestic cement plant in the country in January 1996, the nation’s cement industry leaped into a new era of self-sufficiency.

    An accelerated economy, spurred by a booming construction and housing industry, had made Bangladesh one of the most popular destinations for cement producers. With the arrival of several local companies and a few international cement giants in the field of cement production, there occurred a spectacular growth of output over the last 5 years. Coupled with it, the demand for cement packaging bags went up by mammoth proportions. At the peak of this demand cycle, Bashundhara’s paper sack manufacturing unit went into production in June 2000. At the beginning, this plant received orders from about 50 different cement producers, local and international.

    In June 2000, the first ever-pasted paper sack manufacturing unit was established within the premises of Hazrat Shahjalal Newsprint Industries Ltd., an enterprise of Bashundhara Group, situated at Meghnaghat  about 28 kms from the capital city of Dhaka. Windmill & Holsters of Germany – a world leader in the field, supplied the paper sack converting line. The high-speed sack line for manufacturing multi-wall cement sacks makes use of a strong plastic-type additional wall for added strength and prevention of moisture seepage. The manufacturing capacity of this unit is over 60 million multi-wall paper sacks per annum.

    Bashundhara Group takes pride in being instrumental in making Bangladesh self sufficient in the production of paper sacks so that the import of paper sacks comes to a halt. The buzzword was “Quality & Service” on which the entire manufacturing & marketing policy of the Bashundhara Group is based.

    The paper grade/quality of raw material is vital for bag performance. Experimental work has confirmed the fact that tensile energy absorption (TEA) of the paper can be used to predict bag performance. Bags, when dropped, are subjected to impact loads far to excess of their ultimate tensile strength. Only by dissipating this energy over a period of time can these tensile forces be contained. Therefore, the distance through which the tensile force acts is stretch and the total time must also be taken into account. The Swedish Kraft paper used by Bashundhara for making sacks gives a very high energy absorbing capacity. The adhesive used for pasting the sacks is a specially-developed modified potato starch imported from Holland to make room for firm bonding, even at high humidity levels. It is due to the factors noted above that the Bashundhara sacks performed better than most bags imported earlier in monsoon-prone hot and humid environment. Due to the excellent product quality, Bashundhara’s cement sacks are still in high demand and many cement manufacturers of the country have orders lined up with this plant. The plant is capable of printing any kind of logo/labels on the bags and there is a choice of several color combinations.

    3.4 Bashundhara Trading Company Ltd:

    The BTCL serves as the general trading arm of the Group. It supports the import, export, sales and marketing endeavors of the Group’s many enterprises.

    It helps develop marketing channels and methods. This unit also operates as a private trading company engaged in the acquisition of basic raw materials and finished products for private buyers- outside the domain of the Bashundhara Group. It was launched in the year 1993, initially to support backward linkages and marketing strategies for the Group.

    3.5 Bashundhara Industrial Complex Ltd:

    The Bashundhara Industrial Complex Limited was set up in the year 2000 as the second plant of Bashundhara’s cement producing concern, the Meghna Cement Mills Limited. It began production in 2002 and is now a profitable and viable enterprise of the Bashundhara family. It has immediate plans also to deal in trading, clearing & forwarding and shipping-related business. The BICL is now engaged in carrying out studies on a proposed project that will enable the Company to set up its own dockyards and shipyards in Chittagong, Bangladesh. At a later stage, the BICL has plans to get more intricately involved in inland water transport for movement of passengers and cargo within the country.

    3.6 Bashundhara Communication & Networks Ltd:

    Bashundhara Communication & Networks Limited (BCNL) is the telecom services provider arm of the Bashundhara Group. BCNL’s vision is “To Provide Quality Telecom Services at affordable cost to the people of Bangladesh”. BCNL proposes to build high-bandwidth networks to provide the various telecom services that are now in shortfall. BCNL seeks to provide a wide array of telecom services across Bangladesh that include Fixed Wireless Access (basic services), Mobile and Data over optical backbone in the medium term and to build its own International Gateway over the long term. BCNL would like to position itself as a convergent telecom services provider, with initial entry into Fixed Wireless Services and expanding into Mobile over the medium haul.

    3.7 Marketing Planning for 2005 of King Brand Cement:

    A target has been prepared of 2, 40, 00,000 Bags (1, 00,000 MT Per month) for 2005. The value of this target is Tk. 528, 00, 00,000. An expenditure budget has been calculated of Tk. 5, 28, 00,000, which is 1.00% of total sale. Growth has been taken over 115.50 % last year. Details planning and data are appended bellow.

    Sale in 2004:

    Quantity Daily Monthly Yearly
    In MT 1,546 46,405 5,56,863
    In Bags 30,936 9,28,105 11137260
    In Taka 68,06,103 20,41,83,100 245,01,97,200

    Target for 2005:

    Quantity Daily Monthly Yearly
    In MT 3,333 1,00,000 12,00,000
    In Bags 66,660 20,00,000 2,40,00,000
    In Taka 1,46,65,200 44,00,00,000 528,00,00,000

    Growth taken over 2004 (In Taka):

    2005 528,00,00,000
    2004 245,01,97,200
    Deference 282,98,02,800
    Ratio 115.50 %

    Expenditure Budget for 2005:

    Sp. Commission(65% of Total Target = 1,56,00,000 Bags. X Tk. 2) 3,12,00,000
    Sales Promotion/Scheme(Ad, Gift, Conf.) 1,00,00,000
    Sign Board(100 x Tk. 10,000) 10,00,000
    Ad. On Double Decker 50,00,000
    Others 56,00,000
    Total Expenditure 5,28,00,000
    Exp. Ratio 1.00%Tk. 2.20 Per Bag

    3.8 Objectives:

    • To achieve this target will make us profit.
    • We will regain our market share gradually.
    • Growths will be 132.59 % over last year.
    • Program to be taken in two spells. In 1st spell 60% & in 2nd spell 40%.
    • We have to give benefits to our Dealers silently. (Gifts through Scheme & Sp. Commission)
    • It will not create under rating problem in the market.
    • Target has been taken total 1, 44, 00,000 Bags in 6 months (60% of total target).
    • Value of this target is Tk.316, 80, 00,000.
    • The budget of this scheme is Tk.52, 97,200
    • Ratio of budget is 0.16 % of sales.
    • Each Dealer will get 01 scratch card for each 5000 Bags lifting in each month.
    • Every Dealer will get maximum gifts & Sp. Commission.
    • The prize will distribute through a program at 5 stars Hotel.
    • It will create our image.

    3.9 Strategy:

    (i) Quality:

    • Needed quality product.

    (ii) Price fixation:

    • To be given us the price calculation reports on each LC.
    • To be given us prior information, before declaration of price enhancement or decrease.
    • Needed to sale in Dhaka at break-even price.
    • There may be a price fixation committee. GM and I will be the member of the committee.
    • We want to make profit at western zone.

    (iii) Outstanding:

    • No further credit facility to anyone up to June’05. We will reduce at 50% of previous outstanding up to June’05.
    • It will require to sale on credit from July’05.
    • We need delivery, remittance and outstanding report on daily basis from accounts department.

    (iv) Problems & Suggestions:

    • Needed five Cargo Vessels as chartered.
    • Needed one more Bashundhara Cargo for Western Zone.
    • We will give 115.50% growth over 2004. (Except on institutional sales)
    • If anybody contributes in sales from any institutions that may not be included in our sales, but to be made through sales & marketing department.
    • No interference of other department/ persons.
    • After each quarter, management will take feedback from us.
    • Facility of each member of S&M department will be increased like salary, D.A., mobile phone ceiling, incentives.
    •  Need four more field-forces.
    • Need one asst. officer & one peon.
    • Need 100% expenditure of annual sales to achieve the target for 2005.
    • Need non-ceiling mobile phone & direct T&T phone.
    • Need full time car with driver & maintenance for extensive tour to achieve the target of Tk. 528, 00, 00,000 for 2005.
    • Needed to give incentives to Field Forces.

    (v) Promotional Expenses / Schemes:

    Target has been taken total 1, 44, 00,000 bags in 6 months (60% of total target). Value of this target is Tk. 316, 80, 00,000, the budget of this scheme is Tk.52, 97,200 and ratio is 0.16 %. Each Dealer will get 01 scratch card for each 5000 bags in a month. The prize will be distributed through a program.

    Sl.No Name of Gifts Price Quantity. Value Remarks
    01 Car (Station Wagon) 5,00,000 2 10,00,000
    02 Motor Cycle 70,000 5 3,50,000
    03 Fridge 25,000 6 1,50,000
    04 Washing Machine 10,000 10 1,00,000
    05 Color TV 10,000 10 1,00,000
    06 Micro Woven 10,000 10 1,00,000
    07 DVD Player 4,000 25 1,00,000
    08 Box Fan 1,500 100 1,50,000
    09 Charger Light 1,000 100 1,00,000
    10 Wrist Watch 1,000 500 5,00,000
    11 Iron 500 965 4,82,500
    12 Prize Bond 100 1147 1,14,700
    Total Scratch Card 2880 32,47,200 2880 x 5000 Bags=1,44,00,000 Bags
    Expenses for Program(Dinner) 1000 250 Per 2,50,000
    Other Expenses for program (Artist ,Hotel Rent for Dealers) 3,00,000
    Paper Ad 75,000 24 insert 18,00,000
    Total Expenses in Jan – Jun’05 52,97,200
    Total Expenses in July – Dec’05 47,02,800 T-Shirt,Cap,Def. Gifts,Mason Conf. to be done.

    3.10 Marketing Mix:

    Marketing Mix is the set of controllable, technical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything that the firm can do to influence the demand for its product. Marketing mix is the set of marketing tools that the firm uses to persuade its marketing objectives in the target market.

    McCarthy classified these tools into four groups that he called the four P’s of marketing. The main possibilities can be collected into four groups of variables known the four P’s. These are given bellow:

    Marketing Mix:

    Direct mail, Telemarketing and Internet
    Public Relations
    Sales Fours
    Advertising
    Sales Promotion
    Promotion mix
    Offering mix
    ProductService

    Price
    Distribution Channels
    Company

    Marketing Mix Strategy

    Distribution Channels
     
     
     

     

     

     

     

     

     

     

     

     

     

     

     

     

    The Marketing Mix, a basic tool for marketing managers, is defined by Microsoft Encarta World Dictionary as, “Marketing mix is a mixture of marketing techniques, the particular mixture of marketing techniques, for example pricing, packaging and advertising, used to promote the sale of a product” (2000). Marketing mix is also known as the Four P’s. The Four P’s stand for Product, Price, Place and Promotion. This paper will look at the Marketing Mix by explaining what the Four P’s are and show how a business would use the mix to market a product or service. The Marketing Mix is used to market a product or service to establish what the Product, Price, Place and Promotion is. Marketing managers bring the elements of the Four P’s together, combining them to achieve a greater result from their combination and each of the individual effects of the Four P’s (Anderson, Vincze 2000).

    The Marketing Mix model (also known as the 4 P’s) can be used by marketers as a tool to assist in implementing the marketing strategy. Marketing managers use this method to attempt to generate the optimal response in the target market by blending 4 (or 5, or 7) variables in an optimal way. It is important to understand that the Marketing Mix principles are controllable variables. The Marketing Mix can be adjusted on a frequent basis to meet the changing needs of the target group and the other dynamics of the marketing environment.

    The Four P’s consist of the following:

    (i) Product:

    Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need is called Product. In includes physical objects, services, persons, places, organizations and ideas. “Historically, the thinking was: a good product will sell itself”. However there are no bad products anymore in today’s highly competitive markets. Plus there are many laws giving customers the right to send back products that he perceives as bad. Therefore the question on product has become: “Does the organization create what its intended customers want”? Define the characteristics of your product or service that meets the needs of your customers such as Functionality, Quality, Appearance, Packaging, Brand, Service, Support, Warranty.

    (ii) Price:

    The amount of money charged for a product or service or the sum of the values that consumers exchange for the benefits of having or using the product or service is known as Price. How much are the intended customers willing to pay? Here we decide on a pricing strategy – Do not let it just happen! Even if you decide not to ask (enough) money for a product or service, you must realize that this is a conscious decision and forms part of the pricing strategy. Although competing on price is as old as mankind, the consumer is often still sensitive for price discounts and special offers. Price has also an irrational side: something that is expensive must be good. Permanently competing on price is for many companies not a very sensible approach.

    (iii) Place:

    All the company activities that make the product or service available to target customers is known as Place. Available at the right place, at the right time, in the right quantities. Some of the recent major changes in business have come about by changing Place. Think of the Internet and Mobile telephones, Locations, Logistics, Channel members, Channel Motivation, Market Coverage, Service Levels.

    (iv) Promotion:

    Activities that communicate the product or service and its merits to target customers and persuade them to buy is known as Promotion. How are the chosen target groups informed or educated about the organization and its products? This includes all the weapons in the marketing armory – advertising, selling, sales promotions, public relations, etc. While the other three P’s have lost much of their meanings in today’s markets, Promotion has become the most important P to focus on. Advertising,Public Relations, Message, Direct Sales, Sales, Media, Budget etc. are part of the Promotion programme.

    The function of the Marketing Mix is to help develop a package (mix) that will not only satisfy the needs of the customers within the target markets but simultaneously to maximize the performance of the organization. There have been many attempts to increase the number of P’s from 4 to 5 P’s in the Marketing Mix model. The most frequently mentioned one being People or Personnel.

    Many people have already heard about the “4 P’s of Marketing”. Generally speaking, the so-called “Marketing Mix” is a framework which acts as a guideline for marketers to implement a marketing concept. It consists of a set of major decision areas that a company needs to manage in order to at least satisfy consumer needs. According to Kotler (1999) “The Mix is a set of controllable tactical marketing tools that the firm blends to produce the response it wants in the target market”. Hence, in an effective marketing programme all of those elements are “mixed” to successfully achieve the company’s marketing objectives.

    However, the 4 P’s approach has often been criticised in the past. Some critics for example argue that “It oversimplifies the reality of marketing management” (quoted in Jobber 1998).

    Furthermore, in the context of relationship marketing (to consumers) or key-account management (in industrial marketing), it could be argued to add “Partnerships” as an additional “P” to the marketing mix as well. Main reason for this addition would be the growing focus in marketing towards long-term orientation that needs to be considered in most marketing concepts.

    As one can observe from various marketing related discussion boards on the net (or from the marketing literature), there is no clear “yes” or “no” regarding the usefulness of any possible extension to the traditional 4 P’s approach in marketing.

    The biggest advantage of this discussion however is probably that those who discuss it deepen their own knowledge – not only about the marketing mix in particular but also about marketing in general.

    Note that four P’s represent the seller’s view of the marketing tools available for influencing buyers. From a buyer’s point of view, each marketing tools is designed to deliver a customer benefit. Robert F. Lauterborn suggested that the seller’s four P’s correspond to the customer’s four C’s.

     

     

     

     

    3.11 The Reasons of Buying:

    Sr.No. Particular % of Cases
    1 Brand Loyalty 10%
    2 Reasonable Price 5%
    3 Customer Demand 25%
    4 High Quality 60%

     

     

     

    3.13.12 Price Components:

    Sr. No. Name of the Brand Commission Rate with Carrying cost in the Dhaka city
    1 King Brand No 274 Tk.
    2 Holcim Black 5 Tk. 285 Tk.
    3 Holcim Red 5 Tk. 301 Tk.
    4 Holcim Black Developer 266 Tk.
    5 Holcim Red Developer 288 Tk.
    6 Scan 5 Tk. 286 Tk.
    7 Cemex super Shakti 5 Tk. 254 Tk.
    8 Anwar cement 6 Tk. 254. Tk.
    9 Saven Rings 2 Tk . 256 Tk.
    10 Tigeer 5 Tk. 258 Tk.
    11 Crown 4 Tk. 265 Tk.
    12 Shah 3 Tk. 258 Tk.
    13 Mir 2 Tk 257 Tk.
    14 Fresh 2 Tk. 255 Tk
    15 Akij – 267
    16 Primer 6 Tk. 255

    3.13 Place Components:

    Sr. No. Name of the factory P.Capacity Million M.T. Locatiom
    1 Akij Cement .333 Nabinagar, N. Gonj
    2 Aman Cement .210 Ullaphara, Sirahgonj
    3 Anwar Cement .500 Gazaria. Munshigonj
    4 Bangla Cement .030 Mahmudnagar, N.Gonj
    5 Bangal Tiger Cement .210 Palash, Nr shindig Dhaka
    6 Cemex(BD) Ltd. .450 Madangonj, Dhaka
    7 Hedielbarg(Scan= Rubi) 1.85 katchpur
    8 Metropalitan Cement .80 Mukterpur, Dhaka
    9 M.I Cement .420 Mukterpur, Dhaka
    10 Mir Cement .100 Murapara Rupgonj
    11 Modern Cement .210 Meghna Bridge, Dhaka
    12 M.T.C. Cement .450 Meghnaghat, Dhaka
    13 Padma Cement .180 Sahjadpur, Sirajgonj
    14 Premeier Cement .600 Mukthpur, Dhaka
    15 Rowsaan Cement .100 B.C.C Ind. Sirajgong
    16 Salam Cement .050 B.C.C Ind. Sirajgong
    17 S.C.O Cement .120 Gajaria, Munshigonj
    18 Seven Circles Cement .390 Kaligonj, G Pur Dhaka
    19 Shah Cement 1.200 Mukthpur, Dhaka
    20 Sirajgong Cemenrt .100 Bhelkuchi, Sirajgong
    21 Unique Cement .300 Meghnaghat, Dhaka

     

     

     

     

     

     

    3.14 The Reasons of Not Buying:

    Sr. No. Particular % of Cases
    1 Lack of Advertisements 10%
    2 Lack of Distribution 5%
    3 Doubt About Quality 20%
    4 High Price 65%
    Sr. No. Particular % of Cases
    1 Strongly Agree 10%
    2 Agree 60%
    3 Disagree 20%
    4 Strongly disagree 65%
    Sr. No. Particular % of Cases
    1 Excellent 25%
    2 Satisfactory 45%
    3 Average 25%
    4 Below Average 5%
    Sr. No. Particular % of Cases
    1 Strongly agree 25%
    2 Agree 60%
    3 Disagree 10%
    4 Strongly disagree 5%
    Sr. No. Particular % of Cases
    1 Very High 60%
    2 High 25%
    3 Reasonable 10%
    4 Very Cheap 5%
    Sr. No. Particular % of Cases
    1 Strongly Agree 20%
    2 Agree 55%
    3 Disagree 20%
    4 Strongly disagree 5%
    Sr. No. Particular % of Cases
    1 Agree 25%
    2 Disagree 65%
    3 Strongly disagree 10%
    Sr. No. Particular % of Cases
    1 Strongly Agree 20%
    2 Agree 55%
    3 Disagree 20%
    4 Strongly disagree 5%
    1 Strongly Agree 25%
    2 Agree 55%
    3 Disagree 10%
    4 Strongly disagree 10%

    3.15 Discussion regarding Product Components:

    From dept interview, it is explored that end user purchase their cement based on recommendation of the Architect’s opinion, retailer’s pushing and some other factors including weight, price, depend on use and loyalty towards the particular brand. It also indicates that Meghna Cement has a lack of brand image.

    Some other findings are that quality of King Brand Cement is better but the price is so much high and for the high price it lost its market value.

    Here, it is explored that product is not available, price is high compared to that of competitors is fluctuating every day. There is no credit facility from the company. The company can not deliver product on time and factory location is so much far from the Dhaka city.

    In context of packaging, it is explored that the development of the packaging system is essential. For some reasons end user think that retailers mix less quality cement with the bag and sometimes end user also think that cement weight is not accurate. It means that 50 kegs cement is not there. Another problem is paper sack- during rainy season cement looses its quality.

    3.16 Current Distribution Network in Dhaka city:

    After producing the cement from the factory dealers purchase the product from the company to sale to the retailers and their customers. And dealer can always sell the product to the retailer and developer by the direction of companie’s sales officer. After purchasing the product, retailer sells to the developer and end-users. Dealer also sells the product individually to any kinds of customer. On the other hand company’s sales officer can direct sell to the dealer, retailer, developer and the end-user. Companie’s sales officer also can sell the product directly from the factory. The Current Distribution Network in Dhaka city of King Brand Cement is done by above maintaining procedure.

    3.17 Dealers list at Dhaka Zone of the Meghna Cement Mills Ltd.:

    S.N. Name of the Dealer Area Contact No
    1. Dhaka Builders Mirpur 8010054
    2. United Brothers Pagla 7415276 7415191
    3. Dhaka Builders Pagla 7604560 7415035
    4. Sheema trading Pagla 7604263 7415100
    5. Mintu Enterprise Pagla 7415112 7415722
    6. Madina Trading Pagla 7415116 7604425-26
    7. Rita Traders Pagla 7604771
    8. Mollah & Brothers Pagla 7415166 7604273-74
    9. Masud Trading Pagla 7415282 9337311

    3.18 Discussion Regarding Place Components:

    After analyzing the secondary data, it revealed that 21 cement factories are near the Dhaka city and it is also mentionable that the market leader of Dhaka Shah Cement locates near Dhaka city.

    In dept interview, retailers have said that they are not getting cement on time in the cement sector. On time delivery is important, for example, a builder wants to mould a roof on Friday,therefore, he informes to the retailer on Wednesday or Thursday for a particular brand. Then retailer contacts with dealer or company to get the product. If company or dealer fails to supply the product just in time, then retailer has to supply the product which is available on that time.

    After analyzing the current distribution network it is found that, at first dealer gets the product from factory and sells to the retailer, developers and end user.

    Another findings is that company’s sales representatives  collect order from the developers and retailers. They place those order to the dealers then the dealer acquires some amount of profit, but if it sells on credit that time risk is totally on company. Therefore, it is clear that, current distribution channel has created problem.

    Chapter 04

    4.Conclusion

    King Brand Cement of Bashundhara Group was a pleasant experience while doing a research on identify

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    “Distribution Channel of King Brand Cement.”

    Chapter 01

    1. Executive Summary

    The topic of the report is “Distribution Channel of King Brand Cement.”

    This report is broadly categorized in three parts. In part one is Introduction. In this part purpose of the study, statement of the problem, products components, price components, place components and objectives of the study are discussed. Part two is about background of Bashundhara Group, mission statement and the group’s efforts. In part three is discussed about Bashundhara Group (MCML). In this part product components, current distribution network in Dhaka city, dealers list at Dhaka zone of the Meghna Cement Mills Ltd., discussion regarding place components are discussed. And part four is about Conclusion and Bibliography.

    1.1 Purpose of the Study:

    The main purpose of the study is to fulfill the requirement of 3 credits course.. It will help students to have the practical idea about working in corporate environment. This report is a requirement of the Business Communication. Program. But at the same time it is a great opportunity for the students to share the practical experience in the market. A theory and short-term experience doesn’t fulfill the necessity of requiring a quality of jumping in the practical job market, where it is competitive and deserve more.

    1.2 Statement of the Problem:

    King Brand Cement used to be very popular in the Dhaka Market as local cement company. The management of Meghna Cement wants to know, distribution channel needs to change or not for the Dhaka market. Therefore as a researcher, do not have enough understanding to proceed with the research project. Thus need to explore or identify the problems in current distribution channel of Meghan Cement.

    1.3 Product Components:

    1.4 Objectives of the study:

    The main objectives of the study are to determine distribution channel of MCML. Therefore, following issues are considered as broad objectives:

    To address the board objectives some specific objectives have been developed. They are as follow-

    Chapter 02

    2. Background of the Bashundhara Group

    The Bashundhara Group of Companies started off as a real-estate venture known as “Bashundhara” under the aegis of the Group’s first concern The East-West Property Development (Pvt.) Ltd. This project turned out to be very successful and had helped foster the growth of trust and confidence of the urban people in “Bashundhara”. Dhaka’s burgeoning population combined with a conspicuously slow growth of housing- led to the landmark success of Bashundhara.

    Driven by the ramifications of this success, Bashundhara geared up to invest in new fields, including manufacturing and trading. More enterprises were established in the early 1990s, covering diverse activities involving the production of cement, paper and pulp, tissue paper, steel, LPG bottling and distribution and a trading company among others. All these had happened in a span of less than 10 years. During this period, additional schemes on land development and real estate were lunched and these focused more sharply on increasing responsiveness to client needs. At present, the group employees are over 3500 people. The group’s first publicity-traded company, Meghna Cement Mills Limited, is currently listed on the two stock Exchanges of Bangladesh.

    The Group now has 14 major concerns located in different areas of the country. The most-recent addition to the Group is a multi-faceted shopping mall-cum-recreation centre called the Bashundhara City (BCDL). The BCDL is one further step in our longstanding effort to strengthen our links with the general public through the unique offering of commercial operations and recreation facilities under one roof. It houses theme parks, food courts, multi-screen cinemas, fitness centers, space for over 2800 shops, basement-level parking for over a thousand vehicles, skating and bowling rinks, a supermarket and office space spread over several floors.

    The Group has come a long way in reaching these goals by listening to client needs, learning real-time lessons from past projects, innovating and partnering. Through major investment undertakings, Bashundhara has meaningfully contributed to the economy’s stability in financial and capital markets. Underlying all of the Group’s activities are the common threads of change, flexibility and fostering closer ties with the Government, the City Corporation and our clients. Most of its projects have been success stories – this fact alone is enough to justify a sense of confidence in the Group’s future.

    2.1 Mission Statement:

    Bashundhara Group (BG) is a leading private-sector industrial conglomerate in Bangladesh. It currently has 14 on-going concerns, ranging from real estate development and management to manufacturing and services. The BG strives to work in partnership with the Government for promoting sustainable development, environment preservation, and employment-generation and poverty reduction. The BG has a particular focus on urban housing, recreation centers, and commercial ventures. Thus, the motto of the Group is “For the People, for the Country”. At the crux of all industrial processes deployed at the Group’s enterprises stands the need to ensure environmental stability. As a result, conscious efforts are made to use re-cycled material as industrial input.

    2.2 The Group’s Efforts seek to:

    The BG works in close partnership with the City Corporations, the Government of Bangladesh, other private sector companies, multilateral institutions, the environment department and myriad financial institutions.

    The BG has its headquarters in Dhaka, Bangladesh. Its Chairman and a Board of Directors frame the Group’s policies. The Managing Director acts as the Chief Executive Officer.

    2.3 Projects of Bashundhara Group:

    2.3.1 East West Property Development Ltd.:

    The EWPD has two core on-going projects at this time: the Bashundhara Baridhara Land Project and the Riverview Land Project. The Baridhara Project is a sprawling residential complex covering over 3500 acres and 25,000 plots. The plots come in the following sizes: 3, 4, 5, 7.5 and 10 kathas. At the present time, the Company is offering plots in Blocks – M, N, and P (shown on map) with a very competitive pricing schemes and easy repayment methods. Most of these plots are now ready for immediate home-construction.

    After a successful take-off of the Baridhara land project, Bashundhara took the added initiative of developing an apartment project within the complex itself. This venture focuses particularly on fixed-income urban groups. Pricing and payment options are flexible and can be attuned to the financial circumstances of particular buyers. The Baridhara Apartment Project is now accepting bookings from the general public and expatriate Bangladeshis for allotment of apartments located in Blocks- A, E, G and I of the Baridhara land project. Floor measurements of these apartments range from 1100 to 2600 square-feet. It is expected that these apartments will be ready for hand-over to their owners within three years. In close proximity to these apartment blocks, construction has begun for the establishment of the following facilities: a modern hospital, an international school, two well-known universities, a super market, a sports zone, parks and a mosque. An impressive range of sizes and designs are being offered and prices range from Taka 1350 to Taka 1625 per square-feet.

    (i) Layout Map of Riverview Land Project:

    The Riverview Land Project is located by the side of the scenic River Buriganga. It is conveniently located in close proximity to the China-Bangladesh Joint Venture Bridge-1 (also known as the Buriganga Bridge-1). Thus, it is very well linked to the major roads that connect with the Dhaka city. The main business hub of Dhaka, the Motijheel Commercial Area, is no more than 3 kilometres away from the Project site, as is the popular junction the Babu Bazaar Bridge. This is a mammoth project where it is expected that vital services will be available including schools, colleges, a private university, shopping centres, a mosque and a hospital. The Project is constituted with six blocks – A, B, C, D, E, and F. The sizes of individual plots are: 3, 3.5, 4, 5, 7.5 and 10 kathas (One Katha = 66.91 square metres). This project comes as a fulfillment of a long-standing desire of the residents of “old” Dhaka City to establish a well-structured and modern residential complex, in close proximity to the river and some heritage sites of “old” Dhaka. Experts have carried out the Project’s layout and regional in-site planning. The site is now poised for rapid growth and planned habitation – at very affordable prices.

    The contact details of the Corporate Office are shown below-

    Bashundhara Group,

    Corporate Office,

    Bashundhara City

    13/ka/1 Panthapath

    Dhaka-1205

    Bangladesh

    Phone: (880-2)8158025- 34

    Fax: 880-2-9128319

    Web Site: www.bashundharagroup.com

    E-mail: bgc@bdcom.com

    Chapter 03

    3. Over View of The Bashundhara Group (MCML)

    3.1 Meghna Cement Mills Ltd.:

    The Meghna Cement Mills Limited (MCML) was the first undertaking of Bashundhara Group in the manufacturing sector. This enterprise produces world-class cement and as a testimony to this, stands the fact that the concern has been awarded the ISO-9001 certification for sustainable quality control effort. The Company markets its cement under the registered trademark of “King brand”.

    The factory of this Company is located in the south-western part of Bangladesh at Mongla Port Industrial Area, in Mongla, Bagerhat under the Khulna Division. The Mongla Port is the second-largest seaport of Bangladesh. The Jetty of this Company is situated on the eastern side of the river ‘Possur’. This river is also connected with many other rivers of the country. Given this favorable geographical scenario, it is easy to implement a year-round delivery and raw material transportation to and from the MCML factory site to remote corners of Bangladesh. The factory stands close to the Mongla-Khulna Highway as well.

    The Meghana Cement Mills Ltd. is the largest domestic cement-producing unit in Bangladesh. Its excellent quality-control standards have helped the Company acquire the ISO-9001 certification. The product of the Mill is being marketed under the trademark of ‘King Brand Cement’. This brand now has a steady market share, thanks to its consistently high quality. The Mill was set up in 1995 on 10.5 acres of land and went into commercial production in January 1996.

    It has two computerized production units and two automated packaging plants. The mill has its own jetty with facilities for speedy unloading of raw materials from ships. In addition, the unique barge loaders are capable of quick loading (capacity of 5,600 bags per hour) of the finished and bagged cement for delivery to the buyers. There are six silos within the mill premises to store clinker. These units are equipped with control elements to regulate humidity and temperature, which are vital for the shelf life of stored cement and cement-making ingredients. The Mill has two stand-by generators to provide electric power during phases of power supply failure of the national power grid. The Plant also has a well-equipped quality assurance and testing laboratory.

    Bashundhara’s “King Brand Cement” is well-known throughout Bangladesh. The weight of each marketed bag is always perfect due to the adoption of an automated packaging system. There is a laboratory, equipped with modern equipment within the Mill premises to conduct tests at each hour for every shift covering every stage of the production process. The most recent quality standards, namely BS and ASTM, have also been incorporated in this brand of cement. The factory’s environmental standards are high, thanks to regular inspections by the Company’s senior scientific staff members.

    The Company has been awarded the coveted ISO-9001 Certification in the year 2000 by the National Quality Assurance (NQA), registered by the National Accreditation of Certificate Boards, UK.

    3.2 Sales and Marketing:

    Bashundhara City, Level-16

    13/ka/1 Panthapath, Dhaka-1205, Bangladesh

    Phone : 880-2-8158025-34

    Fax : 880-2-9128319

    E-mail : bgc@bdcom.com

    3.3 Bashundhara Cement Sack Plant:

    In the 1970s, Bangladeshi cement producers had been using simple multi-wall paper sacks for packaging cement. Scarcity of basic raw materials for manufacturing cement such as lime stone, gypsum and inadequate industrial infrastructure had forced the country to import almost 90% of its requirement of cement till the late nineties, most of which used to come in paper sacks. With the commissioning of Meghna Cement Mills Ltd., a concern of the Bashundhara Group, the largest domestic cement plant in the country in January 1996, the nation’s cement industry leaped into a new era of self-sufficiency.

    An accelerated economy, spurred by a booming construction and housing industry, had made Bangladesh one of the most popular destinations for cement producers. With the arrival of several local companies and a few international cement giants in the field of cement production, there occurred a spectacular growth of output over the last 5 years. Coupled with it, the demand for cement packaging bags went up by mammoth proportions. At the peak of this demand cycle, Bashundhara’s paper sack manufacturing unit went into production in June 2000. At the beginning, this plant received orders from about 50 different cement producers, local and international.

    In June 2000, the first ever-pasted paper sack manufacturing unit was established within the premises of Hazrat Shahjalal Newsprint Industries Ltd., an enterprise of Bashundhara Group, situated at Meghnaghat  about 28 kms from the capital city of Dhaka. Windmill & Holsters of Germany – a world leader in the field, supplied the paper sack converting line. The high-speed sack line for manufacturing multi-wall cement sacks makes use of a strong plastic-type additional wall for added strength and prevention of moisture seepage. The manufacturing capacity of this unit is over 60 million multi-wall paper sacks per annum.

    Bashundhara Group takes pride in being instrumental in making Bangladesh self sufficient in the production of paper sacks so that the import of paper sacks comes to a halt. The buzzword was “Quality & Service” on which the entire manufacturing & marketing policy of the Bashundhara Group is based.

    The paper grade/quality of raw material is vital for bag performance. Experimental work has confirmed the fact that tensile energy absorption (TEA) of the paper can be used to predict bag performance. Bags, when dropped, are subjected to impact loads far to excess of their ultimate tensile strength. Only by dissipating this energy over a period of time can these tensile forces be contained. Therefore, the distance through which the tensile force acts is stretch and the total time must also be taken into account. The Swedish Kraft paper used by Bashundhara for making sacks gives a very high energy absorbing capacity. The adhesive used for pasting the sacks is a specially-developed modified potato starch imported from Holland to make room for firm bonding, even at high humidity levels. It is due to the factors noted above that the Bashundhara sacks performed better than most bags imported earlier in monsoon-prone hot and humid environment. Due to the excellent product quality, Bashundhara’s cement sacks are still in high demand and many cement manufacturers of the country have orders lined up with this plant. The plant is capable of printing any kind of logo/labels on the bags and there is a choice of several color combinations.

    3.4 Bashundhara Trading Company Ltd:

    The BTCL serves as the general trading arm of the Group. It supports the import, export, sales and marketing endeavors of the Group’s many enterprises.

    It helps develop marketing channels and methods. This unit also operates as a private trading company engaged in the acquisition of basic raw materials and finished products for private buyers- outside the domain of the Bashundhara Group. It was launched in the year 1993, initially to support backward linkages and marketing strategies for the Group.

    3.5 Bashundhara Industrial Complex Ltd:

    The Bashundhara Industrial Complex Limited was set up in the year 2000 as the second plant of Bashundhara’s cement producing concern, the Meghna Cement Mills Limited. It began production in 2002 and is now a profitable and viable enterprise of the Bashundhara family. It has immediate plans also to deal in trading, clearing & forwarding and shipping-related business. The BICL is now engaged in carrying out studies on a proposed project that will enable the Company to set up its own dockyards and shipyards in Chittagong, Bangladesh. At a later stage, the BICL has plans to get more intricately involved in inland water transport for movement of passengers and cargo within the country.

    3.6 Bashundhara Communication & Networks Ltd:

    Bashundhara Communication & Networks Limited (BCNL) is the telecom services provider arm of the Bashundhara Group. BCNL’s vision is “To Provide Quality Telecom Services at affordable cost to the people of Bangladesh”. BCNL proposes to build high-bandwidth networks to provide the various telecom services that are now in shortfall. BCNL seeks to provide a wide array of telecom services across Bangladesh that include Fixed Wireless Access (basic services), Mobile and Data over optical backbone in the medium term and to build its own International Gateway over the long term. BCNL would like to position itself as a convergent telecom services provider, with initial entry into Fixed Wireless Services and expanding into Mobile over the medium haul.

    3.7 Marketing Planning for 2005 of King Brand Cement:

    A target has been prepared of 2, 40, 00,000 Bags (1, 00,000 MT Per month) for 2005. The value of this target is Tk. 528, 00, 00,000. An expenditure budget has been calculated of Tk. 5, 28, 00,000, which is 1.00% of total sale. Growth has been taken over 115.50 % last year. Details planning and data are appended bellow.

    Sale in 2004:

    Quantity Daily Monthly Yearly
    In MT 1,546 46,405 5,56,863
    In Bags 30,936 9,28,105 11137260
    In Taka 68,06,103 20,41,83,100 245,01,97,200

    Target for 2005:

    Quantity Daily Monthly Yearly
    In MT 3,333 1,00,000 12,00,000
    In Bags 66,660 20,00,000 2,40,00,000
    In Taka 1,46,65,200 44,00,00,000 528,00,00,000

    Growth taken over 2004 (In Taka):

    2005 528,00,00,000
    2004 245,01,97,200
    Deference 282,98,02,800
    Ratio 115.50 %

    Expenditure Budget for 2005:

    Sp. Commission

    (65% of Total Target = 1,56,00,000 Bags. X Tk. 2)

    		 3,12,00,000
    Sales Promotion/Scheme

    (Ad, Gift, Conf.)

    		 1,00,00,000
    Sign Board

    (100 x Tk. 10,000)

    		 10,00,000
    Ad. On Double Decker 50,00,000
    Others 56,00,000
    Total Expenditure 5,28,00,000
    Exp. Ratio 1.00%

    Tk. 2.20 Per Bag

    3.8 Objectives:

    3.9 Strategy:

    (i) Quality:

    (ii) Price fixation:

    (iii) Outstanding:

    (iv) Problems & Suggestions:

    (v) Promotional Expenses / Schemes:

    Target has been taken total 1, 44, 00,000 bags in 6 months (60% of total target). Value of this target is Tk. 316, 80, 00,000, the budget of this scheme is Tk.52, 97,200 and ratio is 0.16 %. Each Dealer will get 01 scratch card for each 5000 bags in a month. The prize will be distributed through a program.

    Sl.No Name of Gifts Price Quantity. Value Remarks
    01 Car (Station Wagon) 5,00,000 2 10,00,000
    02 Motor Cycle 70,000 5 3,50,000
    03 Fridge 25,000 6 1,50,000
    04 Washing Machine 10,000 10 1,00,000
    05 Color TV 10,000 10 1,00,000
    06 Micro Woven 10,000 10 1,00,000
    07 DVD Player 4,000 25 1,00,000
    08 Box Fan 1,500 100 1,50,000
    09 Charger Light 1,000 100 1,00,000
    10 Wrist Watch 1,000 500 5,00,000
    11 Iron 500 965 4,82,500
    12 Prize Bond 100 1147 1,14,700
    Total Scratch Card 2880 32,47,200 2880 x 5000 Bags

    =1,44,00,000 Bags
    Expenses for Program(Dinner) 1000 250 Per 2,50,000
    Other Expenses for program (Artist ,Hotel Rent for Dealers) 3,00,000
    Paper Ad 75,000 24 insert 18,00,000
    Total Expenses in Jan – Jun’05 52,97,200
    Total Expenses in July – Dec’05 47,02,800 T-Shirt,Cap,Def. Gifts,Mason Conf. to be done.

    3.10 Marketing Mix:

    Marketing Mix is the set of controllable, technical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything that the firm can do to influence the demand for its product. Marketing mix is the set of marketing tools that the firm uses to persuade its marketing objectives in the target market.

    McCarthy classified these tools into four groups that he called the four P’s of marketing. The main possibilities can be collected into four groups of variables known the four P’s. These are given bellow:

    Marketing Mix:

    Direct mail, Telemarketing and Internet
    Public Relations
    Sales Fours
    Advertising
    Sales Promotion
    Promotion mix
    Offering mix
    Product

    Service

    Price
    Distribution Channels
    Company

    Marketing Mix Strategy

    Distribution Channels
     
     
     

     

     

     

     

     

     

     

     

     

     

     

     

     

    The Marketing Mix, a basic tool for marketing managers, is defined by Microsoft Encarta World Dictionary as, “Marketing mix is a mixture of marketing techniques, the particular mixture of marketing techniques, for example pricing, packaging and advertising, used to promote the sale of a product” (2000). Marketing mix is also known as the Four P’s. The Four P’s stand for Product, Price, Place and Promotion. This paper will look at the Marketing Mix by explaining what the Four P’s are and show how a business would use the mix to market a product or service. The Marketing Mix is used to market a product or service to establish what the Product, Price, Place and Promotion is. Marketing managers bring the elements of the Four P’s together, combining them to achieve a greater result from their combination and each of the individual effects of the Four P’s (Anderson, Vincze 2000).

    The Marketing Mix model (also known as the 4 P’s) can be used by marketers as a tool to assist in implementing the marketing strategy. Marketing managers use this method to attempt to generate the optimal response in the target market by blending 4 (or 5, or 7) variables in an optimal way. It is important to understand that the Marketing Mix principles are controllable variables. The Marketing Mix can be adjusted on a frequent basis to meet the changing needs of the target group and the other dynamics of the marketing environment.

    The Four P’s consist of the following:

    (i) Product:

    Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need is called Product. In includes physical objects, services, persons, places, organizations and ideas. “Historically, the thinking was: a good product will sell itself”. However there are no bad products anymore in today’s highly competitive markets. Plus there are many laws giving customers the right to send back products that he perceives as bad. Therefore the question on product has become: “Does the organization create what its intended customers want”? Define the characteristics of your product or service that meets the needs of your customers such as Functionality, Quality, Appearance, Packaging, Brand, Service, Support, Warranty.

    (ii) Price:

    The amount of money charged for a product or service or the sum of the values that consumers exchange for the benefits of having or using the product or service is known as Price. How much are the intended customers willing to pay? Here we decide on a pricing strategy – Do not let it just happen! Even if you decide not to ask (enough) money for a product or service, you must realize that this is a conscious decision and forms part of the pricing strategy. Although competing on price is as old as mankind, the consumer is often still sensitive for price discounts and special offers. Price has also an irrational side: something that is expensive must be good. Permanently competing on price is for many companies not a very sensible approach.

    (iii) Place:

    All the company activities that make the product or service available to target customers is known as Place. Available at the right place, at the right time, in the right quantities. Some of the recent major changes in business have come about by changing Place. Think of the Internet and Mobile telephones, Locations, Logistics, Channel members, Channel Motivation, Market Coverage, Service Levels.

    (iv) Promotion:

    Activities that communicate the product or service and its merits to target customers and persuade them to buy is known as Promotion. How are the chosen target groups informed or educated about the organization and its products? This includes all the weapons in the marketing armory – advertising, selling, sales promotions, public relations, etc. While the other three P’s have lost much of their meanings in today’s markets, Promotion has become the most important P to focus on. Advertising,Public Relations, Message, Direct Sales, Sales, Media, Budget etc. are part of the Promotion programme.

    The function of the Marketing Mix is to help develop a package (mix) that will not only satisfy the needs of the customers within the target markets but simultaneously to maximize the performance of the organization. There have been many attempts to increase the number of P’s from 4 to 5 P’s in the Marketing Mix model. The most frequently mentioned one being People or Personnel.

    Many people have already heard about the “4 P’s of Marketing”. Generally speaking, the so-called “Marketing Mix” is a framework which acts as a guideline for marketers to implement a marketing concept. It consists of a set of major decision areas that a company needs to manage in order to at least satisfy consumer needs. According to Kotler (1999) “The Mix is a set of controllable tactical marketing tools that the firm blends to produce the response it wants in the target market”. Hence, in an effective marketing programme all of those elements are “mixed” to successfully achieve the company’s marketing objectives.

    However, the 4 P’s approach has often been criticised in the past. Some critics for example argue that “It oversimplifies the reality of marketing management” (quoted in Jobber 1998).

    Furthermore, in the context of relationship marketing (to consumers) or key-account management (in industrial marketing), it could be argued to add “Partnerships” as an additional “P” to the marketing mix as well. Main reason for this addition would be the growing focus in marketing towards long-term orientation that needs to be considered in most marketing concepts.

    As one can observe from various marketing related discussion boards on the net (or from the marketing literature), there is no clear “yes” or “no” regarding the usefulness of any possible extension to the traditional 4 P’s approach in marketing.

    The biggest advantage of this discussion however is probably that those who discuss it deepen their own knowledge – not only about the marketing mix in particular but also about marketing in general.

    Note that four P’s represent the seller’s view of the marketing tools available for influencing buyers. From a buyer’s point of view, each marketing tools is designed to deliver a customer benefit. Robert F. Lauterborn suggested that the seller’s four P’s correspond to the customer’s four C’s.

     

     

     

     

    3.11 The Reasons of Buying:

    Sr.No. Particular % of Cases
    1 Brand Loyalty 10%
    2 Reasonable Price 5%
    3 Customer Demand 25%
    4 High Quality 60%

     

     

     

    3.13.12 Price Components:

    Sr. No. Name of the Brand Commission Rate with Carrying cost in the Dhaka city
    1 King Brand No 274 Tk.
    2 Holcim Black 5 Tk. 285 Tk.
    3 Holcim Red 5 Tk. 301 Tk.
    4 Holcim Black Developer 266 Tk.
    5 Holcim Red Developer 288 Tk.
    6 Scan 5 Tk. 286 Tk.
    7 Cemex super Shakti 5 Tk. 254 Tk.
    8 Anwar cement 6 Tk. 254. Tk.
    9 Saven Rings 2 Tk . 256 Tk.
    10 Tigeer 5 Tk. 258 Tk.
    11 Crown 4 Tk. 265 Tk.
    12 Shah 3 Tk. 258 Tk.
    13 Mir 2 Tk 257 Tk.
    14 Fresh 2 Tk. 255 Tk
    15 Akij – 267
    16 Primer 6 Tk. 255

    3.13 Place Components:

    Sr. No. Name of the factory P.Capacity Million M.T. Locatiom
    1 Akij Cement .333 Nabinagar, N. Gonj
    2 Aman Cement .210 Ullaphara, Sirahgonj
    3 Anwar Cement .500 Gazaria. Munshigonj
    4 Bangla Cement .030 Mahmudnagar, N.Gonj
    5 Bangal Tiger Cement .210 Palash, Nr shindig Dhaka
    6 Cemex(BD) Ltd. .450 Madangonj, Dhaka
    7 Hedielbarg(Scan= Rubi) 1.85 katchpur
    8 Metropalitan Cement .80 Mukterpur, Dhaka
    9 M.I Cement .420 Mukterpur, Dhaka
    10 Mir Cement .100 Murapara Rupgonj
    11 Modern Cement .210 Meghna Bridge, Dhaka
    12 M.T.C. Cement .450 Meghnaghat, Dhaka
    13 Padma Cement .180 Sahjadpur, Sirajgonj
    14 Premeier Cement .600 Mukthpur, Dhaka
    15 Rowsaan Cement .100 B.C.C Ind. Sirajgong
    16 Salam Cement .050 B.C.C Ind. Sirajgong
    17 S.C.O Cement .120 Gajaria, Munshigonj
    18 Seven Circles Cement .390 Kaligonj, G Pur Dhaka
    19 Shah Cement 1.200 Mukthpur, Dhaka
    20 Sirajgong Cemenrt .100 Bhelkuchi, Sirajgong
    21 Unique Cement .300 Meghnaghat, Dhaka

     

     

     

     

     

     

    3.14 The Reasons of Not Buying:

    Sr. No. Particular % of Cases
    1 Lack of Advertisements 10%
    2 Lack of Distribution 5%
    3 Doubt About Quality 20%
    4 High Price 65%
    Sr. No. Particular % of Cases
    1 Strongly Agree 10%
    2 Agree 60%
    3 Disagree 20%
    4 Strongly disagree 65%
    Sr. No. Particular % of Cases
    1 Excellent 25%
    2 Satisfactory 45%
    3 Average 25%
    4 Below Average 5%
    Sr. No. Particular % of Cases
    1 Strongly agree 25%
    2 Agree 60%
    3 Disagree 10%
    4 Strongly disagree 5%
    Sr. No. Particular % of Cases
    1 Very High 60%
    2 High 25%
    3 Reasonable 10%
    4 Very Cheap 5%
    Sr. No. Particular % of Cases
    1 Strongly Agree 20%
    2 Agree 55%
    3 Disagree 20%
    4 Strongly disagree 5%
    Sr. No. Particular % of Cases
    1 Agree 25%
    2 Disagree 65%
    3 Strongly disagree 10%
    Sr. No. Particular % of Cases
    1 Strongly Agree 20%
    2 Agree 55%
    3 Disagree 20%
    4 Strongly disagree 5%
     
    1 Strongly Agree 25%
    2 Agree 55%
    3 Disagree 10%
    4 Strongly disagree 10%

    3.15 Discussion regarding Product Components:

    From dept interview, it is explored that end user purchase their cement based on recommendation of the Architect’s opinion, retailer’s pushing and some other factors including weight, price, depend on use and loyalty towards the particular brand. It also indicates that Meghna Cement has a lack of brand image.

    Some other findings are that quality of King Brand Cement is better but the price is so much high and for the high price it lost its market value.

    Here, it is explored that product is not available, price is high compared to that of competitors is fluctuating every day. There is no credit facility from the company. The company can not deliver product on time and factory location is so much far from the Dhaka city.

    In context of packaging, it is explored that the development of the packaging system is essential. For some reasons end user think that retailers mix less quality cement with the bag and sometimes end user also think that cement weight is not accurate. It means that 50 kegs cement is not there. Another problem is paper sack- during rainy season cement looses its quality.

    3.16 Current Distribution Network in Dhaka city:

    After producing the cement from the factory dealers purchase the product from the company to sale to the retailers and their customers. And dealer can always sell the product to the retailer and developer by the direction of companie’s sales officer. After purchasing the product, retailer sells to the developer and end-users. Dealer also sells the product individually to any kinds of customer. On the other hand company’s sales officer can direct sell to the dealer, retailer, developer and the end-user. Companie’s sales officer also can sell the product directly from the factory. The Current Distribution Network in Dhaka city of King Brand Cement is done by above maintaining procedure.

    3.17 Dealers list at Dhaka Zone of the Meghna Cement Mills Ltd.:

    S.N. Name of the Dealer Area Contact No
    1. Dhaka Builders Mirpur 8010054
    2. United Brothers Pagla 7415276 7415191
    3. Dhaka Builders Pagla 7604560 7415035
    4. Sheema trading Pagla 7604263 7415100
    5. Mintu Enterprise Pagla 7415112 7415722
    6. Madina Trading Pagla 7415116 7604425-26
    7. Rita Traders Pagla 7604771
    8. Mollah & Brothers Pagla 7415166 7604273-74
    9. Masud Trading Pagla 7415282 9337311

    3.18 Discussion Regarding Place Components:

    After analyzing the secondary data, it revealed that 21 cement factories are near the Dhaka city and it is also mentionable that the market leader of Dhaka Shah Cement locates near Dhaka city.

    In dept interview, retailers have said that they are not getting cement on time in the cement sector. On time delivery is important, for example, a builder wants to mould a roof on Friday,therefore, he informes to the retailer on Wednesday or Thursday for a particular brand. Then retailer contacts with dealer or company to get the product. If company or dealer fails to supply the product just in time, then retailer has to supply the product which is available on that time.

    After analyzing the current distribution network it is found that, at first dealer gets the product from factory and sells to the retailer, developers and end user.

    Another findings is that company’s sales representatives  collect order from the developers and retailers. They place those order to the dealers then the dealer acquires some amount of profit, but if it sells on credit that time risk is totally on company. Therefore, it is clear that, current distribution channel has created problem.

    Chapter 04

    4.Conclusion

    King Brand Cement of Bashundhara Group was a pleasant experience while doing a research on identify

    " 107,"

    DRAGON FRUIT & IT’S BENEFITS

    ","

    Objectives

    1. To find out the possibility of starting the business in the country.
    2. A brief view on the important elements needed for Dragon Fruit business.
    3. Knowing the aspect and potentiality of Dragon Fruit in the country.
    4. The effective and efficient measures to improve and make more scope of this business in Bangladesh.

    Methodology

    The preparation of report regarding the feasibility study of Dragon Fruit Corporation involves the following steps:

    To prepare the report we have to collect the information from Secondary sources.

    Secondary Sources:-

    Analyze and research of all data is done on next stage to seek out the related information by using flowcharts and diagrams.

    Finally, we prepare the feasibility study report by analyzing all information in some specific areas like management, technical, marketing and financial.

    Limitations

    Preparation of feasibility study of Green Bio-Diesel Corporation involves a number of limitations in its various stages. While preparing the report we face the following problems, which we tried best to avoid:

    Scope

    There is good scope of our business. Because our business product is the Dragon Fruit, which is new to the country. The followings are the scope of our business:

    Part-1

    Business

    Introduction

    1.1. Background: What is Dragon Fruit?

    Pitaya Fruit, Pitahaya Fruit or commonly known as the Dragon fruit is among the most nutritious and wonderful exotic fruits. It is a favorite to many, particularly people of Asian origin. It features a mouthwatering, light sweet taste, an intense shape and color, not forgetting its outstanding flowers. In addition to being tasty and refreshing, this beautiful fruit boasts of a lot of water and other vital minerals with varied nutritional ingredients.

    Due to its vital nutrients, the Pitaya fruit is suitable for all diets as it supplements fiber, which is best for laxative and the liver. Similarly, people who have high blood pressure, diabetes and obesity have attested to the fruit’s goodness. Recent findings show that if an obese person eats a Pitahaya fruit on a regular basis, it naturally reduces the weight considerably, creating a well-balanced body without compromising on the individual’s health.

    1.2. Why the Dragon Fruit?

    Dragon fruit, a new type of fruit has now entered into city’s leading shopping malls. Dragon fruit (Hylocereousundatus) is a member of Cacti or Cactaceae family native to Central America, now grown in many parts of the world including Bangladesh. The fruit is tasty and has nutritious values. It contains a good amount of vitamin C, B, minerals such as Calcium, etc. Dragon fruit is a rich source of antioxidant, which prevents cancer. The fruit also helps in reducing blood cholesterol and blood sugar. Among many other qualities Dragon fruit helps in reducing body weight.

    In fact, Prof. Dr. Abdur Rahim, Director, Germplasm Center, Bangladesh Agricultural University, Mymensingh had brought this fruit to Bangladesh and started researching on Dragon fruit in 2007 to examine up to what extent this fruit could be adapted under the soil and climatic condition of Bangladesh. In addition, he came out successful in growing Dragon fruit in Bangladesh. Now that two types of Dragon fruit, red and white received certification from the relevant government department.

    In addition, to expand cultivation of Dragon fruits, the Department of Agricultural Extension (DAE) may undertake a project to popularize Dragon fruits and to keep on surveying the market of this new fruits so that farmers may not sustain loss after cultivating Dragon fruits on their lands.

    Social/Health Issues:

    Environment Issues:

    1.3. Company’s Vision:

    A Vision Statement is sometimes called a picture of a company in the future but it is so much more than that. The vision statement is like inspiration, the framework for all the strategic planning.

    A vision statement may apply to an entire company or to a single division of that company. Whether for all or part of an organization, the vision statement answers the question, “Where do we want to go?”

    What we are doing when creating a vision statement is articulating dreams and hopes for business. It reminds us of what we are trying to build.

    Our business- “Paramount Fruits Ltd.’s” vision is to make people healthy by making the habit of eating fruit every day.

    1.3. Company’s Mission:

    A Mission Statement is a brief description of a company’s fundamental purpose. A mission statement answers the question, “Why do we exist?”

    The mission statement articulates the company’s purpose both for those in the organization and for the public.

    Our company- “Paramount Corporation’s” mission is-

    1.2. Uniqueness of the Product:

    Dragon Fruitis good food for health benefit. It helps to lower blood glucose levels in diabetes. It prevents formation of cancer causing free radicals. In addition, helps moisturize and smoothen skin and decrease bad cholesterol level. Dragon fruit helps improve appetite. It can enhance the body metabolism because of its protein content. Dragon fruit helps improve digestion and reduce fat. It helps maintain the health of the eyes. In addition, helps strengthen the bones and teeth. Helps in tissue development. It promotes healing of cuts and bruises.

    Part-2

    Management

    Aspect

    2.1. Promoters and their qualifications:

    Our business promoters and their qualifications are as follows:

    Name Age Educational Qualification Educational Institutions
    Md. Ashiqur Rahman 28 BBA, MBA University of Dhaka
    Anika Islam 26 BBA, MBA BRACK University
    Zahidur Rahman 28 BBA, MBA University of Dhaka
    Kh. FiroozeNawer 27 BBA, MBA North South University

     

    2.2. Share Holding of the Owners:

    Name Share
    Md. Ashiqur Rahman 25%
    Anika Islam 25%
    Zahidur Rahman 25%
    Kh. FiroozeNawer 25%

     

    2.3. Legal form of business:

    “Paramount Fruits Ltd.’s” is a partnership business and it was established in 2010. Registration of partnership business is not mandatory. Therefore, we are not registered.

    2.5. Consultant and advisor:

    Mr. Abdur Rahman is the Consultant as well as advisor of the firm. He has long experience on working in agricultural sector. He has done so many courses based on agriculture of the country.

    2.6. Auditor:

    Our Green Bio-Diesel Corporation is a partnership business. Here all the partners are having the equal distribution in the capital that is all the partners are providing the capital equally in the business. In addition, the total capital invested is enough for our business. Therefore, there is no need to go for issuing share in the outside market. For that reason, external auditor is not required for auditing and internal auditor is enough for our business.

    2.7. Human Resource Management:

    Category Staffing Need Monthly Salary per person (tk.) Annual Salary (tk.)
    Marketing Manager 01 20,000 2,40,000
    Commercial Manager 01 18,000 2,16,000
    Administrative Officer 01 20,000 2,40,000
    Production Manager 01 16,000 1,80,000
    Agricultural Advisor 01 16,000 1,92,000
    Supervisor 02 8,000 1,92,000
    Labor 10 4,000 4,80,000
    Total= 26   =17,40,000

     

    Part-3

    Technical

    Aspect

    3.1. Introduction:

    Paramount FruitsLtd., is a Dragon fruit cultivator of Bangladesh. We focus upon the promotion of one nutritious fruit that provides health benefit and holds a particular promise for improving local economies and environments. Dragon fruit plant is a night flowering vine-like cactus. The beautiful yellowish flower is about 1 foot long and 9 inches wide, bell-shaped and very fragrant; they open during the early evening and wilt by daybreak. The fruit is oblong and has a unique appearance because of its bright pink to red, green-tipped overlapping scales rind. The edible portion is white or red, with hundreds of tiny black seeds. Its taste is sweet and juicy similar to that of pears, kiwis and watermelons. Dragon fruit is now grown commercially in Asia in places like Philippines, Thailand, and Vietnam and most recently in Bangladesh.

    3.2. Cultivation Technology:

    Dragon fruit is an agriculture-based product. The cultivation technology is as almost same like we use in cultivating other domestic crops. There is not much difference, just that Dragon Fruits are from the cactus family, and they need a lot of water to be given to them for proper growth. Obviously, there are other differences but they are all very minor. Our product, Dragon fruits are from the cactus family, they need more water than our domestic crops. Therefore, our first concern is water. Than we need to apply some bio-fertilizers, like- smashed cow-bones, shattered wood coal, and mainly the chicken residue. Every month the fertilizers are needed to apply with much water. We also need to apply pesticides in order to kill the insecticides that are harmful for the plants.

    The followings are the growing conditions-

    Frost Tolerance: Hardy to 30°F and lower if well watered the day before.

    Optimum Temperatures: 65°F—77°F.

    Heat Tolerance: Prolonged temperatures above 90°F can cause sunburn and above 100°F can kill the plant, unless shaded.

    Sun Exposure: Full sun; if sunburn occurs, then provide 15% – 30% shade.

    Watering Needs: Drought tolerant. Commence watering in mid-April or after winter rains are over and soil is dry, then once or twice per week with drip irrigation, enough to thoroughly moisten but not waterlog the soil around the roots.

    Growth Habits: Sprawling, tree-like cactus up to 30 feet tall with branches up to 10 feet long, each with 2-4 ribs; areoles along each rib are 0.8 to 1.2 inches apart, each with 1 to 3 reddish, 0.1 to 0.5 inch long spines.

    Blooming Habits: Huge (up to 12” across) snow-white nocturnal flowers.

    have yellow or pink outside petals and copious amounts of yellow pollen in the center, and open just one night, closing around noon the following day.

    Fruit: The fruit is nearly round to eggshaped,2 to 6 inches in diameter, weighing from oz. to 4 lbs., with a thick skin commonly pink to deep magenta or red and with protruding scales of varying red, pink or green color. The edible pulp has a crisp texture reminiscent of kiwifruit, while possessing a distinctly different sweet and sometimes lemony flavor.

    3.3. Utilities:

    In our cultivation process there are some equipment that will be used. Like we need a tractor to plow the land, we need spades, we need a motor to supply water to the land, and some other common tools that are used in domestic cultivation process.3.5. Information and communication technology

    We will use both electronic and print media for advertisement and to communication with the people as well as with the customer. We will have our own website and e-mail address. Our website address is www.paramount-fruits.com.bd.

    Beside these use will have a hotline number, a tax number and cell phone number. By these customers can communicate with us.

    3.6. Research and development

    In our project, we have a laboratory for research and development. Our agricultural specialistwill always try to improve our product.

    3.7. Product and Services

    Our product is mainly the dragon fruit. But there are many ways to consume it. They are as follows:

    This sweet and sour salsa is the perfect toppingfor B-B-Q salmon, chicken or pork chops. Or serve it like any salsa as a dip with tortilla chips.

    Ingredients

    Prep Time: 10 minutes

    Cook Time: 10 minutes

    Serving Description: 1 pie slice

    Servings: 12

    Directions

    *Any combination of fruit can be used for this recipe.

    Combine olive oil, lime juice, garlic and shrimp in a bowl; toss to coat shrimp.Arrange lettuce leaves in 4 salad bowls. Divide ½ of the avocado cubes among the 4 bowls. Add equal portions of the marinated shrimp followed by the rest of the avocado. Garnish each bowl with equal amounts of dragon fruit. Serve with crusty garlic bread.

    Ingredients

    Preparation

    In a large saucepan, sprinkle the unflavored gelatin over cold water, let stand 1 min. Stir over low heat until gelatin is completely dissolved, about 5 min. Add dragon fruit pieces, sugar and lemon juice. Bring to a boil and simmer for 10 minutes, stirring occasionally and crushing the dragon fruit pieces slightly. Spoon into jars; cool slightly before refrigerating. Chill until set, about 3 hours. Store up to 4 weeks in refrigerator or to up to 1 year in freezer. Makes 4 cups jam.

    Services or Health Benefits of Dragon Fruit::

    3.8. Project Location

    Our project is located in near to Dhaka. It’s in Savar, Thana-Ashulia, Union- Shimulia, and Village- Marichkata. The total area of our project is about 10 acres.

    3.9. Supplies and sources of Raw materials

    As we need to use the dragon fruit seed as our raw material. We will collect our seeds from Dept. of Horticulture, Bangladesh Agricultural University Germplasm Centre (BAU germplasmcentre), Mymensingh. As they are researching and developing the dragon fruit seeds and also sell them to those interested in culvation of Dragon fruit.

    3.10. Structure and civil work

    The building structure and civil construction works of our project consists of anwarehouse for raw material, an office building and a tractor shade. Some other essential works such as water supply system, underground water reservoir, reserve tank, drainage wall and gate are also to be constructed for the project.

    Part-4

    Marketing

    Aspect

    4.1. Current Scenario of Bangladesh

    Bangladesh is a developing country. Here most of the people doesn’t have enough ability bye expensive fruits for them. At present the dragon fruit is sold 500/600 tk. Per kg, because the fruits are imported. But as we will grow it in our country, we can sell it in a much lower price than the existing price. As it is the first time we are going to produce this fruit, gradually the price will be more decreased in order to reach in every class of customers.

    4.2. Situation Analysis

    4.2.1. Market summary:

    Present situation of Dragon fruit in the market is not good. The high price of this fruit is a big obstacle in reaching all classes of consumers. Only the high class consumers can have it. So we have a plan to provide this fruit all over the country with a target to capture middle to upper class people at the primary level. Present situation is perfect for this business. Dragon fruit cultivation is quite a new idea for our country so we will introduce it to the general people of Bangladesh.

    4.2.2. SWOT analysis:

    The SWOT analysis shows the Strength, Weakness, Opportunity and Threats of a business. They are as follows:

    Strengths:

    Weaknesses:

    Opportunities:

    Threats:

    4.2.3. Competitor analysis:

    At present there are very few competitors in this sector. The demand of this product is increasing day by day. But supply is not increasing. So it’s a big opportunity to enter into the market. But according to Michael E. Porter’s five forces model, there can be threats of-

    Our company is completely new so we need time to reach the level from where we can compete our competitor.

    4.3. STP Analysis

    4.3.1. Market Segmentation:

    Under these two broad segments of customers we expect to render the following services:

    4.3.2. Target Market:

    We have targeted our market on the Geographic basis. Under this basis we are now mainly targeting the customers of the capital city. As there are many super shops here. Such as the- Agora, Mina Bazar, Swapno, SSMart, PQS etc. At the preliminary stage we will supply our product to those super shops and gradually we will capture the local market.

    4.3.3. Market positioning:

    We promise our customer that we give our first priority to maintain product quality which is differentiable from other existing product sacrificing a little cost comparable to others. Maintaining quality and its value we will be able to maintain a faithful relationship with our customer.

    4.3.4. Marketing Mix analysis:

    Product:

    Price:-

    For several reason we take this policies which are:-

    Place ( type of distribution channel):-

    Promotion:-

    Since we are using direct marketing so the advertisement is given in the following way:-

    Part-5

    Financial

    Aspect

    5.1. Cost of the project

    To establish a business how much money is required is called cost of project business.Paramount Fruits Ltd. is a newly established business. Total estimated cost of the project is 1,00,000.Different segment of cost is given below.

    Cost of the project
    Cost of the project Taka
    Land and site development 50,00,000
    Add: land development cost 6,00,000
    Civil construction and building 28,00,000
        Water pump and preserver 2,00,000
    Other assets
    Minimum cash balance 2,00,000
    Delivery- truck 10,00,000
    Office equipment 1,00,000
        Preliminary expenses 1,00,000
    Total= 1,00,00,000

    5.2. Means of Finance

    Means of Financing Taka
    Total Capital Requirement 1,00,00,000
    Long term loan 60,00,000
    Equity supplied by the owners 40,00,000
    Debt Equity Ratio 60:40

    5.3. Working capital requirement

    Particulars Year 1(TK) Year 2(TK) Year 3(TK)
    Raw materials (seeds) 3,00,000 3,32,500 3,40,000
    Lobar cost 4,80,000 5,00,000 5,10,000
    Utilities 50,000 51,500 53,500
    Others – – –
    Total 8,30,000 8,84,000 9,03,500

    5.4. Cost of production                                                                       

    Particulars Year 1 Year 2 Year 3
    Production per year 30,000 35,000 40,000
    Per plant seed cost 10 9.5 8.5
    Raw material 3,00,000 3,32,500 3,40,000
    Labor cost 4,80,000 5,00,000 5,10,000
    Over head
    Supervisor supply 1,92,000 2,00,000 2,06,000
    Depreciation 1,00,000 1,00,000 1,00,000
    Utility 50,000 51,500 53,500
    Water supply 10,000 10,000 10,000
    Power 12,000 14,000 15,000
    Total= 11,94,000 12,08,000 12,34,500

    5.5. Projected Income Statement

    The financial reports are prepared in a yearly basis. They are intended to be comparable with each other. The following is the Projected Income Statement of Paramount fruits ltd.

    Projected Income Statement

    Particulars Year 1(TK) Year 2(TK) Year 3(TK)
    Sales 28,00,000 31,26,600 36,00,000
    Direct Cost of Sales 11,94,000 12,08,000 12,34,500
    Other $0 $0 $0
    Total Cost of Sales 11,94,000 12,08,000  12,34,500
    Gross Margin 16,06,000 19,18,600 23,65,500
    Gross Margin % 57.36% 61.36% 65.70%
    operating Expenses
    Sales and Marketing and Other Expenses 80,000 80,000 80,000
    Depreciation 0000 0000 0000
    Utilities 50,000 51,500 53,500
    Other 20,000 20,000 20,000
    Total expenses (1,50,000) (1,51,500) (1,53,500)
    Income from operation(EBIT) 14,56,000 17,67,100 22,12,000
    Non-operating Expenses:
    Interest Expenses (Long term) (8,40,000) (7,96,561) (7,47,040)
    Income before tax(EBT) 6,16,000 9,70,539 14,64,960
    Tax paid (40%) (2,46,400) (3,88,216) (5,85,984)
    Net Profit 3,69,600 5,82,324 8,78,976
    Net Profit/Sales 13.20% 18.63% 24.42%

    5.5.1 Loan Repayment Schedule:

    Long-term Loan= tk. 60,00,000.  Interest Rate= 14%.  Time= 10years

    End of year Beginning balance Installment Interest Principal Payment Ending balance
    1 60,00,000 (11,50,281.25) 8,40,000 (3,10,281) 56,89,719
    2 56,89,719 (11,50,281.25) 7,96,561 (3,53,721) 53,35,998
    3 53,35,998 (11,50,281.25) 7,47,040 (4,03,242) 49,32,757
    4 49,32,757 (11,50,281.25) 6,90,586 (4,59,695) 44,73,061
    5 44,73,061 (11,50,281.25) 6,26,229 (5,24,053) 39,49,009

    5.6. Projected Balance Sheet

    The following is the projected balance sheet of Paramount fruits ltd.

    Projected Balance Sheet

    Particulars Year 1 Year 2 Year 3
    Assets (TK) (TK) (TK)
    Current assets:
    Cash 2,59,319 2,28,322 2,31,733
    Total current assets 2,59,319 2,28,322 2,31,733
    Fixed assets
    Land 56,00,000 56,00,000 56,00,000
    Building 28,00,000 28,00,000 28,00,000
    Water pump 200,000 200,000 200,000
    Office Equipment 1,00,000 90,000 80,000
    Truck 10,00,000 9,00,000 8,00,000
    Preliminary expense 1,00,000 1,00,000 1,00,000
    Total fixed assets 98,00,000 96,90,000 95,80,000
    Total assets 1,00,59,319 99,18,322 98,11,733
    Liability and owners’ equity
    Long term loan 60,00,000 56,89,719 53,35,998
    Repayment (3,10,281) (3,53,721) (4,03,242)
    Total long term liability 56,89,719 53,35,998 49,32,757
    Owners’ equity:
    Capital 40,00,000 40,00,000 40,00,000
    Retain earnings 3,69,600 5,82,324 8,78,976
    Total owners’ equity: 43,69,600 45,82,324 48,78,976
    Total liability and owners’ equity 1,00,59,319 99,18,322 98,11,733

    5.7. Retained Earnings Statement

    Particulars Year 1 Year 2 Year 3
    Retain earning(beginning date) 60,00,000 56,89,719 53,35,998
    Earnings after tax 3,69,600 5,82,324 8,78,976
    Retain earning as on closing date 3,69,600 5,82,324 8,78,976

    5.8. Risk Analysis

    We have some risk associated with the project. They are given below:

    5.9. Social cost Benefit Analysis

    Particular Year 1 Year 2 Year 3
    Total cost of production 11,94,000 12,08,000 12,34,500
    Direct Cost of Sales 11,94,000 12,08,000 12,34,500
    Equipment cost 1,00,000 90,000 80,000
    Land cost 56,00,000 56,00,000 56,00,000
    Buildings 28,00,000 28,00,000 28,00,000

    Benefits-

    Increased of consumer satisfaction- As there are health benefits of this fruit, people must have a good return by consumin

    " 108,"

    E GOVERNMENT MODEL OF PUBLIC SERVICE

    ","

    E-Government model through ICT of public service delivery was started in South Africa first time, for the preferred as channel for citizen-centered service delivery. It means to provide quality services to the citizens of its country. In this paper we will study the role of E-government within developing country in the South Africa with the help of case study.

    First of all we will consider what is E-government?

    E-Government

    E-Government (short for electronic government, also known as digital government, online government or transformational government) is a diffused neologism used to refer to the use of information and communication technology to provide and improve government services, transactions and interactions with citizens, businesses, and other arms of government.

    Delivery models and activities of e-Government

    The primary delivery models of e-Government can be divided into:

    Within each of these interaction domains, four kinds of activities take place:

    These types of activities may be performed but not may be that all activities are performed by all the countries. Some have greater but some have less

    Primarily purpose of introducing this model is to direct access to the Government. So improve the efficiency of public services delivery in South Africa.

    This model is based on case study research, focused on one of the governments primary service delivery programmes – social grants, as mentioned in case study.

    South African Social Security Agency (SASSA) was established as an extension of government delivery arm that administers the delivery of social grants to the poorest of the poor in South Africa. SASSA’s

    Vision and mission is aligned with several Batho Pele principles.

    Batho Pele which literally means “people first”.

    Introduction of this Model

    Batho Pele & Public Service Delivery in South Africa. Batho Pele is South Africa’s constitutionally mandated public service delivery philosophy. This model ensures that all the citizens can hold public servants accountable for the levels of service receive from government. The expected transformation in service delivery is better comprehended on the reflection that South Africa has only been a Democratic country since 1994.

    Here we look into background of this model. The path of service delivery transformation formally began in 1995 with the release of the White Paper on the Transformation of Public Service. The WPTPS established the institutional framework that could guide the introduction of new policies and the implementation of the new constitutional mandates. It was shortly followed in 1997 by the White Paper on Transforming Public Service Delivery, labeled as the Batho Pele White Paper. The Batho Pele White Paper specifically aimed at promoting integrated and seamless public service delivery. This was on the basis of the Batho Pele philosophy.

    Batho Pele advocates nine principles to guide public

    Servants;

    On the other hand South Africa, through its Center of Public Service Innovation (CPSI), places significant Importance to initiatives to transform government’s way of working through ICT – a notion commonly known as E-government / e-governance.

    E-Government & E-Governance

    The terms e-government and e-governance are often used to describe a government’s use of Information and Communication Technology (ICT) to render services to its citizens. There is a debate in research community about these two terms of E-government and E-governance.

    E-governance can be defined as “the use of emerging information and communication technologies to facilitate the processes of government and public administration”

    E-government can be defined as “the use of Information technology to support government operations, engage citizens, and provide government services”.

    In the definition of e-governance, we see that it focuses on the use of ICT to assist the administration and management of Government.

    On other hand in the definition of e-government we see that it focuses on the use of ICT to provide the services in the support of government operations for the public service delivery of people of that country.

    The dominant models for e-government find their roots in public management models and e-business models. While researchers of e government differ on the rights, privileges and obligations of clients, customers and Citizens. They generally concur that e-government move through stages to reach maturity. Notwithstanding, the successful initiatives are hard to come by. This realization led to the very important and underlying concern: are government ICT technological innovations adhering to the principles of ‘people first’, so to say, are the government ICT technological innovations enabling the improvement of service delivery in South Africa?

    This case study also tells us about the understanding by focusing on the government agency responsibilities for one of the key service delivery programs the South African Social Security Agency, SASSA.

    A case study of a government department, the South African Social Security Agency (SASSA), was adopted investigate the phenomenon of e-government will be studied in the context of Batho Pele. Since the each government service is measured against the same principles that are defined in Batho Pele. Applicability of this model can be drawn to other government units.

    In this case study the data was collected by different ways, through structured face-to-face and telephonic interviews with people involved in delivering an ICT system to the business units of the South African Social Security Agency (SASSA).

    Pros/Advantages/Merits of this Model

    Any thing is not perfect in this universe except God. So every model is having both characteristics of merits and demerits. Similarly here we are using the E-government model which was used in South Africa for public service delivery.

    We know that it is very poor country and not so developed. So many South Africans do not have direct approach to public services which are supplied by the Government as stated in the case study.

    Following may be the major advantages of this model.

      1. Equally distribution of services

    Batho Pele aims to distribute the services equally among the public. Not any differentiation on the basis of race, gender, citizen, distance etc. its mean that every one has right equally of public services

      1. Access to information

    This model also explains that the citizen has easily access to the information about the Government performance and other activities so there may be accountability in such a manner.

      1. Quality services

    Access to information services empowers citizens and creates value for money, quality services.

      1. Reduction of Unnecessary expenditure.

    When there will be e-government so easily information available about every thing of government and government institution.

    It reduces unnecessary expenditure for the citizens. Questions that can generally be answered during the interview can revolve around what ICT initiatives are being used to increase the accessibility of the service or product and how accessible these initiatives are to communities who don’t have the required ICT infrastructure.

      1. Providing information

    Availability of information with regards to products and services should

    Not only be at the service point, but should also strive to increase the availability of products and services to the public who are far away from those service points The main area of focus would be to increase the Availability of information to the public who are far away From service points.

    ICT is used as a business support tool, and since the business of government is to deliver a public Service, ICT supports public service. The implementers of these ICT services will thus be measured against the benchmarks of how well the public service was delivered.

    Thus we should have to carefully analyze the support of use of ICT within the government department or agency. This sensitivity would greatly influence the interpretation of the text collected during the interviews.

      1. Cost effective

    It is convenient and cost-effective for businesses, and the public benefits by getting easy access to the most current information available without having to spend time, energy and money to get it.

    E-government helps simplify processes and makes access to government information more easily accessible for public sector agencies and citizens.

    The anticipated benefits of e-government include efficiency, improved services, better accessibility of public services, and

      1. Transparency

    We see that due to use of this model transparency occurred. Due to the whole connected system through internet technology, every information is available for all.

      1. Accountability

    Study approved that due to E-government, there is greater accountability on each and every thing because all the information is available to every one. So public knows the activities of government. So there is a accountability on government by public and other institutions and citizens.

      1. Democratization

    Through e-government the greater citizen can participation upon political issues. They can connect themselves to politicians through internet.

    This model gives the more transparent government, allowing the voters to see the effect of their representatives. What they are doing and what they are not doing in right manner.

    Public can become more aware about the government activities and they can make best decision about their future.

      1. Speed, efficiency, and convenience

    E-government allows citizens to interact with computers to achieve objectives at any time and any location, and eliminates the necessity for physical travel to government agents sitting behind desks and windows. Improved accounting and record keeping can be noted through computerization, and information and forms can be easily accessed, equaling quicker processing time. Individuals with disabilities or conditions no longer have to be mobile to be active in government and can be in the comfort of their own homes.

    This model was accepted warmly, the young people who were not participating in political issues before but now they are too participating is national level issues due to e-government.

      1. Risks

    There are many considerations and potential implications of implementing and designing e-government, including disintermediation of the government and its citizens, impacts on economic, social, and political factors, vulnerability to cyber attacks, and disturbances to the status quo in these areas.

      1. Hyper-surveillance

    Increased contact between government and its citizens goes both ways. Once e-government begins to develop and become more sophisticated, citizens will be forced to interact electronically with the government on a larger scale. This could potentially lead to a lack of privacy for civilians as their government obtains more and more information on them. In a worse case scenario, with so much information being passed electronically between government and civilians, a totalitarian-like system could develop. When the government has easy access to countless information on its citizens, personal privacy is lost.

      1. Cost

    Although “a prodigious amount of money has been spent” on the development and implementation of e-government, some say it has yielded only a mediocre product. The outcomes and effects of trial Internet-based governments are often difficult to gauge or unsatisfactory.

      1. Lack of secrecy

    Although internet-based governmental programs have been criticized for lack of reliable privacy policies, studies have shown that people value prosecution of offenders over personal confidentiality. Ninety percent of United States adults approve of Internet tracking systems of criminals, and fifty-seven percent are willing to forgo some of their personal internet privacy if it leads to the prosecution of criminals or terrorists.

      1. Inaccessibility

    An e-government site that provides web access and support often does not offer the “potential to reach many users including those who live in remote areas, are homebound, have low literacy levels, exist on poverty line incomes, suffer from chronic illness, and are single parents or older adults.”

      1. False sense of transparency and accountability

    Opponents of e-government argue that online governmental transparency is dubious because it is maintained by the governments themselves. Information can be added or removed from the public eye (i.e. the Internet) with or without public notice.

    For example, after the World Trade Center in New York City was attacked on September 11, 2001, United States federal officials removed a large amount of government information from its websites in the name of national security. This act went relatively unnoticed by United States citizens. To this day, very few

    Conclusion

    In conclusion we see that this E-Government model of public service delivery is very important, adopted by government of South Africa.

    This model has advantages as well as disadvantages. This model has advantages of equally information provision, quality services, efficiency in public services delivery etc. but it has also some drawbacks such lack of secrecy, and so many other factors which may harmful for government through this system.

    The use of e-government as a service delivery enabler will definitely support government’s service improvement philosophy of Batho Pele, thus putting people first.

    Now a day’s technology has become the every thing very easier, more informative, efficiency and cost effective. Through this model of ICT can put people first, but only if the use of ICT is supported by the underlying business processes. For e government to be effective, all e-government initiatives in South Africa should be integrated. E-government will only truly be effective if it is managed from a single portfolio in government, and not from silos within each government department. Many other countries have adopted this model such as United States. But level of applying this model may vary. It means some are applying higher level and some countries are applying less level of E-Government.

    In United States E-government model was used The United States Government under the Bush Administration has created a separate portfolio that manages the implementation of e-government. The Office of Management and Budget (OMB) is developing what it calls the “Federal Enterprise Architecture” that will manage the way in which the United States Government does business and particularly through the use of e-government (US Office of Management and Budget, 2007) slow progress in implementing a single portal for Government services.

    It is clear from the case study that South Africa needs a portfolio within its government that drives the implementation of e-government.

    This will include policy, legislation and implementation standards. This is where the Office of the Government Chief Information Officer (OGCIO) also plays a role to smooth the progress of the use of ICT in Government.

    Components

    It consists of three components, namely:

    1. ICT Programme Management
    2. Government Chief Operations Officer and
    3. E-Government Architecture and Integration.

    The case study was focused on only one area of e-government within the public service of South Africa, namely the Department of Social Development and its service delivery component, the South African Social Security Agency. Similarly there is need to done this in the other departments of Government of public service delivery. Which are inefficient as compared to others? And ensure that the use of ICT is effective at all government departments. It is proposed that there is need to be studied at departments that come under the lack of service delivery similar studies should be done with Other departments to ensure that the use of ICT is effective at all government departments, such as the

    References:-

    " 109,"

    E GOVERNMENT MODEL

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    Purpose

    This paper aims to present a meta‐model for electronic government (e‐government) which takes account of the broad nature of this contemporary socio‐technical phenomenon. As such it contains within it a number of possible “business models” for the development of e‐government – strategies for e‐government focused around key business processes and information systems.

    Design/methodology/approach

    This meta‐model is built from literature taken from the domains of informatics, business and public administration. It is also built on established academic, policy and practitioner literature from the domain of e‐government itself.

    Findings

    The paper demonstrates and validates the use of this meta‐model in three ways. First, it is used as an explanatory tool to help review the contemporary experience of e‐government in the UK. To help in this process we position specific case examples of e‐government against the model from this experience. Second, it is used to evaluate a number of existing models of e‐government, particularly those which provide an explicit framework of e‐government progress. A number of deficiencies in such models are identified from this evaluation. Third, the meta‐model is proposed as a framework for evaluating and potentially benchmarking e‐government. The intention is to raise the perspective of evaluation and benchmarking in this area beyond its contemporary focus on electronic service delivery.

    Originality/value

    To demonstrate the worth of this approach, the paper describes the application of elements of this meta‐model in two evaluation/benchmarking exercises undertaken by the author in the context of regional e‐government.
    " 110,"

    E-recruiting practices of Prime bank Limited

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    “E-recruiting practices of Prime bank Limited”

    Executive Summary

    The Prime Bank ltd is large national banking group that is corporate banking in our country. At the very arena of globalization and technological innovation, banking business is a very competitive. To cope with this, banker should have vast theoretical knowledge and professional knowledge as well as technical basic. As a MBA student with major in HRM felt bank was my destiny to gather the real practical knowledge. The requirement of MBA program and as well as gain practical experience. The appointed as an intern in the Prime bank ltd at head office .There had to work three month in HR division and general banking division. This report entitled “E-recruiting practices of Prime bank Limited”

    In the first chapter, the discussed about the objective of the study methodology and limitation of the study. In second chapter discuss in banking sector in Bangladesh and chapter the history of the PBL, its management hierarchy, branches network, and then overview of human resource management.

    And finally discuss e-recruiting process, benefit, function and other activates.

    At last the tried to include all necessary information related to the e-recruiting practices of Prime bank limited. While preparing the term paper have tried level best to make it authentic and at the same time easily understandable. For this came up with a number of reference book and browsing internet backup. In of heart and soul effort there may be some mistakes and unforeseen errors, which may arise due to experience.

    Chapter-One

    Introduction

    The human resource management function includes a Varity of activities and key among them is deciding what staff you have and whether to use independent contractors or hire employees to fill the needs, recruiting and training ,the best employee ,ensuring they are high performance, dealing with performance issues. so E-recruiting is the most important issue of Prime Bank Ltd. This bank fulfill there needs Appling this way .Now a days e-recruiting is the most popular way of many organization. Prime Bank Ltd provides this way in job applicants. As result bank easily collect resume from applicants and easily serve applicant resume. It’s faster of banking human resource activities.

    E-Recruitment covers a range of Web-based application tools used for the provisioning (typically) of human resources. These applications assist in the recruitment of suitable candidates for vacant positions. Some applications do this by semi-automating the entire recruitment and hiring process. E-recruitment applications (or software packages that are web-enabled) typically enable recruitment teams to create job postings, manage job application responses, schedule interviews and manage other recruitment tasks. This dramatically reduces the labour and money spent on physical recruitment.

    This report is an attempt to reflect the position of Prime bank Ltd in the banking industry of the country in respect of her activities in the arena of Human resource Department.

    1.1 BACKGROUND OF THE STUDY:

    We are living in global village now. Globalization is combination or much freer in goods and service. Commercial banks in Bangladesh economy are to face an increasing competition for their business in coming days, like any other emerging market economies. Their business is no longer remaining easy as they earlier. The real change in the banking business has started to come with the government’s decision to allow the business in the private sector in the middle of the Eighty’s. This report is an effort to reflect a clear idea about the strategies, activities, and performance of Prime Bank Ltd. regarding human resource department.

    The human resource department is the important part for any organization. It’s maintained and good manage of organization employees and provide compensation, salary and other benefit. So it is very important to have an effective and sound management system in E-recruiting practices of prime bank ltd.. As a business studies student it is necessary for me to have vast acquaintance regarding e-recruiting practices and wanted to be acquainted with the whole procedure of e-recruiting.

    1.2ORIGIN OF THE REPORT:

    This report is originated having three months long internship program originated after completing the MBA program from Department of Human resource Management under Stamford University Bangladesh. During the internship a student has to undertake an arena of investigation of any organization for in depth study. This report is the outcome of the assigned internship, suggested by the human resource department of Prime Bank Limited, Head Office.

    1.3 OBJECTIVE OF THE REPORT:

    In this report, tried to furnish all sorts of practical dealings that are conducted in case of handling various types of activities in human resource department, the theoretical aspects, that is what should be the procedures and requirements maintained from first to last, and actual practices as well as the ultimate gain for the bank in conducting e-recruiting activities are mainly discussed. So the purpose and objective of this report can be summarized as follows:

    As it is an overall study of human resource department so going to analyze the related factors of E-recruiting process of Prime bank Ltd.

    Specific: To focus on the Brief description of human resource department

    To know deeply about e-recruitment process

    To examine bank’s performance in human resource department

    To focus on some other activities of e-recruitment of bank

    To specify some findings on given topic

    To reveal some recommendation for better performance in human resource department

    1.4 METHODOLOGY:

    The methodology of this report is very different from conventional reports. The emphasized on the practical observation though this report has to need some primary and secondary data. Nevertheless, eventually almost the entire report consists of my practical observation.

    1.5 SOURCES OF DATA COLLECTION:

    While preparing the report, I have taken information from the following sources:

    1.5.1 Primary Sources:

    § Observation of banking activities.

    § Working with my own experience while internship program.

    § Questioning and interviewing

    § Collect data deferent level of employees.

    1.5.2 Secondary Sources:

    1.6 SCOPE OF THE REPORT:

    The report is highlighting the major functional area of Human resource department and procedure of E-recruiting. It is not possible to pinpoint the each & every aspects of human resource department due to this short span of time.

    1.7 LIMITATION OF THE REPORT:

    During my internship period, the faced some problems, which hindered me to cover all the aspects of my study, like:

    So that’s all problem the facing prepare my report.

    Chapter- Two

    Overview of Banking Sector in Bangladesh

    2.1 INTRODUCTION:

    This chapter discusses the overview of the banking sector which gives us a better understanding regarding the ancient banking and modern banking. After all that deals with the organizational overview which includes the history, vision, and mission.

    The Jews in Jerusalem introduced a kind of banking in the form of money lending before the birth of Christ. The word ‘bank’ was probably derived from the word ‘bench’ as during ancient time Jews used to do money -lending business sitting on long benches. First modern banking was introduced in 1668 in Stockholm as ‘Svingss Pis Bank’ which opened up a new era of banking activities throughout the European Mainland.

    In the South Asian region, early banking system was introduced by the Afgan traders popularly known as Kabuliwallas. Muslim businessmen from Kabul, Afganistan came to India and started money lending business in exchange of interest sometime in 1312 A.D. They were known as ‘Kabuliawallas’.

    A bank is a financial institution whose main objective is the mobilization of fund from the surplus unit to deficit unit. In the process of acceptance of deposits and provision of loan, Bank creates money. This characteristics feature sets bank apart from other financial institutions. A bank is an economic institution whose main objective is to earn profit through exchange of money and credit instrument.

    2.2 BANKING INDUSTRY IN BANGLADESH AND ITS OPERATION:

    Bank is very old institution that is contributing toward the development of any economy and is treated as an important service industry in modern world. Now a day the function of bank is not limited to with in the same geographical limit of any country. Due to globalization and free market economy, this industry is facing severe competition in any country and implementation of WTO will further increase competition. The overall performance of Bank does not only depend upon the banking industry itself but also on the performance of economy where it is operating.

    After the birth of Pakistan in 1947, the State Bank of Pakistan, the central bank of the Country, came into being in 1948. Later, the National Bank of Pakistan, a commercial bank was set up in 1949. In all, 36 scheduled commercial banks were in operation throughout Pakistan. Pakistanis owned most of these banks. Only three of them, namely, National Bank of Pakistan, Habib Bank, and the Australasia Bank had a branch in East Pakistan in 1949. During 1950-58, three other Pakistani-owned banks, the Premier Bank, Bank of Bawalpur and Muslim Commercial Bank had opened branch offices in East Pakistan. Four Pakistani-owned banks, the United Bank, Union Bank, Standard Bank and Commerce Bank conducted business in the province during 1959 – 1965. The province had only two banks owned by local business groups and with headquarters at Dhaka, the Eastern Mercantile Bank (now pubali bank) and Eastern Banking Corporation (now uttara bank), established in 1959 and 1965 respectively.

    The banking system in the territory of Bangladesh grew slowly during the British and Pakistan periods. There were only 25 bank branches in 1901 and the number grew to 668 ‘n 1946. Creation of Pakistan was a deterrent in the sector as was evidenced by the closure of bank branches, which came down to 148 in 1950. In 1965, the number rose again to 545 Subsequent years, however, showed dramatic changes in the situation and the number of bank branches increased to 1,025 in 1970. The banking system in Bangladesh started functioning with 1,130 branches of 12 banks inherited from Pakistan. Subsequently, these banks were nationalised and renamed after being merged into six banks. The new names of the banks were the sonali bank (The National Bank of Pakistan, The Bank of Bawalpur, The Premier Bank), agrani bank (Habib Bank, Commerce Bank), janata bank (United Bank, Union Bank), rupali bank (Muslim Commercial Bank, Standard Bank), pubali bank (Australasia Bank, Eastern Mercantile Bank) and uttara bank (Eastern Banking Corporation).

    2.3 BANKING OPERATION IN BANGLADESH:

    The development process of a country largely depends upon its economic activities. Banking is a powerful medium among other spheres of modern socio-economic activities for bringing about socio-economic changes in a developing country like Bangladesh. Three different sectors like Agricultural, Commerce and Industry provide the bulk of a country’s wealth. The nourishment of these three is only possible through an adequate banking facility. The banking service facilitates these three to be integrated in a concerted way. For a rapid economic growth a fully developed economic system can provide the necessary boost. The whole economy of a country linked up with its banking system.

    With the passage of time the functions of a bank, lending is far by the most important. They provide both long-term and short-term credit. The customers come from all walks of life, from a small business of a multi-national corporation having its business activities all around of the world. The banks have to satisfy the requirements of different customers belonging to different social groups.

    Banks particularly have a very important role in rising of the financial resources because of their capacity to tap resources from a wider spectrum of people and diversified nature of their operations. The banking business has therefore, become complex and requires specialized skills. They function as a catalytic agent for bringing about social, economical, industrial, and agricultural growth and prosperity of the country.

    Ranks are the custodians of the society’s economic resources and if they are socialized, the socialistic government can acquire with them a tremendous power of intervention in every type of business enterprise, both large and small and wide spread power of control and planning over the entire economy. In our country where about 80% of the population lives below the poverty line, this poverty line can be declined by the success of banks. So bank plays an active role in the economic development, as a result different types of banks have come into existence to suit the specific requirements.

    The regardless the numbers of bank nature of their functions and activities, a central bank exists to regulate the activities of other banks. All the commercial private/ nationalized/ specialized banks perform service related activities within the jurisdiction of the central bank. In our country, Bangladesh, the role of the central bank is entitled to be executed by the Bangladesh Bank.

    bangladesh bank, the central bank of the country, was set up on 16 December 1971 by the Bangladesh Bank Order 1972. The government accepted the assets and liabilities Of the Deputy Governor’s office of the State Bank of Pakistan in Dhaka and declared the Bangladesh Bank as a fully effective and permanent central bank.

    To conduct banking in Bangladesh, all banks have to have licenses from the Bangladesh Bank under the Bank Companies Act 1991. To be able to get a license, all intending banks have to be registered with the Registrar of Joint Stock Companies under the companies act 1994, and collect Certificate of Incorporation. Moreover, to collect capital through public offerings of shares, intending banks have to obtain permission from the countries.

    2.4 SECURITIES AND EXCHANGE COMMISSION: imam

    Banking institutions in Bangladesh can be classified under different groups. Most banks fall under the category of branch banking i.e. the banks operate through branches at home and abroad under the control of their head offices. Foreign branches of Bangladesh banks have to abide by home country regulations.

    2.5 UNDER THE OWNERSHIP-BASED CLASSIFICATION

    Banks in Bangladesh are classified as government/nationalized, private, foreign, and joint ownership banks. The country had 6 (Six) nationalized commercial banks (NCB) until 1983, when one of them, the Rupali Bank was denationalized. Another government bank, the Pubali Bank, was denationalized in 1986.

    2.6 DOMESTIC PRIVATE BANKS:

    INTERNATIONAL FINANCE AND INVESTMENT BANK (ific bank, estd. 1976), islami bank bangladesh (1983), united commercial bank (1983), city BANK (1983), NATIONAL BANK (1983), ARAB BANGLADESH BANK (1985), AL BARAKA BANK (1987), EASTERN BANK (1992), NATIONAL CREDIT AND COMMERCE BANK (1993), PRIME BANK (1995), SOUTH-EAST BANK (1995), DHAKA BANK (1995), AL-ARAFAH ISLAM! BANK (1995), SOCIAL INVESTMENT BANK 1995), PREMIER BANK (1996), DUTCH-BANGLA BANK (1996), MERCANTILE BANK (1999), STANDARD BANK (1999), ONE BANK (1999), EXPORT IMPORT BANK (1999), BANGLADESH COMMERCE BANK (1999), MUTUAL TRUST BANK (1999), TRUST BANK (1999), BANK ASIA (1999) and FIRST SECURITY BANK (1999).

    The three NCBs now operating in the country are the SONALI BANK, JANATA BANK , AGRANI BANK. and RUPALI BANK There is a special group of nationalized banks known as specialized or development financial institutions to support specific economic purposes of the country. These include two for agricultural development, the Bangladesh krishi bank (estd. 1973) and RAJSHAHl krishi UNNAYAN bank (estd. in 1987 with branches of Bangladesh Krishi Bank in Rajshahi division), one for industrial development, the Bangladesh shilpa bank (estd. 1972) and one for supporting unemployed youths in their self-employment activities, the employment bank (estd.1997). The country has a Co-operative Bank established in 1948, as the apex institution of all co-operative societies in Bangladesh. The main function of this bank is to mobilize small savings and assist members of co-operative societies to build up capital and provide them with loan/financial assistance for the development of agriculture, commerce, fisheries, urban and rural cottage industries, etc. It also provides loan to promote other income generating activities in the society.

    2.7 FOREIGN PRIVATE BANKS WHICH HAVE BRANCHES IN BANGLADESH:

    Are thestandard chartered GR1NDLAYS BANK, AMERICAN EXPRESS BANK, STANDARD CHARTERED BANK, STATE BANK OF india, credit AGRICOLE IN’DOSUEZ, HONGKONG AND SHANGHAI BANKING CORPORATION (HSBC), national bank of pakistan, citibank n a, habibbank, and hanvit bank.

    Some branches of both nationalized and private commercial banks have been permitted to conduct foreign exchange business under the Foreign Exchange Regulation Act 1947. Such banks are called authorized dealers and their club or association bears the name RAPED A – Bangladesh Foreign Exchange Dealers Association. Apart from the authorized dealers, more than 400 Money Changers throughout the country are engaged in buying r and selling of foreign exchange.

    Depending upon the relationship with and the degree of control of the Bangladesh Bank banks in Bangladesh are divided into scheduled and non-scheduled banks. Scheduled banks are enlisted by the Bangladesh Bank under the provisions of section 37 of the Bangladesh Bank Order 1972. They are promise bound to obey central bank instructions, rules and regulations especially, those relating to required capital and provisions, statutory liquidity reserves, audited returns etc. Through scheduling, banks gain special status and enjoy some special facilities from the central bank such as re-discounting, participation in the money market, membership of the clearing house and deposit insurance scheme. Non-scheduled banks do not enjoy such privilege. The list of non-scheduled banks in Bangladesh includes the Eden Bank, Saidpur Commercial Bank, Comilla Co-operative Bank, Dinajpur Industrial Bank, Rajshahi Bank, Shankar Bank, Faridpur Banking & Corporation and Madaripur Commercial Bank.

    Banks in Bangladesh have correspondent relationship with other banks in foreign countries in order to sell their services or to purchase services from them. Although only three in number, nationalized commercial banks dominate banking activities in the country, especially the mobilization of deposits and making advances. Their share in total bank deposits on 31 March 2000 was 57.28%, while that of domestic private banks, foreign private banks, and the specialized banks was 29.01%, 8.42% and 5.29% respectively. The share of NCBs, domestic private banks, foreign private banks and specialized banks in advances on the same date was 51.66%, 29.25%, 6.03% and 13.06% respectively.

    Laws that directly regulate the banking system of Bangladesh are: Bangladesh Bank Order !972; Bank Company Act, 1991; Bangladesh Bank (Nationalization) Order 1972; Companies Act 1913 and 1994; Deposit Insurance Order 1984; Bankruptcy Act 1997; Insolvency Act 1920; Financial Court Act 1990; Foreign Exchange (Regulation) Act 1986; Financial Institutions Act 1993; Financial Institutions Rules 1994; and Co-operative Societies Ordinance 1984.

    Laws that indirectly influence the banking system and for which references are made in the Banking Company Act 1991 are: Code of Civil Procedure 1998; Code of Criminal Procedure 1898; Evidence Act 1872; General Clauses Act 1897; Limitations Act 1908; Negotiable Instruments Act 1881; Penal Code 1860; Trust Act 1882; Transfer of Property Act: and Bangladesh Chartered Accountant Order 1973.

    Sources: Chowdhry, L.R. (2002, 2nd edition), “A Text Book On Banker Advances

    Some words used as a abbreviate form in the diagram are:

    BKB – Bangladesh Krishi Bank

    RAKUB – Rajshahi Krishi Unnayan Bank

    BSB – Bangladesh Shilpa Bank

    BSRS – Bangladesh Shilpa Rin Shangshta

    BASIC – Bangladesh Small Industries & Commerce.

    BSBL – Bangladesh Samabaya Bank Ltd.

    CCBL – Central Co-operative Bank Ltd.

    PCS – Primary Cooperative Societies.

    2.8 OVERVIEW OF PRIVATE BANK:

    The development process of a country largely depends upon its economic activities. Banking is a powerful medium among other spheres of modern socio-economic activities. So private bank is a important role o country economic situation. This type of bank work within country branches way are the International Finance and Investment Bank (ific bank, estd. 1976), islami bank Bangladesh (1983), united commercial bank (1983), city BANK (1983), NATIONAL BANK (1983), ARAB BANGLADESH BANK (1985), AL BARAKA BANK (1987), EASTERN BANK (1992), NATIONAL CREDIT AND COMMERCE BANK (1993), PRIME BANK (1995), SOUTH-EAST BANK (1995), DHAKA BANK (1995), AL-ARAFAH ISLAM! BANK (1995), SOCIAL INVESTMENT BANK 1995), PREMIER BANK (1996), DUTCH-BANGLA BANK (1996), MERCANTILE BANK (1999), STANDARD BANK (1999), ONE BANK (1999), EXPORT IMPORT BANK (1999), BANGLADESH COMMERCE BANK (1999), MUTUAL TRUST BANK (1999), TRUST BANK (1999), BANK ASIA (1999) and FIRST SECURITY BANK (1999).

    All this are private bank in Bangladesh. They are various functions. They established district wise branches. These branches maintain all banking work all Bangladesh. This private bank provide various loan like education loan, business loan, car loan, family loan and other loan.

    The ratio of bank deposits to GDP in Bangladesh has increased from 19.53% in 1990 to 32.35% at end 2001. As the private sector banks are still in a rudimentary stage, they are way behind the SCBs in terms of deposit mobilization and asset accumulation. But classified loans of SCBs are large, constituting 3.94% of GDP in 1990 and 8.66% in 2001. In 1990, the SCBs had 27.59% of their total outstanding loans classified, compared to 23.73% in private commercial banks and 20.65% in foreign commercial banks. The NPL ratio reached 44.62% in the SCBs and 25.76% in private banks,

    So this are all private bank activates and concept.

    2.9 OVERVIEW OF PUBLIC BANK:

    The Jews in Jerusalem introduced a kind of banking in the form of money lending before the birth of Christ. The word ‘bank’ was probably derived from the word ‘bench’ as during ancient time Jews used to do money -lending business sitting on long benches. First modern banking was introduced in 1668 in Stockholm as ‘Svingss Pis Bank’ which opened up a new era of banking activities throughout the European Mainland.

    Public bank is most important role on economic activities in country.This bank ownership is government. Its mainly control by central bank.There are some public bank now operating in the country are the SONALI BANK, JANATA BANK , AGRANI BANK. and RUPALI BANK There is a special group of nationalized banks known as specialized or development financial institutions to support specific economic purposes of the country. These include two for agricultural development, the Bangladesh krishi bank (estd. 1973) and RAJSHAHl krishi UNNAYAN bank (estd. in 1987 with branches of Bangladesh Krishi Bank in Rajshahi division).They provide various service like agrictural loan ,business loan and other government work .This bank license provide by central bank. They work under by government rules & regulation. Public bank collect more foreign currency.And this currency expense for country develop purpose. The established branches all over country and service provide all level of people.

    So all this is the information of public bank.

    2.10 OVERVIEW OF FOREIGN PRIVATE BANK:

    Foreign bank another important banking sector in Bangladesh and they are more helpful for economics situation in bank n country but now a days, many foreign banks are established in Bangladesh. They can provide much service in country. They similar service provide as domestic private bank but this bank introduce more new technology of our country like online banking system, ATM Card, Master Card and other card system banking. There are some foreign private bank like the standard chartered GR1NDLAYS BANK, AMERICAN EXPRESS BANK, STANDARD CHARTERED BANK, STATE BANK OF india, credit AGRICOLE IN’DOSUEZ, Hongkong and Shanghai Banking Corporation (hsbc), national bank of pakistan, citibank n a, habibbank, and hanvit bank.

    Some branches of both nationalized and private commercial banks have been permitted to conduct foreign exchange business under the Foreign Exchange Regulation Act 1947. Such banks are called authorized dealers and their club or association bears the name RAPED A – Bangladesh Foreign Exchange Dealers Association. Apart from the authorized dealers, more than 400 Money Changers throughout the country are engaged in buying r and selling of foreign exchange. These banks follow up government rules and regulation.

    2.11 OTHER BANKS INFORMATION:

    The birth of Pakistan in 1947, the State Bank of Pakistan, the central bank of the Country, came into being in 1948. Later, the National Bank of Pakistan, a commercial bank was set up in 1949. In all, 36 scheduled commercial banks were in operation throughout Pakistan. Pakistanis owned most of these banks. Only three of them, namely, National Bank of Pakistan, Habib Bank, and the Australasia Bank had a branch in East Pakistan in 1949. During 1950-58, three other Pakistani-owned banks, the Premier Bank, Bank of Bawalpur and Muslim Commercial Bank had opened branch offices in East Pakistan. Four Pakistani-owned banks, the United Bank, Union Bank, Standard Bank and Commerce Bank conducted business in the province during 1959 – 1965. The province had only two banks owned by local business groups and with headquarters at Dhaka, the Eastern Mercantile Bank (now pubali bank) and Eastern Banking Corporation (now uttara bank), established in 1959 and 1965 respectively.

    The banking system in the territory of Bangladesh grew slowly during the British and Pakistan periods. There were only 25 bank branches in 1901 and the number grew to 668 ‘n 1946. Creation of Pakistan was a deterrent in the sector as was evidenced by the closure of bank branches, which came down to 148 in 1950. In 1965, the number rose again to 545 Subsequent years, however, showed dramatic changes in the situation and the number of bank branches increased to 1,025 in 1970. The banking system in Bangladesh started functioning with 1,130 branches of 12 banks inherited from Pakistan. Subsequently, these banks were Nationalised and renamed after being merged into six banks. The new names of the banks were the Sonali bank (The National Bank of Pakistan, The Bank of Bawalpur, The Premier Bank), Agrani bank (Habib Bank, Commerce Bank), Janata bank (United Bank, Union Bank), Rupali bank (Muslim Commercial Bank, Standard Bank), Pubali bank (Australasia Bank, Eastern Mercantile Bank) and Uttara bank (Eastern Banking Corporation).

    2.12 B A N G L A D E S H R E S E A R C H

    Swinging Banking: Not Very Promising

    Not too bad if you may claim so ….

    The Bangladesh banking sector relative to the size of its economy is comparatively larger than many economies of similar level of development and per capita income. The total size of the sector at 26.54% of GDP dominates the financial system, which is proportionately large for a country with a per capita income of only about US$370.The non-bank financial sector, including capital market institutions is only 3.22% of GDP, which is much Than the banking sector. The market capitalization of the Dhaka Stock Exchange was US$1,025 million or 2.19% of GDP as at mid-June 2002. In contrast, the size of the total financial sector in India, including banks and non-banks as well as the capital market is 150% (March 2002) of its GDP, with commercial banks accounting for 58.3% of GDP. I access to banking services for the population has improved during the last three decades. While population per branch was 57,700 in 1972, it was 19,800 in 1991. In 2001 it again rose to 21,300, due to winding up of a number of branches and growth in population. Compared to India’s 15,000 persons per branch in 2000, Bangladesh is not far behind in this regard. This indicates that access to the banking system in the country is not a significant problem.

    However the story tells a different tale

    The finance sector remains predominantly bank-based, accounting for 96% of the sector’s resources. While there are sound banks, based on IAS, the banking sub-sector as a whole is technically insolvent. Consolidated data reported tend to have significantly understated provisions. Adjusting partly for the understatements, the financials of the banking sub-sector are characterized by about 32% NPL ratio, US$720 million shortfall in provisions, US$1,106 million shortfall in provisions and capital combined, and losses of US$685 million after adjusting for the shortfall in provisions in mid 2001. The adjustments would possibly be larger if provisioning as followed by major international auditors were applied. State-owned Commercial Banks (SCBs) also have disproportionately large and unexplained “Other Assets” that include, in particular, jute and other subsidized credits, suspense accounts and various receivables. To what extent these questionable assets have been provisioned remains unclear.

    Wonder why so?

    The large capital deficiency, operating inefficiencies and recurring losses of the banking system is the product of a combination of different factors including: a) weak corporate governance (bank-wide structures, policies, systems and procedures, especially credit risk management); b) deficient executive and staff banking skills; c) absence of professionalism, accountability and incentives; d) policy lending (particularly to jute and other loss-making State-owned Enterprises or SoEs); e) political patronage and directed lending in the SCBs; f) insider lending in private local banks; g) pervasive systemic default culture; h) non-cost recovery for governmental services extended; i) loss-making branches; j) unproductive assets; k) politically-influenced recruitment, extraordinary staff redundancy, bank-wide security of tenure, and disruptive union activity; and l) poor IT/MIS that hinders efficient and cost-effective operations.

    Who is who?

    At mid-2001, the US$13 billion stock of financial market instruments was predominantly tilted toward banking products (72.2%), basically in the form of term deposits, and secondarily toward non-bank debt instruments (27.8%), with private sector obligations accounting for 0.4% of all non-bank debt instruments and GOB-related instruments making up for the balance of 99.6%. Of the GOB-related instruments, Savings Schemes, redeemable instruments with disproportionately high yields, accounted for 59.3%, the balance made up of T-Bills (26.7%) and Treasury Bonds (13.9%). Private sector instruments are basically debenture-type issues mainly of one business group listed in the stock exchanges. With the exception of T-Bills and private sector debentures, the fixed income securities are non-transferable and, where they are transferable, there is no secondary market activity. There are no government securities dealers or market makers and the ‘buy-hold’ culture is quite pronounced. The commercial banks have not issued any securities to raise funds, other than for government-administered programs

    Pot belly or belly up already?

    The ratio of bank deposits to GDP in Bangladesh has increased from 19.53% in 1990 to 32.35% at end 2001. As the private sector banks are still in a rudimentary stage, they are way behind the SCBs in terms of deposit mobilization and asset accumulation. But classified loans of SCBs are large, constituting 3.94% of GDP in 1990 and 8.66% in 2001. In 1990, the SCBs had 27.59% of their total outstanding loans classified, compared to 23.73% in private commercial banks and 20.65% in foreign commercial banks. The NPL ratio reached 44.62% in the SCBs and 25.76% in private banks, but in foreign commercial banks, it came down to 3.74% in 2001. The banks achieved some success in reducing the percentage of non-performing assets by 3.31% of cumulative total loans, although in absolute figures it aggravated by 3.32% between 2000 and 2001. NPLs came down from 34.92% (of total loans and advances) in 2000 to 31.61% in 2001. About 86.60% or Tk204.35 billion in the total classified loans of Tk235.99 billion in 2001 have been identified as bad or irrecoverable. Classified loans during the 1997-1999 were 33.49%, 40.65%, and 41.11% respectively. Most of the banks were running with a deficit on loan provisioning as well as risk-weighted capital adequacy requirement.

    Spreads trimmed but bottom-line up….

    The interest spreads available to scheduled commercial banks in Bangladesh are actually not so high as being perceived, compared to both developed and developing countries. Interest spread came down recently mainly because they have to offer considerably higher rates on deposits to compete with various high yield savings instruments of the Government-run schemes as well as to compensate for the huge burden of NPLs. Despite a decline by 0.11% in the average lending rate recently, the average yield on loans and advances increased significantly, mainly due to time factor in incidence of the rates. Average deposit interest rate decreased by 0.18%. Actual yield on loans and advances for the sector came down much below the lending rate due to a huge component of non-performing advances. The performance of the banks during year 2001 was relatively better than the previous year. During 2001, the commercial banks registered a 14.12% growth in loans and advances, and reported increasing operating profits. Most of the listed commercial banks declared higher dividends for the year 2001 than for 2000 and some announced stock dividends. However, the banks are acutely undercapitalized, which enabled declaration of high percentage of dividends, though in the long run such trend could prove unproductive if not fatal.

    Cost of inefficiency … who is paying?

    The operational cost (i.e. general and administrative cost) in the banking system is a staggering 3.13% of net assets against an international norm of 1%. In neighboring India it is 2.5%, also on the higher side. The substantial excess cost therefore stands at 2.13% of net banking assets, which translates to 0.56% of the current GDP. On the other hand, the recapitalization needed to meet the statutory capital adequacy requirement is 3.20% of GDP. The annual cost of servicing the recapitalization at 10 percent interest per annum therefore stands at 0.32% of current GDP. The total of the two cost indicators indicates that the annual cost of inefficiency of the banking sector in Bangladesh is 0.88% of current GDP. Again, there are reasons to believe that the recapitalization needs are grossly understated, especially in provisioning against loans and advances to the SoEs and sector corporations. Based on other studies, the recapitalization requirement can be estimated at around US$2.89 billion and the annual cost of financing placed at 0.62% of GDP. Using these figures, the total annual cost of the banking sector inefficiency would stand at 1.18% of GDP. The recapitalization requirement of the development financial institutions (DFIs) and specialized banks are also large, and the cost of financing would be roughly around an additional US$1.165 billion or 0.24% of GDP. Thus, the aggregate cost of refinancing for banks and DFIs and specialized banks through issuance of bonds with 10% coupon would be as high as 1.42% of GDP. In comparison, such refinancing cost in India is roughly at 0.75% of GDP.

    The road map ahead…

    The Bangladesh economy registered noteworthy developments and growth in some major areas including the social sector and achieved relative fiscal stability in the decade of the 1990s. However, the vulnerability of the apparent stability has been exposed in the aftermath of the September terror and changing environmental uncertainties. The authorities now have limited room for maneuver in responding to external shocks. Substantive unresolved or unattended issues remain which could pose a threat to macroeconomic stability. There is a strong need to introduce a legislative program that would enable the regulatory authorities to take timely measures to ensure soundness and efficiency of the banking system, strengthen credit discipline among borrowers as well as speed up the recovery process. The resolution of issues relating to the banking sector could strengthen macroeconomic stability, while enhancing growth and depth, governance, efficiency, private sector presence, and an enabling environment. Conceptually, and potentially by any measure, the Banking Reform and Development (BRD) should be the centerpiece for any program for the finance sector, with other supporting projects having varying degrees of impact. A holistic strategic framework for the finance sector could include potential response initiatives that address targeted performance metrics and strategic results relating to growth and development, governance, sustainability, efficiency, reach, governmental presence and the enabling environment. Some time-bound quantitative indicators and targets could be considered for the banking sector. Few such targets and indicators could be:

    1) Review of all financial sector and specifically banking related laws, rules and regulations within 1 year;

    2) Enactment of foreclosure law within 1 year;

    3) Provision shortfall and re-capitalization requirement of SCBs met through market priced bonds within the next 2 years;

    4) Transformation and divestment of the BASIC Bank within the next 2 years;

    5) Adoption of all IAS and ISA standards by the Institute of Chartered Accountants of Bangladesh within 2 years;

    6) Establishment of an AMC to take over bad debts of commercial banks within 3 years;

    7) Only one commercial bank under state ownership at the end of 5 year;

    8) No fully state-owned commercial bank after 10 years etc.

    2.13 HELPING BANGLADESH BANKING SECTOR TO GROW IT FULL POTENTIAL:

    A Government initiative for a strong and effective regulatory and supervisory system for Bangladesh’s banking sector is moving ahead. The World Bank is supporting the Central Bank Strengthening Project (CBSP) to enable Bangladesh Bank to play its role as country’s monetary authority, bank regulator and supervisor.

    Under CBSP, the World Bank is assisting Bangladesh Bank in three areas: (I) Strengthening the Legal Framework; (II) Reorganizing and Modernizing Bangladesh Bank by focusing on (a) Functional Reorganization, (b) Automation, and (c) Human Resources Development; and (III) Capacity Building of Bangladesh Bank focusing on (a) Strengthening the Research Department, (b) Strengthening Prudential Regulations and Bank Supervision, and (c) Strengthening Accounting and Auditing systems.

    This project started in 2003 with a World Bank commitment of US$ 37 million, out of a total cost of US$46.13 million. Under this project, a merit based promotion policy has been adopted recently, while international central banking accounting and auditing standards have been introduced. It also strengthened regulations and supervisions by revising regulations on corporate governance, accounting policy, capital adequacy, loan classification and provisioning and foreign exchange and interest rate risk, among others.

    Progress on the human resources reforms has been gradual. The most significant progress is the implementation of the Performance Management System (PMS). A proposal of defining Bangladesh Bank’s salary and compensation package from the Civil Services is now under active consideration of the government.

    The Government is also speeding-up the implementation of Bangladesh Bank automation, and procurement of IT systems, the largest component of the project. Under a separate arrangement, the World Bank Institute has also helped Bangladesh Bank in setting up a Policy Analysis Unit to spearhead research on all aspects of macroeconomics including monetary policy and central banking.

    Chapter- Three

    Introduction of the Prime Bank Limited

    Bank is a financial institution. The economy is mostly depended on the bank since the bank facilitates the economic and financial transactions. Prime bank limited is a fast growing private sector bank and the bank is already at the top slot in terms of quality services to the customers and value addition for the shareholders. The bank made satisfactory progress in all areas of business operation in 2006.

    Prime Bank Ltd. is one of the few banks permitted by the Bangladesh in the early 90’s. These banks are known as the second-generation banks and fortunate to remain immune from the bad loan culture. Prime Bank Limited was designed to provide commercial and investment banking services to all types of customer ranging from small entrepreneur to big business firms. Besides investment in trade and commerce, the bank participates in the socioeconomic development through the participation in priority sectors like agriculture, industry, housing and self-employment. Prime Bank Limited wants to establish, maintain, and conduct all types of banking, investments and businesses in Bangladesh and abroad with superior service quality and performance.

    The bank has consistently turned over good returns on Assets and Capital. During the year 2005, the bank has posted an operating profit of Tk.1520.34 million and its capital funds stood at Tk.3177.32 million. Out of this, Tk.1400 million consists of paid up capital by shareholders and Tk.1777.32 million represents reserves and retained earnings. The bank’s current capital adequacy ratio of 9.96% is in the market. In spite of complex business environment and default culture, quantum of classified loan in the bank is very insignificant and stood at less than 0.96%.

    Presently the bank has 41 branches all over the Bangladesh and a booth located at Dhaka Club, Dhaka. Out of the above 41 branches, 05 (Five) branches are designated as Islamic Branch complying with the rules of Islamic Shariah, the modus operandi of which is substantially different from other branches run on commercial conventional basis.

    3.1 The Policy, Vision, Mission, Goals & Objectives of Prime Bank Ltd:

    Policy: A bank with a difference

    Vision:To be the best Private commercial Bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability having strong liquidity.

    Mission: To build Prime Bank Limited into an efficient, market driven, customer focused institution with good corporate governance structure. Continuous improvement in our business policies, procedures and efficiency through integration of technology at all levels.

    Goals and Objectives:

    Maximization of Profit through customer satisfaction is the main objective of the Bank. In addition, the others relevant objectives are:

    § To be market leader in high quality banking products and services.

    § Active excellence in customer service through providing the most modern and advance technology in the different spheres of banking.

    § To participate in the industrial development of the country to encourage the new and educated young entrepreneurs to under take productive venture and demonstrate their creativity and there by participate in the national development.

    § To provide credit facilities to the small and medium size entrepreneur located in urban & sub-Urban area and easily accessible by our branches.

    § To develop saving attitude and making acquaintance with modern banking facilities.

    § To inspire for undertaking small projects for creation employment through income generating activities.

    § To play a significant role in the economic development of the country.

    3.2 CORPORATE INFORMATION IN BRIEF

    Memorandum and Articles of Association signed by the Sponsors 5-Feb-1995
    Incorporation of the Company 12-Feb-95
    Certificate of Commencement of Business 12-Feb-95
    License issued by Bangladesh bank 20-Feb-95
    License issued for opening the first branch, Motijheel Branch 8-Apr-95
    Formal launching of the Bank 17-Apr-95
    Initial Public Offering (IPO):
    – Publication of Prospectus 29-Aug-99
    – Subscription Opened 9-Sep-99
    – Subscription Closed 22-Sep-99
    Listed with Dhaka Stock Exchange Ltd 27-Mar-00
    Listed with Chittagong Stock Exchange Ltd 15-Nov-00
    Dividend declared in the 5th AGM (First after the IPO) 3-Mar-00
    Registered as Merchant Banker with Securities & Exchange Commission 29-Mar-01
    License issued from Bangladesh Bank as Primary Dealer 11-Dec-03
    Registered as Depository Participant of CDBL 29-Mar-04
    Trading of Shares started in Demat from in Stock Exchanges 15-Jun-04
    Agreement with Temenos for Core Banking Software T24 30-Jun-05

    3.3 ORGANOGRAM OF PRIME BANK LIMITED

    Computer Division
    General Service Division
    F.A.D
    H.R.D
    Monitoring & Inspection Division
    Credit Committee
    Research & Development
    Corporate Affairs Division
    D.M.D
    Treasury Unit
    International Division
    Investment Division
    Marketing Division
    Senior Executive Vice President
    Board Audit Cell
    Board Secretariat
    Policy Committee of the Board
    Executive Committee of the Board
    Managing Director
    Board of Directors
    Public Relation Division

    3.4 HIERARCHY OF PRIME BANK LIMITED

    3.5 A BRIEF DESCRIPTION OF BUSINESS ACTIVITIES, PRODUCT & SERVICES AND FINANCIAL POSITION OF PRIME BANK LIMITED:

    3.5.1 Business Activities of PBL:

    The Principal activities of the bank were banking and related businesses. The banking businesses included deposits taking, extending credit to corporate organization, retail and small & medium enterprises, trade financing, project financing, international credit card etc. Prime Bank Limited provides a full range of products and services to its customers, some of which are mentioned below with a brief overview of the major business activities.

    Retail Banking:

    As a part of risk diversification strategy PBL expended the lending activities in this sector during 2005. The growth rate of PBL’s consumer financing was 45.43% during this year. The loan schemes offered by the bank include Home Loan, Loan against Salary, Marriage Loan, Car Loan, Hospitalization Loan, Education Loan, Doctors Loan, Travel Loan etc.

    SME Lending:

    Job creation is essential and it must come from Small and Medium Enterprise that will ultimately dominate the private sector. During 2005 bank’s Strategy was focused on customer convenience. The Bank provided working capital loans to suppliers or dealers of large corporations or clusters of small exporters of non-traditional items. The exposure is well diversified among over 500 customers in manufacturing; trading and service sector like Light Engineering and manufacturing, Cottage and power loom industries, CNG, Paper and pulp etc. The outstanding loan against SME is 343 million.

    Corporate Credit:

    PBL’s strategy is to provide comprehensive service to the clients of this segment who are large and medium size corporate customers with expertise in trade finance and related services. Besides trade finance bank are providing working capital finance, project finance and arranging syndication for our corporate clients. Syndication and structured Finance Unit of the Bank strengthened its footstep in the consortium financial market and arranged a number of syndication deals for its corporate clients.

    Islamic Banking:

    For the development of Islamic Banking Business, 2005 was also a commendable year. It has been observed that compliance of Shariah has improved in 2005 as compared to the preceding years. According to their advice Islamic Banking operation of the bank has been separated from the operation of Conventional Banking and shown separately in the bank’s financial statement. It is found that the investment and deposits grew by 82.07% and 11.59% respectively in the year 2005.

    Credit Card:

    In the year of 2005, Prime Bank Ltd has launched VISA. Before that PBL started its credit card operation in 1999 by introducing Master Card. Now PBL has become the first local Bank of the country to achieve principal membership of both the worldwide-accepted plastic money network i.e. Master Card and VISA. PBL has redesigned the credit card facility by providing the incentive of “Free Life Insurance Coverage” for their valued cardholders to mitigate the financial risk.

    Custodial Service

    PBL equator fulfills its strategic commitment to provide custody and clearing services. Equator’s focuses are on the following:

    § Commitment to quality

    § Dedication to customer needs

    § Sustained investment in people and systems

    3.5.2 International Trade Management:

    This division is operational throughout the group and PBL’s core strength is trade finance and services. With an experience, Prime Bank has developed knowledge of trade finance, which is world class. Principle services to importers include imports letter of credit, import bills for collection and back-to-back letters of credit facilities. Services provide to exporters include export letters of credit, direct export bills, bonds, and guarantees.

    Cash Management

    Prime Bank recognizes the importance of cash management to corporate and financial institutional customers, and offers a comprehensive range of services and liquidity management.

    Institutional Banking

    Prime Bank Limited provides a wide range of services to institutional clients, commercial, merchant and central banks; brokers and dealers; insurance companies; funds and managers, and others. It provides relationship managers who are close to their customers and speak local language. This wide network of institutional banking facilities includes transaction, introduction, problem solving and renders advice and guidelines on local trading condition.

    Treasury

    Treasury operations had been consideration as an important avenue for income generation purpose within Head Office. In fact, in the past, income from treasury operation was quite sizable and significant to the total income generated by the bank. The treasury division publishes daily and weekly currency newsletters, which provide analyses of currency trends and related issues. Seminars and workshops are conducted for customers from time to time on foreign exchange related topics. Prime Bank is one of the first local banks in Bangladesh to integrate treasury dealings of local money market and foreign currency under one Treasury umbrella. The bank has handl

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    Eco-Friendly Tourism Development in Bangladesh

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    Eco-Friendly Tourism Development in Bangladesh

    Background of the Term Paper

    Eco tourism is a form of tourism that involves traveling to tranquil and unpolluted natural areas. According to the definition and principles of ecotourism established by The International Ecotourism Society (TIES) in 1990, ecotourism is “Responsible travel to natural areas that conserves the environment and improves the well-being of local people.” (TIES, 1990).

    Objectives

    Objectives behind this paper are given below:

    Main Objectives

    The primary objective of the term paper is—

    To analyze on the issue Travel Agency and Tour Operation Management.

    To disclose the precise scenario of the ‘Eco-friendly Tourism Development in Bangladesh: Strategies and Policies’.

    To analyze and recommend on the mentioned issues.

    Scope of the Term Paper

    This research study will cover the topic “Eco-friendly Tourism Development in Bangladesh: Strategies and Policies” and its related issues. It also includes recommendations against the selected issues. This paper can be used as a secondary source for further purposes.

    Sources of Information

    To fulfill the objective of this paper collection of relevant, accurate, standardized and needful information was required. To make this term paper reliable data are collected from secondary sources. The whole paper is prepared based on secondary sources. That is why there is no primary source. Special consideration was given so that chances of biasness could not arise. The sources used were:

    Secondary Sources

    Secondary sources are those, which simplify the process of finding and evaluating the primary literature. Secondary data may be available which is entirely appropriate and wholly adequate to draw conclusions and answer the question or solve the problem.

    Secondary sources were consulted for an understanding of techniques of writing feasibility studies and for other relevant information. Few publications and web pages were also browsed.

    Data are also collected from the following secondary sources:

    · bibliographies

    · biographical works

    · commentaries

    · dictionaries and encyclopedias

    · handbooks and data compilations

    · history

    · journal articles

    · newspaper and popular magazine articles

    · internet

    · review articles and literature reviews and

    · textbooks

    Methodology

    This term paper covers the different aspects and activities that are required to make a term paper on ‘Eco-friendly Tourism Development in Bangladesh: Strategies and Policies’. However, the term paper is prepared based upon the information collected from several books, journals, articles, magazines, annual term papers, the researcher’s own judgments and basically from the Internet. The findings are strictly structured upon information provided by these sources and some secondary sources. The focus here is on presentation of facts as discovered.

    Introduction

    Bangladesh is a country filled with natural wonders and untouched reserves and home to a variety of unique and magnificent creatures. With hills, valleys, forests, beaches, lakes and rivers, ecotourism in Bangladesh is ideal. Although this is still a relatively new form of tourism in Bangladesh, ecotourism is on the rise and extensive efforts are being made to promote it in the country.

    Aside from exploring the vast natural territories, ecotourism in Bangladesh also affords visitors the opportunity to become acquainted with tribal villagers.

    Bangladesh boasts to having the world’s biggest mangrove forest ecosystem, expansive pristine beach, impressive Hilly Districts (Khagrachari, Rangamati and Bandarban), a massive marine world and the largest lake built by man. Certainly with these vital ecosystems contribute greatly to Bangladesh’s ecotourism potential. Bangladesh is putting in order measures to integrate ecotourism resources. It is important that when ecotourism is being promoted in the country, the environment does not become over-exploited or damaged. Thus sustainable development needs to be followed. It may be necessary to control the number of tourists permitted in a particular area.

    A variety of ecotourism activities are on offer in Bangladesh. Hike through the countryside as you search for ancient temples on the Bay’s offshore islands. Hope aboard a boat and drift along on a glistening lake or river. Trek through thick forest where you may come across Mru villages. Stand a chance of viewing Bangladesh’s amazing tigers. Many tourism companies offer a variety of itineraries and personalized eco-tours along with knowledgeable guides who will add to your amazing experience.

    One of the most popular spots for ecotourism in Bangladesh is the Sundarbans. This group of islands is home to the world’s largest mangrove forests. Residing in these verdant forests are Royal Bengal Tigers. There is little doubt that this is an ecotourism experience not to be missed. Recently designated a World Heritage Site, the Sundarbans attracts nature-lovers from around the world.

    Ecotourism in Bangladesh is increasing in popularity as more people come to appreciate the stunning landscapes, unique animal life and fascinating plants of the country.

    Ecotourism

    Defining “Ecotourism” has proven to be a difficult task given all the different players attempting to define it. People tend to define things in terms that are beneficial to themselves, hence the variety of definitions. There are however several workable definitions currently in wide use.

    The International Ecotourism Society defines Ecotourism as: “responsible travel to natural areas that conserves the environment and improves the welfare of local people”.

    Characteristics of Ecotourism

    1) Involves travel to natural destinations: These destinations are often remote areas, whether inhabited or uninhabited, and are usually under some kind of environmental protection at the national, international, communal or private level.

    2) Minimizes Impact: Tourism causes damage. Ecotourism strives to minimize the adverse affects of hotels, trails, and other infrastructure by using either recycled materials or plentifully available local building materials, renewable sources of energy, recycling and safe disposal of waste and garbage, and environmentally and culturally sensitive architectural design. Minimization of impact also requires that the numbers and mode of behavior of tourists be regulated to ensure limited damage to the ecosystem.

    3) Builds environmental awareness: Ecotourism means education, for both tourists and residents of nearby communities. Well before departure tour operators should supply travelers with reading material about the country, environment and local people, as well as a code of conduct for both the traveler and the industry itself. This information helps prepare the tourist as The Ecotourism Societies guidelines state “to learn about the places and peoples visited” and “to minimize their negative impacts while visiting sensitive environments and cultures”.

    4) Provides direct financial benefits for conservation: Ecotourism helps raise funds for environmental protection, research and education through a variety of mechanisms, including park entrance fees, tour company, hotel, airline and airport taxes and voluntary contributions.

    5) Provides financial benefits and empowerment for local people: National Parks and other conservation areas will only survive if there are “happy people” around their perimeters. The local community must be involved with and receive income and other tangible benefits (potable water, roads, health clinics, etc.) from the conservation area and it’s tourist facilities. Campsites, lodges, guide services, restaurants and other concessions should be run by or in partnership with communities surrounding a park or other tourist destination.

    6) Respects local culture: Ecotourism is not only “greener” but also less culturally intrusive and exploitative than conventional tourism. Whereas prostitution, black markets and drugs often are by-products of mass tourism, ecotourism strives to be culturally respectful and have a minimal effect on both the natural environment and the human population of a host country. This is not easy, especially since ecotourism often involves travel to remote areas where small and isolate communities have had little experience interacting with foreigners.

    7) Supports human rights and democratic movements: Although tourism often is glibly hailed as a tool for building international understanding and world peace, this does not happen automatically; frequently in fact tourism bolsters the economies of repressive and undemocratic states. Mass tourism pays scant attention to the political system of the host country or struggles within it, unless civil unrest spills over into attacks on tourists. Ecotourism demands a more holistic approach to travel, one in which participants strive to respect, learn about and benefit both the local environment and local communities.

    Ideally, ecotourism should satisfy several criteria, such as:

    ü Conservation of biological diversity and cultural diversity through ecosystem protection

    ü Promotion of sustainable use of biodiversity, by providing jobs to local populations

    ü Sharing of socio-economic benefits with local communities and indigenous peoples by having their informed consent and participation in the management of ecotourism enterprises

    ü Tourism to unspoiled natural resources, with minimal impact on the environment being a primary concern.

    ü Minimization of tourism’s own environmental impact

    ü Affordability and lack of waste in the form of luxury

    ü Local culture, flora and fauna being the main attractions

    For many countries, ecotourism is not simply a marginal activity to finance protection of the environment, but is a major industry of the national economy. For example, in Costa Rica, Ecuador, Nepal, Kenya, Madagascar and Antarctica, ecotourism represents a significant portion of the gross domestic product and economic activity.

    The concept of ecotourism is widely misunderstood and in practice is often used as a marketing tool to promote tourism, which is related to nature. This is an especially frequent malpractice in the realm of Jungle tourism. Critics claim that these green-washing practices, carried out in the name of ecotourism, often consist of placing a hotel in a splendid landscape, to the detriment of the ecosystem. According to them, ecotourism must above all sensitize people to the beauty and the fragility of nature. They condemn some operators as green-washing their operations: using the labels of “green” and “eco-friendly”, while behaving in environmentally irresponsible ways.

    Defining the Experience

    There are almost as many terms to describe types of travel as there are travel companies. A couple of buzzwords that we often hear these days are “Eco-Tourism” and “Adventure Travel”. To further confuse the issue there is also “Sustainable Tourism”, “Responsible Tourism”, “Nature Based Travel”, “Green Travel”, “Multi-Sport Adventures” and “Cultural Tourism”. The following are Untamed Path’s definitions based on common usage.

    Ecotourism: Perhaps the most over-used and misused word in the travel industry. But what does it mean? The Ecotourism Society defines it as “responsible travel to natural areas which conserves the environment and improves the welfare of the local people”. A walk through the rainforest is not eco-tourism unless that particular walk somehow benefits that environment and the people who live there. A rafting trip is only eco-tourism if it raises awareness and funds to help protect the watershed. A loose interpretation of this definition allows many companies to promote themselves as something that they are not. If true eco-tourism is important to you, ask plenty of questions to determine if your trip will help “conserve and improve” the places you visit.

    Adventure Travel: Another term which is heavily used by marketing departments. While travel to another country is often adventurous it is not necessarily “Adventure Travel”. Most dictionaries define adventure similarly: “an unusual experience including some level of risk and uncertainty”. “Adventure Travel” includes this idea of risk and oftentimes some unconventional means of transport. A dugout canoe journey deep into the Amazon basin with its attendant difficulties meets this definition.

    Sustainable Tourism: Any form of tourism that does not reduce the availability of resources and does not inhibit future travelers from enjoying the same experience. If the presence of large numbers of tourists disturbs an animal’s mating patterns so that there are fewer of that species in the future then that visit was not sustainable. Kayaking school on a free flowing river is an example of sustainable tourism. Big game hunting in Alaska is not.

    Responsible Tourism: Tourism which operates in such a way as to minimize negative impacts on the environment. A wilderness camping trip using “Leave No Trace” ethics would be considered responsible tourism while dune buggy tours would not.

    Nature-Based Tourism: A more generic term for any activity or travel experience with a focus on nature. Large jungle lodges fall into this category as do cruise ships to view penguins in Antarctica. These types of trips may or may not be environmentally sustainable or responsible. –

    Green Tourism: Often used inter-changeably with eco-tourism and sustainable tourism but more accurately described as “any activity or facility operating in an environmentally friendly fashion”. A lodge with composting toilets, gray water system, and solar powered lighting is probably “green”. There are varying degrees of “greenness”; an awareness of where resources are coming from and where wastes are going is at the heart of the idea.

    Multi-Sport Adventures: These trips have a focus on physical outdoor activities. Rafting, mountain biking, climbing, surfing, diving, etc. all offered in the same package. Not necessarily sustainable or eco but might be since many companies want to protect the areas where these activities take place.

    Cultural Tourism: Interacting with and observing unique cultures is the focus of this style of trip. The concept of learning from other cultures to broaden ones perspective is usually a core value. An artisan showing you how to weave a tapestry and learning from them about their traditional dress would be a form of cultural tourism. Buying crafts in the market with no more interaction than the exchange of money does not provide the insight into another culture that is the central theme of cultural tourism.

    Ecotourism Attractions of Bangladesh

    Bangladesh is endowed with various tourist attractions which include archaeological sites, mosques, temples, monuments, modern resorts and a range of tours, including river cruises and boating. Visitors to Bangladesh are invariably brought close to nature. The following are the major tourist attractions.

    Cox’s Bazar: This is the tourist capital of Bangladesh with a 120 km long sandy, straight and drivable beach. Thousands of tourists, foreign and local, visit this spot every year. The Inani beach, about 30 km from Cox’s Bazar, toward Teknaf, is a beautiful spot, full of coral stones. Not very far from Cox’s Bazar is the island of Maheskhali, famous for its Buddhist and Hindu temples and a dry fish industry. A trip to Tefnak, about 100 km from Cox’s Bazar, takes a visitor to the southern-most point of Bangladesh. It is simply fascinating. From there, one can go to the coral island of St. Martin by boat. Cox’s Bazar is connected to Chittagong and Dhaka by road and air.

    Hilly Districts: The three Hilly Districts of Rangamata, Khagrachari and Bandarban are inhabited by a number of tribes, with their distinctive cultures, rituals and traditions. The picturesque town of Rangamati is about 70 km from the port city of Chittagong. The Kaptai Lake is the largest man-made lake in the sub-continent.

    Chittagong: This port city is famous for its harbour and port, beach and hills, a World War II cemetery, the shrines of saints and beautiful mosques. It is the second largest city in the country and is the commercial capital. Sitakund, a holy place for Hindu pilgrims, is only 36 km from Chittagong. Chittagong is connected to Dhaka by road, train and air.

    Dhaka: Situated on the bank of the Buriganga River, Dhaka is the national capital. Founded in 1608 AD as the seat of the imperial Mughal Viceroys of Bengal and known over centuries for its silk, muslin and pearls, Dhaka has many interesting attractions. These are the Lalbagh Fort (built in 1678 by Prince Azam, son of Mughal Emperor Aurangzeb), the Armenian Church, the Ahsan Manzil Museum (the residence of the Nawabs of Dhaka), the Star Mosque, the National Memorial at Savar, the Central Shadeed Minar (a monument dedicated to the sacred memory of the martyrs of the Language Movement, 1952), Curson Hall, the National Museum, the Baldah Gardens, the Botanical Garden and the National Park. Sonargaon, one of the oldest capitals of Bengal, is 25 km from the present capital of Dhaka.

    Mahasthangar (Bogra): Dating back from the 3rd century BC, this is the earliest known city site in the whole of Bengal. One can see the ruins of an early Buddhist monastery near Mahasthangar.

    Paharpur (Naogaon): This gigantic temple and monastery of the 8th century is by far the most spectacular Buddhist site that has been discovered. It has been declared a World Heritage site by UNESCO.

    Dinajpur: Ramsagor Lake and the Kantajis Mandir (built in 1722) are two important attractions in this northern district. The Mandir, with mythological decorations in terracotta, depicts the entire story of Mahabharata.

    Sixty Domes Mosque (Bagerhat): Built in 1454, with 77 domes, this is the most magnificent and certainly the largest brick mosque of Bangladesh. The mausoleum in memory of the Muslim mystic Khan Jahan Ali is located here. It has been declared as a World Heritage site by UNESCO.

    The Sundarbans: A cluster of islands with an approximate area of 600 km² form the largest mangrove forest in the world. This is the abode of the Royal Bengal Tiger and a unique place for ecotourism. Only recently it has been declared a World Heritage site by UNESCO.

    Comilla: Here the most important place to visit is Mainamati-Lalmai, an extensive centre of Buddhist culture (7th to 12th century), developed during the Chandra and the Deva dynasties.

    Sylhet: This is the city of two great saints, Hazrat Shah Jalal (RA) and Hazrat Shah Paran (RA). It is a beautiful area with more than 130 tea gardens. Colourful Manipuri and Khasia tribes with their folk dances and distinct culture are added attractions.

    Ecotourism Development in Bangladesh

    Various tourism facilities have been developed in many of the potential tourism areas by the Bangladesh Parjatan (Tourism) Corporation and other government, semi-government and non-government agencies. The Government of Bangladesh formulated a National Tourism Policy in February 1992. The main objective of this policy is to attract investment in tourism from the domestic private sector as well as by foreign investors. The government encourages foreign investment in the sector, either in the form of joint ventures or on a full foreign ownership basis. In order to encourage investments, the government has put in place a number of incentives such as tax exemptions, remittances of up to 50% of the salary of foreign staff, facilities for repatriation of savings and retirement benefits, repatriation of capital and profits, and guarantees against nationalization.

    There was a time not too far in the past when tourism focused on beach resorts with recreational facilities. However lately, ecotourism has developed as a major trend. Travelling to relatively undisturbed natural areas with the specific object of studying, admiring and enjoying the scenery and wild plants and animals is a new phenomenon in developing countries.

    Complementary to ecotourism is the emerging concept of green productivity (GP). The term “green productivity” is based on a strategy for enhancing productivity and environmental performance with the goal being overall socio-economic development. GP is the application of appropriate techniques, technologies and management systems to provide environmentally compatible goods and services. The GP concept can be applied in manufacturing, the service sector, agriculture, and in personal consumption; but GP is particularly pertinent to the concept of ecotourism.

    About A National Organization : Bangladesh Ecotours

    Who they are

    Bangladesh Ecotours is an experienced group of tribal leaders, ecotour operators, local guides, ecologists, social activists and other sundry personalities dedicated to deep ecotourism. They’re the founding member of the local Ecotour Association as well as the pioneer (and still the only) eco adventure tour & trek organization in Bangladesh. It is a general member of TOAB.

    “They welcome guests, but don’t want Bandarban to become crowded or polluted like Rangamati. They don’t want to lose their culture nor see it consigned to a museum.”

    – Raja A S Prue

    Why they are

    Established on the principle that sensitive tourism, if under the guidance of enlightened indigenous people, may prove a viable, sustainable alternative resource to the local people to protect the environment and their traditional and diverse cultures – they strive to at least have an interesting time trying and learning.

    Their Focus

    You’ll appreciate their focus on people — their culture and the environment. These are not simply sight-seeing excursions, but real-time learning experiences. Enjoy an ideal blend of adventure and exploration with comfort and relaxation. Good, clean accommodation in the towns and hill tribe eco cottages or homestays in the interior allow a close interaction with the tourists’ host families. Additional local guides and experts are used for treks and special interest tours. Oh, and their rates are as pocketbook-friendly, as the tourists’ll find anywhere in South Asia, and help to preserve the environment and the indigenous cultures at the same time. They’re committed — most of their profits stay in the villages and areas visited, with the local communities — directly supporting local initiatives.

    Alongside providing a rewarding and unique experience for the tourists, a few of the things they seek to do are:

    Their Tour Offerings

    They offer both standard and customized tours for the tourists to choose from, the later being their specialty and passion. If the tourists are into nature, culture and unique experiences; traveling alone or with a very small group of like-minded people, are an ‘off-the-beaten-path’ type, and can manage a laugh (or at least a smile) when things get rather too earnest, the tourists are definitely on the right track.

    Join any of their exciting tours and help develop ecotourism in a planned, intelligent and interactive manner. They know the region and the people well as they live here and work with them, the tourists can help by visiting with an open mind and heart. Their idea of an ideal group is from four to six people – just right for fun, flexibility and a low-impact. Still they’re more than happy to host any individual, couple or groups of up to a dozen. Note that they’re only able to accommodate smaller groups overnight in the interior villages. Larger groups will spend their nights comfortably in nearby small towns.

    Their Commitment

    Bangladesh Ecotours cooperates closely with the indigenous communities and generously contributes to, and helps coordinate their local initiatives aimed at conserving both the natural bio-diversity and their unique cultural heritage.

    Their People

    Meet the indigenous people of the Bandarban Hilltracts…

    The Mru: A Hidden Tribe

    Distinct with long hair kept in top knots, adorned with combs & wild flowers and wearing loin cloths, Mru youths return from a long day in the hills.

    The solitary, independent and peace-loving Mru people have lived in the hill tracts of southeastern Bangladesh and western Burma for centuries – their small population split almost in half by the border. Many scholars believe them to be the original inhabitants of the region. Mru prefer to live on the hilltops, remote from even other hill tribes. Their villages are easily distinguished by sacred bamboo totems, presided over by guardian spirits. They live in large and cozy thatch-roofed bamboo cottages raised on stilts, with large open decks. Their life is based on jhoom (slash and burn) agriculture. Government resettlement of non-tribals on hereditary Mru lands makes it increasingly difficult for them to survive, many are now moving deeper into the interior in the vain hope of finding virgin lands. This migration tends to breakup their traditional society. They are in urgent need of a supplemental source of income. Small-scale marketing of traditional handicrafts along with responsible ecotourism (managed by them) may provide a sustainable alternative. This will engage traditional skills of making their own unique clothing, blankets, instruments and various household and cultural items.

    Tender Genders

    Mru highly value child care, shared equally by both genders.

    The primary duty of both genders is agriculture. Women’s other responsibilities are cooking, firewood gathering, making cotton thread & waist-loom weaving, embroidery, beadwork, etc. They carry heavy burdens using the traditional forehead strapped back-baskets. Both sexes acknowledge women work harder than men, brides are a little older than the grooms to ensure a strong woman to run their household. Both genders care and tend the children equally. Of all the tribes, they are the most affectionate and caring and would not imagine disciplining their children in any way. They go to great odds and endure much hardship to avoid any sort of conflict or confrontation. This trait leaves them vulnerable to exploitation by other tribes and settlers. Male duties other than farming, are home-building, hunting, basket-weaving, making musical instruments and other handicraft items, as well as cooking for festivals. Musical entertainment is the almost exclusive function of unmarried boys, who unabashedly groom and adorn themselves with combs, wild flowers and heavy silver jewelry.

    A Gracious People

    Youth carrying bananas to market to trade for what little they don’t produce.

    Mru are very egalitarian and have no castes and few hereditary positions. They are extremely non-confrontational and take pride in being patient & peaceful. Each household has an equal voice in all village affairs. They are one of the few indigenous peoples who have staunchly retain their own unique culture, rituals and beliefs. With no functional leadership or hierarchies, this lack of higher-level social organization makes it difficult for them to avail of, or cooperate in joint efforts for ‘development’ or cultural preservation. Thus they are one of the least ‘modern’ of all the hill tribes, consciously preserving their distinct lifestyle. Mru are especially known for their mystical music, ascetic dress, exotic appearance and long, flower-adorned hair kept in topknots. Curiously, Mru have no sense of being ‘tribal’, as do other indigenous peoples. The word ‘Mru’ simply means ‘man’ — its those other than Mru that seem ‘exotic’. They consider themselves just ordinary folks. Mru value their independence above all else, just desiring to pursue a traditional lifestyle free from domination or exploitation.

    A Sublime Aesthetic

    Youth plays his ‘ploong’, gourd & bamboo flute and sings ad-lib about nature, beauty and love.

    The Mru fully enjoy the beauty of nature – hills, rivers, flora and fauna. They are especially fond of music, through which they express this love of all things beautiful. They sing all day – while farming, cooking, to their children, to themselves, to the trees, mountains – about anything that is pleasing. Words are often ad-lib, made up at the moment about nature, love and day-to-day activities. The simple bamboo flutes (prui) played by young women and the more elaborate mouth organs (ploong) of varying sizes played by the young men made from gourds & bamboo, are the basic instruments. The largest ploong has eight long pipes and sounds somewhat bagpipe-like. Drums and gongs accompany the wind instruments and lyrics. The music is based on set tone sequences, which are repeated indefinitely, the lyrics rather like rap. During the winter months (November to February), young Mru men travel around to woo the girls and by singing questions and answers, often into the early morning, the girls test the suitors qualifications and sincerity.

    A True Mru Welcome

    A sincere smile and humble invitation awaits the tourists’ visit.

    As part of their traditional culture, the Mru simply love to entertain guests – who will surely come away richer by the association of these unique and interesting people. Click to find out how the tourists can do just this. Come visit them and the other fourteen native peoples of the Chittagong Hill Tracts. Stay in a ‘Bawm’ village – on the fabulous lotus-filled Boga lake shore – then trek up to Keokeradang, the highest peak (around 4,500 ft. above sea level) in Bangladesh, and return to enjoy a ‘guitar evening’. Visit the Buddhist ‘Marmas’ while in Bandarban and sip their ‘home-brew’ slowly, while relaxing by the Sangu river. Only two more of the unlimited opportunities that await, as the tourists discover this region and it’s peoples for yourself.

    The Role of Government

    A desire to establish tourism in Bangladesh has been evident for many years; evident in the first master plan for the period of 1965 to 1985 and a second master plan for 1985–1995. Following the latter, a National Policy was formulated in 1992. The Bangladesh Parjatan Corporation (the national tourism organization) was established in 1973. Bangladesh was a founding member of World Tourism Organization (WTO) in 1975. The National Tourism Policy of 1992 identified five key areas for development: (i) emphasis on culture and heritage; (ii) preservation of natural and scenic beauty; (iii) preservation of unspoiled beaches and the preparation of land-use plans for beaches; (iv) emphasis on wildlife and preservation, and; (v) protection and rehabilitation of the Sundarbans.

    Having proper infrastructure is a prerequisite for the development of tourism, especially ecotourism. Lack of infrastructure has been one of the prime causes of slow tourism development in Bangladesh. A few examples will testify to the fact. Kuakata is one of the few beaches in the world offering a full view of both the sunrise and sunset. It is a sloping sandy beach with coconut groves, towering cliffs, waves to be surfed and fish to be caught. Buddhist temples and the lifestyle of Rakhyne tribal people are added educational and cultural attractions. Unfortunately, it takes 12 hours on eight ferries to get there. This is enough for a tourist to lose interest in making a visit. Our government has taken steps to build bridges over the numerous rivers, thereby reducing the journey by four hours. However, it is imperative to construct a small airstrip to facilitate visitation to this area.

    The Hilly Districts offer diversified tourist attractions ranging from fascinating tribal life, tropical evergreen forest, blue lakes, to picturesque valleys. However, many of the attractions have remained virtually inaccessible. Unlike many hill environments around the world, this area is not barren, but majestically green. The average height of the hills is around 1220 m. The highest peak of Bangladesh Tahjindong is in the Chimbuk valley, at 1412 m. This peak is not accessible by road.

    The Sundarbans is the world’s largest mangrove forest. No infrastructure has been developed to provide tourists with food, lodging and transport to the area. This vast waterway of riverine Bangladesh, and its reflection of local ways of life, could become a major attraction for foreigners. However, there are no arrangements for regular water transport allowing for safe travel through the waterways, and because of this its potential ecotourism attractions have remained largely unexplored. A multidimensional, comprehensive development plan needs to be prepared for the area.

    Marketing of Ecotourism Destinations

    Clearly, promotion and advertising play a very significant role in establishing a product in the marketplace. Bangladesh Parjatan Corporation doesn’t have a marketing unit to promote the country’s products. Brochures and other promotional material could be distributed through all foreign missions in Bangladesh, through Bangladesh Biman, the national carrier. Though Bangladesh missions abroad aren’t involved with tourism-related activities, inter-ministerial co-ordination between the Ministry of Civil Aviation and the Ministry of Foreign Affairs could pave the way for additional responsibility on the part of Bangladesh missions to do tourism marketing. Participation in international tourism fairs, publication of features and advertisements in trade journals would enable the country to promote its ecotourism products. Only by a serious effort in promotion will Bangladesh start to be seen as an ecotourism destination.

    Ecotourism Guidelines for Responsible Travelers

    The conscious attitude, actions, participation and interactions on the part of the individual traveler directly affect the outcome for all involved. As a thoughtful and responsible traveler there are several things you can do before, during and after your journey to ensure the experience is in line with the values of “ecotourism” and minimize your impact on the host country. It is far easier to simply go on vacation as an uninformed tourist but making the choice to be an informed traveler can have far reaching impacts on the world around us. The more you put into your trip the more you’ll get out of it. The following is a code of conduct for responsible travelers.

    1) Prepare for your trip: Educate yourself about your destination. Be on the lookout for news and current events about the area. Learn about local history, customs and culture as well as vital ecosystems. Learn at least the basics of the local language. A simple hello, please or thank you goes a long way. Approach travel with the desire to learn rather than just observe.

    2) Respect local traditions and etiquette: Wear clothing that is accepted by the local culture. Be aware of people’s sensitivity to being photographed; always ask first. Observe local customs. Be perceptive of your own cultural values and how they affect your judgment of others. Remember that you are the visitor. There are many different concepts of time, personal space, communication etc. which are not wrong or inferior, just different. Act as an example for other travelers who are less informed than you.

    3) Avoid ostentatious display of wealth: What may not seem a display of wealth to you may be considered extravagant by another culture. For example, a camera hanging around your neck or something as simple as a wristwatch or wedding band. Tuck these items away when visiting rural communities. Leave jewelry and other unnecessary valuables at home. They only create barriers and inhibit genuine interactions. Don’t hand out sweets and loose change, this only serves to corrupt and create a begging mentality where none existed before.

    4) Be flexible in your expectations: Approach your adventure with an open mind and you won’t be disappointed. Sometimes plans change and an opportunity for more in-depth learning or a unique cultural experience presents itself. Adapt yourself to the situation rather than trying to adapt the situation to you.

    5) Conserve resources: Often times the resources in an area visited by tourists are under a great deal of pressure already. Be aware of the resources that are being used because of your visit. This includes your personal consumption of items like water and wood for building fires or specialty foods that had to be transported from afar. Don’t allow your guide to hunt endangered or threatened species or harvest rare plants for your consumption. A large luxury hotel in the middle of nowhere takes far more resources to build and maintain than does a small family run inn.

    6) Practice environmental minimum impact: Follow the International Leave No Trace Rules. Pack out everything that you bring in including toilet paper (if there is no toilet) or plastic water bottles (use purification tablets or a filter). Go to the bathroom at least 200 feet (70 paces) from any water source. Remove litter that others left behind. Do not remove any objects, plants or animal products from nature. Be aware of local endangered or threatened species so as not to purchase souvenirs made from their skin, feathers etc. Not only is this impactful on the environment but it is illegal.

    7) Choosing a tour operator or guide: Thoroughly research your tour operator or guide by asking them pointed questions about specifically what they do that is “eco” and how they involve the local communities and economies. The “greening of tourism” has led companies to promote themselves as “eco” simply to sell trips. The larger the company with more luxurious accommodations, the less likely it is to be true ecotourism. Be persistent in your inquiries of an international or local tour operator.

    8) Support local economies: How will your visit directly benefit the local economy or entire community? This is an integral part of true ecotourism. Use local transportation, guides, inns, restaurants and markets. This helps create a buffer zone for the environment surrounding protected natural areas by giving locals an economic alternative to potentially destructive practices. Community based ecotourism spreads the wealth and workload.

    9) Bridging cultural gaps: Take the opportunity to be a cultural ambassador. Much of the world’s image of western tourists is based on the unrealities of television and magazines. Look for situations for cultural exchange whereby learning about each other’s lives is mutual. Getting to know the person sitting next to you on a local bus or the person cooking your food takes some effort but is often a rewarding experience.

    10) Continued ecotourism: Ecotourism doesn’t need to end with your flight home. Follow through on your commitment to conservation in your everyday life. Share your experiences with others to foster a greater understanding of our world. You will have seen and learned much from your journey. While it is still fresh in your heart and mind take action using the various agencies, grassroots organizations and resources available to you.

    Conclusion

    Traditionally tourism has been viewed as largely beneficial to, and compatible with, the process of economic development. As the demand from tourists to visit natural scenic areas increases, developers have resorted to exploit this segment of the tourism market by developing tourist attractions in and around scenic sites, such as mountains, forests, beaches and cultural and historical areas. However overdevelopment, inappropriate development and poor management can cause environmental degradation. There is a need to balance the requirements of tourism development with the environmental constraints to ensure both economic and ecological sustainability. To create a form of tourism that utilizes unique local, natural, historical and cultural resources, and to promote the conservation and preservation of forests through proper management, and to combine successfully the resources and the promotion of tourism, it is necessary to implement ecotourism and a green productivity program in a planned way. The philosophies and practices of ecotourism and green productivity can be, and should be, a part of the tourism development strategy for Bangladesh.

    Tourists visiting virtually unknown, developing countries like Bangladesh are concerned about food, disease, infection, inconvenience, language barriers, safety and security and so on. Therefore this negative image has to be addressed by the Bangladesh Parajatan Corporation by participating in international fairs, seminars and workshops and also through advertising and publicity campaigns. Government, NGOs and private organizers involved in the general tourism sector should work hand in hand to develop ecotourism and green productivity initiatives. Ultimately, with the right policies and understanding of the relationship between tourism and the environment, all tourism (including mainstream) will move towards being sustainable.

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    Economic Empowerment of Women and Role of NGOs in Bangladesh

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    View With Charts And Images  

    CHAPTER-1

    INTRODUCTION

    The rise of NGOs has become one of the crucial phenomena in
    the sector of women empowerment in Bangladesh. Nowadays, women issues have got
    remarkable attention from different organizations. Different studies show that
    in most of the developing countries, women are always deprived from the society
    and are given subordinate roles. Looking at the present scenario, different
    governmental and non-governmental organizations are established with an aim to
    raise women from their poor financial conditions. Among different means of
    empowerment, micro credit is playing vital role and being popular among poor
    rural women. In rural societies of Bangladesh, women are usually not permitted
    to interact with men other than their direct close family members and as a
    result, they have only limited access to development personnel (Parveen &
    Ingrid, 2004). In this regard, gender discrimination is found as an immense
    factor for women empowerment. Most of the women from third world countries are
    facing such kind of discrimination either in the name of religion or social
    structure. In Bangladesh, women constitute about half of the total population
    of which 80 percent live in rural areas (BBS, 2001: 21). It is a well
    established fact that in a patriarchal society like Bangladesh, women are
    ascribed a lower status as men who have the sovereign power to control
    households and society as a whole, while women are often secluded in their homes
    (Balk, 1997:4). In this regard, the establishment of NGOs and their effort is
    mentionable for the development of women’s status in education, health,
    economic and other essential sectors.

    In comparison with worldwide scenario the status of
    Bangladeshi women has been ranked the lowest in the world on the basis of
    twenty indicators related to health, marriage, children, education, employment
    and social equality (NCBP, 2000: 27). The impact of micro credit on empowering
    women’s economic condition is the main schema to talk about in this study. The
    focus is given to discover the real scenario in view of positive and negative
    impacts of micro-credit provided by NGOs in Bangladeshi rural villages and the
    economic status of women. On the other hand the study tries to reveal the
    condition of working women through photo documentation. Photo method has become
    an easy and effective way to make people understand and visualize the situation
    in their own perspectives. In the book “The Photograph” Mary Price argue
    that the meaning of the photographic image is primarily determined through
    associated verbal description and through the context in which the photograph
    is used. “(Wells, 1997:25).

    In this project, photos are representing the women’s status
    in the rural villages. Hall (1980) contends that content is structured in a way
    that produces a preferred reading or the meaning the producers of the text
    intend the receiver to accept (quoted in Gunter: 2000: 85). He states that
    semiotic analysis of content can assess the encoded messages of the producers,
    which represents the latent ideological assumptions of the content. McQuail
    (2005) explains that visual images are inevitably ambiguous and polysemic, but
    they also have certain over words. “Represent means in American pop culture
    is to carry the name of a certain area or group” (Pineforge, 2011). A
    group of people can represent the particular culture or tradition by their
    special attribution. For example in some occasions, some people are wearing
    same dress which represents their identity. Likewise in this study photos try
    to present the condition of poor rural women and their involvement in income
    generating activities. Semiotics is also the popular method to analyze the
    photos. Which can be defined as (Branston, 2003) the study of signs or of the
    social production of meaning by signs sign systems, of how things come to have
    significance.” Meaning is associated with the environment and most of the
    time it is contextual. So, same picture may not be denoted same way by all. People
    perceive meaning depending on the context where picture is used and varies with
    different cultural background of the viewer.

    As I mentioned previously that the photos play the
    vital role in this study, it is essential to talk about its contribution here.
    Photos represent the rural Bangladeshi women’s condition and try to signify
    their economic status. This study is specially conducted in the rural villages
    of Bangladesh where poverty exists the extreme. Though the project is a photo
    story, the following write up tries to give the theoretical and methodological
    underpinning to it. 

    Project Questions

    Throughout this study, the focus was given to find out the
    answers to the following questions.

    Project Objectives:

    As objectives lead the study in a proper way, it should be
    clear at the beginning of any study. The main objectives to conduct this study
    are listed below:

    •
    To investigate whether women are
    empowered through the programs launched by NGOs. It specially deals with the
    economic empowerment,

    •
    To reflect the real condition of
    rural women who are involved in small business with the help of micro-credit
    and to find out its effectiveness on them, and

    •
    To provide theoretical and
    methodological understanding about the economic empowerment of women.

    Production Process

    The study is conducted using a photo story method on women’s
    economic empowerment through NGO micro-credit loans. The layout of the photo
    story is printed pictures with captions and short stories. Photographs and
    story both are press print on color/glossy paper. It is divided into two parts
    i.e. pre-production and post production.

    : This section includes taking photographs, data collection
    and observation of the selected places. It is the pre stage of the production.
    So, raw data was collected for the study.

    This part of the production contains editing pictures,
    writing stories depending on the collected data. Writing Caption, designing,
    finally making a photo story combining photo and story altogether is the final
    part of the production. As the project demands both practical and theoretical
    understanding, this paper tries to fulfill the latter requirement.

    The first chapter includes background of the study, research
    question, objectives of the study and the production procedures. In the
    background part some information about women empowerment and micro credit and
    the importance of photo method is presented. Impacts of micro credit in
    Bangladeshi context are discussed which especially deals with economic
    empowerment of women.

    Second chapter is review of literature which tries to give
    the clear ideas about previous studies on this very topic. Women empowerment
    through micro-credit is highlighted in the entire study. It also deals with the
    micro-credit and gender relation. Some examples are presented to reflect the
    impact of micro-credit lending organizations. Previous studies on women
    empowerment are presented in an analytical way.

    Chapter Three – Research Methodology

    Third chapter deals with the methodology. Here, I have presented
    the way of data collection, sampling and rationale for sampling, questionnaires
    design and the reasons behind choosing the rural villages of Bangladesh. And I
    have also talked about the photo method with some theoretical understanding and
    tried to shed light on its importance in this study.

    Chapter Four – Data Presentation and Analysis

    This chapter covers analyzing and presenting the data.
    Collected data are presented in an analytical form with reference to the
    respondent’s experiences. Furthermore, it also presents the findings in an
    analytical way.

    At the end, discussion and conclusion is presented
    taking into consideration of the whole study. In fact the findings and
    discussion chapter gives the whole study at a glance with further suggestions
    and recommendations.

    CHAPTER 2

    The literature has been reviewed in this research in terms of
    several concepts relevant to this project. Numerous studies have been made
    under women empowerment and impacts of micro-credit. Here, I am trying to
    review some of the relevant studies by previous researchers which provide the
    condition of women in terms of their economic and social status.

    Women empowerment agenda has become a buzz word among women
    activists and development practitioners. In recent days, women themselves are
    being aware about their rights and responsibilities which is the result of
    their active participation in different development activities.

    “Women’s participation in the workforce of advanced
    capitalist societies had been increasing since the early years of the 20th
    century. This increase was largely due to the increasing numbers of married
    women involved in paid employment”. (Charles, 2000:7$.

    Charles (2000) states that the feminization of poverty also
    refers to the fact that many women ‘ would be poor if they had to support
    themselves. “He emphasizes on women’s less access on resources which is
    legitimated by an ideology of dependency”. In another study (Banui, et at,
    2011), defined women empowerment is to have control over asset and resources
    which empowers women as it gives power to make decision about the use and management
    of those specific assets and resources. It also plays an important role in
    determining a person’s bargaining power within the household and in the wider
    community as well. Empowerment actually means to have access of resources, to
    have own ability to decision making, to get opportunity of being educated, live
    healthy life, etc.

    In recent days, women empowerment agenda
    has got remarkable attention from different animations.
    Empowering women through micro-credit is the most recent phenomena by the
    different governmental and non-governmental organizations. In Bangladesh, many micro-credit lending organizations
    claim that they are established with the aim of empowering women’s economic
    condition by providing minimal amount of money. In 1976, Mahmmud Yunus started
    giving loan to the poor by establishing a bank named “Grameen bank”.
    This bank got lots of popularity among the poor as it started hear their
    problems. “Micro-credit allows families to work to end their own poverty –
    with dignity. Micro-credit programs around the world, using a variety of
    models, have shown that poor people achieve strong repayment records – often
    higher than those of conventional borrowers.”(Microcredit summit, 2011).
    Below, the literature is trying to reflect the connection between micro-credit
    and women empowerment.

    2.2. Economic empowerment of women through micro
    credit

    Nowadays, all over the world NGOs’ popularity is getting into
    its peak. As NGOs are working in different sector of development, women’s
    development is also not far from its stroke. Talking about economic empowerment
    of women, emerging number of NGOs who are providing micro credit especially for
    women are mentionable in this section.

    pact on women in terms of
    raising their economic condition.

    Kasia (2008) studied about the impact of micro credit
    with the title “Limits of credit- A Bangladesh Case”. Their observation
    was the danger of taking micro as a “Silver Bullet” for development
    and the limits of employing purely market-led development approaches as
    strategic for poverty alleviation. Micro credit claims that is it ig     people to empower themselves
    by engaging different income generative activities. Some of the advocates of
    micro-credit say that micro-credit helps to break down the poverty and reduce
    depending charity and other forms of dependency.” (Jaison & Kasia,
    2008). They found that micro credit is helping women to be independent with
    their individual business. Micro-credit is helping in enhancing women’s
    decision making power and providing opportunities to engage in income
    generating activities.

    Khan and Rahman (2007) studied on “Impact of
    Microfinance on Living Standards, Empowerment and Poverty Alleviation of Poor
    People” with the aim of finding the impact of micro-finance and poverty
    alleviation in rural Bangladesh. Their area of study was Chittagong district of
    Bangladesh where they interviewed the people who were involved with the micro
    credit lending organizations. Depending on the data, they found that micro
    credit has not only helped poor to come over from the poverty line but also
    helped to empower themselves. Their study says that micro finance institutions
    are contributing not only in alleviating poverty and improving the living
    standards of the poor but also in offering extensive human development programs
    in Bangladesh. Zeeler et al, 2000 (quoted in Mosely & Hulme’s; 1998)
    revealed that for each of the intermediaries, the impact of lending on the
    recipient household’s income increases with the debtor’s income and asset
    position improved.

    Nycander’s (2004) study on the “Empowerment of women
    through micro-credit” revealed that only providing micro-credit is not the
    solution of alleviating poverty. Until the women are far from the access of
    resources, the small amount of money cannot bring radical changes in their
    life. More job opportunities and chances for the women are crucial to empower
    them. With the loan, many types of skill development training should be
    provided hand to hand so that women will be able to use their skills in proper
    way.

    More than 65 million poor people have
    accessed on micro-credit schemes and about three quarters of them are women. Studies in Bangladesh
    have found that apart from economic impact, access to micro credit has had
    substantial impact on gender equality.” (Nycander. 2004)

    Gender is the most discussed topic all over the world and it
    has got remarkable attention from the development practitioners and women
    activists. Hashemi, Sechler & Riley (1996) found that Grameen Bank and BRAC
    in Bangladesh had a positive effect on numerous other aspects of life of women
    besides their economic and social empowerment. Osmani 1998 (quoted in Zeller,
    et al, 2008) also observed improvement in the bargaining power of women in the
    family because of their access to credit. Jaison & Kasia (2008) found that
    micro credit and gender has very close relation. But their observation brought
    tbe negative impact of micro-credit in the name of empowering women. They
    revealed That micro credit has been used in improper way. Micro-credit lending
    organization are attributing loan for women and men are benefited in many ways.

    “Women take micro-credit as their husbands order them to
    do so. When their husbands fail to pay the installment, then NGO workers abuse
    the women a lot. Women have to bear the pressure coming from both sides”
    (Jaison, et al, 2008).

    World economic forum writes in its report, “The economic
    participation of women, their presence in the workforce in quantitative term is
    important not only for lowering the proportionate levels of poverty among
    women, but also as an important step toward casing household income and encouraging
    economic development in countries as a whole” (we forum, 2011). Looking
    into the present scenario micro credit has become an easy alternate among poor rural people of Bangladesh to
    engage with individual work. Women are importantly targeted by the NGOs and
    provided loans for different purposes. Gendered socio-economic rights clearly
    affect the ability of women to enter the economic sphere. If women are not able
    to enter the economic sphere as a result of rights aasrictions, then
    empowerment and development, twin goals of microfinance, cannot be
    achieved” (Bermer & Mathew, 2009).

    2.4 Micro-credit and its Impacts

    The impacts of micro-credit have been studied by
    different people. Ahamed (2002) says that “Up to June 2002, the total
    coverage of micro-credit programs was 13.5 million households. Some of the
    borrowers received loans from more than one institution. In cent
    days, the number of micro-credit borrowers has been increased in huge numbers  earlier. The general consensus is that 15% of the borrowers
    are borrowing from than one institution. Khandker (quoted in Islam & Miya:
    2008) states that in that e. the effective coverage is 11 million borrowers,
    which is roughly one quarter of the raral households. About 80% of them are
    from below poverty level and most of them are »omen. In
    other studies Rahman, 1986; Shehabuddin, 1992; Mizan, 1994 (quoted in Warn
    & Miya; 2008) conclude that women’s participation in micro credit programs
    has positive results on women’s empowerment. Some other evaluations (Montgomery
    et al., 19%: Rahman, 1999) provide a completely opposite view and conclude that
    participation leads to greater subordination of women and makes them more
    vulnerable in an unequal rural society”.

    many instances
    disempowered them. They emphasizes that although women are earning money, they
    are lacking the power over it to spend as their interest. On the other band,
    not having access of market and lack of social and structural changes are being
    the hindrance for women’s development. Some other examples show about the
    terrible behaviors of NGOs people to the women is another bitter part of micro
    credit operation. Cheston
    and Kuhn 2002, 29; McCarter 2006, 361, ( quoted in Elizabeth & Mahew, 2009)
    state that in highly restrictive environments, microfinance programs have
    potentially negative impacts on women, including increasing the burden of
    workloads, changing family dynamics, increased divorce rates and rising
    domestic violence rates. In such cases, neither the beneficiary can come over
    from this condition nor can avoid it. In Jaison & Kasia’s (2008) study the
    beneficiaries said that ‘WGO workers come to our kouse and try to make us
    understand the benefit of taking micro-credit. After getting the loan, if we
    fail to repay the installments on time they put pressure on us. So, we are
    bound to get another loan to repay the previous loan “.

    Micro credit is not only established in Bangladesh,
    gradually with the emancipation of NGOs entrance in development sector, it has
    started to attract the attention of different  countries. In south Asian context, most of the
    developing countries have started to work in different sector of development
    through NGO’s programs. Micro credit is being practiced as a tool to alleviate
    poverty in Bangladesh, Nepal, India, Pakistan and other countries as well. Some
    stories from South Asian countries are presented below to give a look about the
    availability and practice of micro-credit.

    In Nepal, Parbati Karki, 27, purchased a Jersey cow
    five years ago by obtaining a small loan of Rs. 5,000 from Mahila Sahayogi
    Sahakari Sanstha (MSSS), a micro-credit provider. She now sells 18 litres of
    milk daily from her two cows and earns about Rs. 400. She has been able to
    erect a new house by putting together her income from the milk business and her
    husband’s earnings, (povertynewsblog, 2011). Likewise, Baymma (India) became a
    member of SKS in 2001. With her first loan of $150, she bought a buffalo. By
    selling milk and other dairy products from the buffalo, she was able to save an
    average of $2.75 each week after paying her loan installment and buying feed
    for the buffalo. She is now relaxed with her income and able to dream a good
    future for their children’s rearing and caring (unitus, 2011).

    In October 2007 Safura (Bangladesh) applied for the
    membership of the micro credit programme and received credit from Grameen-Bank.
    She rented the land from the landowner and cultivated vegetables. The land is
    now full of green and fresh vegetables. Safura is now counting a better future
    in her life, (nannan, 2011). In another example, Alice Pallwela lives in Srilanka.
    She is running her candy business for long. Pallewela’s business now draws
    enough profit for her to save regularly, allowing her credit union to lend to
    other micro-entrepreneurs. She is now living with in peace and getting full
    respect from the family (microcreditsummit, 2011).

    2.6. Conclusion

    As we reviewed the literature above, it contains both
    negative and positive impacts of micro-credit in women. Some studies argue that
    micro-credit has really empowered women and enhancing their economic condition
    by making them aware about their rights and responsibilities. On the other
    hand, some other studies conclude that micro-credit has disempowered women by
    giving extra burden, harassment, violence and it has increased the divorce rate
    as well. Instead of empowering women, micro credit has created fear about its
    repayment process.

    So, here the concluding remarks can be made that
    micro-credit is not fully successful in its way of empowering women but its
    effort in the development sectors can be taken as a good step toward
    alleviating poverty. It has given the platform and opportunities to the poor
    women. Women are involved in income generating activities and moving towards
    the independence. Thus, women and micro-credit has YCiy CldSC relationship lf
    economic development.

    RESEARCH METHODOLOGY

    Methodology

    This study has two different parts. One part which includes
    photo story and another important part is theoretical and methodological
    understanding on this very topic. So, it is a photo story blending of two
    methods. Photo method and qualitative method is the main method to discuss
    here. I found the necessity of these two methods to get intended data and
    information from the respondents. This study also includes direct field
    observation and documented photos which is necessary to reach its goal as per
    the research questions.

    Photo Method

    “The photograph, technically and aesthetically has a
    unique and distinctive relation with that which is/was in front of the camera.
    “(Wells, 1997:25). In this study photographs are used to demonstrate the
    condition of poor Bangladeshi women and their economic condition. A single
    photograph can speak what thousand of words cannot. Nowadays, photographs have
    become popular among the people and it is an easy and attractive tool to make
    people understand about the truth. In recent days, increasing demand of
    photographs itself reflects the importance and popularity of it among the
    people. Still photography has its own importance to visualize the reality. In
    this study, I have tried to give the real picture of poor rural women using the
    still pictures those who are involved in income generative activities.
    Methodological understanding is presented in this paper and the photos are
    attested in photo story.

    During the data collection procedure, I tried to
    capture the moments where women were involved with their individual business
    (in the field, shop, market, etc). Those pictures are representing the actual
    condition of poor women and their involvement in income generating activities.
    The meaning is created according to the context and circumstances which
    examines how it is being taken by the viewers through different perspectives.
    “Semiotics is also the wonderful tool for analyzing images.” (Lacey,
    1998:56). Photographs help to see the world from different perspective and make
    people inform/know about the reality. “Photography does not simply
    reproduce the real; it recycles it- a key procedure of a modern
    society.”(Sontag, 1977:174).For this reason, photo method is used here to
    show the women’s economic condition after being involved with their small
    business through micro credit. Those photographs presented in the photo story
    with women’s life time experiences try to give the real condition of rural
    women. As the words are not enough to explain the impacts of micro-credit, I
    used photo method which I believe helps to make the study more practical and
    meaningful.

    Qualitative method was used for selecting and analyzing the
    data. In depth interview with the beneficiary and analysis of the data in
    qualitative way is the main method of this study. Direct observation of the
    study area and interviews with micro-credit beneficiaries was the main data
    collection procedure.

    In depth interview was made with eight women by asking
    question, which include 21 questions. Questions were made generally taking into
    consideration of rural poor women who are running their life with minimal
    amount of loan provided via different NGOs. Demographic questions including
    basic information were asked to the women, which includes name, gender, marital
    status, no. of children and other basic information. Other questions related
    with MGO connection, income generated activities; earning and saving including
    women’s present economic conditions were asked. 8 in-depth interviews were made
    with the beneficiaries. “Case studies, which are generally considered to
    be qualitative studies, can combine a wide range of methods, including
    quantitative techniques. “(Bell, 1993: 63). Same pattern of questions were
    asked to all the respondents to make the study specific. Qualitative method I
    found an effective tool to analyze the case studies. While interviewing, mostly
    open ended questions were asked.

    3.4. Sampling and rationale for sampling

    The sampling method is purposive which includes 8 women
    cases. In Gaibandha District five women were interviewed and three case studies
    from Hobiganj district were chosen. In this study the purpose of selecting case
    was to have in-depth interviews with the beneficiary and look into the progress
    in-terms of their economic ups and downs. Being economically empowered is not
    only associated with the economical aspects. It is a process to make woman
    independent in other essential sectors. Economic empowerment brings many other
    forms of independence together. For instance, education, health, social status,
    self realization and actualization, social activeness, decision making power
    etc are some of them.

    I choose eight women from two different districts (Gaibandha
    and Hobiganj) to have interview who are affiliated with NGOs and doing their
    own business. I have not included any voice of the NGO people or other experts.
    This study is fully devoted with the poor illiterate people. What I believe is
    the information collected by the direct beneficiaries is more reliable than
    secondary sources. I could have interviewed women activists or other
    professionals but my area of interest was different than other researchers. I
    believe the voice of the voiceless is more powerful than the experts. I found
    eight cases ideal for this project to go in depth taking into consideration of
    available resources and time.

    Area chosen

    Gaibandha and Hobiganj district of Bangladesh were chosen for
    this study where most of the families are under the poverty line. Extreme
    poverty lies over there and people don’t have access to modern technology. Most
    of its habitants are still struggling for the basic needs including food,
    sanitation, education etc. Those families, who are poor, cannot afford or
    borrow big loan from the conventional bank which needs own land and property.
    Earlier, village people used to depend on the so-called rich people in the
    community and paying high interest rate for minimal amount. Considering this
    scenario, many local and national NGOs are been established with the aim of
    helping poor and elevating poverty. Most of Gaibandha and Hobiganj people are
    depending on micro­credit provided by different local and national NGOs. The
    key concern was to find out the impacts of micro credit in empowering women’s
    economic condition in terms of their income and saving. Actually, the places I
    have chosen are really vulnerable places of Bangladesh where lack of resources
    and opportunities can be seen in a greater extent.

    Data collection procedures

    This section of the study includes taking photographs,
    observing the property of respondents and exploring the real condition of
    women. Direct interview with women and field observation was the main way of
    collecting the data. As I mentioned earlier Gaibandha and Hobiganj Districts
    were chosen for the study, I went there, stayed with the village people and
    mixed up with them to get the intended information. During the data collection
    process, the cooperation of the local people is unforgettable. Their support
    and hospitality made the procedure more effective and fruitful in many ways. I
    went to visit the women directly and interviewed them with myself observation.
    So, data collection process does not include any secondary source, it fully
    depends on primary data.

    Qualitative method was used to analyze the data. In depth
    interviews and collected data are presented in analyzing section using
    qualitative approach. “Qualitative analysis procedure emphasizes the
    capacity of texts to convey multiple meanings, depending upon the
    receiver” (Gunter: 2000:82). The researcher should have the idea about the
    multiple meaning while analyzing the data qualitatively. In this study, cases
    of women, their present economic condition, their
    satisfactions/dissatisfactions with affiliated NGOs and suggestions are
    presented in analyzing part. Analyzing part is completed on the basis of
    interviews and obtained data from the interviewee. Genuine experiences of the
    beneficiaries and their connection with NGOs are presented in data analysis
    part in qualitative way including women’s direct quotations.

    Data presentation

    In this chapter, data are presented depending on the
    collected materials. The analysis is made in qualitative way as I have
    discussed in the methodological section. The study does not include huge
    number of cases so that I have avoided quantitative method. Selected photos are
    taken as the demand of the study but the analysis of every picture separately
    is not possible here. I am not presenting all the pictures with its semiotic analysis.
    Photos are presented in the photo story with captions and stories. The stories
    are not created; it tells the truth and represents the real picture of women in
    regard to their economic stipulation.

    The study is done on a very limited number of women. So, the
    result cannot be generalized for whole Bangladeshi Micro-credit borrowers. But
    the condition of poor people is almost same all over the Bangladesh in terms of
    their economic status. From the study, I found all women I interviewed were
    able to use their income on their own and their economic condition has been
    improved after taking the loans. Six out of eight women have involved
    themselves in income generating activities and other two women had given it to
    their husbands. The privilege for spending income is not restricted by their
    husband or any other male fellows. It means women can use productive and non­productive
    assets as their wish. Most importantly the participation and involvement of
    women in income generative activities is visible. Almost all of them had no
    home before the affiliation with NGOs and had no possible option to depend
    upon. Available resources (Conventional Bank, Charity, Local rich people, etc)
    were not trust worthy and not easily accessible too. In this case, NGOs have
    become the preeminent alternative to rely upon and to overcome from the poverty
    line.

    Analysis of the data

    The literature review above, explores both negative and
    positive impact of micro-credit in empowering women’s economic condition. This
    study was conducted to find out whether the NGOs are able to empower women? The
    main focuses were given to the beneficiaries and in depth interview were
    conducted to dig out the economic ups and downs of the women. So far the
    economic empowerment is concerned; the focus was given to Micro­credit lending
    institutions. There are millions of beneficiary all over the Bangladesh who
    have made micro-credit as their major source of income. As the data collection
    procedure depends on in depth interviews, here I am presenting the analytical
    form of the data which I obtained during my study. It includes the saying of
    women and their stories, experiences after getting involved with micro-credit.
    The sub-headings try to enlighten the whole study in analytical and elaborative
    way.

    The observation suggests that for the poor people in
    Bangladesh, the entrance of MFIs in economic world has brought new hope within
    themselves. People had no alternate way to depend upon earlier. The very first
    need for the people is to fulfill their basic requirements. Most of the village
    people as I visited and observed in my study area, are poorest of the poor who
    hardly know about outer world. They are limited in very few resources. All the
    people I interviewed have no other source of income so they fully depend upon
    the NGO’s loan.

    “Before taking the loans our economic condition was very
    bad, we had no source of income. It was difficult to manage food and other
    basic things. But now we all are happy with the progress. My family members
    help me to bring the goods from the market. I am satisfied with the income and
    in Peace for this Bank”, said Rahela, a beneficiary of Grameen bank.

    Chapala Rani Pal, a habitant of Gaibandha, is running her
    pottery business. She said “My economic condition was very bad. Then I
    decided to start the work. Seeing the progress of my neighbors I decided to
    take loans from BRAC. Actually, pottery is like our family business. By the
    name, we are kumar, which means those who makes the pot of soil.” “NGOs
    give the loans in very low interest rate and I was influenced from other women
    around”,     Mosammot Anwara Begum (Gaibandha) said. She added, taking
    money from the local rich people is not safe and interest is also high. In this
    case, micro credit is an easy option. She took loans from VDRS (Village
    Development Rehabilitation Sangstha) a local NGO of Gaibandha and started the
    fishery business. She is running her family with this business and happy with
    her progress. Those women who want to start their business micro-credit has
    become the only way to depend upon. NGOs are available in local and national
    level.

    Independent with individual business

    A simple word “independent” carries huge meaning.
    Actually, talking about Bangladeshi village women, there are very less
    opportunities to engage themselves in income generative activities. In this
    case, those NGOs. who are providing micro-credit with the slogan of women
    empowerment, have given the platform to start their owti business The main objective of taking loan was “to
    be independent’1. Bulu Rani replied to the question why did you
    start taking loan from SKS? She said “My all family members encouraged me
    for starting this work. Taking loans from NGO was easy than begging for money
    with the so-called rich people. They ask for more interest and if we are unable
    to pay according to their need, they can do anything. So, NGO is the safe option
    for poor”. SKS (Samaj Kalyan Sangstha), a local NGO from where she took
    loan and started farming profession.

    “I was running out of money. My economic condition was
    worst, so I planned to start my own business”. I started working with Tk.
    6,0007- loan. Initially I had no source of income. There was no proper place
    and opportunity to put my effort. But VDRS (Village Development Rehabilitation
    Sangstha) has given the platform and encouraged me to be independent” Most
    Firoza (Gaibandha) said. Now women like Firoza & Bulu Rani have got the
    courage to start their own work. In most of the developing countries government
    is not able to provide best alternative way to its people to survive in proper
    way. In that case, people have found micro-credit very easy and handy.

    Women’s economic condition is getting better

    Rahela (Hobiganj) used to manage one time food hardly a day
    with so many difficulties. But, recently she is earning Tk. 3,000-4,0007- per
    month and rearing her children. She said, “Before taking the loans our
    economic condition was worst, but now we all are happy with the progress.
    “BRAC gives more money than others and my husband also told me to take
    loan from this Bank. I willingly took loan from this bank and started my work.
    BRAC is the best among other NGOs available in this province. Now my economic
    condition is improved than before.” Chapala Rani Pal (Gaibandha) said.

    Mosammot Anwara Begum (Gaibandha), her economic condition was
    very poor initially. After taking loan it is improving. Now all of her children
    are going to school. She used to work as hookers and had to depend on others
    for food. But with this loan she has got one independent way to live her life.
    Earning depends on her effort. Now she is saving per month l,000/-excluding all
    the expenses which need to run the family. Salma Begum (Hobiganj) said, “Earlier
    my husband used to get Tk. 15,00/- per month by pulling other’s rickshaw but
    now he earns more than Tk. 4,500/- which is a good earning comparing his
    earlier earnings. I am satisfied with the progress and want to continue this
    profession.     Six out of eight women I interviewed have improved their
    economic condition after the involvement with NGOs.

    Those women who were passing through extreme poverty are daring
    to save money for their future although it is very less amount. They all pay
    weekly installment as per the rule of NGOs and most of them are saving Tk. 20/-
    to Tk. 30/- in their saving account during the weekly payment. Initially saving
    was beyond their imagination as they were struggling for the basic needs. To
    manage the food on time was a big challenge for the poor. Rahela (Hobiganj) is
    paying Tk. ISO/- weekly as an installment and saving Tk. 307-in her saving
    account for the betterment of her children. She said “Initially my income
    was actually O/-. I had faced so many difficulties and had to suffer for basic
    needs. But now I am earning Tk. 3,000-4,000/- per month and running my
    family.” Same happens with Anwara (Gaibandha), who is paying weekly 630/-Tk
    for installment and saving 30/Tk in her saving account.

    There are several other examples those who are saving a small
    amount of money with the aim of better future. They are hopeful that such a
    minimal amount will secure their future. Although, it is a small try but the
    awareness has been developed inside them which is a very good sign of
    development. Even in the rural places of Bangladesh, educational institutions
    are available in every step which shows that the need of education for
    development has been realized and people have started to think about it. Poor
    people are being alert about the forthcoming possibilities.

    Social Recognition

    Nazma Begum (Hobiganj) is helping her family. In-fact the
    whole family is depending on her income. Her husband also helps her in the
    field and selling the products to the markets. In the male dominated society
    where men are taken as the “bread winner” of the family and women as
    care taker, the gender stereotypical role has been changed with the involvement
    of women in income generative activities. Rahela (Hobuganj) says, “Initially
    the -working environment was not women friendly. But now with my progress
    nobody dares to question or point the finger on me rather some are influenced
    and some others are jealous of my progress.”     This experience gives
    positive symbol of women empowerment. Women are being respected in the eyes of
    the people and some have become entrepreneurs in the society.

    Chapala Rani Pal (Gaibandha) has her pottery business. Her
    husband sells the pot in the market because it is difficult for her to go to
    the market and sell the products. Her husband and other family members help her
    in bringing soil and preparing the pot. She had no space before in her family
    and relatives but now she is getting respect within her circle. In fact, it is
    the effect of earning and being independent. Her independency has brought light
    in her family and within herself.

    Increment in bargaining power

    Women are running their individual work and have created
    their space in their family. Their decision making power in the family has
    increased and they have become powerful than earlier. Now their husbands
    consult with wives before taking any decision. Initially women used to agree
    whatever their husbands decide and they had no space to put their voice against
    the violence and discrimination within the family and society. But, with the
    earning, their bargaining power has been increased. Women have got the courage
    to give disagree vote if they are not happy with the decisions made by others
    male fellows. It has always been seen the domination of males in different
    spheres of their life of the women. NGOs role in empowering women’s bargaining
    power is mentionable because these days’ women are not same as they used to be
    ages back. Their eternal empowerment has come out as a social change. Of course
    gradual development in education and other sector has brought new arena in
    women development.

    Ownership and control over Income

    Ownership is the first basic element to make women
    independent and powerful. Almost all women I interviewed in Gaibandha and
    Hobiganj are using the income on their own. They have their own control in
    their capital. But, I found that as women have all the responsibilities to look
    after the family, it is easy for men to let women do their work so that they
    don’t need to think about family matters. It shows that men are avoiding the
    responsibilities in the name of women’s freedom. But, the truth is that women
    are able to use the income in their complex situations. Initially, women used
    to depend on men’s earning and the supreme power was given to the men. By law
    and social rule, no women were able to have access over
    productive/non-productive assets. But now with the emancipation people have
    started to become liberal and modern in many respects. If women are working and
    earning, they had to have full control which is the fundamental rights too. My
    observation in this study is that those women, who are engaged in income
    generating activities, are able to use that property and income by themselves.
    Ownership, having control over property and use of the resources without any
    obstacles are the main forms of empowerment. Micro-credit has given that power
    to women so that they can use the income according to their wish. It has given
    the strength to the women to use their income in proper way.

    4.2.8. Gender Stereotyping Exists

    Having courage to do something is very hazardous sometimes
    those who are bound to stay inside the social and cultural boundary. Till now,
    in every field work if any woman comes out and starts to do something, then
    definitely she has to face difficulties. Anwara Begum (Gaibandha) started to
    talk without being stopped when I asked; being a woman did you face any
    difficulty to start this business? She said, “There are problems
    everywhere. Many people say, you are shame less and they talk very dirty things
    about me. They tease me sometimes and try to misbehave with me when I am alone
    in my shop. They say very malicious thing which is unendurable.  am compelled to avoid such comments, if I
    care, I will have to die without food. It’s not my interest; it’s my need for
    my survival. So, I can’t stop working. “

    Anwara has courage and inner power to face the situation, but
    all women are not the same. Some women who are in need of work can not come out
    and tackle the situation. Their thought has been developed with the societal
    boundary. They might think that staying inside is safer than being criticized.
    Courageous women are limited in number, but not in zero which gives the hope
    for upcoming generation.

    “I wanted my husband to be independent. Now he earns and
    our family is running properly. It was difficult for me to start my own work
    because as I have my son and all responsibilities to take care of him are mine.
    1 don’t have enough time and energy to do my own work. So, I thought it is
    better to buy own rickshaw so that my husband does not need to pull somebody
    else’s rickshaw”, said Sulma Begum ( Hobiganj). Though the income is used
    for the family purpose, Sulma is not involved in economic activities. She has
    to depend on her husband. The aim of micro credit to empower women is being
    misused for other’s interest. Nazma Begum (Hobiganj) said “My husband
    helps me in field and selling the products in the market”. She is also
    facing the problems of being a woman. She said, “When I started my work,
    there were so many difficulties; the working environment was not women
    friendly. I can produce the things but cannot go to market to sell it. I have
    to depend on others to sell the goods in the market. So, the income does not
    come to my hand directly.”

    Aforementioned examples are some among thousands. Almost each
    woman has to go through such situation every day in rural village. Women
    development is not imaginable until the social barriers are removed. If women
    are producing, why would they let others to enjoy the benefit? Still, women are
    given subordinate roles and are compel to stay inside conservative thoughts.

    Almost all women I interviewed were illiterate. Some of them
    can hardly sign in the form and other cannot. But every step of NGO activities
    (while taking loans or paving installments) are in written formats. It has
    created difficulties for the women in every repayment. Most of the women are
    paying their installment weekly basis but they are not aware about the interest
    rate. Generally, the interest rate is 15% which is added with the borrowed
    money. Due to the lack of education and general knowledge of math, poor people
    cannot think critically. As the result, they have to suffer all the time. But I
    observed that most of the village people are serious about their children’s
    rearing and education. So, we can expect that soon the problem will be solved
    and the illiteracy will be vanished.

    DISCUSSION AND CONCLUSION

    The data presented above and its analysis gives the clear
    picture about the condition of women. Their participation in income generating
    activities can be taken as a good symbol of women development. Micro-credit has
    performed its role as a resource and the women are using that resource for
    improving their life standard. Women’s independency in individual business and
    their improving economic status shows that micro-credit is somehow in its way of
    achieving the targeted goal of alleviating poverty. The following points try to
    give the quick look of the findings.

    ·
    Women
    are involved in their individual business with the help of loans provided by
    micro-credit lending organizations,

    ·
    NGOs
    have given the platform for the rural poor women to engage themselves in income
    generating activities,

    ·
    Social
    recognition for the women became possible after the involvement with micro
    credit lending organizations,

    ·
    Micro-credit
    lending organization has created a systematic environment where people can feel
    safe to be affiliated with,

    ·
    The
    gender gap has been decreased and other awareness including education, health,
    and healthy habit has been improved,

    ·
    Women’s
    decision making and bargaining power has been developed,

    ·
    Women
    have their control over their income and assets,

    ·
    People
    have achieved future oriented plans which shows that they are alert about forthcoming
    possibilities,

    ·
    Women’s
    bargaining power has been increased, 4 Support and respect from the family
    members and relatives became possible through micro-credit,

    ·
    NGOs
    have played vital role in enhancing economic condition of women which can be
    taken as a good sign of economic development for the whole country,

    The main objective of conducting this study was to find out
    the impacts of micro-credit lending organization on empowering women’s economic
    condition. Throughout this study, it was found that the impact of NGOs on
    empowering women was positive.

    Before 1970s, rural poor people had no options to involve in
    income generating activities because the commercial banking was not so
    poor-friendly in its procedures and not easily accessible too. In 1976, when
    Dr. Mahmmud Yunus came with the idea that even a small investment can bring an
    immense change in alleviating poverty; the practice of micro credit was
    started. With the popularity of micro-credit, the expectation grew up in high
    range. After the establishment of Grameen Bank, numerous other micro-credit
    lending organizations started to invest with the aim of eliminating poverty
    from the country and the targets were helpless poor rural women.

    Now, among the micro credit borrowers, 95% are women who are
    engaged in small business. They have had bunch of bitter experiences of being
    poor and living under poverty. On the other hand they have success stories as
    well after being involved with NGOs.

    There are several reasons behind growing interest of poor in
    micro-credit. Those people who does not hold their individual land and
    property, for them it is difficult to get loans from commercial banks.
    Comparing to micro-credit lending organizations, conventional banking is tough
    in its procedure and not easily accessible too. Most of the rural people are
    illiterate and uninformed about proper implementation of the available
    resources. In some cases the NGO people suggest and give creative ideas to the
    borrowers so that they can use the loan in appropriate ways.

    In this study, most of the women I interviewed could enhance
    their economic condition after the association with micro-credit lending
    organizations. Women’s decision making power has been increased and they have
    got social recognitions in many respects. Women have become optimistic about
    their future and aware about their children’s rearing. Psychological development
    and positive anticipation about the life can be smelled among the poor. Their
    involvements in income generative activities show the new direction for the
    development of entire economy of Bangladesh.

    Furthermore, easy access to loan, handy distribution
    procedures and consideration of the circumstances are playing the key role to
    arouse the interest of poor people towards micro-credit. It is a small
    investment unlike commercial banking which does not give any fear of having
    great loss. And the most important reason of its attractiveness is it came with
    the motto of women empowerment. As I have presented in the analysis section,
    most of the women I interviewed could enhance their economic conditions. It
    shows that their efforts are seen in the economic development. So far, I found
    one woman has taken loan and directly and indirectly all members of the family
    are involved in that work. So, micro-credit is providing opportunities to
    engage in business not only the very beneficiary but also other family members.
    It is quite impressive to see that such a small amount can give numerous
    opportunities if one utilizes it in proper way.

    Moreover, lack of education and consciousness can be seen in
    a greater extent because almost all women I interviewed had no idea about the
    interest rate of the borrowed loans. More awareness building programs are
    essential which can pave the way to utilize the available resources in a
    productive way. Gender gap is still seen in greater extent as women do not have
    access to the market.

    The conclusion can be made depending on the intact study that
    in a greater extent Micro­credit lending organizations are successful in their
    objectives by enhancing the economic condition of poor women via providing
    loans. Women’s economic empowerment can be seen as they are earning money and
    engaged in their individual business. Some have become the entrepreneurs in the
    society and most of them have got the recognition in their community. It is the
    great achievement of micro-credit in mounting the women’s status in the
    society. Women are not the burden for the family rather they can run the family
    on their own, which has been proved by their entrance in the economic world.

    Numerous problems occurred during this study. The main
    problem I realized was language. Most of the micro-credit holders were poor and
    illiterate and their local dialects were not understandable. So, it was
    difficult to interact with them. Though I appointed a translator, it was
    complicated to make people understand what I really wanted them to say. Limited
    time and budget was another barrier or else the study would have been more
    effective. I had selected eight cases depending on available resources and
    time, which may fail to represent the whole Bangladesh. And also the scale of
    women’s economic empowerment through micro-credit cannot be measured with the
    minimal number of case studies. Besides, very limited access of books related
    with micro credit made me feel some incompleteness in the literature review.

    In a greater extent Bangladeshi rural people are depending on
    micro-credit. Although micro credit is working as a tool for social change,
    there are numerous challenges ahead to reach its goal of empowering women.

    Only providing micro-credit cannot be an option for
    alleviating poverty from rural Bangladesh or any other country. Providing
    minimal amount of money has no meaning until it comes with the proper
    utilization techniques. Proper agenda to raise the women from their poor
    economic conditions through different skillful trainings and awareness building
    programs are necessary for its success. And of course minimizing the gender gap
    is essential to fetch the women in the main development agenda.

    Another important thing I realized during the study is
    micro-credit programs are targeted for the poor illiterate people but
    illiterate friendly. Micro-credit lending organizations should think that if
    the programs are targeted for the illiterate poor, the process should be handy
    and clear to its beneficiaries. There is hope that the upcoming generation can
    undertake this problem as they are being sent to the schools and hopefully this
    problem will not remain longer. Besides, I observed the continuation of
    stereotypical professions by the micro credit beneficiaries. Most of the women
    are doing farming and some are involved with small business. It seems that if
    women get proper ways to implement the provided loans, the scenario will be
    different. Even a very small effort of NGOs can bring smile in thousand faces
    of the poor. If NGOs can provide proper guidance to the poor, then the twin
    goal of micro credit, alleviating poverty and women empowerment can be
    achieved.

    Ahamed, K.F. “‘Microcredit
    as a Tool for Women Empowerment: The Case of Bangladesh “Development
    Studies, London School of Economic
    http://www.foreignaid.com/thinktank/microcredit.html Downloaded on 22nd
    February, 2011

    Bangladesh, Asia-Pacific
    Population & Policy 41: 4. Honolulu, Hawaii (USA): East-West Centre.

    Bangladesh Support Group, Micro Finance Success stories- Success Story of Safura Khatun, a poor
    housewife ofSatkania,

    BBS (2001) “Statistical
    Yearbook of Bangladesh”, Bangladesh Bureau of Statistics,
    Government of the People’s Republic of Bangladesh.

    Bell, J. (1993), “Doing your Research Project”, St. Edumundsbury Press Ltd, Great
    Britain

    Charles, N. (2000),”Fem/sm, the state and social policy”, St.
    Martin’s Press, United States of America.

    Dilruba, B. Fehmin, F. Altaf, H. Shahnuj, A. in Empowering Women in Rural Bangladesh: Impact
    of Bangladesh Rural Advancement Committee’s (BRAC’s) Programme.

    Gunter, B. (2000), ” Media Research Methods”, Sage Publicatin, Thousand Oaks,
    London.

    Lacey, L. (1998), “Image
    and Representation- Key Concepts In Media Studies”, ST. Martin’s
    Press, 175 Fifth Avenue, New York, N.Y. 10010.

    McQuail, D. (2005)
    -Mass Communication Theories”, Sage Publication, Thousand Oaks,
    London. “Micro credit success
    story from Nepal- Poverty News Blog “,

    http://povertynewsblog.blogspot.com/2009/01/microcredit-success-story-from-nepaLhtml,
    www.microcreditsummit.org Downloaded on 23rd May, 2011

    NCBP (2000), Gender
    Equality, Development and Peace for the Twenty-first Century, NGO Committee on
    Beijing Plus Five in Bangladesh, Dhaka: Women for Women – A Research and
    Study Group., D. (1997) ‘Change Comes Slowly for Women in Rural

    Nycander, L. (2005), “Empowerment
    of Women through micro-credit, micro-credit and social protection Mitigating
    social exclusion and empowering women”, Chief Technical Advisor,
    ILO Report, Dhaka

    SKS Client success Stories – http://www.unitus.com/microfinance-partners/unitus-mfi-partners/india/sks/client-success-stories,
    downloaded on 25th May, 2011

    Sontag, S. (1987), “On
    Photography”, Penguin Books, USA

    “Stuart Hall and Cultural
    Studies, Decoding Cultural Oppression”

    http://www.pineforge.com/upmdata/13286_Chapter_2_Web_Byte__Stuart_Hall.pdfAcce
    issued on 20th April, 2011

    “The micro-credit summit
    campaign, Micro-credit Borrowers Stories ” http://www.microcreditsummit.org/news/, downloaded on
    25th May, 2011

    Wells, L. (1997), “Photography:
    A Critical Introduction”, Rutledge publication, 11 New Feter Lane,
    London EC4P 4 EE.

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    Measuring the Global Gender Gap” http://www.weforum.org/en/index.html, Downloaded on 12th
    February, 2011


    " 113,"

    Eden Restaurent-Fine Dining Restaurant Business Plan

    ","

    View With Charts And Images
    Fine Dining Restaurant Business Plan

    Eden’s Restaurant is a 60 seat fine-dining restaurant. We focus on our New American-Swedish menu with a touch of Asian influence. We will be located in the booming, and rapidly expanding place of Ashulia, Dhaka on the Shore of Turag River.

    The outlook for the future of Ashulia is promising. Developers will create a tk.50 million first-class resort project. There will be 100,000 sq. ft. of commercial space, and over 40 residential units ranging from tk. 50,000 – tk. 150,000; rentals from tk. 1000 – tk. 2,500 a month, and a two-tier garage. The combination of these elements will provide the city with a year-round economy. The area is in need of a warm and friendly place with excellent food. A place where you always know you will get the best of everything. Eden’s Restaurant will feature a cozy dining room and comfortable furnishings and decor with soothing warm tones. It will be the perfect place to stop in for a bite to eat, for a drink or for a small business meeting. For extra comfort and to please a large group of people we will make up special hors d’ oeuvre platters for customers. The menu will be inspired from different countries’ specialties and appeal to a diverse clientele. You can get Swedish specialties like herring, gravlax and meatballs, or you can go a little bit more International and choose a red curry chicken with basmati rice, or an Asian grilled shrimp with spinach, tofu and black bean sauce. We will also have a special pasta dish entree every day plus the ‘all American meal’ such as barbecue beef ribs and baked beans. Adding value will be an interesting business lunch menu with specialties every day. The menu will change every 3-4 months but keep the favorites. Prices will be competitive with other upscale restaurants in the area. However, it is the strategy of Eden’s Restaurant to give a perception of higher value than its competitors, through its food, service and entertainment. The restaurant will be open seven days a week. We will offer special theme nights to attract new customers to Eden’s. The restaurant will be fine dining in a cozy atmosphere: Warm colors, fresh flowers, soft music, candles and amazing artwork from some of the areas most notable new artists. This will contribute to a sense of community and give new artists a chance to show their work for a diverse clientele. During the busy summer months we will offer a special summer menu, featuring lighter fare, exotic drinks, as well as non-alcoholic offerings. The patio and garden setting will be a fun and casual atmosphere for the summer crowd. The service will be relaxed, very friendly and correct. We will hire the best people available, training, motivating, and encourage them, and thereby retaining the friendliest most efficient staff possible. Our management team is comprised of individuals whose backgrounds consist of 50 years experience in food, restaurant and hotel, catering, management, finance, marketing, art and motion pictures.

    Catering will be a major part of the business. “Leave it to Mou Catering” already has an established clientele and we are growing each and every day. We feel in today’s hectic work schedule customers don’t always have time to set up that birthday party or other event that we all need and want. Now customers can leave it to pros and get the finest, most memorable party or dinner ever. We will have a large International menu for customers to select from, and we will offer full catering service providing everything from table settings to the dessert. We anticipate our total sales allocation to be 85% restaurant sales and 15% catering sales. The combined cost of sales will be 33% producing a gross profit of 67% on total sales. Most important to us is our financial success and we believe this will be achieved by offering high-quality service and excellent food with an interesting twist. We have created financial projections based on our experience and knowledge of the area. With a start-up expenditure of tk. 385,0000 we can generate tk.1, 085,4650 in sales by the end of year two, and produce good net profits by the end of year three. We are seeking an SBA 7(A) loan guaranty for tk. 3250000 with a 15% interest rate. I am investing tk. 60,0000 of my own capital.

    Objectives

    Eden’s Restaurant’s objectives for the first three years of operation include:

    Keeping food cost under 35% revenue.

    Keeping employee labor cost between 24-29% of revenue.

    Stay as a small restaurant with excellent food and service.

    Averaging sales between tk 1, 000,000-tk 1,500,000 per year.

    Expand our marketing and advertising in Dhaka.

    Mission

    Eden’s is a great place to eat, combining an intriguing atmosphere with excellent, interesting food. The mission is not only to have great tasting food, but have efficient and friendly service because customer satisfaction is paramount. We want to be the restaurant choice for all families and singles, young and old, male or female. Employee welfare will be equally important to our success. Everyone will be treated fairly and with the utmost respect. We want our employees to feel a part of the success of Eden’s Restaurant. Happy employees make happy guests. We will combine menu variety, atmosphere, ambiance, special theme nights and a friendly staff to create a sense of ‘place’ in order to reach our goal of over all value in the dining/entertainment experience. We want fair profits for the owners, and a rewarding place to work for the employees. Keys to Success

    The creation of a unique and innovative fine dining atmosphere will differentiate us from the competition. The restaurant will stand out from the other restaurants in the area because of the unique design and decor. We will offer a fine dining experience in a cozy atmosphere.

    Product quality is not only great food but great service and atmosphere. The menu will appeal to a wide and varied clientele. It is International with an interesting twist. We will have special theme nights like restaurant nights, local artist’s openings, Easter dinners, and Swedish Midsummer party, Fourth of July celebration, Labor Day weekend, wine tasting dinners & special ethnic food nights. All this will attract a varied clientele to Eden’s. Leave it to Linda Catering already has an established clientele in the area. Controlling costs at all times without exception.

    Due to intense competition, restaurateurs must look for ways to differentiate their place of business in order to achieve and maintain a competitive advantage. The founder of Eden’s realizing this. With the re-development of Long Branch, it needs a place that will fit into the ‘new look’ of the community that is sophisticated and entertaining. The fact that no other restaurant in the area has this concept and atmosphere presents us with a window of opportunity and an entrance into a profitable niche in the market.

    Table of contents

    Contents Page no.
    2.0 Company summery

    2.1 company ownership

    2.2 start-up summery
    3.0 services

    3.1 pricing & profitability
    4.0 market analysis summery

    4.1 market segmentation

    4.2target market segmentation strategy
    5.0 strategy & implementation summery

    5.1 competitive edge

    5.2 marketing strategy

    5.3 sales strategy

    5.4 milestones
    6.0 web plan summery
    7.0 management summery

    7.1 management team

    7.2 personnel plan
    8.0 financial plan

    8.1 important assumption

    8.2 break even analysis

    8.3 projected profit & loss

    8.4 projected cash flow

    8.5 projected balance sheet

    8.6 ratios

    8.7 exit strategy
    9.0 sample menus

    lunch

    dinner

    Company Summary

    Company Summery

    Eden’s Restaurant will feature an outstanding New American-Swedish menu with a touch of Asian influence in an upscale and cozy atmosphere. The menu is inspired from different cuisine’s specialties and will appeal to a wide and varied clientele.

    We will be open 7 days a week. Serving lunch Monday – Friday 11:30 AM – 2:30 PM. Dinner Sunday – Thursday, between 5 PM – 10 PM. Friday and Saturday Dinner 5 PM – 11 PM. We will be closed on New Years Day, Thanksgiving Day and Christmas Day. We will be open on large holidays such as Memorial Day, Fourth of July and Labor Day weekend. These are three big weekends ‘down the shore’ that brings many tourists to the area.

    The restaurant will have paintings and drawings from some of the areas most notable new artists. We will send out special invitations for the opening night and attract many people and newspapers. Eden’s Restaurant will be the perfect place when customers need that ‘little extra.’ They can have business meetings here, a place for a quiet conversation, or for a special occasion. We will make up special hors d’oeuvre platters or full course meals for customers’ special occasions.

    Company Ownership

    The restaurant will start out as a LLC corporation, owned by its founders Moushumi Farjana and will function as the General Manager & Ashrafuddin Ahmed as a financial manager.

    Start-up Summary

    The founders of the company are Moushumi Farjana and her companion Ashrafuddin Ahmed. Moushumi works in the kitchen and manages personnel. Ashraf focuses on the financial issues. We are looking for a restaurant space approximately 2,000 – 2,500 sq. ft. Ashulia, Dhaka. We will open Eden’s in July 2008.

    We are personally committing tk 60,000 of capital, plus a tk 325,000 SBA 7(A) loan guaranty to start up the business. Our start-up costs come to tk 3085,000 which is mostly expensed equipment, furniture, painting, reconstruction, rent, start-up labor, liquor license, six months operating cash, and legal and consulting costs associated with opening our restaurant. These are the start-up requirements to the best of our knowledge and experience in the industry.

    Start-up

    Start-up
    Requirements:
    Start-up Expenses:
    Legal Tk 5,0000
    Stationery & Sign Tk 5,0000
    Office Supplies (Computer, Fax, Printer) Tk 5,0000
    Uniforms Tk 2,0000
    Insurance Tk 2,0000
    Rent & Security Deposit Tk 18,0000
    Outdoor Patio & Garden Setting Tk 10,0000
    Liquor License Tk 75,0000
    Furniture Tk 40,0000
    Cash Register/Software Tk 10,0000
    Bathrooms Repair (Materials/Labor) Tk 15,0000
    Windows Repair (Materials/Labor) Tk 5,0000
    Floor & Wall Coverings (Materials/Labor) Tk 20,0000
    Paint Tk 4,0000
    Lighting & Lamps (Materials/Labor) Tk 12,0000
    Phone & Gas Deposit Tk 1,0000
    Food & Liquor Tk 30,0000
    Kitchen Supplies Tk 30,0000
    Music/Stereo/TV Tk 4,0000
    Cleaning Tk 1,0000
    High Chair & Booster Seat Tk 2000
    Advertising & Website Tk 5,8000
    Total Start-up Expenses Tk 300,0000
    Start-up Assets:
    Cash Required Tk 85,0000
    Other Current Assets Tk 0
    Long-term Assets Tk 0
    Total Assets Tk 85,0000
    Total Requirements Tk 385,0000

    Start-up Funding

    Start-up Funding:
    Start-up Expenses to Fund Tk 300,0000
    Start-up Assets to Fund Tk 85,0000
    Total Funding Required Tk 385,0000
    Assets:
    Non-cash Assets from Start-up Tk 0
    Cash Requirements from Start-up Tk 85,0000
    Additional Cash Raised Tk 0
    Cash Balance on Starting Date Tk 85,0000
    Total Assets Tk 85,0000
    Liabilities and Capital:
    Liabilities:
    Current Borrowing Tk 0
    Long-term Liabilities Tk 325,0000
    Accounts Payable (Outstanding Bills) Tk 0
    Other Current Liabilities (interest-free) Tk 0
    Total Liabilities Tk 325,0000
    Capital:
    Planned Investment
    Moushumi Farjana Tk 60,0000
    Additional Investment Requirement Tk 0
    Total Planned Investment Tk 185,0000
    Loss at Start-up (Start-up Expenses) (tk 300,0000)
    Total Capital (tk 115,0000)
    Total Capital and Liabilities Tk 85,0000
    Total Funding Tk 385,0000

    Start-up

    Services

    Eden’s Restaurant will be unique to the Ashulia area. International creative food and a style of service that will make everyone feel welcome and special. Our food products will be of the finest quality and prepared with sensitivity and care. We will ‘go all the way’ to satisfy our guests. We will change our menu every 3-4 months, but we’ll keep ‘ your favorite’. Portions will be modestly sized with an attractive presentation.

    Our drinks list will be modest in size and primarily focused on drinks from California, France, New Zealand and Argentina. Approximately 25% will be exclusively available by the glass and the remaining labels will be available by the bottle. During the busy summer months we will offer a special summer menu, featuring lighter fare, exotic drinks, as well as non-alcoholic offerings. The patio and garden setting will be a fun and casual atmosphere for the summer crowd.The kitchen staff will have the best in culinary education and work experience. Our creative talents will compliment one another. The restaurant staff will offer the finest service in a cozy atmosphere and offer customers an extraordinarily successful evening.

    Pricing and Profitability

    We anticipate our total sales allocation to be 85% restaurant sales and 15% catering sales. The combined cost of sales will be 33% producing a gross profit of 67% on total sales. Prices will be competitive with other upscale restaurants in the area. However, it is the strategy of Eden’s Restaurant to give a perception of higher value than its competitors, through its food, service and entertainment.

    Market Analysis Summary

    Eden’s focuses on local and tourist restaurant seekers, people that have a desire for good food and a fascinating atmosphere. Ashulia is located 35 miles west of Dhaka City and 25 miles south of Uttara City & 6 miles of Mirpur area on the Turag river shore.’ The city of Ashulia is in the process of revitalizing. In 2008, the city will be developing a new look and will be attracting a larger community of affluent residents.

    Ashulia tomorrow:

    The river shore front area includes five sectors which are identified as:

    River shore Front North is located above the Hotel Campus and just south of residential area. It will have 350 residential units, 1,100 parking spaces, and a bike path over an area of 25 acres. This project, along with existing undeveloped residential area, will change the face of the city’s shore front for the next hundred years and provide a major economic boost to the city of Ashulia as model town. The influx of permanent residents will provide the city with a legitimate year-round economy. One to three-bedroom rentals with 850 to 1,200 sq. ft. will range from tk 7,000 to tk 9500 a month. The condominiums will range in size from 1,000 to 2,000 sq. ft. and in price from tk 200,000 to tk 400,000; the townhouses, with 1,500 to 2,500 sq. ft., will cost tk 225,000, to more than tk 500,000.As the city of Ashulia is re-developing, we can see that a fine dining establishment like Eden’s is needed here. The city will have much to offer and the people that it draws expect a place where they will get the best of everything. Eden’s Restaurant will offer a new fine dining concept to the area. The elegant atmosphere, our excellent food and our friendly staff will stand out and make a name in Ashulia as well as in the nearest sophisticate areas & towns. We will succeed by giving people a combination of excellent and interesting food in an environment that attracts successful people that want to get a little bit more out of life than just the ordinary!
    Market Segmentation

    Eden’s Restaurant intends to cater to a wide group of people. We want everyone to feel welcome and relaxed in a cozy atmosphere with a wide and varied menu. It is our goal to have “something for everyone” everyday on our menu. In looking at our market analysis, we have defined the following groups as targeted segments.

    The Business Man: They work hard all day and often stay overnight in a strange city. He needs a competent establishment that helps impress his clients and prospects. Afterward, they want to relax and use the money they are making. They are the people that spend the most on drinks, food and tips.

    Happy Couples: The restaurant will have an intimate, romantic, sophisticated atmosphere that encourages people to bring dates and to have couples arrive. Eden’s wants to be a search place where people meet each other and develop a network. These young couples are generally very successful but balanced and won’t be spending as much on drinks.

    The Family: The perfect place for a family dinner. Families will come for the accommodative menu and friendly service. The excellent value in their meals will keep Eden’s in favor with the parents.

    High-end Singles: We will attract them with our decor and layout. Our international menu, striking artwork, wine tasting evenings and events, excellent service and engaging clientele will confirm the feeling of being in “the coolest place” in Monmouth County.

    Tourists: Long river shore that attracts many vacationers during the summer months of March through June. Eden’s will be a destination with its attractive atmosphere, international menu, and outdoor patio.

    Market Analysis

    Market Analysis
    2008 2009 2010 2011 2012
    Potential Customers Growth CAGR
    Business Man 17% 14,280 16,708 19,548 22,871 26,759 17.00%
    Happy Couples 14% 8,925 10,175 11,600 13,224 15,075 14.00%
    Tourists 15% 3,570 4,106 4,722 5,430 6,245 15.00%
    The Family 13% 5,355 6,051 6,838 7,727 8,732 13.00%
    High-end Singles 12% 3,570 3,998 4,478 5,015 5,617 12.00%
    Total 14.99% 35,700 41,038 47,186 54,267 62,428 14.99%

    Market Analysis (Pie)

    Target Market Segment Strategy

    Eden’s Restaurant will focus on attracting a wide and diverse clientele ages 25-60 with an annual income of at least tk 30,000.

    We want the business man, happy couples, high-end singles, families, tourists with money, wealthy image seekers and compulsive spenders. We focus on these specific groups because these are the types of people who frequent other restaurants in the area. They are the ones that are willing to spend their money on good dining and service at a value price. We generally know the characteristics of our clientele with the available demographics. Our geographic include people from the local Ashulia area, Mirpur area, Uttara area, Zia International Airport, Savar area, restaurant patrons from neighboring cities, and tourists from other cities and countries. The characteristics of our clientele will be people who are creative, entertaining and sophisticated diners.

    Strategy and Implementation Summary

    Our strategy is simple; we intend to succeed by giving people a combination of excellent and interesting food in an environment that appeals to a wide and varied group of successful people. We will focus on maintaining quality and establishing a strong identity in our community. Our main focus in marketing will be to increase customer awareness in the surrounding communities. We will direct all of our tactics and programs toward the goal of explaining who we are and what we do. We will keep our standards high and execute the concept so that word-of-mouth will be our main marketing force.

    We will create an appealing and entertaining environment with unbeatable quality at an exceptional price. An exciting and friendly restaurant, we will be the talk of the town. Therefore, the execution of our concept is the most critical element of our plan. All menu items are moderately priced for the area. While we are not striving to be the lowest-priced restaurant, we are aiming to be the value leader.

    Competitive Edge

    Our competitive edge is the menu, the chef, the environment, the management, the service and our friendly place! We will have an international menu and our food will be made with the freshest ingredients and produce available. The chef has an excellent taste for what fine dining is and requires. Our environment is elegant and comfortable and our decor is warm and relaxing. Great service is very important to us. The management and servers will handle every detail to make customer’s special evening even more special! All this and our great atmosphere will make customers want to come back again and again!

    Main Competitors

    Our biggest competition is the town next to Ashulia, called Uttara which has a large selection of restaurants. Currently, many people who live in Ashulia, Uttara & Mirpur drive seven miles to Uttara to dine out. With the redevelopment in Ashulia and with Eden’s Restaurant, we will convince these people to stay in Ashulia and eat at our restaurant.

    There are three restaurants in Ashulia that are similar to Eden’s. These are also the three most popular places in Ashulia. Each of these restaurants will be important to us. We feel the clientele they have the class of clientele that Eden’s will appeal to.

    1 The first place is an 80 seat restaurant, open six days a week and serves lunch and dinner located uptown on Broadway. It is very busy for lunch as well as at dinner time. Their price range is tk 125-tk 365 for lunch and tk 250-tk 600 for dinner entrees.

    2 The second is an upscale lounge/food with a small menu. It is located in the West of Ashulia near the Chotbari. They are only open for dinner. The small items on there menu range from tk 126-tk 375 and a mixed drink is tk 255-tk 700.

    3 The third place is an upscale Contemporary Chinese restaurant at the river shore. They are open seven days a week; dinner for two without wine or drinks averages tk 550.

    Everyone that sells prepared meals is our competition though because we all compete for the same meal replacement taka. However, there are two segments of the restaurant industry that are our main competition: the casual dining restaurant concept and the fine dining value restaurant. If the value of the food and price and service is better at a fine dining restaurant than a casual restaurant, where will is a customer more likely to go?

    The key is to deliver the best food at the best price with the highest level of service. This is the very definition of value. This concept is at the heart of Eden’s Restaurant.

    Marketing Strategy

    The total population in Mirpur-Ashulia is 18,414,350 people. 615,301 people live in Mirpur, 50% between 25-55 years old. That is the age group that dines out two to three times a week and spends an average tk 795 a month on food and drinks. There are 224,447 households in Mirpur and an average 2.7 persons per household. The median family income in Mirpur & Ashulia averages, tk 64,271/year. There are 636 registered businesses in Ashulia with 7,885 employees.

    Our primary customer base is from Mirpur, Saver, Uttara, Zia International Air port, Tongi Ashulia, Baridhara, and Gulshan.

    City Population Median Family Income
    Mirpur 831,340 Tk 88,651
    Uttara 387,690 Tk 91,852
    Baridhara 53,595 Tk 190,484
    Gulshan 637,137 Tk 180,865
    Savar 166,237 Tk 75,566
    Tongi 16,170 Tk 59,094
    Zia International Airport 11,844 Tk 87,282
    Ashulia 16,930 Tk 23,081

    Marketing Program

    We will employ three different marketing tactics to increase customer awareness of Eden’s Restaurant. Our most important tactic will be word-of-mouth/in-store marketing. This will be by far the cheapest and most effective of our marketing programs.

    Word-of-mouth/In-store Marketing

    V.I.P. Party – We will host a V.I.P. Dinner before the ‘Grand Opening.’ This will serve the dual purpose of training our staff and introducing ourselves to the community. The list of individuals we will invite comes from the Chamber of Commerce, Grand Opening celebration.

    “Restaurant Night” – Every Monday night we will have a special evening for restaurant people. A perfect night for the local area’s restaurant owners and staff to get together on a night off!

    1. Eid

    2. Victory Day

    3. Independence Day

    4. Valentine’s Day.

    5. Easter dinner.

    6. Swedish Midsummer party.

    7. Labor Day weekend party.

    8. New Years Eve party.

    9. Special ethnic food nights.

    10. Memorial Day.

    Local Store Marketing

    Make a brochure for the large hotels and popular bed & breakfast establishments in town to provide to their guests, containing interior pictures of our restaurant, menus and prices. There are several nursing homes in the city of Mirpur-Ashulia. We will approach them to sponsor meals for the elderly. This will offer us higher visibility to a group that may not be as mobile and we’ll be contributing to the community in a material way. Word-of-mouth referral is very powerful and particularly amongst the elderly to both their peers and their extended families.

    Local Media

    · Newspaper campaign – Placing several large ads throughout the month to deliver our concept to local area.

    · Direct mail piece – Containing interior pictures of our restaurant, our menu, “Theme Nights,” catering and an explanation of our concept.

    · Website

    · Target marketing to businesses for regular business lunch and dinner entertaining.

    Sales Strategy

    Our sales plan is to establish and maintain position with our local customers. The strategy is to build more customers in order to increase revenue. Sales in our business are client service. It is repeat business. We will focus on making all our customers happy with our food, service and entertainment options. Our strategy in the restaurant is to have an experienced staff that knows the food, wine and liquor. We will train every new employee so they will fit in with Eden’s concept, which is “Wonderful food, reasonably-priced wine and knowledgeable service in an outstanding atmosphere.”

    5.3.1 Sales Forecast

    The following table and charts show sales projections for our first twelve months. Monthly restaurant gross sales are to average tk 68,186. That is 30 people for lunch spending approximately tk 155 per person, and for dinner approximately 50 people spending an average $650 per person. Catering will average tk 10,471/month or three parties of tk 3,490 each. Our total cost of goods sold is capped at 33% of total sales. We expect sales to increase 15% after Year 1. See Income Statement in the appendix for restaurant and catering sales assumptions.

    Sales Forecast

    Sales Forecast
    FY 2004 FY 2005 FY 2006
    Sales
    Food & Liquor Tk 818,2300 Tk 940,9650 Tk 1,082,1100
    Catering Tk 125,6520 Tk 144,5000 Tk 166,1750
    Other Tk 0 Tk 0 Tk 0
    Total Sales Tk 943,8820 Tk 1,085,4650 Tk 1,248,2850
    Direct Cost of Sales FY 2004 FY 2005 FY 2006
    Food & Liquor Tk 270,0160 Tk 310,5180 Tk 357,0960
    Catering Tk 41,4650 Tk 47,6850 Tk 54,8380
    Other Tk 0 Tk 0 Tk 0
    Subtotal Direct Cost of Sales Tk 311,4810 Tk 358,2030 Tk 411,9340

    Sales Monthly

    Sales by Year

    5.4 Milestones

    The accompanying table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation. What the table doesn’t show is the commitment behind it. Our business plan includes complete provisions for plan-vs.-actual analysis, and we will hold monthly follow-up meetings to discuss the variance and course corrections.
    Milestones

    Milestone Start Date End Date Budget Manager Department
    Painting/Reconstruction of Restaurant 10/1/2007 10/28/2007 Tk 80,0000 Mr. zaker hosen Architect/Contractor
    Lighting & Lamps 5/1/2008 6/1/2008 Tk 12,0000 Ashraf Manager
    Office Furnitures & Supplies 5/20/2008 5/30/2008 Tk 5,0000 Moushumi Owner
    Furniture for Restaurant 6/1/2008 6/15/2008 Tk 40,0000 Moushumi Owner
    Decorations and Cash Register 6/1/2008 6/20/2008 Tk 15,0000 Moushumi Owner
    Production and Completion of Menus 5/1/2008 6/1/2008 Tk 2,0000 Moushumi Moushumi
    Buy Kitchen Supplies 5/15/2008 6/15/2008 Tk 60,0000 Moushumi Kitchen/ Moushumi
    Open Eden’s 7/1/2008 7/1/2008 Tk 0 Moushumi Owner
    VIP Party 7/1/2008 7/1/2008 Tk 2,0000 Moushumi Owner
    VIP Party 7/2/2008 7/2/2008 Tk 2,0000 Moushumi Owner
    Upgrade Mailer 7/1/2008 7/15/2008 Tk 0 Andrea Marketing
    Advertising 6/1/2008 6/15/2008 Tk 1,5000 Andrea Marketing
    Advertising 9/1/2008 9/15/2008 Tk 4000 Andrea Marketing
    Advertising 10/1/2008 10/15/2008 Tk 4000 Andrea Marketing
    Advertising 12/15/2008 12/20/2008 Tk 4000 Andrea Marketing
    Advertising 2/1/2009 2/5/2009 Tk 4000 Andrea Marketing
    Direct Mail 6/1/2008 6/15/2008 Tk 1,0000 Andrea Marketing
    Business Plan Review 6/1/2008 6/3/2008 Tk 0 Moushumi Owner
    Website 5/1/2008 6/15/2008 Tk 3,5000 Ashraf Manager
    Corporate Brochure 5/1/2008 6/15/2008 Tk 1,5000 Rafee Friend
    Brochure 12/1/2008 12/1/2008 Tk 1,0000 Rafee Friend
    New Catering Accounts (5) 7/1/2008 9/1/2008 Tk 2500 Moushumi Owner
    New Catering Accounts (5) 1/1/2009 11/1/2009 Tk 2500 Moushumi Owner
    Wine Class for all Employees 6/20/2008 6/25/2008 Tk 1,0000 Epon Wine Distributor
    Employee Training 6/20/2008 6/25/2008 Tk 1,0000 Moushumi/Andrea Owner/Manager
    Swedish Midsummer 10/20/2008 10/20/2008 Tk 3000 Moushumi Owner
    Direct Mail 8/1/2008 8/15/2008 Tk 4000 Andrea Marketing
    Direct Mail 11/1/2008 11/15/2008 Tk 4000 Andrea Marketing
    Swedish Christmas Introduction 12/14/2008 12/14/2008 Tk 2000 Moushumi Owner
    Upgrade Mailer 9/1/2008 9/5/2008 Tk 10,0000 Andrea Marketing
    Totals Tk 241,9000

    Milestones

    Web Plan Summary

    Eden’s Restaurant and ‘Leave it to Mou Catering’ will have a combined website. It will be the virtual business card and portfolio for the company, simple, classy and well designed. Our site will offer our menus, prices, reviews and happenings at Eden’s. We will also have a monthly newsletter about what did happen at Eden’s to get new customers interested in our restaurant. You will also be able to send us an E-mail when you want to make reservations at our restaurant or to book ‘Leave it to Mou Catering.’ Fast, easy and convenient!

    Management Summary

    Moushumi Farjana will manage Eden’s Restaurant. She will also function as head chef.

    Ashrafuddin Ahmed will take care of all financial issues including bookkeeping.

    Andrea Karim is the front manager and our marketing director. She will take care of ordering for service and managing the wait-staff. She will also take care of marketing and advertising.

    Moushumi Farjana – Owner/Executive Chef:

    Moushumi Farjana has 5 years of experience in the food and hospitality industry, receiving her culinary training at several leading restaurants in America at Los Angeles. In 2003 she moved to Bangladesh to pursue a personal chef career. She worked for over a year for a family and catered all their personal and business events.

    When she was in America worked on about 20 motion picture projects, traveling for months at a time, planning and preparing meals for hundreds of people, cooking for demanding celebrities such as Denzel Washington, Meg Ryan, Matt Damon, Adam Sandler, Damon Wayans, Cameron Diaz, Tom Cruise, Kevin Spacey, James Cameron, Steven Spielberg…just to mention a few.

    In 2001 she moved to New York and worked at Ulrika’s (a Swedish restaurant in Manhattan) as the general manager. Moushumi handled many duties including food and liquor ordering, inventory, bills, operating the dining room and bar, scheduling, hiring and terminating employees. She is now cooking enormous numbers of dinners for many private homes and businesses in Dhaka.

    Ashrafuddin Ahmed – Managing Partner/Financial Supervisor

    Mr. Ashrafuddin experience in catering and restaurants began in the mid-90’s providing hospitality and catering services to rock bands performing in Syracuse, NY. After little over a year, he left to pursue a career in motion picture production. Satisfying a strong visual sensibility he entered the lighting department assisting in projects over the past 12 years initially with a lighting services company and eventually as a union member in IATSE 52.

    During this time he has operated both as an employee and as an independent contractor. This has provided experience in issues of small business taxation, bookkeeping, lease arrangements, inventory management, personnel management, property ownership, margins, re-selling and a myriad of other situations pertaining to the small businessman.

    Since 2000, Mr. Ashrafuddin has also started a financial planning business encompassing securities and insurance products. Honesty and integrity, with customer oriented advice have produced a growing asset base in wildly volatile markets in some of the most challenging and historic times. In all these endeavors, the key issue has always been service. Meeting and exceeding expectations has consistently been the standard Mr. Ashrafuddin has achieved and brings to Eden’s Restaurant.

    Andrea Karim – Manager/Marketing Director

    Andrea Karim is an artist who has been working in the Motion Picture Industry as a camera assistant since 1992. She moved from Park Slope, Brooklyn to Uttara, Bangladesh in November of 1995. As a resource, Andrea knows many people in the Uttara & Ashulia area.

    Andrea has worked on catering jobs and as a prep chief. Andrea is prepared to work with Moushumi in Eden’s as a front manager who will take care of advertising, wait staff and ordering for service. Andrea also worked as a union waitperson for many years in Rockefeller Center Cafe while she was in college and when she attended the Whitney Independent Study Program.

    Management Team

    Our management team is well compensated. We have a team that has considerable experience together and shares knowledge in many different fields of business and in life. In Year 2 we will hire a General Manager to assist Eden’s Restaurant to grow even further. The General Manager will also work to expand Leave it to Mou Catering in Dhaka & Chittagong. Moushumi Farjana can then concentrate more on the kitchen and take her restaurant to yet a higher level.
    Personnel Plan

    We believe the personnel plan is in good proportion to the size of the restaurant and projected revenues. The staff will include 13 full-time employees and seven part-time employees, who will work a total of 754 man-hours per week and generate an average weekly gross payroll of tk 4,929 for the first year in business. The estimated gross annual payroll of tk 236,592 is 22% of total sales.

    Kitchen:

    Chef Moushumi Farjana will be assisted by:

    · Sous chef with considerable experience in different restaurants (1).

    · Cooks that work directly with Linda or the sous chef (2).

    · Prep cooks/dishwasher (2).

    · People cleaning the restaurant (2).

    In front of the house:

    Ashrafuddin Ahmed will take care of the financial issues including bookkeeping and work in ‘front of the house’.

    Andrea Karim will be our Front Manager. She will take care of advertising, wait staff and ordering for service.

    To help Andrea she will have servers that will work as captains (these people have experience in managing, waiting tables and bartending) and take care of service and make sure the restaurant is in excellent shape (2). Servers that work part time (4). Full-time bartender (1). Full-time busboys (2). Part-time busboy (1).

    Personnel

    FY 2009 FY 2010 FY 2011
    General Manager Tk 0 Tk 36,0000 Tk 36,0000
    Front Manager Tk 20,1600 Tk 26,8800 Tk 26,8800
    Captain 1 Tk 6,2160 Tk 6,2160 Tk 6,2160
    Captain 2 Tk 6,3840 Tk 6,3840 Tk 6,3840
    Waitperson Tk 5,0400 Tk 5,0400 Tk 5,0400
    Waitperson Tk 3,8640 Tk 3,8640 Tk 3,8640
    Waitperson Tk 4,2000 Tk 4,2000 Tk 4,2000
    Wait/Barperson Tk 6,8400 Tk 6,8400 Tk 6,8400
    Bartender Tk 10,8000 Tk 10,8000 Tk 10,8000
    Busboy 1 Tk 7,9200 Tk 7,9200 Tk 7,9200
    Busboy 2 Tk 10,5600 Tk 10,5600 Tk 10,5600
    Busboy 3 Tk 6,0000 Tk 6,0000 Tk 6,0000
    Head Chef Linda Tk 32,4000 Tk 32,4000 Tk 32,4000
    Sous Chef Tk 32,4000 Tk 32,4000 Tk 32,4000
    Cook 1 Tk 23,0400 Tk 23,0400 Tk 23,0400
    Cook 2 Tk 17,7600 Tk 17,7600 Tk 17,7600
    Prep Cook/Dishwasher Tk 11,0880 Tk 11,0880 Tk 11,0880
    Prep/Dishwasher/Cleaning Tk 11,7600 Tk 11,7600 Tk 11,760
    Dishwasher Tk 8,4000 Tk 8,4000 Tk 8,4000
    Cleaning/Dishwasher Tk 11,7600 Tk 11,7600 Tk 11,7600
    Additional Cook Tk 0 Tk 9,6000 Tk 9,6000
    Additional Dishwasher Tk 0 Tk 8,4000 Tk 8,4000
    Additional Waitperson Tk 0 Tk 4,2000 Tk 4,2000
    Additional Busboy Tk 0 Tk 0 Tk 6,0000
    Total People 200 240 250
    Total Payroll Tk 236,5920 Tk 301,5120 Tk 307,5120

    Financial Plan

    $385,000 of funding is needed over the next year for renovations, furniture, kitchen equipment, liquor license, food & restaurant supplies, legal fees, working capital, marketing and personnel.

    Important Assumptions

    The financial plan depends on important assumptions, most of which are shown in the following table as annual figures. The key underlying assumptions are:

    · We assume a slow-growth economy, without major recession.

    · We assume that there are no unforeseen changes in the expectancy in the popularity of our restaurant.

    · We assume access to investments and financing are sufficient to maintain and fulfill our financial plan as shown in the tables.

    General Assumptions

    FY 2009 FY 2010 FY 2011
    Plan Month 1 2 3
    Current Interest Rate 0.00% 0.00% 0.00%
    Long-term Interest Rate 7.00% 7.00% 7.00%
    Tax Rate 34.58% 35.00% 34.58%
    Other 0 0 0

    Break-even Analysis

    For our Break-Even Analysis, we assume running costs include our full payroll, rent, and utilities, and an estimation of other running costs.

    Break-even Analysis

    Monthly Revenue Break-even Tk 50,8690
    Assumptions:
    Average Percent Variable Cost 33%
    Estimated Monthly Fixed Cost Tk 34,0820

    Break-even Analysis

    Projected Profit and Loss

    The most important assumption in the Projected Profit and Loss statement is the gross margin. Although it doesn’t jump drastically in the first year, over time the restaurant will develop its customer base and reputation and the growth will pick up more rapidly towards the fourth and fifth years of business.

    Month-by-month assumptions for profit and loss are included in the appendix.

    Profit and Loss

    FY 2009 FY 2010 FY 2011
    Sales Tk 943,8820 Tk 1,085,465 Tk 1,248,285
    Direct Cost of Sales Tk 311,4810 Tk 358,203 Tk 411,934
    Other Tk 0 Tk 0 Tk 0
    Total Cost of Sales Tk 311,4810 Tk 358,203 Tk 411,934
    Gross Margin Tk 632,4010 Tk 727,262 Tk 836,351
    Gross Margin % 67.00% 67.00% 67.00%
    Expenses
    Payroll Tk 236,5920 Tk 301,512 Tk 307,512
    Sales and Marketing and Other Expenses Tk 55,8970 Tk 75,564 Tk 85,291
    Depreciation Tk 0 Tk 0 Tk 0
    Leased equipment Tk 2,0040 Tk 2,0040 Tk 2,0040
    Professional fees accounting Tk 2,0040 Tk 2,4000 Tk 3,0000
    Professional fees legal Tk 2,0040 Tk 2,4000 Tk 3,0000
    Licenses and permits Tk 9960 Tk 1,1520 Tk 1,3200
    Office Supplies Tk 2,0040 Tk 3,2000 Tk 4,8000
    Postage Tk 9960 Tk 2,3000 Tk 3,3000
    Utilities Tk 20,0040 Tk 21,9960 Tk 22,9920
    Insurance Tk 15,0000 Tk 18,0000 Tk 21,6000
    Rent Tk 36,0000 Tk 36,0000 Tk 36,0000
    Payroll Taxes Tk 35,4890 Tk 45,2270 Tk 46,1270
    Other Tk 0 Tk 0 Tk 0
    Total Operating Expenses Tk 408,9900 Tk 511,7550 Tk 536,9460
    Profit Before Interest and Taxes Tk 223,4110 Tk 215,5070 Tk 299,4050
    EBITDA Tk 223,4110 Tk 215,5070 Tk 299,4050
    Interest Expense Tk 13,1390 Tk 11,5320 Tk 9,7470
    Taxes Incurred Tk 72,3640 Tk 71,3910 Tk 100,1730
    Net Profit Tk 137,9080 Tk 132,5830 Tk 189,4840
    Net Profit/Sales 14.61% 12.21% 15.18%

    Profit Monthly

    Profit Yearly

    Gross Margin Monthly

    Gross Margin Yearly

    8.4 Projected Cash Flow

    The cash flow depends on assumptions for inventory turnover, payment days, and accounts receivable management. Our projected same-day collection is critical, and is reasonable and customary in the restaurant industry. We do not expect to need significant additional support even when we reach the less profitable months, as they are expected.

    Month-by-month assumptions for p

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    Employee Performance Appraisal of Otobi Limited

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    Employee Performance Appraisal of Otobi Limited

    1.1 Background of the Report:

    The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs an organization have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring personnel and management practices conform to various regulations of the organization. Activities also include managing the approach to employee benefits and compensation, employee records and personnel policies. These policies are often in the form of employee manuals, which all employees have.

    The HRM function and HRD profession have undergone tremendous change over the past 20-30 years. Many years ago, large organizations looked to the “Personnel Department,” mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the “HR Department” as playing a major role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner.

    1.2 Objectives of the Study:

    Broad objective of this report is to performance Appraisal of employees which is a manufacturing organization Like Otobi Ltd.

    1. To know about Otobi Ltd, Company.

    2. To analyze the existing performance Appraisal of Otobi Ltd.

    3. To evaluate the performance Appraisal of Otobi Limited.

    4. To identify the problems in performance Appraisal in Otobi Limited, analyze it and obtaining its solutions.

    5. To give some suggestions of overcomes from the Problems.

    1.3 Scope of the Study:

    The study is limited to review of specification, literature and data that were available pertaining to performance management practices as well as implementation & maintenance processes of Furniture manufacture Company. This report on performance management system of a manufacturing organization aims at studying the performance management views of the concerned organization on the employees, customers, distributors/retailers, competitors and in a sense on the regional leading national companies. The management of huge development activities refers to a comprehensive plan and implementation stating how the organization would achieve its mission and objectives delivering the organization image and utmost performance management through it. The Otobi Limited’s vision is to become a major global brand and its current mission is to dominate Asia-Pacific by 2020.Objectives are the end results of planned activities. This scenario sets the scope of the internship report that led to study the followings of Otobi Limited.

    · <href=”#anchor1972621>Establishing Performance Goals

    · <href=”#anchor1973781>Performance Plans

    · <href=”#anchor1974022>Observation and Feedback

    · <href=”#anchor1974259>Evaluating Performance

    · <href=”#anchor1974638>Rewarding Performance

    · <href=”#anchor1975677>Recognizing Performance Problems (“Performance Gaps”)

    · <href=”#anchor1976062>Performance Improvement / Development Plans

    · <href=”#anchor1224513>Firing Employees

    Also the study has the scope of determining the strengths, weaknesses, opportunities and threats of Otobi Limited as well as the action plans taken.

    1.4 Methodology of the study:

    To prepare the report, data and information are collected from two major sources;

    1.4.1 Primary source and information:

    The primary source and information relating to this report was collected through informal discussions. Strategic Human Department was also organized with different department to get the information relating to performance management of employees and department wise.

    1.4.2 Secondary source and information:

    The Secondary information is collected from HR Department. Human Resource Management Policy, contract documents, annual report, monthly report, weekly report, daily report, Web-site and from different meeting minutes about Otobi Limited.

    2. Profiles of Otobi Limited.

    2.1 Historical Background of Otobi Limited.

    OTOBI Limited is world class furniture manufacturing company and established in 1975. OTOBI at first brought a revolutionary change in the furniture world in our country. In this field it is the pioneer in Bangladesh. Till now OTOBI is the industry leader in all kind of furniture and decorative items. With the touch of OTOBI furniture gets a new look, a nice combination of artistic view and superb structural model. Late Nitun kundu was the founder chairman of OTOBI Limited and now his son Mr. Animesh Kundu is the key person of OTOBI Limited.

    In 1975 Late Nitun Kundu founded a small workshop, OTOBI Limited, which started to supply steel furniture in a small scale. In the same year he designed the National File Award. OTOBI started to grow gradually with dedication and whole-hearted efforts of its people. Today OTOBI is fully equipped with latest machines and technologies. Near about 2051 workers and employees are engaged in OTOBI including about forty architects and designers

    The consumers of Bangladesh traditionally use wooden furniture. But forest resources being extremely limited, Late Nitun Kundu anticipated the market for Metal furniture. With the view of marketing his products in 1978 he opened a showroom at 230 New Elephant Road, Dhaka and gradually stared marketing all kinds of metal furniture.

    Now 33 years after the artist turned entrepreneur has more than 1500 items on his product line with an annual sale figure of around Tk.120.00 crore with 35 percent growth rate. Now OTOBI Limited also doing Interior Decoration business.

    In 1984 of gaining sufficient experience and confidence he stared commercial production under the Brand name OTOBI. A great deal of emphases was given to meet the need for customers and OTOBI products started gaining popularity. As a result OTOBI gain many awards in several times.

    2.2 Organization’s Vision, Mission and Objectives

    2.2.1 Otobi’s Vision

    OTOBI will be Globalization within 2020

    2.2.2 Otobi’s Mission

    OTOBI sell all kind of World Class Furniture

    2.2.3 Otobi’s Objectives

    Size- alone- that is being the largest by some quantitative measure does not define leadership. OTOBI aspire to be a larger company only to the extent the size and scale contribute to achieving more important measures of preeminence.

    First and above all, the leading company must be an outstanding financial performer for its stockholders. OTOBI try to produce dependable and consistent financial returns, which rank high in absolute terms as well as relative to our peer competitors.

    Secondly, OTOBI want to establish product position must be very high quality, compete in significant product-market segments, and command exceptionally strong market shares.

    Thirdly OTOBI’s People and processes must be of the highest caliber and appropriate to the times.

    And fourth, OTOBI must be recognized corporation with an especially high sense of responsibility to our employees and public constituencies i.e. their stakeholders.

    2.2.4 Company Strategy

    Invest to accelerate internal growth. Direct and focus investment spending in strategic opportunities to build share and to accelerate unit volume growth in key product positioning.

    Develop the lowest cost position in strategic product categories. Emphasize and measure operating efficiencies and cost structures in all areas of the company to reduce coast consistently and to increases return in sales without sacrificing quality.

    OTOBI Limited has the mission to have an effective participation in economic and social development and activities. Actually, to attain its goal,

    2.2.5 Business Objectives

    1. Participating to solve Unemployment Problems.

    2. Business diversification.

    3. Motivating customer to buy quality products.

    4. Increasing profit to have greater business strength.

    5. Considering each and every unit of company as a family.

    6. Maintain open effective communication system under participation condition.

    2.2.6 Marketing Objectives

    1. Increasing sales to increase the market share perhaps globally.

    2. Providing maximum services and after sales services to the customer.

    3. Keeping up to date information on competitor’s activities.

    4. Reducing the expenses.

    5. Cultivating new customer.

    6. Identifying and motivating competitor’s permanent customer for brand switching to wooden furniture.

    With above set of predetermined objectives, the company is continuously striving and monitoring the actual performance to avoid any deviation. OTOBI believes in quality and view that Bangladeshi companies should strive to manufacture quality products.

    2.3 Companies Major Function

    OTOBI Limited is a world class furniture manufacturing Company. The main function of this company is producing all kinds of furniture for trading in Bangladesh. Such as wooden, metal, laminated board and plastic furniture.

    2.3.1 Description of its business

    Market

    OTOBI Limited sells its products in all over the Bangladesh. The overall intensity of market competition is favorable for OTOBI. OTOBI satisfied the all level of customers such as upper level, mid lever and lower level. At present we cover 25% – 30% of total market and many potential segments are uncultivated. This is our market opportunity to satisfy them. OTOBI Limited to export its products in India, Mayanmer, Nepal and ongoing process in Malaysia, Singapore.

    Quality

    OTOBI Limited is an ISO certified Company. This company follows the quality policy very strictly in every step of their production by quality assurance department. More than 40 Engineers & 1577 skilled workers are working for top quality products. The workers of OTOBI Limited are fully satisfied. OTOBI Limited also is a Moody International certified company.

    Compliance

    OTOBI Limited has been designed and developed keeping all the compliance issues in mind. Compliance issues are very closely checked, monitored and followed by the management. It has various facilities such as separate dining for the employees, well decorated working place, fire alarm system, fire extinguisher, emergency medical aid facility etc. OTOBI Limited has two factories and 1577 worker are working there. They are maintaining a Trade Union.

    Performance

    The performance of the company is excellent. It is a well established company and its sales are moving upward randomly as year passing.

    2.4 Management of Otobi Limited

    The strength of an organization depends on the strength of its management team. Otobi Limited is proud to have a team of highly motivated, well-educated, and experienced executives who have been contributing substantially to the continued progress of the organization. The management is supported and assisted by well motivated, high skilled, experienced officers and managers dividing different divisions and departments to carry out regular activities to reach its goal.

    2.5 The Strategies, the People, the Technology

    2.5.1 The Strategies

    While pursuing the Mission and being guided by its values, Otobi Limited follows the following approaches gathered and tested from its development practices in Company. Together with the Vision, Mission and Values, the approaches constitute of Otobi Limited, determine its analysis of the development context and help devise its Goals, Objectives, Outputs and Strategies:

    Participation, Empowerment and Reflect

    Otobi Limited firmly believes that people’s participation in their own development is essential for sustainability and effectiveness. Reflect[1] is a key tool for effective participation of people, which can lead to Organization. Otobi Limited facilitates the participation of the manufacturing and marginalized communities in planning, implementing, monitoring and evaluation of selling activities. For that, it constantly develops new approaches ensuring greater voice and assertion of their rights from duty-bearers. Reflectpromotes collective analysis and action to change what is possible. It also delineates the changes needed in policy and practice to ensure equality and justice.

    Rights-based Approach

    Invest to accelerate internal growth. Direct and focus investment spending in strategic opportunities to build share and to accelerate unit volume growth in key product positioning.

    Develop the lowest cost position in strategic product categories. Emphasize and measure operating efficiencies and cost structures in all areas of the company to reduce coast consistently and to increases return in sales without sacrificing quality. Otobi Limited has the mission to have an effective participation in economic and social development and activities. Actually, to attain its goal,

    Innovation

    Otobi Limited believes that in order to assert influence at the policy level, it is important to remain at the cutting edge of development thought and practice. For that, Otobi Limited will continue to support innovation in development practice and communication.

    2.5.2 The People

    The people who are making it happen- the employees are young, dedicated and energetic. All of them are well educated at home or abroad, with both sexes (gender) and minority groups in Bangladesh being well represented.

    2.5.3 The Technology

    Otobi Limited has a web based data management system called Enterprise Resources Program (ERP). In this system all the information about 2000 staffs are kept. The system is updated in regular basis and keeps abreast with updated information. Through this process Otobi Limited try to ensure effective

    Communication, production, distribution, accounts and total operations.

    3.1 Employee Performance Management

    Performance management includes activities to ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on performance of the organization, a department, processes to build a product or service, employees, etc. In this report we will try to have a sense of the overall activities involved in employee performance management including basics concepts in performance management, organization performance management and group performance management.

    3.2 Performance Appraisal

    3.2.1 Statements of Policy

    Performance Appraisals are means to encourage communications between staff and his/her line manager(s) and also to enable each of them to understand the expectations of the other. Better communications between staff and their Line Manager(s) leads to a better understanding, more effective management and stronger performance. Further, Performance Appraisal is the procedure to formally evaluate the performance of staff, so that good performance is recognized and weaknesses are identified with a view to assisting and guiding the employee in improving their performance.

    In Otobi Limited, every Manager has the responsibility to ensure the development of his/her staff’s capabilities required to perform their jobs effectively. Generally, the Line Manager(s) conduct individual meetings with their staff to discuss the employee’s performance, achievements, and strengths, weak areas, difficulties in job performance, explore the ways to improve performance, staff development and jointly set objectives or goals to be achieved by the next Appraisal (or next Appraisal period).

    The purpose of the performance appraisal is to:

    a) Give the employee an opportunity for self-assessment of his/her performance and propose means of self improvement and development

    b) Give the employee feedback on his/her status to meet the objectives which were agreed between the employee and Line Manager

    c) Enable the employee to understand how the Organization perceives his/her performance so that it will consequently help the employee to perform accordingly

    d) Document the employee’s performance for current and future reference

    E) use as a basis for salary increments, promotions, career developments or disciplinary actions

    f) Identify need for training or skill development and provide input for management planning.

    3.2.2 Time for Performance Appraisal

    A complete and written Performance Appraisal shall be prepared annually in December for regular and long-term Contract employees of Otobi Limited. Below are other occasions for Performance Appraisal:

    i) At the end of employee’s probation period

    ii) Before proposing promotion for an employee

    iii) Before proposing any change in employee’s employment status from temporary/contract to regular or from regular to contract status, and for change in roles and responsibilities.

    iv) Before preparing staff development plan.

    v) On transfer

    Since Otobi Limited recognizes HRD as the continuous process, therefore, if required, a Performance Appraisal meeting may be conducted at any time during the year to review and feedback of the performance of the employee. The continuous feedback enables the employee to recognize and keep up his/her strengths and improve any weak areas. Such performance appraisal does not necessarily require documentation. However, if deemed necessary due to special circumstances a concise written document on the performance appraisal should be prepared, signed by both employee and line manager(s) and provide a copy to the concerned employee after retaining a copy for his/her personal file.

    3.2.3 Directives for Line Manager

    i) It is the responsibility of all Line Managers to ensure that staff is evaluated in a timely manner on each occasion. The Head of HRD/Admin is responsible for circulating guidelines to each Unit, Department and Project offices prior to the Annual Performance Appraisal of Otobi’s staff.

    ii) All assessment must be fair, honest, impartial and meticulous in grading the employees. For any kind of misinformation and deliberate disgracing or falsifying the information, which may go against or in favor of any employee unduly, and if it is proved with evidence then the evaluator will have to explain to the Otobi’s Management for such unprofessional and unethical acts. The concerned personnel will be subject to disciplinary actions for such misconduct.

    iii) Performance Appraisal does not mean that the employee shall be promoted or his/her salary shall be increased.

    iv) The Annual appraisal shall be carried out in relation to the employee’s’ performance throughout the entire appraisal period and not just on recent performance.

    v) Supervisors should discuss the employee’s work in a positive manner to help each employee to be more effective in his/her job.

    vi) Areas for improvement should be reviewed and management should take every possible measure to overcome the weakness.

    vii) Recommendation/Approval for Increment or Promotions must be consistent with the content of the Employee’s Performance Appraisal and within the approved budgetary provisions. It is important that an employee should not be deprived from salary increase if he/she has performed accordingly and eligible for the Increase. Again, a budget provision does not mean that the salary increase of an employee is automatic.

    Viii) The Performance Appraisal shall include an objective assessment (qualitative and quantitative) of employee’s performance level in relation with his/her current duties and responsibilities, according to the Job Description.

    ix) The performance appraisal will look at the employee’s job related personal characteristics such as attitude, promptness, initiative, appearance, commitment and team work.

    x) The Performance Appraisal will also look at the employee’s job related skills and knowledge such as, communication skills, management skills, training skills, reporting skills.

    3.2.4 Performance Appraisal Format

    Performance Appraisal of all regular and long-term contract employees shall be done using the Otobi Limited designed Performance Appraisal Form. The Annex 11 will be used for all employees. However for senior management staff (grade-I & J) additional attachment can be used along with the standard format. Performance Appraisal Format includes a number of parts which shall be filled in appropriately by the Line Manager(s) who evaluates their staff, employee.

    It is expected that Otobi Offices will use this standard Performance Appraisal form also at the time of promotions, at the end of probation period and for staff development plan for their employees. For other cases, such as, on transfer, change of employment status of the employee’s, the line manager will prepare a narrative Performance Appraisal (in brief).

    3.2.5 Guidelines for Evaluators

    To ensure the effectiveness of evaluation procedure evaluator’s fair judgment is essential. The rating for assessment represents the line manager’s evaluation of the employee’s actual performance in his/her present job. The following points should be important for the evaluators when carrying out evaluations:

    i) Line managers, before making Performance Appraisal of staff, must have read the Performance Appraisal policy as described in HRP Manual, Performance Appraisal Format and the issued Guidelines on Performance Appraisal procedure.

    ii) Supervisor(s) shall make his/her judgments on the job requirements, the job description and the employee’s performance in the job.

    iii) Line managers should consider only one factor at a time. Rating in one trait should not influence the rating of another.

    iv) Line managers should conduct the Performance Appraisal with each staff in a one to one discussion.

    v) Supervisors will consider the factors those might have affected results, especially those beyond control of the employee and comment appropriately.

    vi) In cases where an employee has secondary evaluators, the Line Manager should collect input from these secondary sources prior to completing the appraisal format. Secondary sources will be most helpful if they know at the beginning of the year exactly what type of comments will be required at the end of the year. The Primary Evaluator should communicate with all secondary evaluators early in the year to clarify these expectations.

    Responsibility of Secondary Evaluators: Many staff has secondary evaluators listed on their job descriptions, Secondary evaluators time to time should share comments on the performance of employees with the concerned Primary Evaluator. At the time of preparing the Annual Performance Appraisal, Secondary Evaluators should be asked to submit their comments to the Primary Evaluator to assist in preparing a fair appraisal. In some instances if required, the Secondary Evaluator may be asked to discuss their comments in person with the Primary Evaluator or with the concerned employee.

    3.2.6 Performance Appraisal Procedures

    As a fundamental part of the Performance Appraisal procedures every Line Manager shall conduct an individual appraisal review meeting with his/her staff. The purpose of this meeting is to discuss the employee’s performance with him/her ensuring the opportunity for participatory review. It is important to recognize good performance so that the employee is aware that he/she is making a positive contribution and encouraged to continue. The meeting also enables the Line manager to provide advice or guideline to the employee in the event there is any weakness or shortcoming in the performance. In this meeting, targets and objectives that have been agreed upon are reviewed and again will be set for the next appraisal period.

    During this review, the Line Manager attempts to understand the difficulties of his/her staff and to identify his or her developmental needs. Before each review, the employee prepares for the discussion through self-assessment, identifying factors that have contributed to his or her performance and factors that hinder it, as well as the types of support that he or she needs from the supervisor or others in order to do better in the next period. The Line Manager also prepares for the meeting by listing achievements, observations, problems, suggestions, and expectations. During the appraisal meeting, the Line Manager and his/her staff share their observations and concerns. Each responds to the subjects raised by the other. Such discussions help to develop mutual understanding, and the data generated is reported to higher management and is used in making decisions about individual staff development as well as developmental needs of the work group or the entire organization.

    The following points are important for success of the Performance Appraisal meeting:

    Before the meeting:

    i) Give the employee adequate notice of the meeting and brief him/her on the purpose of the meeting (Employee should be provided with a blank Performance Appraisal Form Annex 11 for his/her reference and self – assessment).

    ii) Prior to the discussion all evaluators must have read and reviewed the following documents:

    ¨ Staff personal file with special focus on notes of the last appraisal conducted.

    ¨ Job Description.

    iii) Consider the points the Line manager wishes to make and the targets or priorities and expectations which will need to be agreed for the following appraisal period.

    During the meeting:

    i) Start off by stating the purpose of the meeting and invite the employee to comment on how he/she sees his/her performance (Refer the employee’s self assessment).

    ii) First of all pointing out examples of good performance and then outline areas where improvements are needed.

    iii) Explore reasons for the strong and weak points. Identify training needs if necessary.

    iv) Goals, objectives and action for improvement in the following period should be discussed and agreed.

    v) Employees should be encouraged to seek and receive guidance in improving performance.

    After the meeting:

    On completion of appraisal, evaluators must immediately put down all salient points on paper and share these with the staff member. Subsequently, if possible within the next day, based on the outcome of the Appraisal meeting, the Line managers (1st and 2nd supervisor in consultation with each other) will fill in the Performance Appraisal form with appropriate rating of the traits and other descriptive areas and sign on it. Staff concerned shall be provided with filled in Performance Appraisal (in duplicate) for his/her study and comments. Staff members must be encouraged to put down their comments on the Form itself before signing on it.

    After return of the Performance Appraisal from the staff, Unit/ Department Head, in consultation with the line manager will fill up the confidential part of the form and thereafter will send all staff Performance Appraisals to HRD/Admin for review, action and record.

    3.2.7 Steps for Otobi Limited Annual Performance Appraisal Procedure

    · At the beginning, HRD/Admin sends guidelines of Performance Appraisal to Projects/Units/Departments for Performance Appraisal.

    · The Unit/Department Heads hold meetings with their Line managers on the guidelines and their special concern over Performance Appraisal of their staff for the given year.

    · The individual Line Managers notify their staff of the Performance Appraisal meeting. (Probationary staff unless the probation ends within 15 January of the following year and the staff recently evaluated will not require the Annual Performance Appraisal for the given year)

    · Conduct the Performance Appraisal meeting between the respective Line Manager and staff; the feature and the outcome of the meeting is noted.

    · Performance Appraisal and signed by both the Line Manager(s) and the concerned staff; a copy of the document is given to the staff concerned.

    · The Unit/Department Head in consultation with Line Manager will fill in the confidential part of the Appraisal form.

    · The respective Department Head will also prepare a summary of recommendations/approvals for Increments, Promotions, No Increment, Separations, Transfers of their staff of each region/sector supported by a narrative (but short) rationale of individual special cases.

    · Each Project Unit/Department send copy (s) of all staff’s Performance Appraisal to HRD/Admin.

    · Otobi Limited Accounts Department will provide HRD/Admin. With the following year’s approved salary level of each office as per the budget so as to reconcile with the recommended/approved Increments/Promotions.

    · HRD/Admin. will review the submitted Performance Appraisals and will act:

    a) Submit Performance Appraisal of higher management and Performance Appraisals with exceptional recommendation such as Disallow Increment, Two step Increment, Promotion, Disciplinary action etc. to the head of HR and CEO along with summary of recommendation / approvals for his/her review and final approval.

    b) HRD Head will write short notes on the Performance Appraisal form in the event the recommendation is not according to the policy and not approved by CEO and MD.

    c) Prepare relevant letters as finally approved by CEO.

    · HRD/Admin. Will issue letter as per the outcome of their Performance Appraisal to individual staff in the corporate office.

    · HRD/Admin. will keep a copy of Performance Appraisal along with letters of all branch office employees in the Personal file kept at the Corporate office

    · HRD/Admin. Will record and update Human Resources Information, staff list, data base file.

    Performance Appraisal Form

    (Staff / Officer) GG/HR/PA-03.2

    1. Personal record:
    Name: Supervisor/ Dept Head Name:
    Designation: Designation:
    Joining Date: Department:
    Evaluation Period: Length of service: ————years ————months
    Education at the time of Joining: Current Education:
    Last Increment Amount: Last Increment Date: Current Salary:

    Instructions

    È Read the entire sheet thoroughly before rating any employee.

    È Base your judgment upon the entire period covered and not upon isolated incidents only. Be objective.

    È Use your independent Judgment.

    È Your ratings must not be influenced by personal feelings.

    È Don’t be influenced by general impression, but concentrate on one factor at a time.

    È Rate on each factor separately. Do not allow judgments of one factor to influence judgment on other factors.

    1. Evaluation by Departmental Head / Immediate Supervisor:
    2.1 Job Knowledge 2.5

    Poor

    		 5

    Fair

    		 7.5

    Good

    		 10

    Excellent
    Demonstrates and applied understanding of the technical, procedural any policy aspects of the job. Inadequate Knowledge: requires considerable assistance. Adequate Knowledge of essentials: requires some assistance. Through knowledge of the job: may perform duty without any assistance. Sound knowledge on all aspects of work. Capable of performing the job independently.
    2.2 Motivation 2.5

    Antagonistic (opposed)

    		 5

    Passive

    		 7.5

    Loyal

    		 10

    Loyal & Enthusiastic
    Is Responsible and willing to take the initiative committed of the organization? Annoyance: Organization’s policies and practices openly critical. Accepts the policies of the organization reluctantly. Supports the policies of the organization, keeps abreast of policy changes. Advocates the organizational policies: takes pride in its success.
    2.3 Speed of work 2.5

    Slow

    		 5

    Acceptable

    		 7.5

    Normal

    		 10

    Loyal & Exceptional
    Is productively energetic, even on routine task, and sees things through towards prompt completion. Procedures less than s/he can or should; need continuous assistance. Produces enough to get by: rarely exceed standards. Frequently turns out more than normal volume. Outstanding high in volume of good work.
    2.4 Quality of work 2.5

    Poor

    		 5

    Fair

    		 7.5

    Good

    		 10

    Excellent
    Work is always of a high standard, demonstrating precision and accuracy and a concern for quality. Frequent errors/ careless. Occasional errors, usually orderly & complete Infrequent errors, usually orderly & complete Exceptionally accurate neat & through.
    2.5 Speed of Learning 2.5

    Learn Slowly

    		 5

    Average Learner

    		 7.5

    Quickly

    		 10

    Loyal & Exceptional
    Is adaptable to new situations and quick instructions, enthusiastic about learning new skill. Have considerable difficulties in adjusting to new situation Adjusts slowly to changes performs work fairly well. Rapidly absorbs new skill: adjusts reasonably fast to changes. Outstanding quick to learn new skills and adjust quickly to changes.
    2.6 Team Building Capacity 2.5

    Extremely disorganized

    		 5

    Occasionally disorganized

    		 7.5

    Organized

    		 10

    Exceptionally Organized
    Effective plans time: is personally well organized and able to keep schedule / deadlines. Work is always haphazard, cannot meet deadlines, tasks get perfect after a few revisions. Sometimes become disorganized and fails to meet schedules; otherwise alright to work with. Able to meet deadlines on time with accurate work. Always submit work well in advance of deadlines and helps to take corrective actions if anything goes wrong.
    2.7 Dependability 2.5

    Extremely disorganized

    		 5

    Occasionally disorganized

    		 7.5

    Organized

    		 10

    Exceptionally Organized
    Can work without supervisor. Cannot be relied upon. Has to be closely checked. Usually reliable, can be entrusted to do a job with routine check. Applied knowledge and abilities well, requires little supervision. Inspire utmost confidence. Need no supervision.
    2.8 Supervisory Skill 2.5

    Inadequate

    		 5

    Average

    		 7.5

    Effective

    		 10

    Exceptional Leader
    Sets an examples to staff and can be posted where necessary; but also make efforts to coach others and develop their performance. Lack of qualities, necessary to be a successful supervisor. Uses poor judgment. Have some leadership abilities but at times unable to get group support… Has most of the qualities required to be a supervisor; respected by subordinates. Achieves consistently high performance. Able to obtain cooperation without demanding it…
    2.9 Attendance: 2.5

    Poor

    		 5

    Fair

    		 7.5

    Good

    		 10

    Loyal & Exceptional
    Attends duties timely and regularly. Frequently late & absent… Occasionally late & absent. Seldom absent & late Exceptional attendance i.e. no absent & no late.
    2.10 Relationships with others: 2.5

    Extremely disorganized

    		 5

    Occasionally disorganized

    		 7.5

    Organized

    		 10

    Exceptionally Organized
    Is a cooperative team worker and can readily build relationship, developing suitable relationships with colleagues / beneficiaries. Refuses to help others, difficult to work with. Helps fellow workers when asked; accepted by others. Has a friendly relationship with co-workers; Good team worker. Offers to help others on own initiatives; respected by co-workers.

    Total Score:

    Dept. Head Evaluation <50%

    Bellow Standard

    		 50-75%

    Acceptable

    		 >75%-<90%

    Good

    		 >90%

    Outstanding
    1. Recommendation by the Departmental Head: I hereby recommended that the above mentioned employee:

    A.

    i. Area of strength of the employee:______________________________________________

    ii. Area of weakness of the employee:_____________________________________________

    iii. Area of development of the employee:_________________________________________

    B.

    i. May be considered for increment of _________________ Tk

    ii. Is suitable for promotion.

    iii. May be considered for incentive.

    iv. Is not suitable for promotion at present.

    v. Needs on the job / off training / counseling.

    vi. Others ————————————————————————————————–.

    C.

    a Week potential / poor The person concerned has little to contribute, unless improve his / her service to be considered for termination, annual increment to be held up.
    b Average potential Average progress, but presently not qualified for promotion.
    c Good Potential The candidate is able to contribute sufficiently within the current position. Qualified for limited advancement above present level.
    d Exceptional / Strong Potential The candidate has excellent prospect for promotion to be considered for award of special increments.

    ___________________________

    Signature of the Department Head

    Date

    To be filled up by concerned HR Dept.

    Name: ————————————- Designation: ——————————————————Section/ Dept: ———————–Unit Code ——————–Date of Joining:———————–

    01. Total score:

    02. Recommended for increment / enhancement @ TK. _________________ per month

    w.e.f. _______________________ and his gross salary will stand Tk. ___________________per month

    Existing position.

    03. Recommended for promotion to the position of _____________________________________ without increment / enhancement.

    04. Recommended for promotion to the position of _______________________________________ with increment / enhancement @ TK. ___________________ per Month w.e.f.___________________ and his gross salary will stand TK.___________________ per month.

    _________________________

    Human Resource Department

    Approval:

    02. Recommended for increment / enhancement @ TK. _________________ per month

    w.e.f. _______________________ and his gross salary will stand Tk. ___________________per month

    Existing position.

    03. Recommended for promotion to the position of _______________________________ without increment / enhancement.

    04. Recommended for promotion to the position of _______________________________________with increment / enhancement @ TK. ___________________ per Month w.e.f.___________________ and his gross salary will stand TK.___________________ per month.

    __________________

    3.3 <href=”#anchor1974638>Rewarding Performance

    3.3.1 Annual Increments

    § Annual Increments are awarded once a year effective 1st July based on employee’s performance appraisal.

    § Under very special circumstances a two step Increment may be recommended for an employee’s extra – ordinary performance and must be supported by the rationale.

    § Annual Increments are subject to satisfactory performance of staff throughout the year, and are not automatic. Therefore, if the Performance Appraisal of a staff is not satisfactory, he/she will not receive any increase.

    § The receipt of a warning letter usually results in the loss of annual increment depending on the reason for the letter and amount of improvement in the employee is observed after issuance of the letter. Supervisors will give importance to this point while making comment in the Performance Appraisal Form.

    § Supervisor(s) must state the reasons in the confidential section of the performance appraisal form if an employee is not recommended for an increment for that year.

    3.3.2 Promotions

    § Promotions are only given for employees who will undertake/demonstrated higher responsibilities and possess the qualifications and skills required for the proposed position.

    § All promotions are subject to an existing vacancy in the organization if within budgetary levels.

    § All promotions must be supported by a performance appraisal with rationale either in annual review or in other time. An interview or examination may also be arranged if deemed necessary.

    § While recommending/granting promotion, Otobi’s Position, Grade and Salary chart must be referred to so as to ensure that the appropriate job title and salary is given in the new position.

    § In the event a staff needs trial to perform in a higher position a provisional promotion (in written) may be given. Such Provisional period should be usually for six or twelve months. At the end of Provisional period the employee’s performance should be evaluated so as to determine his/her competency for the new position. If the evaluation proves favourable, the employee’s promotion will be confirmed by giving the position and the higher salary. In case the employee fails to meet the requirements for the new position, he/she will revert in his/her previous position.

    § Upon promotion a new job description will be provided to the employee.

    Other benefits

    Allowance Chart

    Overtime For Support Staff: Tk.20 per hour for overtime hours worked before 8:00 am and 6:00 pm and during the weekend and holidays.
    For the Drivers Tk.25 per hour for overtime hours worked before 8:00 am and 6:00 pm and during the weekend and holidays.
    Relocation Allowance Transfer and national secondment from one geographic location to another in a different part of Bangladesh 10,000/- taka.
    Transfer within district/city leads to changing of residence, the actual cost of shifting of households and immediate family members (not exceeding taka 3000/-)
    Acting/Additional Responsibility Allowance Taka 3000/- per month
    Car Pooling Allowance a. Monthly 800/- taka per group of staff with a minimum travelling distance of 24 Km (approx.) from office to home and vice versa.

    Monthly 500/- taka per group of staff with a minimum travelling distance of 16 km (approx) from office to home and vice versa.

    Monthly 300/- taka per group of staff with a minimum travelling distance of 10 km form office to home and vice versa.

    Monthly 300/- taka to all support staff only in the event he/she fails to form any team and do not fit into any of the above category.

    The group will submit a monthly bill according to the given claim form to HR. Upon receiving authorization from HR, Finance will arrange payment accordingly.

    This allowance will get invalidated once Otobi Limited will be able to provide pick and drop off service to its staff members.

    In Country Travel & Per-diem Chart

    Travel (In Country)

    Accommodation expense entitlement Per-diem for all category of staff
    City/ Town For Assistant to HOD level For support staff and drivers For divisional cities For district towns and other place
    Ingle

    Room Tariff

    		 Double

    Room Tariff

    		 Single Room Tariff Double Room Tariff Half day Full day Half day Full day
    Dhaka, ChittagongSylhet & Khulna 1,000 1,200 400 600 200 400 150 300
    Barisal & Bogra 600 800 350 500
    Other districts 450 600 300 450

    3.4 Separation from the organization

    If a staff member’s performance is found to be poor then he/she may be subject to any change of assignment, transfer, demotion, termination or any disciplinary actions if decided so. However, the required procedures must be followed if disciplinary action like dismissal is recommended. All recommendations of disposition must be supported with rationale and should be consistent with the employee’s Performance evaluation.

    3.4.1 Policy

    Otobi Limited recognises that no organisation can provide long term security of employment, least of all a development organisation. Staff may leave Otobi Limited due to their own reasons; similarly Otobi Limited may let go staff for a variety of reasons. Otobi Limited would like to ensure for the departing staff a smooth and hassle-free exit procedure.

    3.4.2 Categories of separation

    a. Resignation

    Staff willing to resign from the service will give written resignation (hard copy) stating the reasons for leaving and intended date of the resignation to be effective according to the following guideline:

    Regular confirmed staff Contract staff (short term and long term) Staff on probation
    Notice period 1 month As per contract terms and condition 15 days
    Resignation letter addressed to/acceptance letter issued by Head-HR

    (Resignation acceptance letter in consultation/consent from the line manager and approval from the CEO and MD

    		 Head-HR

    In consultation/consent from the line manager and approval from the Head HR

    		 Head-HR

    In consultation/consent from the line manager and approval from the Head HR
    Copy to Line manager Line manager Line manager

    The resignation acceptance letter from HR should include request to handover the charges with a handover note, materials, equipments or outstanding obligations and to take clearance / release certificate from the respective departments before final payment is made.

    · When a confirmed employee resigns, s/he shall be entitled to the following benefits:

    i. Unpaid salary and allowance up to the last day of work. (A proportionate deduction of salary and allowances will be made if the required notice is not given by the employee as per policy of the Otobi Limited HRP Manual)

    ii. Employees own contribution to Provident Fund, if any.

    iii. Organization’s contribution to Provident Fund, if any, as per policy.

    iv. Gratuity at the rate of one month’s gross salary for each completed year’s service plus a proportionate amount for any fractional part of the year, provided that the employee has completed one year service with Otobi Limited.

    · A probationary employee, if resigns, shall be entitled to (i) his/her unpaid salary and allowance up to the last day of work

    Exit Interview

    Head-HR will ensure the filled in Exit Interview from the departing staff as well as an interview with him/her before final clearance is made. The interview will focus on staff’s reason of leaving Otobi Limited and any suggestion the staff wished to give the organisation for its betterment.

    HR will ensure proper documentation and filing up of interview and exit form for future reference.

    b. Redundancy

    In the event of any staff being made redundant due to planned phase-out of the project/position they will be notified with 3 months written notice. In such case the staff concerned will be entitled to the following benefits:

    · 3 months gross salary. In case a redundant staff decides to resign immediately upon receiving the redundancy notice, staff will be entitled to full redundancy benefit. But it must be ensured that a proper handover has taken place between the staff and line authority.

    · Unpaid salary and allowance up to the last day of work.

    · Employees own contribution to Provident Fund, if any.

    · Organisation’s contribution to Provident Fund, if any.

    · Gratuity at the rate of one month’s gross salary for the completed year’s service plus a proportionate amount for any fractional part of the year provided the employee is confirmed in service.

    In general, before make a position redundant, Otobi Limited will, to a limited extent, try to transfer/appoint qualified and well performing staff to corporate office when the need arises. Staff being phased out may also be given some short term training especially skill oriented to enhance re-employment opportunities after their separation from Otobi Limited.

    c. Termination

    · Termination is used when removal of a staff member by other means is not deemed appropriate. This is the prerogative of the Employer and this action can be taken even without any disciplinary reasons.

    · A terminated employee, depending on his/her employment status shall be entitled to the following benefits

    Confirmed staff

    A confirmed employee’s service may be terminated with 3 months’ notice or three months’ gross salary in lieu of notice with the following other benefits:

    I. Three months’ gross salary in lieu of notice.

    II. Unpaid salary and allowance up to the last day of work.

    III. Employees own contribution to Provident Fund, if any.

    IV. Organization’s contribution to Provident Fund, if any.

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    Energy-efficient Multiple Targets Tracking in Wireless Sensor Networks using Minimal Contours

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    Energy-efficient Multiple Targets Tracking in Wireless Sensor Networks using Minimal Contours

    1.0Introduction

    A Low Cost Localization Scheme in a Mobile Sensor Network

    Sensor network has been one of the newer and highly active research areas of Computer Science and Telecommunications. Originally motivated by military applications, such as battlefield surveillance and intelligence data acquisition, the use of sensor network has covered many civilian and industrial application areas now-a-days. However, regardless of its diversified applications, the primary tasks of sensor networks remain the same. These include target detection, classification, localization, data acquisition, tracking and transmission of data over multi-hop networks. Tracking of moving targets is an essential capability required in many practical applications of sensor network. In tracking applications, sensors actively probe for occurrence of phenomena that is, in most cases, intrusion of target entities into the coverage region of the sensor network. Once such activity is detected, the sensors locally gather information to determine the target’s spatial location. The information is conveyed to some remote stations where data arrives from all active sensors. The collected information over a particular time frame is fused together to obtain the global information regarding the location of the target.

    Target tracking, being a well studied research problem, has been expressed and solved by many from different perspectives from time to time. However, the performance of a tracking method largely depends on the application of the sensor network. Since different applications consist of different set of target entities, sensing models and environmental models; target tracking models are driven by specific goals and scenarios. Amidst different desirable qualities and performance goals of a sensor network, energy awareness is one of the key research challenges for sensor network protocol design. Almost all of the sensing and routing devices of sensor networks are equipped with limited power sources. Therefore, tracking of targets must be performed with energy conserving strategies in order to obtain the optimal performance and life-time of sensor network.

    1.1 Multiple Targets Tracking

    The multiple-target tracking problem deals with the correct and simultaneous tracking of several targets in a sensor network. Compared to the tracking of a single target, tracking multiple targets is significantly more sophisticated and challenging because of difficulties in data association and identity management of targets. In this thesis, we study and find the solutions of energy-efficient multiple targets tracking in large scale sensor networks; the type of sensor network typically used for border surveillance. Border surveillance systems are required to monitor and detect different and possibly concurrent phenomena like trespassing, smuggling, human trafficking as well as enemy movements in warlike situations. Since these phenomena often involve moving and interaction of more than one target entity present in the sensing region independently or in groups; multiple targets tracking is an essentially required feature in such applications. We consider tracking all possible target entities including battlefield entities (human, tracked, wheeled vehicles). In scenarios like the one stated above, the task of target tracking is heavily dependent on proper detection and classification of targets. Therefore, we also propose algorithms for target detection and define appropriate features and classifiers for classification of targets.

    1.2 Outline of the Thesis

    We look to achieve an energy-efficient multiple target tracking algorithm by using cluster based sensor activation strategy. We do so by adopting a minimal contour based target tracking algorithm which previously, was modelled by Tian He et al. [11] to track only a single target at a time. The tracking method described in [11] is based on simple assumptions and therefore, it is unable to emulate the complex scenarios arisen while tracking multiple targets in a realistic environment. In this method, the sensing region of each individual target in restricted to a contour of interest, on the basis of its kinematics. To incorporate the support of different types of target entities in a sensor network, we introduce classification of target entities according to their sensing signatures. The use of target classification enables us to restrict the sensing region for targets according to the class they belong to. In addition, we are the first to introduce the concept of overlapping of the contours of interest which could take place while tracking multiple targets simultaneously. In such cases, we devise appropriate heuristics to ensure the correct association of sensing data with target contours. To perform such operations, a cluster based distributed tracking method is preferable to centralized tracking. Also, due to realistic considerations, the formation of clusters in the sensor network needs to be done dynamically for which, we propose using Voronoi cells to form the bounded region of the sensor network dynamically. We also discuss various target detection strategies and their viability in the scope of our problem.

    The rest of the thesis is organized as follows. In Chapter 2, we discuss the related research work in the field of target tracking in sensor networks. Then in Chapter 3, we discuss the preliminaries and issues related to the problem domain. In Chapter 4, we describe the problem domain in details. In the same chapter, we give the solution also. In the next chapter, we report the experimental results and empirical analysis in the form of tables and graphs. Finally, Chapter 6 concludes the thesis with a summary discussion and proposals for future developments.

    Related Works

    In this chapter, we study some of the major research works related to target tracking, especially multiple targets tracking in wireless sensor networks. To do so, we classify the existing tracking methods in some broad classes and discuss the advantages, disadvantages and trade-offs present in those classes.

    The problem of tracking targets using sensor networks has received attention from various perspectives. Based on the network architecture over which the algorithms are incorporated, these tracking algorithms can be classified into the following two broad categories:

    1. Centralized tracking
    2. Decentralized/Distributed tracking

    2.1 Centralized Tracking

    The simplest approach to track targets is to task each sensor to transmit their sensing information towards a processing node where a central processor fuses the report collected by all other sensing nodes; then performs long distance transmissions towards the base station. Therefore, the workloads of sensor tasking and data gathering concentrate to a single point in the network. While this approach is more invulnerable to noises and erroneous reports, it has numerous drawbacks. Sending time series data through the network introduces latency and synchronization issues. It also consumes energy and network bandwidth, while potentially introducing a single point of failure. It becomes ambiguous when sensors have overlapping ranges, disagree, or when multiple targets are present. Yaakov Bar-Shalom et al. [2] discussed such centralized tracking scheme along with a centralized data association method for sensors.

    Figure 2.1 : Centralized tracking approach

    2.2 Distributed Tracking

    In a distributed network, no central processor is required as the member nodes gather sensing information directly by sensing as well as by gathering sensing information from its neighbouring nodes. That is, target tracking is achieved through collaboration of active sensors located near the target. Since there is no central entity to coordinate the tracking process; the operations of the sensor network are decided using locally gathered information or in many cases, using partially aggregated data of a set of collaborating sensors which of often called a ‘cluster’. In a tracking application, only a set of sensors near the target remain active at a time and it is their job to choose which other sensors on the network need to be activated for proper tracking of targets and which of the active ones need to be deactivated or put asleep when not in use. Because of the use of local information, distributed systems may temporarily result ambiguous or inconsistent information in different parts of the network. However, distributive approaches provide much more flexibility for the number and orientation of sensors which provides scalability to the network. In most of the sensor network applications scalability remains an essential requirement. Therefore, distributive algorithms are of better match for tracking applications than the centralized ones and most of the recent research works have been focused on the development of distributed tracking algorithms. These algorithms can be further categorized as follows:

    i) Tree based approach

    ii) Prediction based approach

    iii) Cluster based approach

    2.2.1 Tree based Approach

    In [27], the authors provided a tree based target tracking algorithm named DCTC; where the sensors taking part in tracking targets form a tree structure called a ‘convoy tree’. As the target moves along its trajectory, the tree is continually reconfigured by adding some nodes along the predicted path and pruning the ones not required any more. Compared to a completely distributed algorithm, DCTC needs less redundant calculations and thus it is more energy-efficient. On the other hand the construction of the convoy tree puts an additional computational overhead over the sensor nodes that makes it difficult to implement. The DAT algorithm provided in [14] uses tree structures to facilitate in network processing while in [12], tree structure is used to employ hierarchy based data propagation in the sensor network.

    (a) (b)

    Figure 2.2: DCTC: Tree based target tracking in [18]. (a) Convoy tree (b) Tree reconfiguration

    2.2.2 Prediction based Approach

    In Prediction algorithms, a sensor can predict the future movement of moving object using control sensor’s state (i.e. active mode, sleep mode etc.). Like the tracking process itself, prediction based algorithms provide methods for monitoring targets as well as for reporting, For monitoring, various number of prediction models have been used. Some use Hierarchical Markov models [8, 25] or Kalman filters [5], while [24] used a linear prediction model that performs prediction based on the previous two observations. Similarly, higher order predictions (using up to n-1 observations to perform the nth prediction) are also possible. In [8], the active sensor nodes transfer their sensing data to their cluster head. The cluster head uses the data from its member nodes to predict the object movement. When the object moves out of a sensor node’s sensing area, the sensor sends the object movement information to the cluster head for further prediction computation. And the cluster sends the latest prediction data to the next sensor node that the target approaches. Like most other distributed algorithms, it exploits the use of local, short range data transmission while only the cluster heads communicate in long range. In [24], a similar cluster based reporting algorithm was proposed. However, for tracking, they relied on predictive approaches; as stated previously.

    Figure 2.3: A generic predictive tracking operation.

    2.2.3 Cluster based approach

    Cluster based target tracking is one of the more widely used tracking approaches in recent works. In this approach, a set or ‘cluster’ of sensors are dynamically activated/deactivated at a time. Each cluster consists of a number of active working nodes along with a designated sensor node which is often referred to as cluster head (CH). All the members in a cluster take part in target monitoring while the designated one aggregates and summarizes the data and transmits towards the sink. As a result, the cluster head dissipates more power than other nodes and therefore is expected to have a shorter lifetime if all sensors are assumed to have the same amount of initial energy.

    Figure 2.4: Dynamic clustering in sensor network.

    LEACH[10] is one of famous cluster-based routing protocols in wireless sensor network. In LEACH, cluster head is elected randomly and periodically. Therefore, energy consumption is distributed evenly. However, because cluster head is randomly elected, LEACH is not fit for moving object tracking scenario. A more efficient approach is to elect the cluster head according to the energy profiles of the members of a cluster. This again, comes with an extra information exchange overhead which is acceptable comparing to the expected benefit of increased system lifetime. [4] incorporates an event-triggered dynamic cluster head election where the head is selected automatically by the detection event itself. This requires a heterogeneous sensor network where cluster heads have more computational power and more battery capacity than others. This also results a scalable hierarchical architecture which makes a good candidate for large scale sensor networks. However [4] emphasized on the details of the network architecture rather than the tracking algorithm itself. This leaves room for further improvement in accuracy and energy efficiency for tracking in heterogeneous hierarchical sensor networks.

    Preliminary Issues

    A wireless sensor network is a system of small, wirelessly communicating nodes in which each node is equipped with multiple components. In particular, each node has a computation engine; communication and storage subsystems; a battery supply; and sensing and, in some cases, actuating devices. Such a network is envisioned to integrate the physical world with the Internet and computations. The power supply on each node is relatively limited, and frequent replacement of the batteries is often not practical because of the large number of nodes in the network. Therefore, energy is the most constraining factor on the functionality of these networks. In order to save energy, nodes use multi-hop short-range communications, which have been proven to consume much less energy than a single-hop long-range communication of the same distrance[28]. The sensor nodes form an ad-hoc network where each node, in addition to transmitting or receiving its own data; also forwards data originated from other nodes towards the destination. Therefore, long range data transmission between two nodes or between a node and the base station can be done in multiple hops, instead of using the more expensive single hop long range transmissions.

    3.1 Foundational Aspects of Sensor Network

    Efficient and fault-tolerant network architectures play a very important role in successful implementations of sensor networks. Apart from the timeliness and complexity of information transmission, interconnection topology has a significant impact on the computational aspects of data routing and sensor deployment schemes discussed in later sections. Therefore, the overall performance of a sensor network is critically dependent on its network architecture.

    3.1.1 Sensor Characteristics

    A sensor network can consist of either homogenous or heterogeneous entities. In a homogenous sensor networks, all the consisting sensor nodes have the same sensing modalities and range although they might have different role of operation, depending on the architecture and Application services used. On the other hand, a heterogeneous sensor network may consist of a mixture of motes with different models, battery power, sensing modality and sensing and transmission range. In mobile agent based sensor networks, some or all of the entities could also have mobility features providing capacity to move throughout the sensor network region. Such features are useful in evader-pursuer type applications; while ill suited for other applications due to the size, energy consumption and expense of the nodes.

    3.1.2 Communication Model

    The communication model of a sensor network is different from the traditional client-server model. Sensor networks are more like distributed systems where the communication flow is omnidirected and evenly distributed. As stated previously, most of the communications that take place in a sensor network are of short range; which are used to share local information among the sensors. Therefore, sensor networks require different, specialized MAC layer protocols to incorporate effective communication. Standard CSMA based protocols suffer from hidden station problem as well as from high collision rates for which new variants such as S-MAC,B-MAC etc are proposed[17].

    3.1.3 Energy Model

    Energymodels, as well as battery models are required to predict the lifetime of a sensor network and compare the quality of different algorithms and protocols. As stated earlier a node performs various kinds of operation such as computation, sensing, data transmission and receiving etc. All of these actions dissipate energy at different rates. While power dissipation rate for sensing, computation as well as being idle are specific and subject to the model of sensor nodes models; the transmission power is proportional to the range of communication . That is:

    For a sensor whose subunits can be turns on or off independently, the combination of such on/off states can be assigned as an energy state for the node. For a sensor network consisting of n sensors, each with m distinct states with per-state energy dissipation vector R[1:m] and per-state activity duration vector T[1:m], the total dissipated energy can be formulated as:

    3.1.4 Data Integration Methods

    In many applications, sensors are typically deployed in hazardous on harsh environments where the sensor operations and data communications are not as reliable as the communications are prone to various kinds noises. The other possible sources of unreliability are faulty sensor, false alarms, localization failure etc. Therefore, fault tolerance is an indispensable property of data integration algorithms. The measurements collected by sensors are usually processed into interval-valued estimates serving as the inputs of an overlap function, whose redundancy may be used to provide error tolerance.

    Colouqueur et al. [6] introduced and compared two methods for fault tolerant data fusion, namely value fusion and decision fusion. In value fusion, the sensors in the network exchange their local data values and fuse them by finding the average. The final decision is made by comparing this final value to a threshold. On the other hand in decision fusion, the sensors in the network make a local decision by comparing their own measurement to a local threshold. Then they exchange their local decision and fuse them by averaging. The final decision is made by comparing this fused decision to another threshold.

    3.2 Sensor Deployment

    The sensor nodes of a sensor network are can be deployed both statically and dynamically. In applications like traffic surveillance or industrial monitoring, sensor nodes could be deployed in a fixed orientation. However, in many other applications such as battlefield surveillance, hazardous environment monitoring etc., fixed deployment is not possible. In that case sensor nodes are usually scattered or air-dropped over the region. Dynamic deployment requires the sensor nodes to ‘learn’ their overall or partial topology once they are deployed. Between the two methods of deployment, dynamic deployment provides more versatility and fault tolerance as deployment is much easier in this manner. In cases of air dropping of a large number of sensors, their deployment is considered to be spatially uniform in the network region.

    3.3 Event detection

    Even in a homogenous sensor network, different sensors may play different roles. The sensor nodes those are located near the boundary of the sensing region perform the additional task of event detection. Events could be of different types in different applications. For example an increase in industrial waste flow could be considered as an eventwhile in surveillance systems, intrusion of target entities into the sensing region is considered as an event. The performance goal in event detection is to find a distinct feature that can be sensed cheaply (energy-wise) and that can reliably detect a target.

    3.4 Network Partitioning

    As shown in [4], A hierarchically structured sensor network is composed of (a) a static backbone of sparsely placed high-capability sensors called cluster heads; and (b) moderately to densely populated low-end sensors whose function is to provide sensing information to their corresponding dynamically associated cluster heads upon requests. That is, a hierarchical sensor network is partitioned into a number of autonomous regions or cells where the low end sensors of each cell are tasked and controlled by its designated cluster head. By implementing such two level or possibly multiple level hierarchy, the transmission range for the low end sensors can be reduced significantly while the cluster heads perform the long range communication among the partitions. Again, as the low-end sensors outnumber the cluster heads, overall we obtain decrease of energy consumed in data transmission and receiving. By this way, cellular/hierarchical structures provide energy efficiency while maintain the distributive characteristics to a sensor network. The cells could be formed in predefined shapes such as squares and hexagons. Alternatively, dynamic clustering methods such as voronoi diagrams can be usedto provide scalability and support random sensor deployment in the sensor network.

    (a)

    Figure 3.1: Partitioning approaches in hierarchical sensor network. (a) fixed format cells (b) Voronoi cells

    (b)

    Chapter 4

    Problem Formulation

    In this section, we present our methodology to ensure energy-efficient multiple target tracking in sensor networks used in a typical surveillance system. To do so, we describe the problem domain using practical assumptions and related definitions. Later we discuss algorithms and methods for tracking multiple targets as well as for target detection and classification.

    4.1 Assumptions

    We use the following assumptions on the sensor network to formulate the border surveillance problem:

    § A homogeneous sensor network, which implies a sensor network consisting of only a single kind of sensor, will be used to perform detection and tracking.

    § The network entities of interest are annotated in three categories :

    o Computational Sensor Node (CN)

    o Working Sensor Node (WN)

    o Boundary Sensor Node (BN)

    Figure 4.1: An Illustrative Example of the Deployment Scenario

    Furthermore, we assume the following propositions as attributes of the proposed system architecture:

    § Target can enter into the sensing field from any point on the boundary.

    § The tracking area is divided into cells. Each cell contains a CN which collects data from the WNs and the BNs associated to that specific CN. Deployment of the CNs in each individual cell is dynamic, the commonly deployment technique in surveillance applications. The cells, possessing non-uniform size, are created by these CNs dynamically using Voronoi diagram. We prefer the algorithm in [1], for implementing Voronoi diagrams, as it is harmonious to our assumptions and also has an auxiliary advantage of performing better than other algorithms given by Zhao et al. [29]. In [29], the provided algorithm uses only one sensor for calculating Voronoi diagrams.

    § The CNs, deployed all over the tracking field, is high powered nodes performing computation jobs.

    § WNs are deployed over the whole sensing area sparsely, possibly by air-dropping from aerial vehicle.

    § Each CN is capable to relay target information to the base station or to other computation nodes.

    § We assume all the distributions of transmitting and receiving signals between the nodes, used in this proposal to be Gaussian .Gaussian distributions have an important capability to work with second-order statistics and estimate mean vector and covariance matrices [3].

    § To detect the kinematic properties of the targets and transfer them to the corresponding CN, we consider the number of active WNs in a contour of interest to be six.

    § We consider, each cell, to consist at most four targets of any type tracked, wheeled or animal, in order to track the targets of interest properly, considering the kinematic properties followed in the problem formulation part.

    4.2 Definitions

    We define the following terms related to our work:

    Definition A. Refresh Time

    The longevity of the tracking area is defined as refresh time which also implies that the old tracking area is replaced with the new tracking according to the target’s movement every refresh time.

    Definition B. Circle of Interest

    Circle of Interest is the tracking area where the target can visit for its current position and speed during refresh time .The radius of the Circle of Interest is obtained by multiplying the target’s speed and refresh time.

    Definition C. Contour of Interest

    Contour of Interest is the tracking area where target can visit for its current position, speed and direction during refresh time. By applying vehicular kinematics and other practical assumptions, we can find the area portion of a Circle of Interest where the target is unlikely to visit. Omitting the unnecessary area from the Circle of Interest results the Contour of Interest for a particular refresh time.

    Definition D. Overlapping Contour Region:

    The common region covered by two or more overlapping contours of interest is defined as Overlapped Contour Region. This situation occurs when more than one targets come close to each other by such margin that the boundary area covered by contours of interest detecting and tracking the targets cross each other.

    4.3 Elaboration of Our Approach

    The main objective of our research will be looking for policies which will minimize the energy consumption of the sensors implying increased lifetime of the sensor network. Initially, the BNs wait for target appearance while all the other sensors remain asleep. The idea of deploying BNs is introduced to increase network longevity. He et al [11] were inclined to the idea of keeping all sensors awake and eventually directing all of them to sensing as well as tracking. We have already introduced the new concept of BN which is helpful for reducing power cost of the overall network as they are deployed only to perform the simple task of detecting the presence of a target. Low powered threshold based sensor nodes are expected to perform the job of detection sufficiently.

    Unfortunately, an interesting issue arises when nearly all the nodes die, which is literally referred as single point of failure [3]. If all the BNs become dead near about the same time the target presence will not be detected and failure rate will increase. Two layer deployments of BNs can be an option where alternatively the two layer sensors will be awake and asleep, but unfortunately this strategy leads to increasing deployment cost. Therefore, a trade-off should be made in deploying BNs in a single or multiple layers. Focusing on the energy preserving issue we will stick to the one layer deployment scheme.

    After detecting a target by any of the boundary sensors, corresponding detection information will be reported to the nearest CN. The CN will examine the received signal and provide relevant decision, using appropriate computations described in the next section in detail.

    In accordance to our assumption we consider the incoming signal, x which has a mean µ1 when there is no external signal present, and µ2 when there the external signal is present. Since we have assumed the distributions are Gaussian having same variance but different means, the distribution incoming signal tends to,

    p (x| ?i) ~ N(µi , ?2).

    The dynamic detection algorithm illustrated by Colloquer et al. [6] will be the core concept to detect targets in case of our research effort.

    In our research process there will be multiple biological and mechanical targets and so the contour of interest will differ with respect to target. In case of considering a biological target for a battlefield scenario, for example , a human entity or an animal, application of kinematics will not make any kind of improvements in pruning the contour of interest of the biological entities and also at the same time ensuring proper tracking .So relevant kinematics provide a Circle of Interest ,where the circle’s centre is defined by, p = (x , y) where x and y are co-ordinates in a two-dimensional coordinate system ,with a radius of r which we can express as r = vt where t = refresh time and

    v = velocity of the target (human or animal). Let b = (v, ?) be the motion process of the human target. Here, v = target speed and ? = target’s direction in the corresponding two-dimensional co-ordinate system.

    Four wheeled vehicles are used in a typical surveillance field for supply and surveillance. In this case we can prune out the most unlikely area that this type of target cannot visit. The formulation is specified according to Tian He et al. , that the tracking area will be a polygon of cone-shape, The four-wheeled target’s position will be expressed as, p = (x , y); where x is the X-coordinate and y is Y-coordinate and also the wheeled target’s motion can be expressed using the same particulars, b=(v , ?) .As mentioned before , v = target speed and ? = target’s direction in the corresponding two-dimensional co-ordinate system.

    The position in a two-dimensional co-ordinate system of a tracked vehicle will be depicted in the same way as the human target and the wheeled vehicle. The motion process is, b = (v, ?) where as mentioned before, v = target speed and ? = target’s direction in the corresponding two-dimensional co-ordinate system .The direction of the tracked vehicle is related to its axis movement angle .The relationship is illustrated in the next section. The tracked target’s position will be expressed as, p = (x, y), where x is the X-coordinate and y is Y-coordinate.

    4.3.1 Design Goals

    We perform our modelling keeping the following objectives in mind:

    § Detecting true occurrence of target (single/multiple) entrance efficiently

    § Classifying the target or targets properly

    § Minimizing the overall sensor energy cost by efficient sleep-wake mechanism based on contour of interest by the CN.

    § Detecting the overlapping of contours of interest and taking appropriate decisions for ensuring first efficient target tracking then energy minimization.

    The refresh time, will be needed in determining the Contour of Interest and also the Circle of Interest; smaller refresh time will lead to smaller Contour of Interest and also smaller Circle of Interest. This selection of an optimal refresh time will be dependent on communication and sensing cost; and not computation cost unlike Tian He et al. [11], as the WNs will not do the complex job of computation.

    4.3.2 Target Detection and Classification

    In this section we illustrate our attempts to detect and classify multiple targets and establishing them to fulfil achieve our objective with concreteness. We will start with the detection mechanism of multiple targets in the tracking field.

    4.3.2.1 The Detection Algorithm:

    Researchers have relied on threshold based strategies in detecting targets in different scenarios. Gu, Jia, Yan, He and others proposed auto-adaptive threshold based sensing strategies to detect events generating acoustic signature [22] .Others like Sayeed et al [3], also used techniques completely based on threshold. They exploit time series segment extracted from the time period when the event occurs.To ensure maximum fault tolerance we can follow the ‘decision value’ algorithm as found out by Colouqueur et al [6], they also show that ‘value fusion’ algorithm works well when the necessity of fault tolerance is low. Faults so happen during event detection in real time environment and improper dealing leads to disastrous results .So we will proceed our work using the ‘decision fusion’ algorithm to minimize faults in event detection.

    4.3.2.2 Illustration of the Classifier:

    As we have stated before classifiers can be described as a set of discriminant functions. But these choosing a suitable discriminant functions is challenging. To ensure minimum error rate classification our effort will eventually will lead to a simple calculation and we start with the following form,

    gi(x) = ln p( x |?i) + ln P (?i) (4.1)

    Where,

    x = feature vector of the observation,

    ?i Î { ?1, ? 2, ? 3,.., ? c} a finite set of c classes where c is a natural number .

    P (?i) = a priory probability for the class ?i .

    As previously mentioned, the Gaussian distribution is followed and hence the posterior probability, p(x | ?i) stands, for multivariate density in d dimensions,

    p(x | ? i) = (4.2)

    Now, in our case as the acoustic features do possess continuous univariate normal distribution , with a mean of µi and variance of ?2i ,for each class ?i .We assume the variances of all the classes will be same and thus ?2i = ?2 as the features will inherit acoustic information, from same quality of acoustic sensors having same attributes .

    Thus our posterior probability density function becomes,

    p(x | ?i) = (4.3)

    Inserting this form in equation (4.1), we get,

    gi(x) = ln [( ] + ln P (?i) (4.4)

    It can be shown that, this form of equation will eventually reduce to a linear classifier and leads the classifier to,

    gi(x) = (4.5)

    Where, ,

    And, = – + ln P(?i).

    We can call wi0 the threshold or bias the ith category and term this classifier as a ‘linear machine’ which can solve the classification job at a linear cost.

    Speed, velocity and position of target can be obtained by the target localization scheme proposed in [9], [13] and used in [11].The dynamic cell creation will be done by the distributed approach proposed in [1].To wake and sleep up the sensors we will use algorithms similar to Ray-Crossings [16] which is an efficient approach to find a point within the polygon. We will use our linear classifier to classify targets and assign a unique identity for them.

    4.3.3 Illustrating the Multiple Targets Tracking Algorithm:

    After performing target detection and classification as stated previously, CN initiates the tracking which controls the activation of WNs of that cell. The targets which we consider for tracking can be divided into three broad classes. One such class is wheeled vehicle. In border and battlefield surveillance systems, four- wheeled vehicles dominate the domain of wheeled vehicle and therefore, primarily 4 wheeled vehicles are taken into consideration. Other wheeled vehicles like 2 wheeled or three wheeled, can be modelled as four-wheeled ones, even though their presence in the tracking field is negligible.

    4.3.3.1 Contour Tracking of Wheeled Vehicles:

    Tian He, in his work [11], defined the vehicle motion on the basis of vehicular kinematics and proved that his modelling leads to a minimized shape of contour. He used the wheel base of the four wheeled vehicle and related the steering angle to the direction of rotation of the target vehicle. Tian He dignified the notion of the four wheeled vehicle as a random vector, having different states. At the beginning of tracking, there is an initial state and driving process that determines the vehicle motion. As its efficiency is proven, we follow the same approach. In this specific case of a four wheeled vehicle target, we model the vehicle motion by a random vector A = (X, Y, a, b, v, a) where (X, Y) is the position of the vehicle, a denotes direction, b is the steering angle, v is the velocity and a is the acceleration of the vehicle. The initial state can be defined as A0 =(X0, Y0, a0, b0, v0, a0). The process that determines the vehicle motion can be expressed as (b,a) where both a and b are Gaussian. Following the concept of He, we get the stochastic update equations as follows:

    Xd+Dt= Xd+ d cos as dt (4.6)

    Yd+Dt= Yd+ d sin as dt (4.7)

    Then, d ß d + Dt

    Here, d = the time already passed before the first detection.

    Dt = refresh time

    We also assume the driving processes (b,a) to be Gaussian, in accordance with He’s approach.

    4.3.3.2 Contour Tracking of Tracked Vehicles:

    The other class of targets we emphasize on this thesis is the tracked vehicle class. Tracked vehicles make up significant portions of target entities in battlefield scenarios. Compared to wheeled vehicles, they have a very different type of acoustic signature for which their presence and location can be distinguished from other entities. The two target classes also use different kinematic principles to manoeuvre. Track vehicles steer using the principle of ‘skid steering’ that is, applying different velocities to its two tracks to produce steering with the desired direction. And there is no ‘steering angle’ measure in such steering. Therefore, the modelling of kinematics behaviour of track vehicles needs a different approach than the one performed previously for the wheeled ones.

    Kinematic Modelling of tracked vehicles was studied in a number of previous works such as [15], [20], [19]. In [19], the equation of motion of a tracked vehicle was formulated in terms of vehicle mass and the moment of inertia around the mass centre. It is evident that such modelling is not feasible in sensor networks since most of the parameters cannot be measured from typical distantly located sensors. J. L. Martínez et al. in [15], established a kinematic similarity between tracked and wheeled traction. He proposed using genetic algorithm on experimental data (in this case, sensed data) to identify optimized constant values of track parameters for a given condition. The problem with this approach is that the parameters require several iterations within a period of refresh time before they are optimized. Each iteration is expensive, both in terms of time and processing power. Therefore, the ‘experimental identification’ process fails to deliver sufficient energy-efficiency as well as real-time performance. In [20], the authors provided mathematical model for the entire skid steering system of 4 wheeled electric vehicles which is somewhat similar to our requirements. Therefore we use [20] as a reference along with other necessary formulations to model the tracking vehicle kinematics.

    Figure 4.2: Kinematic Modelling Of a Tracked Vehicle

    As mentioned before, the principle of tracked vehicle steering is referred as ‘skid steering’. The skid steering vehicle is turned by generating differential velocity at the opposite sides of the vehicle. This could be done in three different ways: braking/deceleration of the inner track, simultaneous speeding up the outer track and slowing down the inner track or by increasing velocity at the outer track. The motion of a tracked vehicle is dependent on a number of parameters such as mass, track acceleration, track velocity, normal force, moment of inertia about normal direction, slip ratios, track-soil friction coefficient as well as other frictional forces etc. Naturally, the complete modelling of tracked vehicle motion would be highly complex and therefore, computationally expensive. In its simplest form, the motion of tracked vehicle is modelled by a random vector A = (X, Y,q, v, vdiff) where (X, Y) is the position of the vehicle, q denotes its direction with reference to global coordinate axes, vis the velocity of vehicle and vdiff is the differential velocity between the tracks. The initial state can be defined as A0 = (X, Y, q, v0, 0); Let R be the instantaneous turning radius of the vehicle and f the displacement angle made by the vehicle about the instantaneous centre of radius during the interval of one refresh time, Dt. Also, let the distance between the left and the right track be denoted with d. When there is no steering involved, both tracks of the vehicles have the same velocity, that is, vdiff =0. At the moment skid steering is performed, outer track will have a greater velocity than that of the inner track to produce the same angular displacement around the instantaneous centre of radius. If the outer track velocity is increased by Dv, the following equations are obtained at the end of a refresh time:

    For outer track: (v +Dv) Dt = (R +) f (4.8)

    And, for inner track: v Dt = (R – ) f (4.9)

    Solving equations (4.5) and (4.6) implies –

    R = + (4.10)

    And, f = (4.11)

    Therefore, by varying the differential velocity Dv in the above equations, we can derive the corresponding turning radius and we can also measure the angular displacement along the steering path at any given time. The combination of such trajectories provides us the limit of region manoeuvrable by the vehicle at a given time and by sequentially connecting the end-points of those trajectories, our desired contour is formed.

    After each refresh time, the modelling vector for the motion of the vector is updates with the followings:

    qt+Dt= qt + f (4.12)

    Xt+Dt= Xt + v cos(qt + f) (4.13)

    Yt+Dt = Yt + v sin (qt + f) (4.14)

    Figure 4.3: Paths Followed By a Tracked Vehicle

    Therefore, at the end of every refresh time, the current contour of interest will be replaced by a new one using the updated parameters and the sensors those fall inside the contour, will be activated; putting any other active nodes into sleep mode.

    4.3.3.3 Contour Based Tracking for Multiple Targets (CBTMT)

    Let , ?ibe the ith CN ,acting as the head of cell ?i , in a surveillance field ?, where , ?i ? ? , the set of CNs in the surveillance field, ? and ?i? ? ,the set of cells formed in surveillance field , ?.

    We are also assuming , ?ij as the jth WN for ith cell, ?i, in the surveillance field ? ; where ?ij ? ?i ,the set of the WNs in ith cell , ?i and true for all i=1..n in ? .

    Also, let k be the total number of contours of interest present in the ith cell, ?i, at time t.

    Here, n is the total number of active cells in the surveillance field ?, as the number of active cells will be as same as the number of computational nodes in the surveillance field ?.

    Let, ?tpbe the corresponding contour of target p at any time t, in surveillance field ? along with µtp, the corresponding area covered by contour ?tpat time t.

    _____________________________________________________________________

    Algorithm 1: Contour_Based_Tracking_for_Multiple_Targets (surveillance_info)

    ______________________________________________________________________

    1: for each computational node, ?i in ?

    2: ?i =know self cell (?i)

    {This module will partition the whole surveillance field into n active cells dynamically}

    3: performDetectionJob(detection signal from BNs);

    {Will differentiate between a false alarm and a real target appearance.}

    4 classificationJob (detection features from BNs);

    {Using the proposed linear machine the classifier will classify the targets present in the cell ?i }

    5: ?i =know the WNs in the cell (?i);

    6: getKinamaticsInfo(?i)

    {Speed, velocity, time for sampling, angle respect to the co ordinate system will be obtained from this procedure}

    7: t = get Optimal Refresh Time(v);

    8: ?tp = form Contour of Interest ( X, Y, t , q, v);

    9: Assign Worker The Id (?i, ?tp);

    10: ?: = find total (?i , ?tp )

    {Determines the total number of contour of interests in the cell}

    11: Overlap (t, ?);

    12: go to 6;

    13: End for

    As the algorithm clearly states that the WNs will be activated on the basis of the contour of interest formed by the CN. The contour of interest will be created on the basis of the vehicular kinematics of wheeled and tracked vehicles and will significantly contribute to energy minimization. The location of the neighbouring sensor nodes within the area formed by the CN is known by itself and using efficient sleep-wake policy the activation of the WNs is possible.

    ______________________________________________________________________

    Algorithm 2: Assign Worker the Id (?i , ?tp) ______________________________________________________________________

    1: for each ?ij ? ?i

    2: if (check inclusion (?ij , ?tp ))

    Activate (?ij);

    Assign identity (?ij , ?tp );

    Else

    Skip

    End if

    3: end for

    ______________________________________________________________________

    Algorithm 3: Overlap (t, ?) ______________________________________________________________________

    1: For p=1 to k

    2: If (p < ?)

    3: l=p+1;

    4: Check overlap (?tp , ?tl );

    5: Overlap action (?tp , ?tl );

    6: End if

    7: If (p+1 < ?)

    8: l=p+2;

    9: Check overlap (?tp , ?tl );

    10: Overlap action (?tp , ?tl );

    11: End if

    12: If (p+2 < ?)

    13: l=p+3;

    14: Check overlap (?tp , ?tl );

    15: Overlap action (?tp , ?tl );

    16: End if

    17: End for

    The number of active WNs in contour of interest ?tp is ?tp, for target p, in surveillance field ?. We also call µtp,k the overlapped area of interest between µtp and µtk ,which corresponds to the contours of interest , ?tpand ?tk respectively.

    ______________________________________________________________________

    Algorithm 4: Overlap Action (?tp , ?tl) ______________________________________________________________________

    1: Get the overlapped area, µtp,l from µtp and µtl .

    2: Update µtl using µtl = µtl – µtp,l and ?tl accordingly

    3: If ?tl < 1

    4: ?t`p= ceiling ( ?tp / 2 ); (4.15)

    5: Else if ?tl= > 1 && ?tl < = 5

    6: ?t`p= floor (?tp/ 3) ; (4.16)

    7: End if

    8: Update ?tp such that ?tp= ?tp – ?t`p ;

    9: Update ?tl such that ?tl= ?tl + ?t`l ;

    10: End.

    We would like to consider, the technique followed in (4.15) as, ‘The Mitosis Technique’, in conformance with the cell division technique, Mitosis [18], particularly observed in flora and fauna cells, where, the size and properties of the newly created cells are roughly the same. On the other hand, the technique described in (4.16) is considered by us as ‘the Amitosis Technique’. The two new cells created in the Amitosis [18] process, vivid in unicellular microscopic organisms like Bacteria, Yeast, are unequal in size and properties.

    When there will be insufficient number of WNs (one to four) in an updated contour of interest during overlapping action, we plan to take a few WNs from a contour of interest having good number of WNs (five to six) and give it to the updated one. However, if the updated contour of interest contains less than one WN then we divide the number of WNs of the fixed contour of interest into two and assign half of the WNs to the updated one.

    Simulation Result

    In the previous chapters we have described the architecture and algorithm of the proposed energy efficient contour tracking approach for sensor network along with heuristics for multiple target tracking. In this chapter we describe the simulation results of multiple target minimal contour tracking in a sensor network. Through simulation we study the behavior of our approach and evaluate its performance based on some performance metrics. We also compare the simulation results of the proposed scheme with conventional prediction based algorithms provided in [24].

    5.1 Simulation Settings

    We simulate contour tracking using OMNeT++, an open-source, component-based simulation package designed for modelling communication networks and other distributed systems. Our main objective is to understand the impact of various parameters on the performance issues of the proposed system. We also simulate one of the more conventional predictive tracking algorithms to make a comparison between our approach and that conventional tracking on various metrics.

    To set up a simulation environment, at first we need to specify various settings for the construction of the base sensor network. These settings are to be kept the same for both simulations: ours’ and the conventional one so that we can evaluate the performance metrics under the same condition and therefore, obtain a fair, unbiased comparison between the tracking methods. In Table 5.1, the general simulation settings are listed.

    Table 5.1 : Simulation Settings

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    Parameter Value
    General settings
    Network dimension 1000 1000 meter
    Number of Worker Nodes(WN) 500
    Number of Computational Nodes(CN) 1 to 10
    Number of Boundary Nodes(BN) 40
    Deployment of nodes Uniform random
    Link types 1. BN to CN: unidirectional, short range

    2. WN to CN: bidirectional, short range.

    3. CN to CN: bidirectional, long range.
    Event settings
    Simulation type Discrete-event driven
    Target intrusion point User defined
    Inter-arrival time for targets Static
    Target mobility type Brownian motion
    Simulation time 2500 STU
    Fault model Not Incorporated
    Energy model
    " 116,"

    Entrepreneurship for Rural Development

    ","
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    Flower Growing (commercial purpose)

     
    1. Preamble
     
    The rural-urban dichotomy reveals wide disparities in various respects. The division of economic activities between rural and urban areas is one of them. Rural areas specialize more or less exclusively in agriculture, while industries are exclusively located in urban areas. Given the weak rural-urban or agriculture-industry linkages, such a situation suffers from two serious shortcomings. First, as agriculture by itself has a tendency to develop at a slower pace than industry, the division of economic activities leads to uneven development. Second, since industry generally leads to higher level of output per worker than agriculture, the gap income levels between those engaged in the two sectors tends to widen. In such situation, rural entrepreneurship is viewed as an effective means of accelerating the process of rural development. Entrepreneurship precedes industrialization. Hence, the need for rural entrepreneurship.
    This paper is, therefore, devoted to deal with various aspects of entrepreneurship, such as, its meaning, need, strategies for rural development in Bangladesh.
     
     
    2. Rural development & Entrepreneurship
     
    Entrepreneurship emerging in rural areas is called rural entrepreneurship. Rural entrepreneurship symbolizes rural industrialization. Rural industrialization provides the best solution to tackle with the twin problems of unemployment and poverty stalking the rural areas in the country, which accelerate the pace of rural development.
    However, the rural development is plagued by some major problems like inadequate flow of credit; use of obsolete technology, machinery and equipment and inadequate infrastructural facilities. Solving these problems is necessary for developing rural entrepreneurship.
     
     
    3. Entrepreneur
     
    An entrepreneur can be defined as one who initiates and establishes an economic activity or enterprise. He arranges everything required to set up an enterprise i.e., funds, land, people, material and machinery.
    An entrepreneur differs from a manager on various counts. The former is owner, whereas the latter is a servant. Entrepreneur is rewarded with profit which is highly uncertain. On the other hand, manager gets salary as a reward for the services rendered by him in the enterprise.
     
     
    The Features of Entrepreneurship:
     
    • Being an Economic Agent: Entrepreneurship is mostly an economic function because it involves the formation and maneuver of an enterprise. It is basically concerned with the production and distribution of services.
     
    • Being Creative: Entrepreneurship is a resourceful response to changes in the environment. It involves innovation or introduction of something new and better. An entrepreneur is a change agent.
     
    • Taking and Bearing Risk: Risk is an inherent, intrinsic and inseparable element of entrepreneurship. An entrepreneur assumes the uncertainty of future. In the pursuit of profits there is every possibility of loss.
     
    • Being Innovative: Entrepreneurship is an innovative function as it involves doing things in new and better way. Innovation may take in several forms e.g. a new product, a new source raw material, a new market, a new method of production etc.
     
    • Being Dynamic: Entrepreneurship is a dynamic function. Entrepreneurs thrive on changes in the environment that bring useful opportunities for business.
    Entrepreneurs always need to take different dynamic decisions.
     
     
    4. Stages of business planning and our thinking
     
    There are various stages of business planning. Different business may follow different planning stages. The standard format is given below which is followed by all business regardless of their different purpose:
     
     
    Now our thinking on our entrepreneurship is given:
     
    Stage 1: Start-up plans: First, we think the economic context and rural development perspectives of our country. Considering the demand for flowers in the domestic market as well as international market, we set our mind to go for flower growing business. This will be a partnership business and we will form a written agreement among the partners.
     
     
    Stage 2: Business Focus or growth planning: Our objective is to produce flowers using local resources and to supply primarily to the domestic flower shop and later expand our business overseas. In this stage, our business will move into the market by linking up with local dealers and distributors.
     
    Stage 3: Selling or Succession Planning: In the stage three, we will begin to carry out our own manufacturing, marketing and sales in the key domestic markets. With a short period of time, our business will move to a full insider position in the markets, supported by a complete business system including R&D and engineering.
     
    Stage 4: Finance application & funding plans:  This will be a partnership business and capital will be collected equally from the partners. Not only investment fund but also operational expense, research and development and all other cash flow required to run the business will be provided by the partners equally. Partners will share profits earned and losses incurred equally.
     
     
    5. Implementation of Business Planning:
     

    1. First, we will go for market research and collect all information relevant to establish a flower business. After analyzing market information we will try to match with our internal planning.
    2. Market review will help us making our business plan more accurate. We will ensure basic resources such as capital, human resources, physical resources, natural resources, technology etc. necessary for establishment of a business.
    3. Constructing the organizational structure and fulfilling legal formalities, we will go for production.
    4. Our marketing channel will be indirect, that means we will use market intermediaries to reach customers. Our marketing department will arrange for some promotional activities that will seem lucrative to the intermediaries i.e. wholesalers, resellers etc.
     
    6. Profile of our proposed rural entrepreneurship:
     
    Name: Flower Heaven
    Proposed business: Growing Flower (commercial)
    Type: Partnership Organization
    Address: Nobinagar, Savar
    Capital: 2,00,000 * 5 = 10,00,000
    Profit & loss: Equally by the five partners.
    Management: By the partners & some required employees
    Registration: Trade license
    Nature: Production, processing and marketing.
    Accounting: 6 months
    Period: 2 accounting period in a year
    Dissolution: According to the agreement of the partners.
    Mission:
    1. Producing and marketing high quality and lucrative flowers.
    2. Achieving a position in the competitive flower supply market.
    3. To increase the technical knowledge of farmers related to flower production
    4. Creating employment opportunity of rural people.
    5. contributing for rural development
     
    Our products: Rose, Tuberose, Gladiolus and marigold
     
     
    Our choice for going to establishing a flower growing firm has a depth realization. On the occasion of marriage, birth, death and wedding anniversaries or in fact, on big or small occasions, flowers are replacing other items as gift, which was not in practice even a decade back. And over 50 percent of the flower need in the country is being met by India. So there is a great potentiality of flower growing and marketing in Bangladesh especially in the capital city Dhaka.
     
    7. Production Planning:
     
    The available resources of production are given below:
    1. Capital: Through our own capital.
    2. Weather: Suitable weather with fertile soil and sufficient day light.
    3. Land: 5 acre in Nobinagar, Savar.
    4. Labor: Available unskilled labor with low cost and skilled employees should be recruiting with specific wages.
    5. Raw materials: All necessary raw materials required for flower production.
    6. Organization: Specific organization structure with head office.
     
    Steps of production below:
     
    Farm Location selection
     
    Soil Testing
     
    Planting
     
    Cultivation
    Irrigation
     
    Crop and Pest management
     
    Harvesting
     
     
    8. Organization and Management:
     
    Office: Head office in Nobinagar, Savar
    Farm Location: Nobinagar, Savar
     
    Management Team
     
     
     
    General Manager
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Name Designation
    Syeda Prem Ara Bahar GM
    Israt Reza Production Manager
    Naofa Nikhat Finance & Accounts Manager
    Tanzina Rahamat Marketing & Sales Manager
    Ayesha Akter HRM Manager
     
     
    Department activities of our business:
     
    1. Production Department: It will coordinate the production activities at different activities ad different stages. Production manager is responsible for the activities of this department.
    2. Finance & Accounts Department: It will use the fund and ensure the stability of fund. Preparing financial statement is another responsibility of the finance & accounting manger.
    3. Marketing & Sales Department: It will deal with the marketing of the product and ensure the sales effectively. Marketing manger is responsible for this department.
    4. HRM Department: It will deal with the human resource activities. Employee recruitment, provide training etc are the duties of HRM manager.
     
     
    9. Finance Planning:
     
    Our Finance and Accounting department prepared projected
     
    Cash Budget
    For six months, ending December 31, 2009
     
    Expected Cash Payments:
     
    1. Land (rent for 6 months; 20,000*6)    = 1,20,000
    2. Raw materials                                      = 1,00,000
    3. Equipment                                                       = 1,00,000
    4. Labor wages (20L* 80tk* 180 days)   = 2,88,000
    5. Office (rent for 6 months; 10,000*6)  =    60,000                  
    6. Delivery van (rent for 6 months; 5000*6)       =    30,000
    7. Other expense                                                  =      2,000
    8. Cash (Fund)                                                     = 3,00,000
    9. Total expenditure                                             = 10,00,000
     
    Expected Cash receipts:
    1. Cash Sales                                                       = 5,30,000
    2. Collections on a accounts receivable   =    20,000
    3. Total cash receipts                                           = 5,50,000
     
    Flower Heaven Enterprise
    Income Statement
    For the month ended, December, 31, 2009
     
    Revenues:
    1. Cash Sales                                                       = 5,30,000
    2. Collections on a accounts receivable   =    20,000
    Total Revenue                                                      = 5,50,000
    Expenses:
    1. Labor wages                                                    = 2,88,000
    2. Raw materials                                      = 1,00,000
    3. Other expense                                      =      2,000
    Total Expense                                                       = 3,90,000
         
                            Net Profit                                            = 1,60,000                  
     
     
    Flower Heaven Enterprise
    Balance Sheet
    December 31, 2009
    Assets:
    Cash                                                                            = 8,30,000
    Accounts receivable                                                    =    20,000
    Land                                                                            = 1,20,000
    Equipment                                                                   = 1,00,000
    Office Building                                                            =    60,000
    Delivery van                                                                =    30,000
     
    Total Asset                                                      = 11,60,000
     
    Liabilities &Owner’s equity
    Capital                                                             = 10,00,000
    + Net income                                                               =   1,60,000
               
    Total Liabilities & Owner’s equity    = 11,60,000
     
     
    10. Marketing Planning:
     
    Possible market:  
     
    Sales Tactics: Our concern is not to maximize profits but to create a position in the market. Doing so, will reduce costs and increase profit in the long run.
     
    Overall marketing strategy:
    11.  Facing Threats and Removing weakness
     
    We will face our threats in following ways:
     
    We will remove our weakness by:
     
    12. Opportunity Maximization
     
     
    Our plans for the opportunity maximization are:
    1. Demographic and population analysis
    2. Customer attitudes and opinions
    3. Statistical analysis and modeling
    4. Site selection and land use analysis
    5. Market feasibility and demand analysis
    6. Customer satisfaction measurement
     
    13. Risk Minimization
     
    Our plans for the risk minimization are:
     
     
    14. Contribution in Rural and Community Development
     
    1. Employment: In our business we will facilitate employment for the skilled people in the rural area. There are is also the opportunity of employment of unskilled labor in the production & processing stages. Almost 50 workers will get job in our farm.
    2. Rural infrastructure development: Employment will foster the living standard of rural people. Moreover we will try to build necessary infrastructure in the rural area.
    3. Communication development: There will be the communication development through our entrepreneurship. The transportation system will be developed and the inter-regional communication will increase. So we will be able to make a genuine contribution in the development of communication in the rural area.
    4. Environment friendly working area: Our ‘flower haven’ is totally environment friendly working area. There is no pollution.
    5. Providing training: We will provide training facilities for the rural unskilled labor and employees.
     
     
    15. Conclusion
     
    Rural development is a continuous process. There are multidimensional aspects in the rural development activities. If the rural development is considered as a system than there are various subsystems and the national development is the super system. Our choice for going to establishing a flower growing firm has a depth realization. On the occasion of marriage, birth, death and wedding anniversaries or in fact, on big or small occasions, flowers are replacing other items as gift, which was not in practice even a decade back. And over 50 percent of the flower need in the country is being met by India. So, there is a potentiality of flower cultivation commercially in Bangladesh. Our entrepreneurship facilitates employment facilities in the rural area. So our rural entrepreneurship is highly suitable for the process of rural development.
    " 117,"

    Evaluation of Corporate Investment standards of different Islamic and non Islamic banks in Bangladesh and its overall effect in Bank’s Performance

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    Evaluation of Corporate Investment standards of different Islamic and non Islamic banks in Bangladesh and its overall effect in Bank’s Performance

    1. Introduction and Background

    Corporate Investment is a generic term given to different banking services that large companies, governments, or other big institutions need in order to carry out their functions. Corporate banking consists of simple business of issuing loans to more complex matters, such as helping minimize taxes paid by overseas subsidiaries, managing changes in foreign exchange rates, or working out the details of financing packages necessary for the construction of a new office, plant or other facility.

    Corporate investment has the bankers who typically help clients raise money through loans. When necessary, corporate bankers will bring in the expertise of their capital markets colleagues.

    In addition Commercial banking, Bank provides financial and technical assistance to broaden the private as well as public sector industrial base of the country. It prioritizes, especially, Export Oriented/Export Linkage industrial units, Efficient Import Substitution, Joint Ventures, Commercialization of local technology and promotion of agro-based industry. Corporate investment is one of the more popular and visible function of bank in all over the world. Corporate investment is a facility for the corporate clients to purchase goods or service for their business use on the assumption that the company has a stable source of income over the next few years. It enables the consumers have access to their desire goods and service based on future purchasing power.

    The Corporate investment facilities are varying from bank to bank in terms of conditions, eligibility, eligible item or goods, security and the necessary documentations. Bank has introduced standards which are to improve the opportunity and interest of the entrepreneurs of the country and this function is known as corporate investment.

    In Bangladesh corporate investment program of different banks have made a significant change in the corporate client group for providing loans. This loan is very much convenient for client as well as profitable for the offering banks. corporate investment facility play a vital role to create a distinctive image in consumer’s mind because it deals with one to one consumer, so by corporate investment it’s very easy to come near to consumer and to know their perception about a bank.

    1.1 Origin of the Report

    This report is an individual assignment as part of the internship program for the completion of the MBA course at Bangladesh University of Professionals. The internship program of 10 week has been conducted at Shajalal Islami Bank Limited from November 28, 2011 to February 3, 2011. The internal supervisor of the internship Major Asaduzzaman of Bangladesh University of Professionals and the external internship supervisor FAVP Mr. Lutful Haque of, Shajalal Islami Bank Limited, Kawran Bazar Branch assigned the research topic jointly on December 18, 2010. The research topic for the internship is “Evaluation of Corporate investment standards of different Islamic and non Islamic banks in Bangladesh and its overall effect in Bank’s Performance – A study based on Shahjalal Islami Bank Limited (SJIBL)” .With the proper guidance of both the supervisors, this report could come to an existence.

    1.2 Problem Statement

    Development of the country mainly depends on the growth of the industrial sector and growth of the business. For development intensive efforts should be undertaken to accelerate the rate of industrialization in the country. In order to attain this objective, large amount of industrial credit was funneled to the industrial sector. Today set up a large business or industry become a dream for the entrepreneurs. But it is not possible for an individual entrepreneur to arrange the full capital for the investment. Nowadays entrepreneur takes loan from different financial institute

    In recent days financing has become an important area for Commercial Banks in Bangladesh. To align its corporate policy with the regulation of Central Bank, banks have become more concerned about corporate investment and opened windows to conduct business or set up industry in particular area.

    A good number of Islamic and non Islamic Banks in our country are successfully operating this program. But the standards such as requirements, document, interest rate, installment system of the Corporate investment of different banks are different. Considering the popularity of Corporate investment it will try to identify comparison its various aspects, which are directly related, with the Corporate investment customers and Corporate investment providing bankers and its effect on the providing banks performance. Again, most of the aspects are related with the salient features of corporate investment in the relevant sample banks

    1.3 Objectives of the Research

    Broad Objectives

    To evaluate the different present standards of corporate Investment of different Islamic and non Islamic banks and its effect on the banks overall performance, and a competitive analysis between Shahjalal Islami Bank Limited and other banks.

    Specific Objectives

    · To know in details about the corporate loan standards of different Islamic and non Islamic banks in Bangladesh.

    · To find out the different factors clients consider for selecting bank.

    · To find out the corporate clients awareness about prerequisite for corporate loan by Islamic and non Islamic banks.

    · To find out the clients perception about the interest charge and other charges or expenses charged by Islamic and non Islamic banks for corporate investment.

    · To find out the clients perception about loan processing time of different Islamic and non Islamic banks.

    · To find out clients perception about the procedural obligation of Banks for corporate loan.

    · To find out the clients perception about corporate loan disbursement system of different Islamic and non Islamic banks in Bangladesh.

    · To find out the corporate clients preference towards Islamic and non Islamic bank for taking their loan.

    · To find out the perception about corporate loan repayment systemof different Islamic and non Islamic banks in Bangladesh

    · To find out the present situation of corporate loan of different Islamic and non Islamic banks in Bangladesh.

    · To find out rules and regulations of Bangladesh bank regarding corporate investment for Commercial Banks.

    · To know the effect of corporate investment on Islamic and non Islamic banks performance.

    1.4 Research Questions

    Research Questions 1: What are the factors that are important for corporate loan of different Islamic and non Islamic bank?

    Justifications: This question will help me to know the difference important factors like interest rate, payment system, loan amount, mode of repayment, securities, step taken for defaulters etc of Islamic and non Islamic bank.

    Research Questions 2: What is therelationship between corporate loan program and Islamic and non Islamic Banks Performance?

    Justifications: This question will help me to know what the effect of corporate loan on banks performance is.

    Research Questions 3: What are the clients awareness about prerequisite of corporate loan that borrower need for loan of Islamic and non Islamic Banks?

    Justification: This question will help me to know whether or not clients are well known with prerequisite documents and what procedural obligation and charges clients face for Islamic and non Islamic Banks for corporate loan.

    Research Questions 4: What is the satisfaction level of required documents or securities that clients need to submit for obtaining loan of Islamic and non Islamic Banks?

    Justifications: This question will help me to know how hassle client have to face for submitting required documents of Islamic and non Islamic Banks.

    Research Questions 5: What are the Bangladesh Bank’s guidelines or policy about corporate loan?

    Justification: This question will help me to know whether or not the Islamic and non Islamic Banks are following guidelines given form Bangladesh bank.

    Research Questions 6: What is corporate client’s perception about loan disbursement system of Islamic and non Islamic Banks?

    Justification: This question will help me to understand the existing loan disbursement system of Islamic and non Islamic Banks.

    Research Questions 7: What is the satisfaction level of the clients about profit/interest rate, loan processing time, documentation and other factors of selected bank?

    Justification: This question will help me to understand the client’s awareness about banks profit/interest rate charged loan processing time, documentation and other factors

    Research Questions 8: What is corporate client’s perception about service charge or processing cost of Islamic and non Islamic Banks for corporate lending?

    Justification: This question will help me to understand the client’s opinion about service charge and processing cost for corporate lendingof Islamic and non Islamic Banks.

    Research Questions 9: What is corporate client’s perception about repayment systemof Islamic and non Islamic Banks?

    Justification: This question will help me to understand the existing loan repayment systemof Islamic and non Islamic Banks

    1.5 Research Hypotheses

    The hypothesis for this research will be formulated in details after exploratory research. However, the model of hypothesis may be as follows:

    Hypotheses-1:

    Null Hypothesis H0: 40 % or more of the corporate clients are aware about prerequisite corporate loan.

    Alternative Hypothesis H1: less than 40 % of the corporate clients are aware about prerequisite corporate loan.

    Hypotheses-2:

    Null Hypothesis H0: Profit charged or interest rates of Islamic banks significantly differ from non Islamic banks for corporate investment.

    Alternative Hypothesis H1: Profit charged or interest rates of Islamic banks insignificantly differ from non Islamic banks for corporate investment.

    Hypotheses-3:

    Null Hypothesis H0: There is an association between service charge or processing cost and corporate investment standard of Islamic and non Islamic bank.

    Alternative Hypothesis H1: There is no association between service charge or processing cost and corporate investment standard of Islamic and non Islamic bank.

    Hypotheses-4:

    Null Hypothesis H0: There is no significant difference in corporate investment documentation process of Islamic banking and non Islamic bank.

    Alternative Hypothesis H1: There is significant difference in corporate investment documentation process of Islamic banking and non Islamic bank.

    Hypotheses-5:

    Null Hypothesis H0: Islamic and non Islamic banks corporate investment loan processing time insignificantly differs insignificantly.

    Alternative Hypothesis H1: Islamic and non Islamic banks corporate investment loan processing time insignificantly differs significantly

    Hypotheses-6:

    Null Hypothesis H0: Corporate investment disbursement system of Islamic bank (Payment order) is more preferable than Non Islamic Bank (Cash).

    Alternative Hypothesis H1: Corporate investment loan disbursement system of Islamic bank (Payment order) is not preferable than Non Islamic Bank (Cash).

    Hypotheses- 7:

    Null Hypothesis H0: There is a significant difference repayment systemof corporate investment standard of Islamic and non Islamic banks.

    Alternative Hypothesis H1: There is no significant difference between repayment system of corporate investment standard of Islamic and non Islamic banks

    Hypotheses- 8:

    Null Hypothesis H0: There is a positive association between corporate loan standard and Banks performance.

    Alternative Hypothesis H1: There is no positive association between corporate loan standard and Banks

    Hypotheses-9:

    Null Hypothesis H0: there is a significant relationship between corporate loan standard and Banks positive performance.

    Alternative Hypothesis H1: There is no significant relationship between corporate loan standard and Bank positive performance

    1.6 Scope of the Research

    This research has deal the corporate investment of different Islamic and non Islamic banks in Bangladesh banking sector and its effect on the banks performance. Therefore my working area is whole banking sector of Bangladesh. But this kind of research needs lot of time. For convenient and complete the research with the limited time the research will be conducted competitive analysis of corporate investment standards of six privet Islamic and non Islamic bank names Shajalal Islami Bank, Social Investment Bank limited, Islami Bank Limited, Trust Bank Limited, Bank Asia and AB Bank. A primary survey has been conduct to find out the opinions of different bank executives, consumers and government regulatory authorities. It has focused on the very limited comparable credit practices of selected Banks.

    1.7 Limitations of the study

    The limitations of the study are as follows

    1.8 Benefits of the study

    Commercial banks are both Islamic and non Islamic providing different types of investment for profit form lending of their deposits. Besides there are many business clients who looking for a suitable lending opportunities. This report will help the management of Islamic and non Islamic Banks to know the opinions of the clients about policy of corporate investment and as results banks will be able to give a suitable investment program that will attract more business people for taking financial help from their banks.

    1.9 Report preview

    The report has discussed mainly in eight chapters. Literature review and overview of Shajalal Islami Bank are discussed in the second and third chapter. Fourth chapter talks about the corporate investment standers of different Islamic and non Islamic banks of Bangladesh. The project part of the research has discussed at chapter five. Summary of findings and recommendation are discussed briefly in chapter six and seven respectively. And finally the chapter eight is the conclusions.

    2. Literature Review

    The primary objectives for the formation of the first Islamic bank, Bank Islam Malaysia Berhad was to strive in its operation as a commercial bank based on Shariah laws in facilitating and banking services to both the Muslim and non-Muslim societies in this country by achieving strength and capacity to develop from time to time. Therefore, the bank has to operate its business without Riba or usury as an alternative to the conventional banking operating based on usury or interest. In order to operate a banking business and other financial dealings, the bank has to operate based on profit and loss sharing mechanism. This is to ensure better social justice in the distribution of the added created wealth of the bank to the depositors, customers benefiting from financings and the equity holders of the bank. In this regard, the bank has to ensure it may become strong financially and expanding in all aspects of its operation as this will then become the measure on the ability of Shariah laws and rules as well as capabilities of the Muslims in offering an alternative way of life when dealing with banking business (Mohd Nasir and Amirul Hafiz, 2006).

    The key characteristic of Islamic finance is the prohibition of Riba, Islamic Financial ethics and law. The literal meaning of Arabic word, Riba is increase, addition of growth. However, it is usually translated as usury. Riba or usury is defined as extra or excess in lending and borrowing or additional in terms of weight or measurement in an exchange or buying and selling transaction. All transactions and contracts must be free from elements of Riba. The prohibition of Riba in Islamic finance is form based traditions (habith) and relates to prohibition of Riba in loan, sale or exchange contracts or exchange sale contract. Those who earn from usury stand only like one who is struck by the devil’s touch. This is because they claim that usury is a form of trade. Therefore the act of giving and taking as well as managing usury or interest is forbidden in Islam. Usury is any fixed percentage of earnings in return for funds deposited (Mohd Nasir and Amirul Hafiz, 2006) Islamic banking is an activity based on Islamic Syariah principles, which do not allow the paying and receiving of interest and promotes profit sharing in the conduct of banking. The most important difference between Islamic and conventional banking is the prohibition of interest in Islamic banking. Islamic banking activity is based on the trading principles of buying and selling of assets. Following that, in conventional financing, customer’s outstanding loan consists of principal plus the interest charged then onwards. The interest is actually the financial institution’s cost in obtaining the funds and its profit. Islamic financing work on the concept of buying and selling where the financial institution purchases the property and subsequently sells it to customers above the purchase price (Mohd Nasir and Amirul Hafiz, 2006).

    The “Islamic banking system has gained momentum worldwide”. Citibank opened one new branch in Bahrain and Sudan adhering to Islamic Sharia’h principles. When a customer borrows money from a bank, it may lead to the interest rate. Thus, Islamic bank will use Shariah principles and specially offer the product and services like conventional banks. Customer pleasure has been a critical perception in contemporary marketing related to buyer behaviour. If customers are satisfied with a particular product or services offering after its use, then they are likely to engage in a repeat purchase. Then, the customer satisfaction is often described as being related to factors such as service quality and future services like convenience, competitiveness, location of service providers and a form of attitude that results from the comparison of expectation with performance. The Islamic banking system is expected to face strong competition not only from the Islamic banks but also from well-established conventional banks offering Islamic products and services (Naser and Pendlebury, 1997).

    Modern banking system was introduced into the Muslim countries at a time when they were politically and economically at low ebb, in the late 19th century. The main banks in the home countries of the imperial powers established local branches in the capitals of the subject countries and they catered mainly to the import export requirements of the foreign businesses. The banks were generally confined to the capital cities and the local population remained largely untouched by the banking system. The local trading community avoided the “foreign” banks both for nationalistic as well as religious reasons. However, as time went on it became difficult to engage in trade and other activities without making use of commercial banks. Even then many confined their involvement to transaction activities such as current accounts and money transfers. Borrowing from the banks and depositing their savings with the bank were strictly avoided in order to keep away from dealing in interest which is prohibited by religion.

    In 1963, Islamic banking came into existence on an experiment basis on a small scale in a small town of Egypt. The success of this experiment opened the doors for a separate and distinct market for Islamic banking and finance and as a result, in 1970s Islamic banking came into existence at a moderate scale and a number of full-fledge Islamic banks was introduced in Arabic and Asian countries. Most of these Islamic banks were in Islamic countries. Having started on a small scale, Islamic banks and non-banking financial institutions are now in operation even on more intensive scale. Today, Islamic banks are operating in more than sixty countries with assets base of over $166 billion and a marked annual growth rate of 10%-15%. In the credit market, market share of Islamic banks in Muslim countries has risen from 2% in the late 1970s to about 15 percent today (Aggarwal and Yousaf 2000). These facts and figures certify that Islamic banking is as viable and efficient as the conventional banking.

    To adhere to the teachings of Islamic Law (Shari’ah) – avoid paying and receiving Riba, avoid Gharar, investing in profit-sharing ventures, avoid investing in such business that are unethical and impermissible, and making socially responsible investments – are the distinguishing points as well as goals of all Islamic banks. How well these Islamic financial institutions have performed and to what extent they have been successful in achieving these goals have been the question marks for the scholars, researchers, and the stakeholders.

    Where Islamic banking, on the one side, is being regarded as a fastest growing market, on the other side, it is not free from issues, problems, and challenges. Numerous studies have been performed since the inception of the modern Islamic banking and finance. Conceptual issues underlying interest free financing (Ahmad 1981, Karsen 1982) have been the prime focus of these previous studies on Islamic banks. It is hard to find enough coverage in the existing literature on the issues of viability of Islamic banks and ability to mobilize saving, pool risk and facilitate transactions (Hassan & Bashir 2003). However, there are few studies that have focused on policy implications of eliminating interest payments [see for example, Khan (1986) and Khan & Mirakhor (1987)].

    Although the phenomenon of Islamic Banking and finance has emerged in recent yearsand despite the considerable development of Islamic banking sector, the studies focusing on the efficiency of the Islamic banks are still limited in number [see, for example, Yudistira (2003) and Sufian (2007)]. Most of the studies that have been conducted, generally evaluate the performance of Islamic banks with regards to the relationship between profitability and bank characteristics. Bashir (2000) and, Hassan & Bashir (2003) employ bank level data and perform regression analysis to determine the underlying determinants of Islamic performance. Samad & Hassan (2003) and Kader & Asarpota (2007) apply financial ratio analysis to assess the performance of the Malaysian Islamic bank and UAE Islamic banks respectively. Similarly, to measure efficiency of Islamic banks in Bangladesh, Sarker (1999) utilizes Banking efficiency model and claims that Islamic banks can stay alive even within a traditional banking architecture in which Profit-and-Loss Sharing (PLS) modes of financing are less dominated. Sarkar (1999) further claims that Islamic financial products have different risk characteristics and consequently different prudential regulations should be in place.

    Samad and Hassan (2000) evaluate intertemporal and interbank performance in profitability, liquidity, risk and solvency, and community involvement of an Islamic bank (Bank Islamic Maalysia Berhad (BIMB) over 14years for the period 1984-1997. The study is intertemporal in that it compares the performance of BIMB between the two time period 1984-1989 and 1990-1997. This is not a new method (Elyasiani 1994). To evaluate interbank performance, the study compares BIMB with two conventional banks (one smaller and one larger than BIMB) as well as with 8 conventional banks. Using financial ratios to measure these performance and F-test and T-test to determine their significance, the results show that BIMB make statistically significance improvement in profitability during 1984-1997, however, this improvement when compared with conventional banks is lagging behind due to several reasons. This result is consistent with that of Samad (1999) and Hassan (2003). The study also reveals that BIMB is relatively less risky and more solvent as compared to conventional banks. These results also conform to risk-return profile that is BIMB is comparatively less profitable and less risky. Performance evaluation of BIMB indicates that it is more liquid as compared to the group of 8 conventional banks. Results of the primary data gathered by surveying 40% to 70% bankers identify that lack of knowledgeable bankers in selecting, evaluating and managing profitable project is a significant cause why Musharka and Mudarabah are not popular in Malaysia.

    Survey and analysis by Ismail and Abdul Latif (2001) on financial reporting of Islamic banks shows that the main difference between standards produced by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and selected Islamic banks in Malaysia including Islamic bank is in classification of deposits funds and the particular prominence that is given to restricted investment accounts and unrestricted investment accounts from other deposits like current and saving. Most of the intellectual activity over the past few decades has been geared toward into developing Shari’ah-compliant alternatives for bank financing. The deposits side attracted little attention. A closer look at the matters reveals that the line of distinction between Islamic banks and their interest-based counterparts is thin. Tahir (2007)

    Abdus Samad (2004) in his paper examines the comparative performance of Bahrain’s interest-free Islamic banks and the interest-based conventional commercial banks during the post Gulf War period 1991-2001. Using nine financial ratios in measuring the performances with respect to (a) profitability, (b) liquidity risk, and (c) credit risk, and applying Student’s t-test to these financial ratios, the paper concludes that there exists a significant difference in credit performance between the two sets of banks. However, the study finds no major difference in profitability and liquidity performances between Islamic banks and conventional banks.

    Kader and Asarpota (2007) utilize bank level data to evaluate the performance of the UAE Islamic banks. Balance sheets and income statements of 3 Islamic banks and 5 conventional banks in the time period 2000 to 2004 are used to compile data for the study. Financial ratios are applied to examine the performance of the Islamic banks in profitability, liquidity, risk and solvency, and efficiency. The results of the study show that in comparison with UAE conventional banks, Islamic banks of UAE are relatively more profitable, less liquid, less risky, and more efficient. They conclude that there are two important implications associated with this finding: First, attributes of the Islamic profit-and-loss sharing banking paradigm are likely to be associated as a key reason for the rapid growth in Islamic banking in UAE. Second, UAE Islamic banks should be 18 regulated and supervised in a different way as the UAE Islamic banks in practice are different from UAE conventional banks.

    Saleh and Rami (2006) in order to evaluate the Islamic banks’ performance in Jordon, examine and analyze the experience with Islamic banking for the first and second Islamic bank, Jordan Islamic Bank for Finance and Investment (JIBFI), and Islamic International Arab Bank (IIAB) in Jordon. The study also highlights the domestic as well as global challenges being faced by this sector. Conducting profit maximization, capital structure, and liquidity tests as performance evaluation methodology, the paper finds several interesting results. First, the efficiency and ability of both banks have increased and both banks have expanded their investment and activities. Second, both banks have played an important role in financing projects in Jordan. Third, these banks have focused on the short-term investment. Fourth, Bank for Finance and Investment (JIBFI) is found to have high profitability. Finally, the study concludes that Islamic banks have high growth in the credit facilities and in profitability.

    Bashir (2000) examines the determinants of Islamic banks’ performance across eight Middle Eastern countries between 1993 and 1998. Using cross-country bank-level data on income statements and balance sheets of 14 Islamic banks in eight Middle Eastern countries for each year in the 1993-1998, the study closely examines the relationships between profitability and the banking characteristics. After controlling for economic and financial structure indicators such as – macroeconomic environment, financial market structure, and taxation – the study shows some very important and interesting results. First, the profitability measures of the Islamic banks react positively to the increases in capital and loan ratios, which is intuitive and consistent with previous studies. Second, the study highlights the empirical role that adequate capital ratios and loan portfolios play in explaining the performance of Islamic banks. Third, the results indicate that customer and short-term funding, non-interest earning assets, and overhead are also important for promoting banks’ profits. Fourth, the results reveal that foreign-owned banks are more profitable than their domestic counterparts. Fifth, keeping other things constant, there is evidence that implicit and explicit taxes affect the bank performance measures negatively. Sixth, favorable macroeconomic conditions have positive effect on performance measures of the bank. Finally, the results of the study show that stock markets are complementary to bank financing.

    A similar study performed by Hassan and Bashir (2003) analyzes how the performance of the Islamic banks is affected by bank characteristics and the overall financial environment. They utilize cross-country bank level data on Islamic banks in 21 countries for each year in 1994-2001 to closely examine the performance indicators of Islamic banks. In general, they find their analysis of determinants of Islamic banks profitability consistent with previous findings. The study indicate that controlling for macroeconomic environment, financial market structure, and taxation, the high capital and loan-to-asset ratios lead to higher profitability. Everything remaining equal, the regression result of the study reveals that there is negative effect of implicit and explicit taxes on the bank performance measures, while there is positive impact of favorable macroeconomic conditions on bank performance measures. That is, favorable macroeconomic environment appears to kindle higher profit margins. Results also show surprisingly a 19 strong positive correlation between profitability and overhead. That is in the Islamic banking market expense preference behavior appears to hold. They also find in their study that size of the banking system has negative impact on the profitability except net on interest margin.

    Yudistira (2003) in his study makes an empirical analysis on efficiency and provides new evidences on the performance of 18 Islamic banks over the period 1997-2000. Panel data set for this time period is extracted from non-consolidated balance sheets and income statements of these Islamic banks with specific purpose of seeing the impact of recent financial crises on efficiency of Islamic banks. This study is different from previous studies in that it utilizes non-parametric approach, Data Envelopment Analysis (DAE) to analyze the technical efficiency, pure technical efficiency, and scale efficiency of Islamic banks. Being in line with the principle of Islamic financial system, the intermediation approach is used to specify input-output variables of Islamic banks. The study finds several results. First, the overall efficiency results indicate that there is a small (at just over 10%) inefficiency across 18 Islamic banks, which is considerable as compared to many conventional counterparts. Similarly, global crisis in 1998-1999 badly affected the performance of Islamic banks; however, they performed better afterwards. Second, the results show that small and medium sized Islamic banks faced diseconomies of scale which suggests that M&A should be encouraged. Moreover, as compared to their nonlisted counterparts, publicly listed Islamic banks are found to be less efficient. Lastly, Country specific factors mainly determined the efficiency differences across sample data.

    Sufian (2007) performs a similar study to provide new evidence on the relative efficiency between the domestic and foreign banks Islamic banking operation in Malaysia during the period of 2001-2004. Non-parametric Data Envelopment Analysis (DEA) methodology has been utilized to distinguish between three different types of efficiency: technical, pure technical and scale efficiencies. The study also used intermediation approach to specify input-output variables of Islamic banks. A series of parametric and non-parametric tests were performed to examine whether the domestic and foreign banks were drawn from the same population, as most of the most of the results could not reject the null hypothesis at 5% level of significance. Finally, Spearman Rho Rank-Order and the Parametric Pearson correlation coefficients were employed to examine the association between the efficiency scores derived from the DEA results with the traditional accounting ratios. Several results are drawn form the study. The results from the DEA show that efficiency of Malaysian Islamic banks recovered slightly in years 2003 and 2004 after declining in year 2002. The domestic Islamic banks are found marginally more efficient than foreign Islamic banks. The study examines that operating at the wrong scale of operations has been the main reason for the Malaysian Islamic banks inefficiency. The dominance of scale in determining the technical efficiency of Malaysian Islamic banks is further confirmed from the results of the correlation coefficients. The results of the study also indicate that profitability is significantly and positively correlated to all efficiency measures.

    A similar study performed by Bashir (2000), In general, our analysis of determinants of Islamic bank profitability confirms previous findings. Controlling for macroeconomic environment, financial market structure, and taxation, the results indicate that high leverage and large loans to asset ratios lead to higher profitability. The results also indicate that foreign-owned banks are more profitable than their domestic counterparts. Everything remaining equal, there is evidence that implicit and explicit taxes affect the bank performance measures negatively. Furthermore, favorable macroeconomic conditions impact performance measures positively.

    3. Overview of Shajalal Islami Bank Limited

    Banks play an important role in economy of any country. At Bangladesh Muslim constituted more than about 90% of its population. This population possesses strong faith on Allah and wants to lead their lives as per the constructions given in the holy Quran and the way shown by the prophet Hazrat Muhammad (Sm). But No Islamic Banking system was developed here upto 3983. The traditional banking is fully based on interest it is commonly meant as commercial banks. But interest is absolutely prohibited by Islam. As a result people of Bangladesh have been experiencing such a no-Islamic and prohibited banking system against their normal values and faith.

    In the Islamic banking system the bank receive no interest. In this case bank receives its entire deposit from the investment of the clints on the basis of profit sharing places it to the actual entrepreneurs on the basis of profit sharing. So it is clear that in case of the traditional banking system, a fixed percentage of interest, irrespective of income earned is paid to the depositors. The depositors of Islamic banking are never deprived of excess income, which the bank may make at the end of year. Not only has this traditional bank given fixed interest rate even when they incur operational loss. The critics of Islamic Banking system are of the opinion that both are found same in terms of deposits mobilization and advances investment.

    The number of banks in all now stands at 49 in Bangladesh. Out of the 49 banks, four are Nationalised Commercial Banks (NCBs), 28 local private commercial banks, 12 foreign banks and the rest five are Development Financial Institutions (DFIs). Among these banks only six local banks have fully Islamic banking system, Shajalal Islami Bank Limitd is one of the Islami Bank.

    3.1 Background of SJIBL

    Bangladesh is one of the largest Muslim countries in the world. The people of this country are deeply committed to Islamic way of life as enshrined in the Holy Qur’an and the Sunnah. Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in accordance with the precepts of Islam.

    The establishment of Shahjalal Islami Bank Limited (SJIBL) on 2001 is the true reflection of this inner urge of its people, which started functioning with effect from 10th May 2001. It commenced its commercial operation in accordance with principle of Islamic Shariah on the 10th May 2001 under the Bank Companies Act, 1991. It is committed to conduct all banking and investment activities on the basis of interest-free profit-loss sharing system. In doing so, it has unveiled a new horizon and ushered in a new silver lining of hope towards materializing a long cherished dream of the people of Bangladesh for doing their banking transactions in line with what is prescribed by Islam. With the active co-operation and participation of Islamic Development Bank (IDB) and some other Islamic banks, financial institutions, government bodies and eminent personalities of the Middle East and the Gulf countries, Islami Bank Bangladesh Limited has by now earned the unique position of a leading private commercial bank in Bangladesh. Shahjalal Islami Bank Limited” offers the full range of banking services for personal and corporate customers, covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. Diversification of products and services include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, real estate to software and is backed by the latest technology.

    The Bank is managed by a Team of professional Executives and Officials having profound banking knowledge & expertise in different areas of management and operation of Banks. During the short span of time, Shahjalal Islami Bank so far introduced a good number of attractive deposit products to broaden the resource base and also Investment products to deploy the deposit resources so mobilized. Some more schemes covering the deposits, Investments & Services will be introduced gradually in near future suiting to the taste and requirement of the clients. The Bank has a strong Shariah Council consisting of prominent Ulama, Fuquah & Economists who meet periodically to confer decisions on different Shariah issues relating to Banking Operation & to address them and to give necessary guidance to the management on Shariah Principle. Since inception, Bank has been performing in all the sectors i.e. general Banking, Remittance, Import, Export & Investment. All our branches are fully computerized having on line Banking facility for the clients.

    During last nine years SJIBL has diversified its service coverage by opening new branches at different strategically important locations across the country offering various service products both investment & deposit. Islamic Banking, in essence, is not only INTEREST-FREE banking business, it carries deal wise business product thereby generating real income and thus boosting GDP of the economy. Board of Directors enjoys high credential in the business arena of the country, Management Team is strong and supportive equipped with excellent professional knowledge under leadership of a veteran Banker Mr. Muhammad Ali.

    Company Profile in Brief
    Name Shahjalal Islami Bank Limited
    Chairman Alhaj Engr. Md. Towhidur Rahman
    Managing Director Muhammad Ali
    Registered Office 2/B, Uday Sanz,, Gulshan South Avenue,Gulshan-1,Dhaka-1216
    Auditors M/S. Syful Shamsul Alam & Co
    Tax Advisor M/S K.M Hasan & Co.
    Legal Advisor Hasan & Associates
    Legal Status Public Limited Company.
    Nature of Business Commercial, Corporate, Investment & Retail Banking
    First meeting of the promoters held on 4th September, 2000.
    Date of Certificate of Incorporation 1st April, 2001.
    Date of Certificate of Commencement of Business 1st April, 2001.
    Banking License received on 18th April, 2001.
    First Branch License received on 24th April, 2001
    Inauguration held on 10th May, 2001.
    Authorized Capital Tk.80.00 crore.
    Paid up Capital Tk.20.50 crore.
    Number of Branches (as on 20.06.2010) 52
    Telephone No. 88-02-9570812, 7160591
    Fax No. 88-02-9570809, 9553562
    Website www.shahjalalbank.com.bd

    3.2 Vision of Shajalal Islami Bank Limited

    To be the unique modern Islami Bank in Bangladesh and to make significant contribution to the national economy and enhance customers’ trust & wealth, quality investment, employees’ value and rapid growth in shareholders’ equity.

    3.3 Mission of Shajalal Islami Bank Limited

    To expand Islamic banking through welfare oriented banking system, ensure equity and justice in economic activities, extend financial assistance to poorer section of the people and achieve balanced growth & equitable development.

    3.4 Moto of Shajalal Islami Bank Limited

    Committed to Cordial Service.

    3.5 Objectives of Shajalal Islami Bank Limited

    From time immemorial Banks principally did the functions of moneylenders or “Mohajans” but the functions and scope of modern banking are now-a-days very wide and different. They accept deposits and lend money like their ancestors, nevertheless, their role as catalytic agent of economic development encompassing wide range of services is very important. Business commerce and industries in modern times cannot go without banks. There are people interested to abide by the injunctions of religions in all sphere of life including economic activities. Human being is value oriented and social science is not value-neutral. Shahjalal Islami Bank believes in moral and material development simultaneously. “Interest” or “Usury” has not been appreciated and accepted by “the Tawrat” of Prophet Moses, “the Bible” of Prophet Jesus and “the Quran” of Hazrat Muhammad (sm).

    Efforts are there to do banking without interest Shahjalal Islami Bank Limited avoids “interest” in all its transactions and provides all available modern banking services to its clients and want to contribute in both moral and material development of human being. No sustainable material well being is possible without spiritual development of mankind. Only material well-being should not be the objective of development. Socio-economic justice and brotherhood can be implemented better in a God-fearing society.

    Other objectives of Shahjalal Islami Bank include:

    3.6 Strategies of Shahjalal Islami Bank include

    3.7 Management Strategy of Shahjalal Islami Bank include

    The entire employees are divided into two categories at large:

    a) Bank Official

    b) Bank staff

    The hierarchy of the Management is as follows:

    The whole management functions as per following Organogram:

    Figure: Proposed Organogram of Shahjalal Islami Bank Ltd

    3.8 Financial Strategy

    Shahjalal Bank limited started it’s business operation when the world had just experienced the deterioration in the overall economy and declining growth for almost all major regions of the world. The overall economic scenario in Bangladesh was also under crucial situation. Confronting many different difficulty of our economy the bank has successfully established a track of steady growth and desired level of achievement. Within five months of inception, the Bank could attain “breakeven” position. As on 20.12.2003, the Bank has achieved profit worth of Tk.19.00 crore. Besides, the bank is increasing asset financing. The Board of Directors of the Bank does not compromise on the quality of assets and the management, within many obstacles has shown their ability to generate steady growth in business. In the process, the Bank has been able to maintain a satisfactory capital adequacy ratio. As per guideline of the central bank, limit on portfolio concentration has necessitated diversification of it’s investment. As a result, small and medium enterprises have been receiving financial assistance.

    The management has become more strength in servicing the clients by developing its technology, human resources and service policy.

    3.9 Stock Summary of SJIBL

    Authorized Capital : Tk. 4,000 million

    Paid up Capital : Tk. 2,245.98 million

    Face Value per Share : Tk. 100

    3.10 Board of Directors of SJIBL

    Chairman Alhaj Engr. Md. Towhidur Rahman
    Vice Chairmen Alhaj Mohiuddin AhmedAlhaj Md. Sanaullah Shahid
    Directors Alhaj Sajjatuz Jumma,Alhaj Mohammed Faruque,

    Alhaj Anwer Hossain Khan,

    Alhaj Tofazzal Hossain,

    Alhaj Md. Harun Miah,

    Alhaj Mohammed Farooq,

    Alhaj Mohammed Hasan,

    Alhaj Abdul Halim
    Independent Directors Alhaj Nazmul Islam Nuru
    Sponsors Alhaj Md. Abdul Mannan
    Managing Director Mohammad Ali

    3.11 Shariah Council of SJIBL

    Shariah Council of the Bank is playing a vital role in guiding and supervising the implementation and compliance of Islamic Shariah principles in all activities of the Bank since its very inception.

    Members of the Shariah Council meet frequently and deliberate on different issues confronting the Bank on Shariah matters. They also conduct Shariah inspection of branches regularly so as to ensure that the Shariah principles are implemented and complied with meticulously by the branches of the Bank.

    3.12 Management Hierarchy of SIBL

    Fig: Organizational Management Hierarchy of SIBL

    3.13 Activities of Shajalal Islami Bank Limited

    The major actives of SJIBL is exchanges of right to possession of money and exchange of money from credit for exchange of money from credit for money. As a banking business it includes deposits taking, extending credit to corporate organization, retail and small and medium enterprise, leases and hire purchase financing, issuance of local and international credit cards etc.

    The mode of banking included interest based conventional and shariah based Islamic Banking. It also performs Merchant Banking function under the license issued by Securities and Exchange Commission, Dhaka , Bangladesh which offers portfolio management, Issuemanagement, underwriting, lease financing, lending at share purchase.

    The main function of SJIBL are-

    3.14 Product and Services of Shajalal Islami Bank Limited

    Shajalal Islami Bank Ltd. has launched several financial products and services considering the needs and requirements of the cuslomer SJIBL have classified the product under different head as below:

    3.14.1 General Banking:

    General Banking is the starting point of all banking operation. General banking division aids in taking deposits and simultaneously provide some ancillaries services. It provides those customers who come frequently and who come one time in banking for enjoying ancillary services. It is the department which provides day to day services to customers. Every day it receives deposits from the customers and meets their demands for cah honoring check. General banking consist of the following sections:

    3.14.2 Deposit Scheme

    Deposit comes from saving and according to investment scheme able fund theory, the four source of saving are house hold, business, government and companies retain earning. Among these as a low cost sensitive and large source house hold savings is the most important for bank. Considering the demography, income, and other variables SJIBL has introduce the following deposit schemes:

    Deposit schemes are classified by above categories as policy to meet the customers need and diversification of sources of financing.

    3.14.3 Investment Scheme

    Bank has to invested the collected fund at higher rate than the depositors rate and difference between the deposit and investment rare is known as spread. SJIBL offers several investment scheme considering customers occupation, business and other requirements. These are called SME and Customer Credit (CC) which have more Return on Investment (ROI) than the corporate investment. SJIBL has introduce the following investment schemes:

    3.14.4 Foreign Exchange Service

    Foreign exchange department of SIBL is one of the most important department of all department this department deals the following activities

    3.15 Corporate Investment Processing of SJIBL:

    Since Shahjalal Islami Bank is running Shariya based banking system, so they exercise islamic term for Deposit Scheme, Loan .etc. For example “loan” term is used as Investment. The bank offers a wide range of Islamic financial products like

    a) Short Term financial

    b) Mid term financial

    c) Long term financial – Up to 5 years

    d) Long term financial -Above 5 years.

    But the processing system of all investment products is same. Here we give a short overview about the whole process in theoretically.

    3.15.1 Life Cycle of Loan Products:

    · The investment-client starts repayment as per schedule in regular manner for the disbursed amount. In parallel, the Branch Investment Officer starts monitoring. If any deviation founds in compliance of terms and condition and Investment financial health he prepares an early alert and send it to Investment Administration Division, HO.

    · If the customer repays the Investment regularly the account is adjusted at maturity. Sometime it may require restructuring of the repayment schedule at any time during the validity period. It is possible at any time. If repayment is irregular, it becomes overdue and/or classified.

    · At the end of month, the Profit of the all accounts (except BAD/LOSS marked) applies to the Investment account and the Profit for the regular Investment is credited to the income account. In case of classified account (except BAD/LOSS), the Profit is credited to the Suspense Account.

    · The classified Investment information must be reported to the central bank at the month end and quarter end by submitting the CL, CIB and SBS3 report

    · Whenever the Investment account is marked BAD/LOSS, the Profit calculation continues but the Profit application to Investment account stops.

    · If the Classified Investment account seems recoverable, then as per Head office approval Investment account proceeds to rescheduling. If the Investment account is rescheduled it gets a newer life. The rescheduled Investment information must be kept in the system for Central bank reporting.

    · During the rescheduling, the suspense Account balance for that Investment account must be recovered first. Sometimes it may hold some balance after the rescheduling and declassification of the Investment account if the recovered amount is less than the suspense balance for that Investment.

    · If the Classified Investment account seems unrecoverable, then the HO recovery unit proceeds to Lawsuit filing. After lawsuit filing the system stops Profit calculation. And capitalize all unapplied Profit to the Investment account while marking Lawsuit. And System just holds the account status open until the Court gives any resolutions.

    · As per court order, recovery unit of Head office liquidates the collaterals of the customer and adjusts the Investment.

    · Meanwhile, if the Investment is not rescheduled, the Recovery Unit writes off the Investment and transfers the Investment to a separate Written-off Investment Register. Though it is washed out from the balance sheet of the Bank, the recovery process continues.

    3.15.2 Process Work Flow:

    · Prospective customer collects

    " 118,"

    Evaluation Of Sustaining Action And Swelling Behaviour Of Some Hydrophilic Polymer Based Matrix Tablets

    ","

    View With Charts And Images

     

    1. General Introduction

     

    The drug delivery technology landscape is highly competitive and rapidly evolving.  Drug dosage forms are keeping pace with high-tech times. Historically, drug delivery has taken the form of injection, infusion, ingestion and inhalation, with additional variations in each category. The focus of pharmaceutical research is being steadily shifted from the development of new chemical entities to the development of novel drug delivery systems of existing drug molecules to maximize their effectiveness in terms of other therapeutic action and patent protection. This shift has been made possible by the discovery of various compatible polymers. These polymers, when used in the formulation, control the temporal and/or spatial delivery of a drug.  The challenge for both drug and drug delivery companies is deliver both existing and emerging drug technologies in a manner that improves the benefits to the patients, healthcare workers and the healthcare system (Charles S. Brunner, 2004).

     

    Areas that are being targeted for improvements through device development include:

    {C}·         Improved efficacy

    {C}·         Reduced side effects

    {C}·         Continuous dosing (sustained release)

    {C}·         Reduced pain from administration

    {C}·         Increased ease of use

    {C}·         Increased use compliance

    {C}·         Improved mobility

    {C}·         Decreased involvement of healthcare workers

    {C}·         Improved safety for healthcare workers

    {C}·         Reduced environmental impact (elimination of CFC’s)

     

    To provide these benefits, worldwide a number of approaches are being (or in some cases have been) developed. The common thread running through the approaches is the concept of self-administered, targeted, sustained release with increased bioavailability. Many drug delivery scientists view oral delivery as the ideal drug delivery method. Although oral delivery meets the need for self-administered drugs, targeted, sustained release and increased bioavailability present the areas of difficulty in meeting the emerging value position. In recent years, in association with progress and innovation in the field of pharmaceutical technology, there has been an increasing effort to develop prolonged release forms for many drugs. So, an important subset of the historical development of pharmaceutics is the sustained or controlled drug release systems.

    There is given one main category of sustain release drug system

     Sustained drug action

    Figure1.1: Sustained release dosage form

     

    Sustained release dosage forms are the pharmaceutical dosage forms formulated to retard the release of a therapeutic agent such that its appearance in the systemic circulation is delayed and/or prolonged.

    1.2: Synonyms of Sustained-Release Dosage Forms

    {C}Ø  {C}Sustained action/release(SR)

    {C}Ø  {C}Prolonged action/release

    {C}Ø  {C}Depot dosage forms(Depot)

    {C}Ø  {C}Respiratory dosage forms

    {C}Ø  {C}Delayed action/release

    {C}Ø  {C}Retardate release(Retard)

    {C}Ø  {C}Timed release(TR)

    The systemic drug level far exceeds the therapeutic level for a brief period after ingestion or injection (in typical cases). The drug level then gradually declines from therapeutic to ineffective levels. This is an undesirable effect, especially when the therapeutic and toxic levels of a drug are close (that is the therapeutic index is low).

    Controlled drug delivery can help reduce this ""sawtooth"" profile. The flip side of reducing negative effects is the promotion of positive effects. Controlled drug delivery can also be used to provide a consistent and sustained dosage. The therapeutic effectiveness of certain drugs can be greatly improved through sustaining an appropriate level of the drugs over time.

    1.3: Components of a Sustained-Release delivery system:

    These include:

    {C}Ø  {C}Active drug

    {C}Ø  {C}Release-controlling agent(s):matrix formers, membrane formers

    {C}Ø  {C}Matrix or membrane modifier, such as channeling agents for wax matrices and solubilizers, and wicking agents for hydrophilic matrices.

    {C}Ø  {C}Solubilizer, pH modifier and/or density modifiers

    {C}Ø  {C}Lubricant and flow aid such as magnesium stearate, stearic acid, hydrogenated vegetable oil,talc, colloidal silicon dioxide

    {C}Ø  {C}Supplementary coatings to extend lag time, further reduce drug release

    {C}Ø  {C}Density modifiers (if required)

    1.4: Classification of Sustained-Release Dosage Forms:

     

    1.4.1: Rate-Preprogrammed Drug Delivery System

    {C}Ø  {C}Polymer Membrane Permeation-Controlled DDS

    {C}Ø  {C}Polymer Matrix Diffusion- Controlled DDS

    {C}Ø  {C}Microreservoir Partition- Controlled DDS

     

    1.4.2: Activation-Modulated Drug Delivery System

    Physical means Osmotic Pressure activated DDS

    {C}Ø  {C}Hydrodynamic Pressure activated DDS

    {C}Ø  {C}Vapor Pressure activated DDS

    {C}Ø  {C}Mechanically activated DDS

    {C}Ø  {C}Magnetically activated DDS

    {C}Ø  {C}Sonophoresis activated DDS

    {C}Ø  {C}Iontophoresis activated DDS

    {C}Ø  {C}Hydration activated DDS

    Chemical means

    {C}Ø  {C}pH activated DD

    {C}Ø  {C}Ion activated DDS

    {C}Ø  {C}Hydrolysis activated DDS

    Biochemical means

    {C}Ø  {C}Enzyme activated DDS

    {C}Ø  {C}Biochemical activated DDS

    1.4.3: Feedback-regulated Drug Delivery System

    {C}Ø  {C}Bioerosion-regulated DDS

    {C}Ø  {C}Bioresponsive DDS

    {C}Ø  {C}Self-regulating DDS

    1.4.4:  Site-targeting Drug delivery system

    1.5:   Formulation of Sustained-Release dosage Forms

    For convenience of description oral sustained-release delivery system can be considered under the following headings:

    {C}Ø  Monolithic or Matrix system

    {C}Ø  Reservoir membrane-controlled systems

    {C}Ø  Osmotic pump systems

    1.6: Methods of Sustaining Drug Action

    Two general set of methods have been developed for implementation of practical sustained release dosage form designs:

     

    {C}q  {C}Method based on modification of the physical and or chemical properties of the drugs.

    {C}q  {C}Method based on modification of the drug release rate characteristics of the dosage forms that affect the bioavailability of the drug.

    The basic methods of sustaining action are:

    Slowing or inhibiting inactivation of drugs producing pharmacological reaction.

    {C}·        Slowing excretion or elimination of drug from the body.

    {C}·        Changing physico-chemical properties of drug crystals.

    {C}·        Controlling the release rate of drug from the dosage forms.

     

    1.7: Different drug formulation methods used to obtain the desired drug release rate from sustained release dosage form includes:

     

    1.7.1: Increasing the Particle Size;

    Increasing the particle size causes decrease in surface area of the particles and decrease in release rate of the drug from the dosage form, as we know dissolution rate is directly proportional to the surface area exposed to the solvent.

     

    1.7.2: Matrix System:

    Matrix system is that system, where the drug is dispersed in solid, which is less soluble or insoluble in fluid depot, making a continuous external phase of dispersion and effectively retards the passage of the drug from matrix system. It is one of the least complicated approaches to the manufacture of sustained release dosage forms that consist of a drug dispersed in a polymer, the polymer playing the role of a matrix.

    {C}{C}

    Fig1.2:  Matrix System

     

     

    1.7.3: Coating System:

    The dosage form or individual particles are coated with materials that retard the drug release into the depot fluid and control the rate of availability of drug from dosage form. Drug release rate is dependent on the physico-chemical properties of the coating material.

    1.7.4: Beads & Sphere

                                      
                                                 Fig1.3:  Beads

    This kind of dosage form contains Beads or Spheres of drug, which are coated with material. The thickness of the coating material determines the times at which the drug will be released by diffusion through their pores.

     

    1.7.5: Enteric Coated Beads In Capsules:

    The drug is incorporated in to beads or spheres of uniform size & uniformly coated with a suitable enteric materials, thus the rate of drug release depends on the stomach emptying rate of beads

                                               .

                                                Fig 1.4: Enteric Coated Beads

                         (Ref :http://www.eurand.com/upload/orbexa.jpg)

     

    1.7.6:  Repeat -action Tablet :

    Repeat-action tablets contain fraction of drug that dissolved or release of different times. They usually contain an immediate release fraction and other fractions periodically release the drug.

     

    1.7.7: Erosion Core with Initial Dose :

    In this kind of sustained product the drug is usually incorporated into tablet with insoluble materials such as high molecular weight Fats and Waxes. This is non-disintegrating tablets that maintain its geometric

     1.7.8:  Erosion Core Only:

    The dosage form is formulated to contain only the sustained release component. The primary purpose is to maintain a therapeutic consideration once therapy has been initiated.

    1.7.9: The Ion Exchange Resins:

    The ion exchange method involves the administration of dosage form containing salt of drug complexes with an ion exchange resin that exchanges the drug for ions as it passes through the gastrointestinal tract

                                                    {C}{C}

                                             Fig1.5:IonExchangeResins       

    (Ref: http://www.epuro.fr/images/standard/96/ion_exchange_resin_03.jpg)

    1.7.10: Complexation: The preparation of complex or salt of active drug that are highly soluble in the gastrointestinal fluid is the strategy used in this method of producing sustained release product

                                                

     

    Fig1.6:  Dinuclear Complexation – (CO)5MnRe(CO)5

     

    1.7.11: Micro encapsulation

    Microcapsules are small particles that contain an active agent or core materials surrounded by a coating or shell. The release of the drug through the microencapsulated particles takes place by diffusion rather than by simple dissolution or disintegration. The drug diffuses through the wall of the microcapsules and dissolved in the gastrointestinal fluid

    {C}{C}

    Fig1.7:  Dinuclear Complexation

    1.7.12:  Osmotic tablet:

    The osmotic tablet consists of core tablet and semi-permeable coating with a hole, produced by a laser beam. The drug exists through the hole due to the osmotic pressure, which occurs when the gastrointestinal fluid passes the semi-           

    Permeable membrane and reaches the core 

                                                             {C}{C}

    Fig1.8: Osmotic tablets (www.wikipedia.org)

     

    1.7.13:  Encapsulated Slow Release Granules:

    In this type of dosage form the non-peril seeds are initially coated with adhesive and followed by powdered drug. The step is repeated until desired amount of drug has been applied. Then the granules are coated with mixture of solid hydroxylated lipids, which helps to sustain the release of active ingredient.

                                               

    Fig 1.9:  Encapsulated  Granules

     

    1.7.14:  Gel forming Hydrocolloids:

    In this kind of dosage form the capsules are filled with dry mixture of drug and hydrocolloids. Upon dissolution the gastric fluid swells the outer most hydrocolloids to form gelatinous area, which acts as barrier and prevents the further penetration of gastric fluids. The gelatinous core erodes and new barrier layer forms. This process is continuous, releases the drug as each layer continues to erode and forms new layer.

     

     

    1.8: Advancement in Methods of Sustaining Drug Action

    
 
    
Milo Gibaldi, Ph.D., Dean of the University of Washington's School of Pharmacy in Seattle, writes in ‘Biopharmaceutics and Clinical Pharmacokinetics’ that:  
    
"" The early history of the prolonged-release oral dosage form is probably best forgotten. Products were developed empirically, often with little rationale, and problems were common. Today, the situation has improved; many of the available products are well-designed drug delivery systems and have a defined therapeutic goal. In some cases, the prolonged-release dosage form is the most important and most frequently used form of the drug.""

    In recent years, there have been numerous developments in polymeric carriers and controlled release systems (some commercially available devices have been described by Lonsdale, 1982). A few examples mentioned in the literature include:

    {C}v  {C}Films with drug in a Polymer Matrix / Monolithic Devices (Singh et al., 1988).

    {C}v  {C}The drug contained by the polymer that acts as Reservoir Devices (Nakagami and Matsumura, 1991). 

    {C}v  {C}Polymeric colloidal particles or microencapsulates (Microspheres or Nanoparticles) in the form of reservoir and matrix devices (Giddings and Farquaharson, 1975). 

    {C}v  {C}Drug contained by a polymer containing a Hydrophilic or Leachable Additive eg, A second polymer, surfactant or plasticizer, etc. (Nicholas, 1987; Udeala and Aly, 1989; Gardner, 1983)

    {C}v  {C}Enteric Coatings, ionize & dissolve at suitable pH (Gregoriadis et al., 1984)

    {C}v  {C}Soluble polymers with covalently attached 'Pendant' Drug molecules

         (Poznansky et al, 1984; Tomlinson et al, 1986)

    {C}v  {C}Devices where release rate is controlled dynamically, eg, the Osmotic Pump

    ( Patrick, O’Donnell and James, 1997

     

    1.9: Matrix Granules:

    Th.e matrix system is commonly used for manufacturing sustained release dosage forms because it makes such manufacturing easy. In this system, the drug in the form of fine powder and a matrix forming components are mixed and the mixtures are then shaped in an appropriate mold. Nonbiodegradeble polymer and wax are commonly used as matrix forming components. The use of wax seems to have a particular advantage due to its wax matrix. Drugs however, are, sometimes unstable under heating. So manufacturing machines and operational conditions have to be carefully specified to obtain wax matrices with desired properties.

    1.10: Monolithic Devices (Matrix Devices)

    Monolithic (matrix) devices are possibly the most common of the devices for controlling the release of drugs. This is possibly because they are relatively easy to fabricate, compared to reservoir devices, and there is not the danger of an accidental high dosage that could result from the rupture of the membrane of a reservoir device. In such a device the active agent is present as dispersion within the polymer matrix, and they are typically formed by the compression of a polymer/drug mixture or by dissolution or melting. For low loadings of drug, (0 to 5% W/V) the drug will be released by a solution-diffusion mechanism (in the absence of pores). At higher loadings (5 to 10% W/V), the release mechanism will be complicated by the presence of cavities formed near the surface of the device, as the drug is lost.

    Matrix type drug delivery systems are an interesting and promising option when developing an oral controlled release system. Matrix tablets are easy to manufacture by direct compression. The kinetics often follows the laws described by Higuchi. Diffusion is the dominant mechanism controlling the dissolution of water-soluble drugs and erosion of the matrix is the dominant mechanism controlling the release of water insoluble drugs. However, generally the release of drugs will occur by a mixture of these two mechanisms. The swelling behavior of swellable matrices is mechanistically described by front positions. Front indicates the position in the matrix where the physical conditions sharply change ( Bettini and  Peppas, 1998).

     

    Fig 1.10:  Different Front Positions in a Swellable Matrix

    .11: Matrix Tablet System

     

     

     

     

     

     

    Figure 1.11: Sustained Release matrix.

    The term matrix tablet describes a tablet in which the drug is applied in a skeleton of nondissolving material. It needs simply direct compression of blended drugs and retarding additives to form tablets. It is one of the least complicated approaches too the manufacture of sustained/controlled release dosage forms, which consists of a drug dispersed in a polymer, the polymer playing the role of a matrix (Fessi et al. 1982; Focher et al.1984; Heller, 1984; Armand et al.1987Matrix systems are relatively easy to formulate. Tablets are manufactured with existing, conventional equipment and processing methods. Matrix controlled release tablets are relatively simple systems that are more forgiving of variations in ingredients, production methods and end-use conditions than coated controlled – release tablets and other systems.

    Direct compression is an accepted pharmaceutical manufacturing technique because of its many advantages such as low equipment costs, short processing time and limited steps, low labor and energy requirements, and use of non-solvent processes. Considerable efforts have been made and are being continued to develop new drug concepts in order to achieve zero order or near zero order kinetics. To alter the kinetics of drug release from inherent non-linear behavior, the use of matrices with erosion, diffusion and swelling controlled mechanisms have changed the release rate (Khan and Zhu, 2001).

    There may be different classes of retardant materials used to formulate a matrix tablet, which is given below in table 1.3:

    Table 1.1. Materials used as retardants in matrix tablets

    Matrix characteristics

    Material

     

    Insoluble, Inert

    (Plastic matrix)

    Polyethylene

    Polyvinyl chloride

    Ethyl cellulose

    Methyl acrylate –methacrylic acid copolymer

    Cellulose acetate

    Vinyl acetate/vinyl chloride copolymer

    Insoluble, erodable

    (Fat-Wax matrix)

     

    Carnauba wax

    Bees wax

    Stearic acid

    Paraffin wax

    High molecular weight polyethylene glycols

    Guar Gum

    Triglycerides

    Hydrophilic

    Methyl cellulose

    Sodium carboxymethyl cellulose

    Hydroxypropyl methylcellulose

    Sodium alginate

    Gelatin

    Hydrogel

    Poly vinyl alcohol

    Poly hydroxyl alkyl methacrylates

    Ethylene vinyl alcohol and their copolymers.

    Several other workers (Desai et al, 1965) have also reported that the rate of drug released from a matrix is affected by:

    {C}·        Drug solubility

    {C}·        The composition of the matrix

    {C}·        PH of the dissolution fluid

    {C}·        Shape

    {C}·        External agitation

    {C}·        Mass of the drug and

    {C}·        The porosity of the matrix

    There are two other problems also of interest:

    {C}1)      {C}When the solubility of the drug is low in the acid gastric fluid as well as the rate of dissolution & when it is necessary to help the drug dissolve in this liquid by provoking the extraction of the drug out of the dosage form.

    {C}2)      {C}When the solubility is very low in the acid gastric liquid & rather high in the intestine where the pH is around 8.

    {C}3)      {C}The polymer is rather complex, especially, with dosage forms made of an erodible polymer, as not only erosion of the polymer takesp lace, but also diffusion of the liquid through the polymer & even diffusion of the drug through the liquid located within the polymer (Liu. et al., 1988)

    There are four basic release systems for matrix formulations:

    {C}a.       {C}Inert Non-Bioerodible Matrix System

    {C}b.      {C}Bioerodible Matrix System

    {C}c.       {C}Swelling Controlled System

    {C}d.      {C}Magnetically Controlled System

    
In matrix system, the release is controlled by a combination of several physical processes. These include:
    
{C}·         {C}Permeation of the matrix by water
    
{C}·         {C}Leaching (extraction or diffusion) of the drug from the matrix
    
{C}·         {C}Erosion of the matrix material
    
 
    
Alternatively, the drug may dissolve in the matrix material & be related by diffusion through the matrix material or partitioned between the matrix & extracting flui(Higuchi, 1963)
    
 
    
1.12: Release Mechanism from Matrices

    Various theories have been elaborated by considering either diffusion (Armand et al., 1987) in the case of non-erodible polymers, or erosion with erodible polymers (Bidah and Vernaud, 1991)

     In fact, the release mechanism from the polymer is rather complex, specially, with dosage forms made of an erodible polymer, as not only erosion of the polymers takes place, but also diffusion of the liquid through the polymer & even diffusion of the drug through the liquid located within the polymer also takes place.

     

     Table 1.2: Release mechanism   from matrix

     

    Inert Non-Bioerodible Matrix System

    Drug diffusion through the Polymer matrix tablet is the rate limiting step

     

    {C}{C}

     

    Bioerodible Matrix System

    The drug dispersed in a polymer and releases according to the rate of polymer bioerosion.

     

    {C}{C}

     

    Swelling Controlled System

    Water penetrates into the matrices; the polymer particles swell modifying the matrix dimensions according to the leaded drug & polymer.

    {C}{C}

    Magnetically Controlled System

    Drug & small magnetic beads are uniformly dispersed to viscous medium; drug is released exposure to an oscillating internal magnetic field (Langer et al., 1980)

    {C}{C}

    		 
    
 
    
In matrix system, the release is controlled by a combination of several physical processes. These include:
    
{C}·         {C}Permeation of the matrix by water
    
{C}·         {C}Leaching (extraction or diffusion) of the drug from the matrix
    
{C}·         {C}Erosion of the matrix material

    1.13: Matrix devices with hydrophilic polymer

    The third group of matrix formers represents non-digestible materials that form gels in situ. Drug release is controlled by penetration of water through a gel layer produced by hydration of the polymer and diffusion of drug through the swollen, hydrated matrix, in addition to erosion of the gelled layer. Formulations of this type release 100% of drug. Release rate can be adjusted for low-milligram-potency formulation by replacing polymers with lactose. Generally, their release rate modulation is achieved using different grades of polymers (Nakano et al., 1983), different types of polymers (Baveja et al., 1987), soluble fillers (Ford et al., 1985), or insoluble fillers (Rao et al., 1990)  One of the major drawbacks of bioerodible systems is that as the release is eroded the surface area of the implant decreases. Bioerodiblep olymers release active drugs at a controlled rate via three major mechanism ( J.Heller, 1980).

    
{C}·         {C}Water-soluble polymers insolubilized by degradable cross-links
    
{C}·         {C}Water insoluble polymers solubilized by hydrolysis, ionization or protonation of pendant side groups
    
{C}·         {C}Water insoluble polymers solubilized by back-bone-chain cleavage in small water-soluble molecules. In most cases, the mechanism of solubilization is a combination of all three mechanisms.
    
 

    2.1 Materials and Method:

    Materials that are used throughout the experiment are listed below with their 

    Table 2.1: List of ingredients used in experiment

     

    Sl

    No.

    Name of experiments

    Category

    Country of origin

    1

    Naproxen

    Drug

    Incepta Pharmaceuticals Ltd,

    2

    Methocel K  4M CR

    Sustaining polymer

    Incepta Pharmaceuticals Ltd,

    3

    Povidone k30

    Binder

    Albright & Wilson Ltd,

    5

    Methocel K15M CR

    Sustaining polymer

    Incepta Pharmaceuticals Ltd,

    6

    Pre gelatinized starch

    Diluent of compressable grade

    China

    7

    CMC-50,000 cps

    Sustaining polymer

    China

    8

    Ethyl cellulose(20 premium)

    Sustaining polymer

    China

    9

    Isopropyl Alcohol(IPA)

    Granulating solvent

    Merck,  Gemany

    10

    Na CMC

    Sustaining polymer

    China

    11

    Aerocel-2000

    glident

    China

     

    Table 2.2: List of Instruments used in the preparation and evaluation of Naproxen based matrix tablets

    Name

    Source

    Country of origin

    Electronic balance

    Denver Instrument M-310

    Switzerland

    pH meter

    Lida

    China

    UV-spectrophotometer

    Hach

    USA

    Dissolution test apparatus

    Pharma Test

    Germany

    Water Bath

    HH-S Thermostatic Water Bath

    China

    Shaking Apparatus

    LAB. Rotator Analog-Type Model2100A

    Germany

    Friability tester

              Pharma Test

    Germany

    Thickness, Hardness & Diameter tester

    Type PTB 311(511)-E

    Germany

    Tray dryer

    DMS-01-T007

    Indian

    Single punch machine

    DMS-O1-T007

       Indian

    Densitometer

    Pharma test

    Germany

     

    Table 2.3: List of reagents used in experiment

    Name

    Source

    Conc. HCl

    Merck, Germany

    Tribasic sodium phosohate

    Merck, Germany

    Methanol

    Merck, Germany

     

     

    2.2      DRUG PROFILE:

    2.2.1   Drug Profile – Naproxen

    Naproxen is one of the most potent non steroidal anti-inflammatory agents: it also presents analgesic and antipyretic properties. The anti-inflammatory effects of naproxen and most of its other pharmacologic effects are generally through to be related to its inhibition of cyclooxyginase and consequent decrease in prostaglandin

              {C}{C}

                                                          Fig: 2.1:  Naproxen

    Formula: C14H14O3,

    Molecular Mass: 230.259g/mol

    Chemical Properties: 

    Naproxen is a member of the arylacetic acid group of non steroidal anti-inflammatory drugs (NSAIDs). The chemical name of naproxen is (S)-6-methyloxy-a-methyl-2-naphthaleneacetic acid. Its empirical formula is C14H14O3, requested with the following structure:

     

    DRUG CLASS AND MECHANISM:

    Naproxen belongs to a class of drugs called non-steroidal anti-inflammatory drugs (NSAIDs). Other members of this class include ibuprofen (Motrin), indomethacin (Indocin), nabumetone (Relafen) and several others. These drugs are used for the management of mild to moderate pain, fever, and inflammation. They work by reducing the levels of prostaglandins, chemicals that are responsible for pain, fever and inflammation. Naproxen blocks the enzyme that makes prostaglandins (cyclooxygenase), resulting in lower concentrations of prostaglandins. As a consequence, inflammation, pain and fever are reduced. Naproxen was approved by the FDA in December, 1991.

    Physical Properties:

    Naproxen is an odorless, white to off-white crystalline substance. It is lipid soluble, practically insoluble in water at low pH and freely soluble in water at pH 7.4 is 1.16 to 1.8. Naproxen has a melting point of 153 K.

    Clinical Pharmacology:

    Pharmacodynamics:

     Naproxen is a non steroidal anti-inflammatory drug (NSAID) with analgesic and antipyretic properties. As with other NSAIDs, its mode of action is not fully understood: however, its ability to inhibit prostaglandin synthesis may be involved in the anti-inflammatory effect.

    Pharmacokinetics:

    Naproxen is itself is rapidly and completely absorbed in gastrointestinal tract with an in vivo bioavailability of 95%. The different dosage forms of Naproxen are bioequivalent in terms of extent of absorption (AUC) and peak concentration (Cmax):. Steady state levels of naproxen are reached in 4 to 5 days, and the degree of accumulation is consists with this half-life.

     

    Absorption:

    After administration of naproxen tablets, peak plasma levela are attained in 2 to 4 hours. After oral administration of naproxen sodium tablets, peak plasma levels are attained in 1 to 2 hours.

    Distribution: Naproxen has a volume of distribution of 0.16 L/kg; At therapeutic levels naproxen is greater than 99% albumin-bound. At doses of naproxen greater than 500 mg/day there is a less than proportional increase in plasma levels due to an increase in clearance caused by saturation of plasma protein binding at higher doses.

    Metabolism: Naproxen is extensively metabolized to 6-Q-desmethyl naproxen and both

    parent and metabolites do not induce metabolizing enzymes.

    Excretion:

    The clearance of naproxen is 0.13 ml/min/Kg. Approximately 95% of the naproxen from any dose is excreted in the urine, primarily as naproxen (less than 1%), 6-o-desmethyl naproxen (less than 1%) or their conjugates (66% to 92%). The plasma half-life of naproxen anion in human ranges from 12 to 17 hours. The corresponding half-lives of both naproxen's metabolites and conjugates are shorter than 12 hours.

    Special Populations:

    Pediatric Use: No pediatric studies have been performed with naproxen sodium extended-release tablets, thus safety of naproxen sodium extended- release tablets in pediatric populations have not been established.

    Renal Insufficiency: Naproxen pharmacokinetics has not been determined in subjects with renal insufficiency. Given that naproxen is metabolized and the kidneys primarily excrete conjugates, the potential exists for naproxen metabolites to accumulate in the presence of renal insufficiency. Elimination of naproxen is

    decreased in patients with severe renal impairment, Naproxen -containing products are not recommended for use in patients with moderate to severe renal impairment (creatinine clearance < 30 ml/min).

     

    Indication

    Naproxen Is Indicated for the relief the signs and symptoms of

    • Rheumatoid Arthritis

    • Osteoarthritis

    • Ankylosing spondylitis

    • Juvenile arthritis

    • Tendinitis

    • Bursitrs

    • Acute Gout

    • Management of Pain

    • Primary Dysmenorrhea

     

    Dosage and Administration:

    The usual adult dose is 250-500 mg twice daily using regular naproxen tablets. The usual dose for Naproxen controlled release tablets is 500 to 1000 mg given once daily. For EC-Naprosyn (Naproxen Enteric coated tablet), the usual dose is 375-500 mg-twice daily. Naproxen should be given with food to reduce upset stomach.

     

    Contraindication

    All naproxen products are contraindicated in patients who have had allergic reactions to prescription as welt as to over-the-counter products containing naproxen. Anaphylactoid reactions may occur in patients without previous known exposure or hypersensitivity to aspirin, naproxen, or other NSAIDs, or in individuals with a history of angioedema, urticaria, bronchospastic reactivity (e.g. asthma), and nasal polyps. Anaphylactoid reactions, like anaphylaxls, may have a fatal outcome.

    PRESCRIBED FOR:

    Naproxen is used for the treatment of mild to moderate pain, inflammation and fever.

    DRUG INTERACTIONS:

    Naproxen is associated with several suspected or probable interactions that affect the action of other drugs. The following examples are the most common suspected.

    Naproxen interactions may reduce the blood pressure lowering effects of blood pressure medications. This may occur because prostaglandins play a role in the regulation of blood pressure.

    When naproxen is used in combination with aminoglycosides (e.g., gentamicin) the blood levels of the aminoglycoside may increase, presumably because the elimination of aminoglycosides from the body is reduced. This may lead to more aminoglycoside-related side effects.

    PREPARATIONS:

    Nanprox (tablets): 275 and 550 mg; Naprosyn (tablets): 250, 375, and 500 mg; Naprosyn suspension: 125 mg/5ml; EC-Naprosyn: 375 mg, Aleve: 220 mg; Naprelan (controlled-release tablets): 375 and 500mg.

    STORAGE

    Room temperature: 15-30°C (59-86°F).

    SIDE EFFECTS

    The most common side effects from naproxen are rash, ringing in the ears, headaches, dizziness, drowsiness, abdominal pain, nausea, diarrhea, constipation, heartburn, fluid retention and shortness of breath. Naproxen also may cause stomach and intestinal bleeding and ulcers.

    2.3: Excipient   profile:

    2.3.1 Profile of METHOCEL 

    Nomenclature

    METHOCEL is a trademark of the Dow Chemical Company for a line of cellulose ether products. An initial letter identifies the type of cellulose ether, its “chemistry”. ‘A’ identifies methylcellulose (MC) products. “E”, “F”, and “K” identify different hydroxypropyl methylcellulose (HPMC) (Figure: 3.1. METHOCEL E). And K is the most widely used for controlled release drug formulation.

     

    The number that follows the chemistry designation identifies the viscosity of that product in millipascal-seconds (mPa.s), measured at 2% concentration in water at 20° C. In designating viscosity, the letter “C” is frequently used to represent a multiplier of 100, and the letter “M” is used to represent a multiplier of 1000.

     

    Several different suffixes are also used to identify special products. “P” is sometimes used to identify METHOCEL Premium products, “LV” refers to special low-viscosity products, “CR” denotes a controlled-release grade, and “LH” refers to a product with low hydroxypropyl content. “EP” denotes a product that meets European Pharmacopoeia requirements; “JP” grade products meet Japanese Pharmacopoeia requirements.

     

     
     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Fig 2.2 : Example of nomenclature for METHOCEL E cellulose ether

    Description

    The flexibility in using METHOCEL products in controlled release matrix tablets stems from the different types of polymer grades. The two polymer grades of METHOCEL most commonly used in controlled release applications are K (HPMC 208, USP) and E (HPMC2910, USP). Only METHOCEL Premium products can be used in controlled-release formulations (table 2.4). Typical products used in controlled release include METHOCEL K4M Premium, K15 M Premium, K100 M Premium, E4M Premium and E10 M Premium CR.

      

    Table 2.4: Properties of selected METHOCEL products for use in experiment

     

    Methocel Premium Product Grade

     

    K100M

    Premium

    K4M

    Premium

    Methoxyl,%

    USP

    19-24

    19-24

    Hydroxypropoxyl,%

    USP

    7-12

    7-12

    Chlorides,max, %

    EP

    0.5

    0.5

    Apparent viscosity, 2%

    In water at 20C, cP

    USP

    80000-120000

    3000-5600

    Apparent viscosity, 2%

    In water at 20C, mPa s

    EP

    16922-19267

    2308-3755

    pH, 1% in water

    EP

    5.5-8.0

    5.5-8.0

    Loss on drying, max %

    USP

    5.0

    5.0

    Organic impurities, volatile

    USP

    Pass

    Pass

    Residue in ignition, max,%

    USP

    1.5

    1.5

    Ash, sulfated, max%

    EP

    1.0

    1.0

    Heavy metals, as Pb, max, ppm

    USP

    10

    10

    Solution color, yellowness, 15 in water

    EP

    Pass

    Pass

    Polymer Structure

    METHOCEL products are available in two basic types: methylcellulose and hydroxypropyl methylcellulose. Both types of METHOCEL have the polymeric backbone of cellulose, a natural carbohydrate that contains a basic repeating structure of anhydroglucose units (Figure: 3.2). During the manufacture of cellulose ethers, cellulose fibers are treated with caustic solution, which in turn is treated with methyl chloride and/or propylene oxide. The fibrous reaction product is purified and ground to a fine powder.

    Substitution Effect on Polymer

    The family of METHOCEL products consists of products that vary chemically and physically according to the desired properties. The major chemical differences are in degree of methoxyl substitution (DS), moles of hydroxylpropoxyl substitution (MS) and degree of polymerization (measured at 2% solution viscosity).

                      

    Fig 2.3: Typical chemical structures of METHOCEL Products

    Methylcellulose is made using only methyl chloride. These are METHOCEL A cellulose ethers (methylcellulose, USP). For hydroxypropyl methylcellulose products, propylene oxide is used in addition to methyl chloride to obtain hydroxypropyl substitution on the anhydroglucose units. Hydroxypropyl methylcellulose products include METHOCEL E (HPMC 2910, USP), METHOCEL F (HPMC 2910, USP) and METHOCEL K (HPMC 2208, USP) CELLULOSE ETHERS.

    The Hydroxypropyl substituent group, -OCH2CH(OH)CH3, Contains a secondary hydroxyl on the number two carbon and may be also considered to form a propylene glycol ether of cellulose. These products possess varying ratios of hydroxypropyl and methyl substitution, a factor which influences properties such as organic solubility and the thermal gelation temperature of aqueous solutions.

    HPMC products such as METHOCEL Premium cellulose ethers are widely used in hydrophilic matrix system for controlled drug delivery. HPMC polymers are non-ionic and tolerant of most formulation variables. They deliver consistent reproducible performance and they quickly form strong, viscous gels that control diffusion of water and drug release.According to industrial data (Colombo 1993), 40 to 50 percent of all potential new drug entities are poorly soluble in water. Many promising new compounds never make it to market because of poor solubility. Others are marketed in less than optimal formulations, resulting in decreased performance and a greater risk of side-effects. By utilizing precise controlled release systems, formulators can improve the performance of existing drugs and keep other potentially valuable products from being abandened. METHOCEL Premium methyl cellulose and hydroxypropyl methylcellulose products (Pharma coat) are water soluble cellulose ethers used in a variety of pharmaceutical applications. They allow developers and pharmaceutical manufacturers to create reliable formulas for tablet coating, granulation and controlled release as well as for viscosity control in liquid formulations.

    2.3.2 Profile of ETHYLCELLULOSE 20 premium

    ETHOCEL* ethylcellulose (EC) is derived from cellulose. Like cellulose, the backbone of the molecule of ETHOCEL is based on repeating anhydroglucose units.

    {C}{C}{C}

    Fig 2.4 : Structural formula of ethyl cellulose

    Synonyms: Aquacoat, E462, Ethocel, Surelease

    Chemical name: Cellulose ethyl ether

    Empirical formula & molecular weight: Ethylcellulose with complete ethoxyl substitution (DS =3) is:

    C12H23O6(C12H22O5)nC12H23O5

    Where n can can vary to provide a wide variety of molecular weights.

     

    Pharmaceutical application:

    EC is widely used in oral & topical pharmaceutical formulations (table3.7)

    Table 2.5: Uses of typical concentrations of ethylcellusose

    Use

    Concentrations (%)

    Microencapsulations

    10-20

    Sustained-release tablet coating

    3-20

    Tablet coating

    1-3

    Tablet granulation

    1-3

    The main use of ethyl cellulose in oral formulation is as a hydrophobic coating agent for tablet & granules. EC coatings are used to modify the release of a drug, to mask an unpleasant taste, or to improve the stability of a formulation, as in the case where the granules are coated with EC to inhibit oxidation. Midified release tablet formulations may also be produced using EC as matrix former (Kibbe A., 2000).

    Characteristics

    Non proprietary name:

    BP: Povidone

    USP: Povidone

    Synonyms:

    Kollidon, plasdone, polyvinyl pyrrolidone, PVP

    Chemical name:

    1- Ethenyl-2- pyrrolidone homopolymer

    Empirical formula:

    (C6H9NO)n

    Molecular weight:

    2500-3000000

    Description:

    Povidone occurs as a fine, White to creamy white colorless odorless, hygroscopic powder. Povidones with K –values equal to or lower than 30 are manufactured by spray –drying and occur as spheres. Povidones with K –values equal to or lower than 90 are manufactured by drum drying and occur as plates.

    pH(1%w/w in water):

    3.0-5.0

    Functional category:

    Disintegrant, dissolution aid, tablet binder.

    Applications in pharmaceutical industry:

    In tableting, povidone solutions are used as binders in wet granulation process. , povidone solutions may also be used as coating agents.

    2.3.3: Profile of Povidon K30

     

    2.3.4: Profile of Starch 1500

    Nonproprietary name: Pre gelatinized starch (USP)

    Synonyms: Compressible starch, Inststarch, Lycatab PGS, Pharma gel, Sepistab ST 1500, Starch 1500.

    Empirical formula, molecular weight: (C6H10O5) n

    Where, n = 300-1000

    Pre gelatinized starch is a starch that has been chemically and/or mechanically processed to rupture all or part of the starch granules & so render the starch flowalable & directly compressible. Typically pre gelatinized starch contains 5% free amylase, 15% free amylopectin & 80% unmodified starch.

    Structural Formula

    {C}{C}

     

    Fig 2.5: Chemical structure of Pre gelatinized starch

    Application in Pharmaceutical formulation: Pre gelatinized starch is a modified starch used in capsule & tablet formulations as a binder, diluents and disintegrant. In comparison to starch, grades of pre gelatinized starch may be produced with enhanced flow & compression characteristics such that the pre gelatinized material may be used as a tablet binder in dry compression processes. In such processes pre gelatinized starch is self-lubricating. However when used with other recipients It may be necessary to add a lubricant to a formulations. Pre gelatinized starch may also be used in wet granulation processes.

    Table 2.6: Application of Starch 1500 according to its content

    Use

    Concentration (%)

    Diluent (hard gelatin capsules)

    5-75

    Tablet binder (direct compression)

    5-20

    Tablet binder (wet granulation)

    5-10

    Tablet disintegrants

    5-10

    Typical properties

    • Acidity/alkanity: pH = 4.5-7.0 for a 10% w/v aqueous dispersion.
    • Angle of repose: 40.7o
    • Density (true): 1.516 g/cm3
    • Moisture content: it is hygrospic
    • Particle size distribution: 30-150 µm
    • Solubility: Practically insoluble on organic solvent. Slightly soluble in cold water, depending upon the degree of pregelation.
    • Viscosity: 8-10 mPa s (8-10 cP) for a 2% w/v aqueous dispersion 3.3.8 Profile of Aerosil 2000

     

     

    Table 2.3.5: Aerosil at a glance

    Feature

    Description

    Nonproprietary names

    BP:     Colloidal anhydrous silica

    USP:   Colloidal silicon dioxide

    PhEur:  Silica colloidalis anhydrica

     

    Synonyms

    Cab-O-Sil

    Colloidal silica

    Fumed silica

    Chemical name

    Silica

    Empirical formula

    SiO2

    Structural formula

    SiO2

    Molecular weight

    60.08

    Appearance

    Colloidal silicon dioxide is submicroscopic fumed silica with a particle size of about 15 nm. It is a light, loose, bluish-white colored, odorless, tasteless, nongritty amorphous powder.

    Acidity/alkalinity (pH)

    3.5-4.4 (4% w/v aqueous dispersion)

    Density

    0.029-0.042 g/cm3 (Bulk)

    Solubility

    Practically insoluble in organic solvents, water, and acids, except hydrofluoric acid; soluble in hot solutions of alkali hydroxide. Forms a colloidal dispersion with water.

    Specific gravity

    2.2

    Refractive index

    1.46

    Functional category

    Adsorbent, Glidant, Ant caking agent, Tablet disintegrant

    Suspending agent.

     

    2.4:  Methods:

    Table 2.8: Formulations of Naproxen matrix tablets.

     

    Formulation   (mg/tab)

    F-1

    F-2

    F-3

    F-4

    F-5

    F-6

    F-7

    F-8

    F-9

    F-10

    Naproxen

    187.5

    187.5

    187.5

    187.5

    187.5

    187.5

    187.5

    187.5

    187.5

    187.5

    Methocel K4M

    50

    37.5

    –

    –

    12.5

    12.5

    –

    –

    –

    –

    Methocel K15M

    –

    –

    50

    37.5

    –

    –

    12.5

    12.5

    –

    –

    Pregelatinized starch

    7.5

    20

    7.5

    20

    15

    15

    15

    15

    15

    15

    PovidoneK-30

    2.5

    2.5

    2.5

    2.5

    7.5

    7.5

    7.5

    7.5

    7.5

    7.5

    Aerosol

    2.5

    2.5

    2.5

    2.5

    2.5

    2.5

    2.5

    2.5

    2.5

    2.5

    CMC-50,000cps

    –

    –

    –

    –

    25

    12.5

    25

    12.5

    25

    12.5

    Na-CMC

    –

    –

    –

    –

    –

    12.5

    –

    12.5

    –

    12.5

    EC

    –

    –

    –

    –

    –

    –

    –

    –

    12.5

    12.5

     

    2.4.1: Preparation of Naproxen matrix tablets:

    Step-1: Preparation of binder solution

    Iso propyl alcohol (IPA) was taken in a beaker. Then, povidone K30 was weight out & added to the IPA. The mixer was continuously prepared binder solution in organic solvent.

     

    Step-2: Mixing of powder

    Naproxen & the other exipients(except aerosol)was weigh mentioned in the formula by electric balanc, taken in motor & mixed gradually using pastle.

    Step-3: Preparation of wet mass

    Power mix was added in the IPA solution gradually, stirring with a glass rod was prepared.

     Step-4: Preparation of granules

    The wet mass was sieved through 1 mm mesh size sieve & the granules were collected & taken on a tray dryer at 45`c for 30 minutes.

    Step-5: Collection of granules

    After drying, the granules were weighed out & again sieved by <1mm mesh size (125nm) sieve. From the differences of the weight, we can find out how much drug is lost here.  Finally the granules were granulated.

    Step-6: Mixing with glidient

    The collected were taken granules in a photo flim pot. Now aerosol added to it and finally the granules mixing were prepared.

    Step-7:  Preparation of tablets by direct Compression

     Amount of the granules were weighed & taken in single punch machine for direct compression. Finally, tablets were prepared.

    2.4.2: Evaluation of flow property of the powder mix:

    2.4.2: Carr’s Index:

    Neumann (1967) & Carr (1965) developed a simple test to evaluate flow ability of a powder by comparing the poured (fluff) density & tapped density of a powder & the rate at which it is packed down. A useful empirical guide is given by Carr’s Compressibility Index. Here ‘Compressibility’ is a misnomer since compression is not involved. Density was measured using ‘Pharmatest’ (Germany) densitometer maintaining 1250 tapping frequencies.

    CI (%) = (TD-PD) X 100 / TD

    Where,

                TD = Tapped Density

                PD = Poured Density

    CI = Carr’s Index.

    It is a simple index that can be determined in simple quantities of powder & may be incorporated as in Table

    Table 2.9: CI as an indication of powder flow properties

    CI (%)

    Type of Flow

    5 to 15

    Excellent

    12 to 16

    Good

    18 to 21

    Fair to passable*

    23 to 25

    Poor*

    33 to 38

    Very poor

    > 40

    Excellently poor

     

     * May be improved by addition of glidant, e.g. 0.2% Aerosil (Aulton, A.E., 2002)

    2.4.2.2: Hausner Ratio  

    A similar index has been defined by Hausner (1967):

    Hausner Ratio = TD/PD

     

                Where,        TD = Tapped Density

                                    PD = Poured density

    Hausner Ratio

    Type of Flow

    < 1.25

    Good flow

    > 1.25

    Poor flow

    1.25 to 1.5

    Added glidant normally improves flow

    Table 2.10 : Hausner ratio as an indicator for powder flow (Aulton, A.E., 2002)

    2.4.2.3: Angle of repose:

    A glass funnel (75mm) was secured with its tip at a given height (H) above a graph paper placed on a horizontal surface. Powder or granules (2.5gm) was poured through the funnel until the apex of conical pile touched the tip of the funnel and then the angle of repose (θ) was calculated using the following formula,

    Tan θ =H/R

                        Where R is the radius of conical pile (Gohel et al., 2007)

    Table 3.11 : Angle of repose as an indication of powder flow properties (Aulton, A.E., 2002)

    Angle of repose (degrees)

    Type of flow

    <20

    Excellent

    20-30

    Good

    30-34

    Passable*

    >40

    Very poor

    *May be improved by glidant (Aulton M. E., 2nd edition, 2002)

    {C}{C}

    Fig 2.6: Measurement of angle of repose by fixed funnel method.

    2.4.3: Evaluation of some physical parameters of Naproxen matrix tablets:

    2.4.3.1: Hardness

    The ability of a tablet to withstand mechanical handling & transport has been evaluated by various types of tests: abration, bending, indentation, hardness, diameter crushing. However the data from these tests seldom can be correlated in a precise manner. Hardness depends on the weight of the material & the space between the upper & lower punches at the moment of compression. If volume of the material or the distance between punches varies, hardness is like inconsistent.

    Five tablets of each of the formulations were taken and hardness was measured by Hardness tester (Type PTB 311,511-E). The average value was calculated and the testing unit was kp.

    2.4.3.2: Thickness Measurement

    Six tablets of each of the formulations were taken and thickness was measured by Type PTB 311(511)-E. The values were reported in millimeter (mm). Mean was calculated.

    2.4.3.3: Diameter Measurement

    Six tablets of each of the formulations were taken and diameter was measured by . PTB 311(511)-E. The values were reported in millimeter (mm). Mean was calculated.

    2.4.3.4. Friability Test

    Six tablets of each of the formulations were taken and friability was measured by Friability tester (pharmatest, Germany). Weights of six tablets were taken. The tablets were introduced into the rotating disk and it was allowed to rotate at 25 rpm for 4 minutes. At the end of the rotation, tablets were collected, dedusted and reweighed.The friability was calculated as the percent of weight loss.

    Tablet integrity is determined by calculating the percent of friability by using the following formula

                Percent of friability = (M1 – M2) / M1 X 100%

    Where;

    M1 = Average weight of the tablets before the rotation

    M2 = Average weight of the tablets after the rotation.

    2.4.4 Preparation standard curve of Naproxen in methanol

    To prepare a standard solution, 50 mg of Naproxen measured in  an  analytical balance weighing Naproxen was taken in a 100ml volumetric flask. Then methanol was added to dissolve the Naproxen and then make the volume up to 100ml by methanol to produce a solution of 500 mg / ml. 1 ml of  each this solution were taken in 6 different 100ml conical flasks and 24,19,14,11,9, and 4 ml of methanol was added to them respectively for the purpose of serial dilution. 10 ml of standard solution is also taken in a conical flask. The solutions were mixed well using shaker. These serial dilutions allowed naproxen concentration to be made in the range of 2 mg / ml to 20 mg / ml. Then absorbance of the solutions was measured at 230 nm using Single Beam UV-visible spectrophotometer. A plot was constructed showing concentration at X- axis and absorbance at the Y- axis.

    The standard curve of naproxen for assay was prepared in concentration range of 5 μg/ml to 34 μg/ml. Then the absorbance of these standard solutions of different concentration was observed with Single Beam Spectrophotometer at 230nm

     

    Table 2.12: Data for Standard curve in methanol

    Concentration (μg/ml)

    Absorbance

    0

    0

    2

    0.149

    2.5

    0.179

    3.33

    0.2.51

    4.17

    2.63

    5

    0.396

    10

    0.805

     

     

     
     

     

     

     

     

     

     

     

     

     

     

    Fig 2.7: Standard Curve of Naproxen in methanol at 230 nm

    2.4.5:  Evaluation of Swelling Characteristics of HPMC K4M & HPMC K15M CR based matrix Naproxen tablets:

     Swelling behaviour of SR matrix tablets: The extent of swelling was measured in terms of % weight gain by the tablet. The swelling behaviour of formulationsF1, F2, F3, F4, F5, F6 , F7.F8,F9 & F10 of Naproxen matrix core tablets were studied .In this test, one tablet from each formulation was kept in a Petri dish containing pH 7.4 phosphate buffer. At the end of 1 hour, the tablets were withdrawn, soaked with tissue paper, and weighed. Then for every 1 hour, weights of the tablet were noted, and the process was continued till the end of 7 hours, % weight gain by the tablet was calculated by formula;

    S.I = {(Mt-Mo) / Mo} X 100

    where, S.I = swelling index,

    Mt = weight of tablet at time‘t’ and

    Mo = weight of tablet at time t = 0.

    2.4.6: Dissolution study of Naproxen matrix tablets:

     

    Dissolution media:

    The dissolution process was carried in 750ml 0.1 N HCl media at first 2 hours but the release of Naproxen was poor. Then the dissolution was carried out by adding pH 7.4fer (0.2 molar tribasic sodium phosphate) up to 8hr in 1000ml pH 7.4 phosphat buffer (which was prepared by adding 780ml 0.3M tribasic sodium phosphate and 50ml water).  The total process was continued for 10 hrs.

    • Preparation of 0.1N HCl:

    For preparing 0.1 N HCl , 8.3 ml concentrated HCl was taken in a  volumetric flask and add distilled waterwas added to make the volume upto 1000 ml

    Calculation:

    Molecular weight of HCl= 36.5gm

    1litre 1N HCl = 36.5gm

    1 litre 0.1N HCl = 36.5 * 0.1

                           = 3.65 gm

    in 37% HCL-

                          100ml = 37gm HCl

                           1 ml   = 37/100 * 1.19gm of HCl

                                     = 0.4403gm of HCl

    0.4403 gm of HCl present in =1ml of 37%HCl

    3.65gm of HCl present in =1ml of 1 * 3.65/0.4403

                                         = 8.28 ml

                                         = 8.3ml

    • Preparation of dissolution media (pH 7.4 Phosphate Buffer):

    1. At first 1000 mL 0.3M tribasic Sodium Phosphate was prepared by dissolving 114.04 gm of Tribasic Sodium Phosphate with distilled water & then the volume was made 1000 mL. The pH of 1000mL 0.3M tribasic Sodium phosphate was 11.45.

    2. In a beaker 750 mL 0.1N HCl was taken & 180 mL of previously prepared 0.3M Tribasic Sodium Phosphate was added & rest amount of water was added up to 1000 mL.  pH was checked 7.4 with pH meter. .

    Calculation:

    Molecular weight of Tribasic sodium phosphat(Na3PO4.12H2O)= 380.12gm

    1 molar Tribasic sodium phosphat(Na3PO4.12H2O)= 380.12gm

    0.3 molar Tribasic sodium phosphat(Na3PO4.12H2O)= 380.12* 0.3gm

                                                                                     =114.04gm

    pH adjustment

    pH adjustment can done by 2 ways

         ● Addition method

         ● pouring method

     Here, we used addition method. Taken 750 ml 0.1N HCl, added NA3PO4.12H20 by addition method to adjust the PH up to 7.4.

    Finally, we found 185/165 ml of NA2PO4.12H20 is acheived the desire PH.

       ● 750 ml HCL + 180 ml Na3PO4.12H20  =PH 7.4

     

     

    2.4.7: Preparation of Standard Curve of Naproxen for Dissolution Study

     

    2.4.7.1: Preparation of Standard Curve of Naproxen by 0.1N HCL

    To prepare a standard solution, 50 mg of Naproxen  was measured in an analytical balance after weighing  Naproxen was taken in a 100ml volumetric flask then 5ml methanol was added drop by drop by pipette for dissolve the Naproxen and then  Prepared 0.1N HCL was added to make the volume up to 100ml to produce a solution of 500 mg / ml. 1 m1each of this solution were taken in 5 different 100ml conical flasks 50 and 69, 79, 99, and  ml of 0.1N HCL was added to them respectively for the purpose of serial dilution. 10 ml of standard solution is also taken in a conical flask. The solutions were mixed well using shaker. These serial dilutions allowed Naproxen concentration to be made in 50 mg / ml. Then absorbance of the solutions was measured at 230 nm using Single Beam UV-visible spectrophotometer. A plot was constructed showing concentration at X- axis and absorbance at the Y- axis.

     

    Table 2.13:  Data for Standard curve in 0.1N HCL

     

    Concentration (μg /ml)

    Absorbance

    50

    0.797

    70

    0.488

    80

    0.418

    100

    0.315

    120

    0.239

    Fig 2.8:  Standard curve of Naproxen in 0.1N HCL

     

    2.4.7.2: Preparation of Standard Curve of Naproxen by pH 7.4 phosphat Buffer

    To prepare a standard solution, 50 mg of Naproxen was measured in an analytical balance after weighing Naproxen was taken in a 100ml volumetric flask Prepared buffer solution (pH 7.4 ) was added to make the volume up to 100ml. to produce a solution of 500 mg / ml. 1 ml of this solution were taken in each 6 different 100ml conical flasks and 9, 19, 24, 39, 49 and 9.9ml of buffer was added to them respectively for the purpose of serial dilution. 10 ml of standard solution is also taken in a conical flask. The solutions were mixed well using shaker. These serial dilutions allowed Naproxen concentration to be made in the range of 5 mg / ml to 50 mg / ml. Then absorbance of the solutions was measured at 230 nm using UV-visible spectrophotometer. A plot was constructed showing concentration at X- axis and absorbance at the Y- axis.

     

    Table2.14 : Data for Standard curve of Naproxen in pH 7.4 phosphat Buffer

    Concentration

    Absorbance

    0

    0

    .05

    0.140

    0.625

    0.192

    .77

    0.224

    1

    0.299

    2

    0.603

    2.5

    0.688

     

                        

                   Fig 2.9: Standard curve of Naproxen in 7.4 phosphat buffer

     

    2.4.7.3: In vitro release studies of the Naproxen SR in 0.1Nn 7.4 phosphate buffer:

    Acid stage: The release rate of Naproxen tablets was determined by using Tablet Dissolution Tester (paddle method). The dissolution test was performed using 750 ml 0.1N HCL solution at 37°C± 0.5oC using 50 rpm. for first 2 hours. For determining the release rate of Ranitidine HCL & Naproxen in HCL the 10 ml sample was withdrawn at 30 minutes time intervals for 2 hours, replacing with 10 ml of the fresh medium to maintain the volume constant. The samples were filtered through a Whatmaan filter paper and diluted to a suitable concentration with required media.

    Buffer stage: After 2 hours, the acid stage was changed into buffer stage followed by addition of 180mL 0.3 M trisodium phosphate & 50 ml of distilled water into 750 ml of 0.1N HCL to raise the pH to 7.4. Now the release rate of Naproxen in buffer was measured for next 9 hours, withdrawing 10 ml of sample at 2 hour interval & replacing with 10 ml of the fresh medium to maintain the volume constant. The samples were filtered through a Whatmaan filter paper and diluted to a suitable concentration with required media. The peak area of the solutions was measured at 230 nm for drug Naproxen UV machine. By finding out the area produced by Naproxen & Ranitidine, percentage of drug release was calculated using an equation obtained from the standard curve. The dissolution study was continued for 2 hour in acid and 9 hours in buffer to get a simulated picture of the drug release in the in-vivo condition and drug dissolved at specified time periods was plotted as percent release.

    2.4.8: Drug content assay

    Drug content of the sample solution i.e. the quantity of the released drug was determined by UV analysis and the absorbance was measured at 230 nm. For each value of absorbance, the concentration of the corresponding solution was calculated by using equation of the standard curve and then the amount of drug of each vessel was determined. Finally the % of drug present in the tablet was calculated of each batch.

     

    2.4.9: Data analysis method

    2.4.9.1: Interpretation of Dissolution Profile

    Absorbance values obtained from the dissolution studies were converted into percent release of drug from the formulations of matrix tablets. This is done by comparing the absorbance values with the standard curve.

    2.4.9.2:  Kinetic Modeling of Drug Release

    The dissolution profile of all the batches was fitted to zero order (Mockel and Lippold 1993), first-order, Higuchi (Higuchi 1963), and Korsmeyer (Korsmeyer 1983) equations to ascertain the kinetic modeling of drug release.

    As percent release of naproxen in acid media is very less, kinetic modeling was done considering duration of dissolution in acid media as one hour. The time of two hours in acid media is considered as initial time (one hour) for such kinetic Modeling. So the responses obtained (T25%, T50%, T80% & MDT) show one hour less than the actual value. After linear transformation of dissolution curves, the results were tested with the following mathematical models

    {C}Ø  {C}Zero order release profile:

    The Zero order equation assumes that drug release is constant:

    M = Mo  – Kot   ———————————— (I)

    In this equation M is the amount of drug remaining undisclosed at time t, Mo is the amount of drug undissolved at t=0 and Ko is the corresponding release rate constant. Zero order plot of drug release is obtained by plotting percent release of drug versus time in hour.

    {C}Ø  {C}Higuchi release profile:

    A form of the Higuchi Square Root Law is given by equation:

    Q= KH√t ———————————————    (II)

    Where Q (Q = 100 – M) is the amount of drug dissolved at time t and KH is the corresponding rate constant. Hence drug release is proportional to the square root of time. Here cumulative percentage of drug release is plotted vs. time. The Higuch’s model which describes release by Fickian diffusion through a porous matrix (Higuchi, 1963).Two factors, however, diminish the applicability of Higuchi’s equation to matrix systems. This model fails to allow for the influence of swelling of the matrix (upon hydration) and gradual erosion of the matrix (Abd-el-Kader H et al, 2007).

    {C}Ø  First order release kinetics:

    Release behavior generally follows the following first order release equation:

    In M = In Mo – K1t ———————————————    (III)

     

    Where M is the amount of drug undissolved at time t, Mo is the amount of drug undissolved at t=0 and K1 is the corresponding release rate constant.

    {C}Ø  Korsmeyer release profile:

    The Korsmeyer’s equation is:

    Mt / Mα = Kktn ———————————————    (IV)

    Where Mt/Mo is the fraction of solute release, t is the release time, Kk is the kinetic constant characteristic of the drug/polymer system and n is the diffusion exponent or release exponent that characterizes the mechanism of release tracers. Log fraction release as a function of log of time (hour) gives the Korsmeyer release pattern from various formulations of Naproxen tablets.

    Ritger and Peppas have defined the exponent n as a function of the aspect ratio for 1- dimentional to 3- dimentional systems (slabs, cylinders, and sphere). The aspect ratio (2a/l) is defined as the ratio of diameter (2a) to thickness (L) (Abdelkader H et al, 2007)

    Table 2.15: Geometric dependence of diffusion exponent (n) and variation of n values with mechanism of diffusion

    Diffusion exponent (n)

    Mechanism of transport

    Cylinder

    Sphere

    Slab

    < 0.45 or 0.45

    < 0.43 or 0.43

     

    < 0.5 or 0.5

    Fickian (class I) diffusion

     

    >0.45 or < 0.89

    >0.43 and <0.85

    >0.5 and <1.0

    Anomalous / non – Fickian transport

    0.89

    0.85

    1.0

    Class II / Zero order transport

    >0.89

    >0.85

    >1.0

    super Class II transport

    For tablets, depending on the aspect ratios, n is bellow 0.45, the Fickian diffusion phenomenon dominates, and n between 0.45 and 0.89 is an anomalous transport (coupled diffusion & polymer matrix relaxation) often termed as first-order release.  Purely matrix relaxation or erosion mediated release occurs for n = 0.89 (zero-order kinetics). After the n value reaches 0.89 and above, the release can be characterized by case II and super case II transport, which means the drug release rate does not change over time and the release is characterized by zero-order release. In this case, the drug release is dominated by the erosion and swelling of the polymer (Peppas, 1985; Chueh et al., 1995). The release exponent, n, is the slope of log fraction of drug release vs. log time curve.

     

    2.4.10: Successive Fractional Dissolution Time

    To characterize the drug release rate in different experimental conditions, T25%, T50% (mean dissolution time) and T80% were calculated from dissolution data according to the following equation

    T25% = (0.25/k)1/n

     T50% = (0.5/k)1/n

     T80% = (0.8/k)1/n

    Mean Dissolution Time can also be calculated by the following equation (Mockel and Lippold 1993).  

    MDT = (n/n+1). K-1/n

    Mean dissolution time (MDT) value is used to characterize the drug release rate from the dosage form and the retarding efficiency of the polymer. A higher value of MDT indicates a higher drug retaining ability of the polymer and vice-versa. The MDT value was also found to be a function of polymer loading, polymer nature and physico-chemical properties of the drug molecule. (Mockel and Lippold 1993)

     

     

    Fig 2.10: Naproxen matrix tablets before drying

     

     

    Fig 2.10: Naproxen matrix tablets after dissolution for 3 hrs

     

     

           

    Fig 2.11:  Naproxen matrix tablets after dissolution for 6 hrs

     

    3.1: Characterization of granules

     Naproxen tablets were prepared by wet granulation process prior to compression; granules were evaluated for their characteristic parameters. Angle of repose was measure by fixed funnel method. Bulk density and tapped density were determined by cylinder method, and Carr’s index and Hausner ratio were calculated.

     

    Table3.1: Characteristics of granules of formulations of 1- to 10

    Formulation

    CI (%)

    HR

    Angle of repose

    F-1

    16.67

    1.2

    23.94

    F-2

    18.18

    1.222

    25.64

    F-3

    16.67

    1.2

    29.68

    F-4

    18.18

    1.22

    27.02

    F-5

    20.00

    1.25

    17.58

    F-6

    18.18

    1.222

    19.03

    F-7

    15.38

    1.182

    21.35

    F-8

    14.29

    1.167

    23.94

    F-9

    16.67

    1.2

    23.94

    F-10

    15.38

    1.182

    21.4

     

    From the above table, it is found that only F-7 & F-10 shows CI(%) 15.38 & 15.38 respectively ,As the good flow property is observed within the range was 12 to 16.   F-7.& F-10 has good flow property. Again, F-8 gives an excellent flow property. F-2, F-4 & F-6 give a good result (range-15 to 18) and F-1, F-9 ,F-5 & F-3 were give a flow of fair to passable, means that the flow may be increase by addition of glidient such as aerosol.

     

    According to Hausner ratio, the range of good flow property range is <1.25 It is  found from the above table, that all the formulations except F-5 follow these range, means that their flow property is good. Only F-5 shows that flow property may be increased by adding glident.

     

    From the angle of repose range, F-5 & F-6 were shown the excellent flow property (<20). Besides them all the formulation were shown good flow property, here the range is 20-30.

     

    Fig 3.1: Relationship between Car’s index (%) and angle of repose of granules of F-1 to F-10

     

    3.2: Characteristics of tablets

     “Single punch compression machine” with 10mm diameter punch and die were used to compress Naproxen mixture as stated earlier. The properties of the compressed matrix   tablets, such as hardness, friability  were determined. Pharma test, Type PTB 311(511)-E was used to measure the diameter and the thickness of the tablets disc. The average thickness and the diameter were found as 2.14 mm and 7.93 mm for all formulations. Hardness of 3 matrix tablets from each formulation was tested using Type PTB 311(511) -E hardness tester. The hardness of tablets was measured in kp.

     

    Friability means the ability to produce a solid substance into a smaller piece with little effort. The integrity of the tablets formulation was assessed by rotating 3 tablets trom each formulation in a tablet friability tester. Tablet friability tester was equiped with a specific rotating disk. Weigh of tablets were taken. The tablets were introduced into a rotating disk and it was allowed to rotate at 100 rpm for 1 minute. At the end of the rotation, tablets were collected and weigh of the tablets were taken. The average % friability was found less than 0.4%, which was well within the acceptable range of 1% and indicates the  tablet surfaces are strong enough to withstand mechanical shock or attrition during stroge and transportation until they are consumed (Merchant al,2006)

     

    Table 3.2: : Physical properties of Naproxen based matrix tablets

     

    Formulation

    Average Diameter(n=3)

          (mm)

    Average Thickness(n=3)

           (mm)

    Average Hardness(n=3)

         (mm)

    Average%

    Friability

    (n=3)

    F-1

    7.75

    2.04

    1.8

    0.99

    F-2

    7.90

    1.87

    4.5

    0.427

    F-3

    7.89

    2.41

    1.5

    1.104

    F-4

    7.88

    2.14

    2.9

    1.83

    F-5

    7.92

    2.27

    17.5

    0.896

    F-6

    7.93

    1.98

    5.5

    0.56

    F-7

    8.0

    2.17

    2.7

    0.141

    F-8

    7.9

    2.13

    9.0

    0.291

    F-9

    7.93

    2.14

    12.4

    0.406

    F-10

    7.92

    2.20

    11.6

    0.919

     

    Table 3.3:  Data of hardness of formulations of Naproxen

    Formula

    Hardness(kp)

    F-1

    1.8

    F-2

    4.5

    F-3

    1.5

    F-4

    2.9

    F-5

    17.5

    F-6

    5.5

    F-7

    2.7

    F-8

    9

    F-9

    12.4

    F-10

    11.6

     

     

    Fig 3.2:  Bar diagram of hardness of various formulations of Naproxen matrix tablets

     

    3.3: Swelling property of HPMC based matrix tablets :

    Swelling study of different formulations of Naproxen matrix tablets are performed. Among the five formulations, F-5 swells more than others. As F-5 contains 5% Methocel K4M and 10% CMC-50,000cps, both of them are strong hydrophilic polymer. Among the formulation, 6 to 10, we found that F-8 shows more swelling action for 3 hours. In F-8 formulation, Methocel K15M, Na-CMC and CMC polymer are used in 1: 1:1 ratio. For this, it shows most swelling property.

     

    Table 3.4: : Data for swelling index of F-1 to F-5

    Time(hr)

     

    SI (%) of Formulations

    F-1

    F-2

    F-3

    F-4

    F-5

    0 hr

    0

    0

    0

    0

    0

    1 hr

    36.308

    21.875

    58.493

    74.952

    138.314

    2 hrs

    21.572

    4.297

    83.683

    76.207

    142.184

    3 hrs

    –

    –

    –

    –

    133.870

    4 hrs

    –

    –

    –

    –

    133.908

     

     

    Fig 3.3: Comparison of swelling index of Methocel K4M  CR & K15M based matrix tablets

     

     

    Table 3.5: Data for swelling index of F-6 to F-10

    SI (%)

    Formulations

    F-6

    F-7

    F-8

    F-9

    F-10

    0 hr

    0

    0

    0

    0

    0

    1hr

    126.832

    106.836

    140.708

    143.548

    183.861

    2hr

    126.336

    139.258

    192.168

    152.137

    167.442

    3hr

    109.160

    171.875

    196.991

    165.726

    116.744

    4hr

    –

    171.484

    183.407

    167.137

    112.558

    5hr

    –

    137.5

    –

    154.0323

    81.86047

     

     

    Fig 3.4: Comparison of swelling index of Methocel K4M CR & K15M based matrix tablets

     

    3.4: In vitro dissolution study of Naproxen matrix tablets:

    Naproxen matrix tablets were formulated according to different formulations, Their dissolution studies were performed with a rpm of 50 rpm at 37.5c using apparatus -2 (paddle method) placed in 750ml of 0.1N HCL for 2 hrs, followed by 100 ml pH 7.4 phosphat buffer media. In 0.1N HCL, the drug release was very poor or very negligible. So  it’s result was not shown here. For this, the result of the drug action in phosphate buffer was present here. Each formulation is used in dissolution study and the release patterned of Naproxen was monitored up to 9 hrs.

     

    Table 3.6: Data for zero order kinetics of Methocel K4M based Naproxen matrix tablets

     

    Time (hours)

    % Release

    F-1

    F-2

    0

    0.000

    0

    2

    7.17

    18.30

    4

    27.80

    47.35

    6

    50.27

    61.60

    8

    57.85

    74.38

    9

    79.24

    91.48

     

     

    Fig 3.5: Zero order plot of release kinetics of Naproxen from Methocel K4M based matrix tablets

     

    Table 3.7: Data for Highuchi release kinetics of Methocel K4M based Naproxen matrix tablets

     

    Time(hr)

    Square root of time (hr)

    %  release

     

    F-1

    F-2

    0

    0

    0

    0

    2

    1.414

    7.17

    18.30

    4

    2

    27.80

    47.35

    6

    2.449

    50.27

    61.60

    8

    2.828

    57.85

    74.38

    9

    3

    79.24

    91.48

     

     

    Fig 3.6: Highuchi plot of release kinetics of Naproxen from Methocel K4M based matrix tablets

     

     

     

    Table 3.8: Data for 1st order kinetics of Methocel K4M based Naproxen matrix tablets

     

    Time(hour)

    Log % Remaining

    F-1

    F-2

    0

    2

    2

    2

    1.968

    1.912

    4

    1.859

    1.721

    6

    1.697

    1.584

    8

    1.625

    1.409

    9

    1.317

    0.930

     

     

     

    Fig 3.7: 1st order plot of release kinetics of Naproxen from Methocel K4M based matrix tablet

     

    Table 3.9: Data for korsmeyer release kinetics of Methocel K4M based Naproxen matrix tablets

     

    Log Time (hours)

     

    Log fraction release

    F-1

    F-2

    0.301

    -1.145

    -0.738

    0.602

    -0.556

    -0.325

    1.778

    -0.299

    -0.210

    0.903

    -0.238

    -0.129

    0.954

    -0.101

    -0.039

     

     

     

    Fig 3.8: Korsmeyer plot of release kinetics of Naproxen from Methocel K4M based matrix tablets

    3.5:  Effects of MethocelK4M on release kinetics of Naproxen from Naproxen based matrix tablets

     

    For these experiments  Methocel K4M was used for  Naproxen matrix tablets, It is shown that F-1 gives 79.24% release of Naproxen at 9 hrs and F-2 shows 91.48% release at 9 hrs.  Here F-1 shows more rate retarding action than F-2 as F-1 contains 20% Methocel K4M and F-2 contains 15%.   

      

    Table 3.10: Data for zero order release kinetics of Methocel K15M based Naproxen matrix tablets

     

    Time (hours)

    % Release

    F-3

    F-4

    0

    0.000

    0

    2

    5.66

    17.73

    4

    22.13

    35.46

    6

    39.27

    50.72

    8

    52.65

    63.52

    9

    72.02

    85.53

     

     

    Fig 3.9: Zero order release profile of Naproxen from Methocel K15M based        matrix tablets

    Table 3.11: Data for Highuchi plot of release kinetics of Methocel K15M based        matrix tablets

     

    Root of time

    %  release

    F-3

    F-4

    0.000

    0

    0

    1.414

    5.66

    17.73

    2.000

    22.13

    35.46

    2.449

    39.27

    50.72

    2.828

    52.65

    63.52

    3

    72.02

    85.53

     

    Fig 3.10: Highuchi plot of release kinetics of Naproxen from Methocel K15M based matrix tablets

     

     

    Table 3.12: Data for 1st order plot of release kinetics of Methocel K15M based Naproxen matrix tablets       

    Time(hour)

    Log % Remeaning

    F-3

    F-4

    0

    2

    2

    2

    1.975

    1.915

    4

    1.891

    1.810

    6

    1.783

    1.693

    8

    1.675

    1.562

    9

    1.447

    1.161

                       

     

    Fig 3.11: 1st order plot of release kinetics of Naproxen from Methocel K15M based matrix tablets

     

    Table 3.13: Data for korsmeyer plot of release kinetics of Methocel K4M based Naproxen   matrix tablets

     

    Log Time (hours)

    Log fraction release

    F-3

    F-4

    0.301

    -1.247

    -0.751

    0.602

    -0.655

    -0.450

    0.778

    -0.406

    -0.295

    0.903

    -0.279

    -0.197

    0.954

    -0.143

    -0.068

       

     

    Fig 3.12: Korsmeyer plot of release kinetics of Naproxen from Methocel K4M based matrix tablets

     

    3.6: Effects of MethocelK15M on release kinetics of Naproxen from Naproxen based matrix tablets

     

     For these formulations, Methocel K15M was used for Naproxen matrix tablets. It is shown that F-3 gives 70.02% release of Naproxen at 9 hrs and F-2 shows 85.539% release at 9 hrs.  Here F3 shows more rate retarding action than F-4, as F-3 contains 20% Methocel K15M and F-4 contains 15%.Though Methocel K15M is more viscous so it shown more retarding property than F-1.     

     

    Table 3.14: Zero order release profile of MethocelK4M, CMC-50,000cps and Na-CMC based Naproxen matrix tablets

     

    Time (hours)

    % Release

    F-5

    F-6

    0

    0.000

    0.000

    2

    19.715

    29.336

    4

    20.289

    54.344

    6

    37.461

    74.871

    8

    45.462

    79.319

    9

    60.349

    91.624

     

    Fig3.13: Zero order plot of release kinetics of Naproxen from Methocel K4M, Na-CMC & CMC based matrix tablets

     

    Table 3.15: Highuchi plot of release kinetics of MethocelK4M, CMC-50,000cps and Na-CMC based Naproxen matrix tablets

            

    root of time

    %  release

    F-5

    F-6

    0

    0

    0

    1.414

    19.715

    29.336

    2.000

    20.289

    54.344

    2.449

    37.461

    74.871

    2.828

    45.462

    79.319

    3

    60.349

    91.624

     

     

     

      

    Fig 3.14: Highuchi plot of release kinetics of Naproxen from Methocel K4M,Na-CMC & CMC based matrix tablets

     

    Table 3.16: Data for 1st order plot of release kinetics of MethocelK4M, CMC-50,000cps and Na-CMC based Naproxen matrix tablets

     

    Time(hour)

    Log % remeaning

    F-5

    F-6

    0

    2

    2

    2

    1.905

    1.849

    4

    1.902

    1.660

    6

    1.796

    1.400

    8

    1.737

    1.316

    9

    1.598

    0.923

                  

     

     Fig 3.15: 1st order plot of release kinetics of Naproxen from Methocel K15M, Na-CMC & CMC based matrix tablets

     

     

    Table 3.17: Data for korsmeyer plot of release kinetics of MethocelK4M, CMC-50,000cps and Na-CMC based Naproxen matrix tablets

     

    Log Time (hours)

    Log fraction release

    F-5

    F-6

    0.301

    -0.705

    -0.533

    0.602

    -0.693

    -0.265

    0.778

    -0.426

    -0.126

    0.903

    -0.342

    -0.101

    0.954

    -0.219

    -0.038

     

     

    Fig 3.16: Korsmeyer plot of release kinetics of Naproxen from Methocel K4M CMC-50,000cps and Na-CMC based Naproxen matrix tablet

     

     

    3.7:  Effects of Methocel K4M, Na-CMC & CMC (50,000cps) on release kinetics of Naproxen from Naproxen based matrix tablets

     

    For these formulations, Methocel K4M, Na-CMC & CMC (50,000) were used for preparing Naproxen matrix tablets, It is shown that F-5 gives 60.349% release of Naproxen at 9 hrs & F-6 shows 91.62% release at 9 hrs.  Here F-6 shows more rate retarding action than F-5, as F-6 contains 5% Methocel K4M, 5%  CMC CMC(50,000 cps) & Na-CMC5%   and F-5 contains 5% Metocel K4M & CMC(50,000 cps).

     

    Table 3.18: Data for zero order release profile of Methocel K15M, Na-CMC & CMC (50,000cps) Naproxen matrix tablets

     

    Time (hours)

     

    % Release

    F-7

    F-8

    0

    0

    0

    2

    24.242

    13.678

    4

    34.106

    57.300

    6

    37.485

    69.431

    8

    55.554

    89.546

    9

    68.657

    90.878

     

    Fig 3.17: Zero order release profile of Naproxen from Methocel K15M, CMC & Na-CMC based matrix tablets     

    Table 3.19: Data for Highuchi plot of release kinetics of  Methocel K15M, Na-CMC & CMC (50,000cps) Naproxen matrix tablets

       

    root of time

     

    %  release

    F-7

    F-8

    0

    0

    0

    1.414

    24.242

    13.678

    2.000

    34.106

    57.300

    2.449

    37.485

    69.431

    2.828

    55.554

    89.546

    3

    68.657

    90.878

     

     

    Fig 3.18: Highuchi plot of release kinetics of Naproxen from Methocel K15M , Na- CMC & CMC based matrix tablets

     

    Table 3.20: Data for 1st order plot of release kinetics of  Methocel K15M, Na-CMC & CMC (50,000cps) Naproxen matrix tablets

     

    Time (hours)

     

    Log% Remaining

    F-7

    F-8

    0

    2

    2

    2

    1.879426

    1.936

    4

    1.818844

    1.630

    6

    1.795983

    1.485

    8

    1.647836

    1.019

    9

    1.496141

    0.960

     

     

    Fig 3.19: 1st order plot of release kinetics of Naproxen from Methocel K15M, Na-CMC & CMC based matrix tablets

    Table 3.21: Korsmeyer plot of release kinetics of Methocel K15M, Na-CMC & CMC based matrix tablets

     

    Log Time (hours)

     

    Log fraction release

    F-7

    F-8

    0.301

    -0.615

    -0.864

    0.602

    -0.467

    -0.242

    0.778

    -0.426

    -0.158

    0.903

    -0.255

    -0.048

    0.954

    -0.163

    -0.042

     

     

     

    Fig 3.20: Korsmeyer plot of release kinetics of Naproxen from Methocel K15M, Na- CMC & CMC based matrix tablets

     

    3.8: Effects of MethocelK15M, Na-CMC, & CMC on release kinetics of Naproxen from Naproxen based matrix tablets

     

    For these formulations, Methocel K15M, Na-CMC & CMC (50,000cps) were used for  preparing Naproxen matrix tablets, It is shown that F-7 gives 68.657% release of Naproxen at 9 hrs & F-8 shows 90.88% release at 9 hrs.  Here F-7 shows more rate retarding action than F-8, as F-8 contains 5% Methocel K15M, 5% CMC & 5%Na-CMC and F-7 contains 5% Metocel K15M & CMC (50,000 cps). So, from the zero order plot of F-5, F-6, F-7 & F-8, it shows that CMC-50,00cps itself is a good rate retarding polymer.

     

    Table 3.22: Data for zero order release profile from Na- CMC,EC & CMC based Naproxen matrix tablets

    Time(hrs)

    % Release

    F-9

    F-10

    0

    0

    0

    2

    35.373

    45.089

    4

    67.704

    69.971

    6

    87.361

    85.025

    8

    93.522

    90.550

    9

    93.522

    95.792

     

    Table 3.21: Zero order release profile of Naproxen from Na-CMC, EC & CMC based  matrix tablets 

    Table 3.23: Data for Highuchi plot of release kinetics of Na-CMC, EC & CMC based  Naproxen matrix tablets 

     

    root of time

     

     

    %  release

    F-9

    F-10

    0

    0

    1.414

    35.373

    45.089

    2.000

    67.704

    69.971

    2.449

    87.361

    85.025

    2.828

    93.522

    90.550

    3

    93.522

    95.792

     

     

     

    Fig 3.22: Highuchi plot of release kinetics of Naproxen from Na-CMC, EC& CMC based matrix tablets

    Table 3.24: Data for 1st order plot of release kinetics of Na-CMC, EC& CMC based Naproxen matrix  tablets

     

    Time (hours)

    Log% Remaining

    F-9

    F-10

    0

    2

    2

    2

    1.810

    1.740

    4

    1.509

    1.478

    6

    1.102

    1.175

    8

    0.811

    0.975

    9

    0.811

    0.624

     

     

     

    Fig 3.23: 1st order plot of release kinetics of Naproxen from Na-CMC, EC & CMC based matrix tablets

    Table 3.25: Data for korsmeyer plot of release kinetics of Na-CMC, EC & CMC based matrix tablets Naproxen

     

    Log Time (hours)

    Log fraction release

    F-9

    F-10

    0.301

    -0.451

    -0.346

    0.602

    -0.169

    -0.155

    0.778

    -0.059

    -0.070

    0.903

    -0.029

    -0.043

    0.954

    -0.029

    -0.019

     

     

    Fig 3.24: Krosmeyer plot of release kinetics of Naproxen from Methcel K15M & CMC based matrix tablets

     

    3.9: Effects of Na-CMC, EC & CMC on release kinetics of Naproxen from Naproxen based matrix tablets

    For these formulations, Na-CMC, EC& CMC (50,000cps) were used for preparing Naproxen matrix tablets, It is shown that F-9 gives 93.52% release of Naproxen at 9 hrs& F-10 Shows 95.792 %release at 9 hrs.  Here F-9 shows more rate retarding action than F-9, as F-10 contains, 5%CM (50,000cps), 5% Na-CMC & 5%EC and F-9 contains 10% CMC (50,000cps) & 5% Na-CMC. Though all the ratio of polymer used in F-10 were more viscous, so it shows more retarding properties than F-10.

     

    Table 3.26: Interpretation of release rate constants and R-sqare values for different release kinetics of Naproxen matrix tablets

     

    Formulation

    Zero order

    First order

    Korosmeyer

    Higuchi

    K0

    R2

    K1

    R2

    Kk

    R2

    n

    KH

    R2

    F-1

    7.976

    0.960

    0.158

    0.877

    0.028

    0.975

    1.540

    20.353

    0.797

    F-2

    10.019

    0.984

    0.240

    0.871

    0.098

    0.974

    1.015

    26.078

    0.908

    F-3

    6.989

    0.948

    0.130

    0.879

    0.020

    0.989

    1.634

    17.705

    0.761

    F-4

    8.754

    0.981

    0.183

    0.843

    0.089

    0.988

    0.988

    22.637

    0.869

    F-5

    6.230

    0.952

    0.091

    0.916

    0.099

    0.839

    0.745

    16.202

    0.870

    F-6

    10.868

    0.939

    0.251

    0.942

    0.185

    0.978

    0.737

    28.717

    0.968

    F-7

    7.324

    0.940

    0.112

    0.913

    0.145

    0.901

    0.640

    19.221

    0.916

    F-8

    10.982

    0.956

    0.286

    0.956

    0.072

    0.913

    1.234

    28.618

    0.890

    F-9

    12.217

    0.867

    0.334

    0.982

    0.244

    0.943

    0.658

    32.569

    0.973

    F-10

    12.272

    0.810

    0.332

    0.982

    0.333

    0.976

    0.496

    32.947

    0.992

     

    Table 3.27: Successive fractional dissolution time (hrs)

     

    Formulation

     

     

     

     

    T25%

    T50%

    T80%

    MDT

    F-1

    4.172

    6.544

    8.880

    6.223

    F-2

    2.503

    4.953

    7.869

    4.939

    F-3

    4.713

    7.203

    9.604

    6.829

    F-4

    2.805

    5.749

    9.251

    5.762

    F-5

    3.469

    8.793

    16.521

    9.517

    F-6

    1.510

    3.867

    7.316

    4.202

    F-7

    2.340

    6.913

    14.407

    7.968

    F-8

    2.750

    4.821

    7.056

    4.670

    F-9

    1.039

    2.981

    6.091

    3.393

    F-10

    0.561

    2.270

    8.880

    3.045

     

     

    Fig 3.25: Successive fractional dissolution times (hrs) of Naproxen matrix tablets from F-1 to F-5

    Fig 3.26:  Successive fractional dissolution times (hrs) of Naproxen from F-6 to F-10

    Table 3.28: Data   treatment of Naproxen from Methocel K4M based matrix tablets in light of rate constant, R-square, n and MDT value:   

     

    Formulation

    Best fitted model

    n Value

    Release mechanism

    F-1

    Korsmeyer  model

    1.540

    Complate zero order(erosion through viscoelastic relaxation of polymer

    F-2

    Zero order

    –

    Concentration independent

    F-3

    Korsmeyer  model

    1.634

    Complate zero order(erosion through viscoelastic relaxation of polymer

    F-4

    Korsmeyer  model

    0.988

    Complate zero order (erosion through viscoelastic relaxation of polymer

    F-5

    Zero order

    –

    Concentration

    independent

    F-6

    Korsmeyer  model

    0.737

    Complate zero order(erosion through viscoelastic relaxation of polymer

    F-7

    Zero order

    –

    Concentration

    independent

    F-8

    Zero order

    –

    Concentration

    independent

    F-9

    1st order

    –

    Release rate depends on the concentration of drug in the depot

    F-10

    Higuchi release

    –

    Diffusion through pore formation

     

    3.10: Discussion:

     From the above table, it is observed that most of the formulations are fitted to korsmeyer mode with the n value greater than 0.89. so, in most cases the release of drug from the hydrophilic polymer based matrix tablets take place due to complete zero order or release through erosion of viscoelastic relaxation of polymer.

     

    From the successive table it shown that the MDT values of different formulations manifest affect of various polymers. The F-1 contains large amount of Methocel K4 M  (20%) and the MDT value was 6.223. In F-2, Methocel K15M (15%) was used and the  MDT value was 4.94. In F-3, contains large amount of Methocel K4M (20%) and the MDT value was 6.829. In F-4, In this formulation Methocel K15M (15%) was used and    the MDT value was 5.76. Among F-1, F-2,   F-3 & F-4, it is shown that, F-1 & F-3 highest value of MDT as they contain highest (20%) amount of greter viscosity grade of HPMC.

     

    The F-5 contains least amount of Methocel K4M (5%) and CMC, the MDT value was 9.517. In F-6, In this formulation Methocel K15M (5%), 5%CMC & Na-CMC (5%) were used and  the MDT value was 4.202.The F-7 contains least amount of Methocel K15M (5%), Na-CMC and  CMC(10%), the MDT value was 7.96. In F-8, In this formulation Methocel K15M (5%), CMC (5%), Na-CMC(5%), are used and  the MDT value was 4.670. Among F-5, F-6, F-7 & F-8, I t shows, F-5 gives highest of MDT, where          CMC 50,000cps)  in large amount which gives more retarding action .

     

    The F-9 contains least amount of EC (5%) and greater amount (10%) CMC (50,000cps), the MDT value was 3.393.I n F-10, In this formulation EC (5%), CMC (50,000cps) (5%) & Na-CMC (5%) are used and the MDT value are 3.045. Between F-9 & F-10, it is found that F-9 gives more MDT value. In this formulation we used CMC (50,000cps)(10%) which are more retarding polymer.

     

     

     

     

     
     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Fig 3.27: Effect of hydrophilic polymers (F-1 to F-4)

     

     

    Fig 3.27: Effect of hydrophilic polymers (F-1 to F-5)

    Fig 3.28: Effect of hydrophilic polymers (F-5 to F-10)

    3.11: Discussion

     From the fig(3.27), we found that  F-1 & F-2 contains Methocel K4M (20%) &(15%) respectively, where F-1 gives 79.24% rate retarding action & F-2 gives 91.48%  rate retarding action. From the among result we can saw that F-1 gives more sustained release action because it contains Methocel K4M (20%) which has more rate retarding action.

     

     From the fig(3.28), we found that F-5 contains a combination (Methocel K4M5% & CMC 10%). F-6 contains Methocel K4M 5% & CMC 5% & EC 5%. Among this combination F-5 gives more rate retarding action because the ratio of CMC polymer was more than F-6. Again, F-7 contains Methocel K15M 5% & CMC 10% where F-8 contains Methocel K15M 5%, Na CMC 5% & CMC 15%. Between these formulations  F-7 gives more rate retarding action because the ratio of CMC(50.000cps) polymer was more than F-6. Again, F-9 contains EC 5% & CMC 10%, where F-10 contains Methocel K15M 5%, Na CMC 5% & CMC 15%. Though the combination of F-9, was more than F-9, but the ratio of CMC (50.000cps) polymer was more F-10.

     

     

    Conclusion

     

    Hydrophilic polymers are very commonly used now- a- days for preparing various sustained released release tablets. Here naproxen is used as a model drug. Naproxen matrix tablets were prepared by wet granulation method. It was taken for swelling study and dissolution testing. The % release was calculated by UV method at 230 nm  both in acid media & in buffer media. The following results were observed:

    {C}Ø  {C} The average diameter, thickness, and hardness were 7.93, 2.14 and 10 kp respectively.

    {C}Ø  {C}Most of the formulations showed good flow properties.

    {C}Ø  {C}Among ten formulations, F-8 showed highest swelling (196.99% at 3 hrs) as the formulation contains 5% Methocel15M, 5% CMC-50,000cps and 5% Na-CMC.

    {C}Ø  {C}Among F-1 to F-4, (containing defferent percentages of single polymer), F-3 showed more sustained action (72.02% at 9 hrs) which contain 20% Methocel K4M and K15M CR. Among MethocelK4M & K15M, K15M is the higher viscosity grade polymer. So it’s highest contain (20%) shows much sustained action.

    {C}Ø  {C}Among F-5 to F-10 (containing various percentages of mixed polymers) F-5 sustained much (60,349% at 9 hrs) as it contains 5% MethocelK4M and 10% CMC-50,000cps.

    {C}Ø  {C}Of all the formulation, the best fitting was observed with Korsmeyer model and least fitting with first order and Highuchi model.

    {C}Ø  {C}Formulation fitting with Korsmeyer model showed n value greater than 0.89. That is release mechanism was complete Zero order.

    {C}Ø  {C}Their MDT values   show   that with the increasing polymer concentration and viscosity grade the values were increasing.

    {C}Ø  {C}Among ten, F-5 showed the highest MDT value (9.517 hrs) as it contains 5% Methocel K4M and 10% CMC-50,000cps.

    References:

    Abdelkader, H., Abdalla, O.Y. and Salem H. 2007. Formulation of Controlled-        Release Baclofen Matrix Tablets: Influence of Some Hydrophilic Polymers on the Release Rate and In Vitro Evaluation. AAPS PharmSciTech. 8(4):E1-E11.

    Aburuz, S., Millership, J. and McElnay, J. 2005. The development and validation of liquid chromatography method for the simultaneous determination of metformine and glipizide, glicazide, glibenclamide or glimperide in plasma. Journal of Chromatography B 817 (2005): 277-286.

    Alderman DA. A review of cellulose ethers in hydrophilic matrices for oral controlled release dosage forms. Int J Pharm Technol Prod Manuf. 1984;5: 1Y9.

    British Pharmacopoeia, The Stationary Office, London, 1998.

    Chien, Y. W., 1992. In Novel drug Delivery Systems, edited by Chien Y. W., 2nd edition, New York, Marcel Dekker Inc: 1. 

    Florence, A.T and Attwood, D. 1981. Physicochemical principles of Pharmacy. 2nd ed. Macmillan press limited.

    Kalu, V.D., Odeniyi, M.A. and Jaiyeoba, K.T. 2007. Matrix properties of a New plant gum in controlled drug delivery. Arch Pharm Res. 30(7): 884-889.

    Kibbe, A. H. 1986. Handbook of Pharmaceutical excipients. 3rd ed. American Pharmaceutical Association. 

    Kuksal, A., Tiwary, A. K., Jein, A.K. and Jein, S. 2006. Formulation and In Vitro, In Vivo Evaluation of Extended- release Matrix Tablet of Zidovudine: Influence of Combination of Hydrophilic and Hydrophobic Matrix Formers. 7(1):E1-E9.

    Korsmeyer, R.W., Gurny, R., Doelker, E., Buri, P. and Peppas, N.A. 1983. Mechanisms of solute release from porous hydrophilic polymers. Int J Pharm. 15:25Y35.

    Lachman, L., Lieberman, H.A and Kanig, J.L. 1987. The Theory and Practice of Industrial Pharmacy. Philadelphia,PA: Lea and Febiger:317-318.

    Langer, R., 1998. Advanced methods of drug delivery science. 254: 1437 – 1521.

    Li, Y. & Zhu, J. 2004. Modulation of combined-release behaviours from a novel “tablets-in-capsule system.” J Control Release. 95:381Y389.

    Lipsky, P.E. & Isakson, P.C. 1997. Outcome of specific COX-2 inhibition in rheumatoid arthritis. J Rheumatol 24:Suppl 49:9-14.

    Maggi, L., Machiste, E.O., Torre, M.L. & Conte, U. 1999. Formulation of biphasic release tablets containing slightly soluble drugs. Eur J Pharm Biopharm. 48:37Y42.

    Peppas, N.A. 1985. Analysis of Fickian and non-Fickian drug release from polymers. Pharm Acta Helv. 60:110Y112.

    Peppas, N.A. and Sahlin, J.J. 1989. A simple equation for the description of solute release, III: coupling of diffusion and relaxation. Int J Pharm. 57:169Y175.   

    Raghuram, R.K., Srinivas, M.& Srinivas, R.  2003. Once-daily sustained-release matrix tablets of nicorandil: formulation and in vitro evaluation. AAPS PharmSciTech [serial online]. 4:E61.

    Reza, M.S., Abdul, Quadir, M. & Haider, S.S. 2003. Comparative evaluation of plastic, hydrophobic and hydrophilic polymers as matrices for controlled-release drug delivery. J Pharm Sci.6: 282Y291.

    Ritger, P.L. & Peppas, N.A. 1987. A simple equation for description of solute release, I: Fickian and non-Fickian release from non-swellable devices in the form of slabs, spheres, cylinders or discs. J Control Release. 5:23Y35.

    Talukdar, M.M., Rommbaut, P. & Kinget, R. 1996. Comparative study on xanthan gum and hydroxypropyl methylcellulose as matrices for controlled-release drug delivery. Int J Pharm. 129:233Y241.

    Uekama, K., Matsubara, K., Abe, K., Horiuchi, Y., Hirayamma, F. & Suzuki, N. 1990. Design and in vitro evaluation of slow-release dosage form of piretanide: utility of beta-cyclodextrin:cellulose derivative combination as a modified-release drug carrier. J Pharm Sci. 79:244Y248.

     

     

     

    " 119,"

    EVIDENCE OF BAD CHARACTE

    ","

    1.That Z had sex with T D & H

    The evidence that Z had sex with T D & H can be admitted with the agreement of all the parties[1]. However it is unlikely that Z would agree that this evidence could be admitted therefore that X would have to rely on one of the other provisions of section 100 (1) of the Criminal Justice Act 2003 in order to admit the evidence.

    Section 100 (1) of the Criminal Justice Act 2003 stipulates, “Evidence of the bad character of a person other than the defendant is admissible if and only if:

    1. It is important explanatory evidence,
    2. It has substantial probative value in relation to a matter which –
    1. is a matter in issue in the proceedings, and
    2. is of substantial importance in the context of the case as a whole, or
    1. all parties to the proceedings agree to the evidence being admissible

    Therefore it is likely that Z will try and admit this evidence under s100(1)(b) arguing that it has substantial probative value in relation to a matter that is either a matter in issue in the proceedings or that is of substantial importance in the context of the case as a whole. In order to determine whether or not the evidence has substantial probative value case law prior to the enactment of the Criminal Justice Act 2003 should be considered where it was considered that such evidence could be admitted if it was “striking similarity[2]”and of “sufficient probative force to overcome prejudice.[3]”

    It is likely that this evidence will be admitted.

    2.That Z was convicted of wasting police time

    The evidence that Z had been convicted of wasting police time could again be admitted if both parties agree to the evidence being admitted. However it is unlikely that Z would agree that this evidence can be admitted therefore that X would have to rely on one of the other provisions of section 100 (1) of the Criminal Justice Act 2003 in order to admit the evidence.

    Section 100 (1) of the Criminal Justice Act 2003 stipulates that “evidence of the bad character of a person other than the defendant is admissible if and only if:

    1. It is important explanatory evidence,
    2. It has substantial probative value in relation to a matter which –
    1. is a matter in issue in the proceedings, and
    2. is of substantial importance in the context of the case as a whole, or
    1. all parties to the proceedings agree to the evidence being admissible

    Therefore it is likely that Z will try and admit this evidence under s100(1)(b) arguing that it has substantial probative value in relation to a matter that is either a matter in issue in the proceedings or that is of substantial importance in the context of the case as a whole. In order to determine whether or not the evidence has substantial probative value case law prior to the enactment of the Criminal Justice Act 2003 should be considered, as above and in consideration of that evidence it is unlikely that the evidence will be admitted. This does not appear to be of substantial importance and it is likely that the jury could reach the right conclusion without hearing this evidence.

    3.That W is a lesbian who is prejudiced against men

    The evidence that W is a lesbian who is prejudiced against men can be admitted with the agreement of all the parties[4]. However it is unlikely that W would agree that this evidence could be admitted therefore that X would have to rely on one of the other provisions of section 100 (1) of the Criminal Justice Act 2003 in order to admit the evidence.

    Section 100 (1) of the Criminal Justice Act 2003 stipulates, “evidence of the bad character of a person other than the defendant is admissible if and only if:

    1. It is important explanatory evidence,
    2. It has substantial probative value in relation to a matter which –
    1. is a matter in issue in the proceedings, and
    2. is of substantial importance in the context of the case as a whole, or
    1. all parties to the proceedings agree to the evidence being admissible

    Therefore it is likely that Z will try and admit this evidence under s100(1)(b) arguing that it has substantial probative value in relation to a matter that is either a matter in issue in the proceedings or that is of substantial importance in the context of the case as a whole. On this basis it is unlikely that this evidence will be admitted.

    4.Psychiatric evidence in respect of Y

    The evidence that Y is suffering from Potipahr’s Wife Syndrome can be admitted by agreement by the parties. [5] However it is unlikely that Y would agree that this evidence could be admitted therefore that X would have to rely on one of the other provisions of section 100 (1) of the Criminal Justice Act 2003 in order to admit the evidence.

    Section 100 (1) of the Criminal Justice Act 2003 stipulates that “evidence of the bad character of a person other than the defendant is admissible if and only if:

    1. It is important explanatory evidence,
    2. It has substantial probative value in relation to a matter which –
    1. is a matter in issue in the proceedings, and
    2. is of substantial importance in the context of the case as a whole, or
    1. all parties to the proceedings agree to the evidence being admissible

    X will need to argue that the evidence is important explanatory evidence. Evidence is “important explanatory evidence” for these purposes if “(a) without it, the court or jury would find it impossible or difficult properly to understand other evidence in the case, and (b) its value for understanding the case as a whole is substantial[6]. Except in relation to evidence of conduct, which is alleged to be similar to matters in dispute at the trial, evidence of witness’s bad character may not be adduced without the leave of the court[7]. Section 100(3) identifies certain factors to be taken into account by the trial judge, alongside any others considered relevant, in exercising his discretion to grant leave to allow bad character evidence to be given. Such factors include the number of relevant incidents, the lapse of time, and other common sense considerations relating to similarities between past and present conduct and questions of contested identity. Therefore such evidence will only be admitted if it bears substantial probative value, and the court grants leave. It would therefore be concluded that in this instance that the evidence would be admitted.

    5.Previous evidence of V

    Assuming as discussed above that the X is not successful in admitting any of the evidence (as if he is this will mean that the evidence of his bad character and previous convictions will automatically be admitted) the Criminal Justice Act 2003 contains a dedicated scheme of rules to regulate the admissibility of evidence of the accused’s extraneous misconduct in s101 (1). These rules are different from those rules that exist for the admittance of other witness’s previous character.

    In criminal proceedings evidence of the defendant’s bad character is admissible if, but only if –

    1. all parties to the proceedings agree to the evidence being admissible,
    2. the evidence is adduced by the defendant himself or is given in answer to a question asked by him in cross-examination and intended to elicit it,
    3. It is important explanatory evidence,
    4. It is relevant to an important matter in issue between the defendant and the prosecution
    5. It has substantial probative value in relation to an important matter in issue between the defendant and a co-defendant,
    6. It is evidence to correct a false impression given by the defendant, of
    7. The defendant has made an attack on another person’s character

    Therefore this evidence can be admitted by agreement by the parties however this is unlikely. Therefore it is likely that the prosecution will attempt to admit the evidence under sections c and d and this are provisions, which are concerned with similar fact evidence. One significant dimension of the “similar facts” cases concerned the dangers posed by deliberate collusion between witnesses or innocent cross-contamination of their evidence.

    In determining the admissibility of evidence of the accused’s misconduct in the first instance, however, section 109 obliges the court to treat the evidence as true, unless “it appears, on the basis of any material before the court (including any evidence it decides to hear on the matter), that no court or jury could reasonably find it to be true[8]. Therefore given the similarities between the previous incident and the current one it is likely that this information will be allowed to be admitted into the current proceedings. The reason for this is that the evidence can either be considered to be important explanatory evidence or alternatively that it is relevant to an important matter in issue between the defendant and the prosecution

    6.X’s previous conviction of Exposure

    The CJA 2003 contains a dedicated scheme of rules to regulate the admissibility of evidence of the accused’s extraneous misconduct in s101(1):

    In criminal proceedings evidence of the defendant’s bad character is admissible if, but only if –

    1. all parties to the proceedings agree to the evidence being admissible,
    2. the evidence is adduced by the defendant himself or is given in answer to a question asked by him in cross-examination and intended to elicit it,
    3. It is important explanatory evidence,
    4. It is relevant to an important matter in issue between the defendant and the prosecution
    5. It has substantial probative value in relation to an important matter in issue between the defendant and a co-defendant,
    6. It is evidence to correct a false impression given by the defendant, of
    7. The defendant has made an attack on another person’s character

    Therefore this evidence can be admitted by agreement by the parties however this is unlikely. Therefore it is likely that the prosecution will attempt to admit the evidence under sections c and d and this are provisions, which are concerned with similar fact evidence. One significant dimension of the “similar facts” cases concerned the dangers posed by deliberate collusion between witnesses or innocent cross-contamination of their evidence.

    In determining the admissibility of evidence of the accused’s misconduct in the first instance, however, section 109 obliges the court to treat the evidence as true, unless “it appears, on the basis of any material before the court (including any evidence it decides to hear on the matter), that no court or jury could reasonably find it to be true[9].

    Section 107 where evidence of the accused’s bad character has been admitted into the trial without the accused’s agreement, under section 101(1) paragraphs (c)-(g), and the court is satisfied at any time after the close of the prosecution’s case that (i) that evidence is contaminated such that (ii) a conviction would be unsafe, “the court must either direct the jury to acquit the defendant of this offence or, if it considers that there ought to be a retrial, discharge the jury”. Either way, proceedings will not be allowed to continue if it emerges during the course of the trial that material evidence of bad character has been contaminated.

    A previous conviction can be admitted as evidence of propensity if it falls into either: (i) one of the categories of offences; or (ii) the statement of the offence in a written charge or indictment would be the same. Thus, a person who has been convicted of actual bodily harm and is now charged with actual bodily harm will fall into the second category (same description)-but a person who has been convicted of theft and is now charged with burglary would not. However, the Home Office will introduce two sets of categories of offences-the first broadly comprising all Theft Act offences, the second comprising sexual offences involving sexual contact with children.

    Therefore given the similarities between the previous incident and the current one it is likely that this information will be allowed to be admitted into the current proceedings. The reason for this is that the evidence can either be considered to be important explanatory evidence or alternatively that it is relevant to an important matter in issue between the defendant and the prosecution

    7.Directing the Jury

    Because of the statutory grounding of the criminal evidence rules the rules on directing the jury, in relation to similar fact evidence and evidence of bad character have altered somewhat. The provisions that we are concerned with here are contained within Section 107 where evidence of the accused’s bad character has been admitted into the trial without the accused’s agreement, under section 101(1) paragraphs (c)-(g), and the court is satisfied at any time after the close of the prosecution’s case that (i) that evidence is contaminated such that (ii) a conviction would be unsafe, “the court must either direct the jury to acquit the defendant of this offence or, if it considers that there ought to be a retrial, discharge the jury”. Either way, proceedings will not be allowed to continue if it emerges during the course of the trial that material evidence of bad character has been contaminated.

    Finally, there is a power for the court to discharge the jury and either direct an acquittal or order a retrial if a judge, having admitted evidence of bad character, later decides that such evidence was “contaminated”. Contamination is defined in terms of evidence that is false or misleading in any respect, as a result of the witness who gave the evidence either having agreed to give false evidence, or being affected by hearing other evidence in the case. It seems these provisions are aimed particularly at allegations of multiple sexual abuse where other allegations are, on occasion, felt to be the consequence of collaboration by different witnesses. In such cases it would be open to the judge to cure the problem by direction to the jury, but where it is felt that direction is inadequate and any subsequent conviction would be unsafe, the judge is empowered to discharge the jury.

    In conclusion therefore if the judge is satisfied with the evidence and there is no evidence of contamination or collusion then this evidence of the defendant’s previous bad character will be admitted.

    Bibliography

    Legislation

    Criminal Justice Act 2003

    Books

    Dennis I, (2002) “The Law of Evidence”, Sweet and Maxwell

    Huxley P & O’Connell M, (2004) “Statutes on Evidence”, Oxford University Press

    McEwan J, (1998) “Evidence and the Adversarial Process, Hart Publishing

    Tapper C, (2003) “Cross and Tapper on Evidence, Oxford University Press

    Zuckermann A & Roberts P, (2004) “Criminal Evidence, Oxford University Press

    Footnotes

    [1] S100 (1) (C)

    [2] DPP v Boardman 1975] AC 421 HL

    [3] DPP v P [1991] 2 AC 447 at 460

    [4] S100 (1) (C)

    [5] S100 (1) (C)

    [6] S100(2)

    [7] S100(4)

    [8] S 109 (2)

    [9] S 109 (2)

    " 120,, 121,"

    Export performance of ready made garments sector of Bangladesh

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    view with charts and images

    Export performance of ready made garments sector of Bangladesh

    Executive summary

    In the newly created opportunity for doing business in trade, industries and services the private sector was attracted more to export sector. A dynamic and vibrant private sector is crucial to rapid and sustained economic growth as well as the development of export sectors in the era of globalization.

    Garments Industry is directly related with Textile, Spinning, Dyeing, Printing and knitting sectors. In Bangladesh there are 3800 Garments factory and 1920 buying houses and more or less near 2000000 (Twenty Lacs) people related with this sector. Bangladesh in not highly developed in garments sector for lacking of appropriate raw materials and modern technology. Now – a – days Bangladesh ‘ can improve this sector gradually. A several number of modern garments industry introduces modern technology with computerized quality control systems which turn this sector in golden future. When the garments business introduce in Bangladesh it was primitive step for industrial sector in there. It was a challenged because in that period a few entrepreneur who had ability but couldn’t brave to take risk. So it was so difficult. Several garments are start their activities by some manual machineries and use of raw hand manpower but now a days it have a huge number of automatic machine and they have the ability to produce a huge number of readymade garments with high quality. In Internship report crack work in several steps.

    Now – a – days the scenarios are gradually changed. The foreign human rights organization influences the garments owner and BGMEA to rescue the use of child labor and influence to provide the basic salary up to the international level. That’s why foreign buyer are now interested to enter our market.

    In present there are 31% knit export is increased and beside this 13% woven garments export is increased. Now, Our Government is very much alert about the fact and offer various incentive program to the garments manufacturer. The Government also makes anti-rules for using child labor and takes various actions to reduce to the unethical practices in this sector.

    Chapter One

    1. Origin of the Report

    The report title “Export performance of readymade garments sector of Bangladesh” has been prepared as a practical fulfillment of MBA Degree in Daffodil International University. Student are required to undertake and internship program. For this purpose each of there is attached with or organization. During the internship a student has to prepare a report on the organization where he is assigned. Has also to undertake and were of investigation o the organization for detailed study.

    The basic purpose of this attachment is to expose the student to the real business world. This exposure acquaints his with the practices of modern business world. This exposure is very helpful is seeing for oneself how things move and to find the gap as well as the similarities between theoretical and practical knowledge.

    2. Aim and objectives of the study

    The main objectives of this internship report is to provide on “Export performance of readymade garments sector of Bangladesh”

    · To know the export performance of Bangladesh garments in international market;

    · To identify the difficulties and barriers faced in the international market;

    · To identify possible threats to the Bangladesh garments in the international market in near future;

    · To identify the opportunities of the Bangladeshi garments that may be realized in the international market.

    · To recommend the measurers needed to be taken for increasing the export volume.

    · To know the current RMG export status of Bangladesh.

    · To full fill the course requirement

    3. Methodology

    · Bookles and Brchures of BATEXPO’ 2005 held on 29-01- October 2005

    · Expolitz.com Garments-Bangladesh (Date as of September 1988)

    · www.bgmea.com

    · bangladeshgarments.info

    · News letter o BGMEA issue March 2005

    · www.google.com

    · Bangladesh country paper on Ready Made Garments Industry of Bangladesh Presented by: Md. Hossain Ali, Economic Consultant the Dhaka Chamber of Commerce and Industry.

    · BBC NEWS World south Asia Bangladesh garments aim to compete.htm

    · BGMEA (1996), Booklets and Brochures of BATEXPO’ 96 held on 3-5 October, 1996.

    · Siddiqi, H.G.A. (1995), Emerging Competitors and in Global Apparel Markets: Strengths, Weakness, Opp0ortunity and Threat Analysis, Keynote paper presented at the BATEXPO’ 95, October 4-5, 1995.

    · International Trade forum-The quarterly magazine of the International Trade Centre Textiles and Garments.htm.

    4. Scope of the study

    The assigned to do Internship program in “DBL Group” this internship program designed by the school of business Daffodil International University together practical knowledge about overall activities of the DBL group at corporate office Dhaka my project was limited in “Exports Performance of Readymade Garments Sector of Bangladesh. How ever studied all the main functional areas of the company they are: Admin department, Marketing Department and other valuable work in garments factories. Also introduce with companies service polices and program. also observed in interaction general manager with other functional department o the company.

    5. Limitations of the study:

    From the beginning to end the study has been conducted with the indentation of making it is a complete and truthful one. However many problems appeared in the way of conducting the study. During the study it was not possible to visit the whole area covered by the company although the financial statements and other information regarding the study have been consider.

    The study considers followings limitations:

    · All the department of corporate office was not physically visited.

    · All the concerns personnel of the company have not been interviewed have been assigned to perform internship program Head Office of “DBL Group” in this office export related work are not practiced. This is why acquiring practical knowledge about export activities was not consummated.

    Chapter Two

    1. History of the Company (DBL Group).

    DBL Group is 100% export oriented knit garments manufacturing composite unit. the group is in business since 1991. All the products undergo a stringent quality inspection procedures at each level of production process. The fabrics are Oeko-Tex certified. the company increase domestic production for local consumption as well as fro export. The company fiscal and monetary benefits to attract the investor for Investment in the industrial sector. particularly benefits to attract much emphasis for setting up 100% exports oriented products. Which will contribute to earning/saving the foreign currency of the country.

    The garments sector occupies major portion in the economy of Bangladesh. DBL Group in advantage position having cheap & sufficient skill alb our & mechanical personnel. The company good and wide markets un the country as well as worldwide.

    2. Product Quality:

    In the export market supply of quality product is considered to be prime determinant for successful marketing of the product. It is generally believed that the buyers do not sacrifice quality for the sake of price. As such, quality of the product must be ensured to compete in the export market. The sponsors of the company to remain always conscious about the quality, design etc. of fabrics. To produce quality fabrics they are required to use proper imported and local raw materials, right –type machinery and to employ experienced and skilled personnel. The quality control section of the project must be equipped with the required and necessary quality control equipment so that at every stage of production quality of the product may be ensured; otherwise, it may difficult for the project to penetrate their product successfully in the international market unless quality is not maintained properly.

    3. The project purposes and designs

    DBL Group setting up a Composite Textile Industries consists of Knitting unit, Fabric Dyeing Finishing unit and Garments unit. The project will produce Knitted Fabric, beached Dyed finished Fabrics and Knitwear apparels like as T-Shirt and polo-Shirt in Garments section.

    The project has most modem and sophisticated machinery in the section of knitting for producing quality fabrics, most modern and sophisticated machinery also included in the dyeing finishing unit to produce quality product. Finally the fabrics will be using in the garments unit to produce T-Shirt, Polo-shirt and high value knit wear.

    4. Product Mix and Production Capacity:

    The annual attainable capacity of the proposed project based on three shift operation for Knitting section & Dyeing and Finishing section and one shift operation for Garments section per day and working for 300 days in a year.

    The annual saleable product of the proposed project based on three-shift operation per day of 8(eight) hours each shift and working for 300 days in a year both for Knitting and Dyeing & Finishing unit and Garments section is 10 hours per day at 100% capacity.

    5. Raw materials

    The project will be a Composite unit consisting Knitting unit, Fabric dyeing & finishing unit and Garments unit. The product of spinning unit i.e. 2411, 26/1 & 30/1 combed or material for knitting unit ,Various kinds of Does and Chemicals like as Reactive Dyes, Salt, Caustic Soda, Soda ash, Wax, Hydrogen Per-Oxide, Detergent, Softener agent etc will be the basic raw material for its fabric dyeing and Finishing unit, which will be imported. The Dyed and Bleached fabrics are the basic raw materials of its Garments unit, which will be received from its dyeing and finishing unit.

    6. Conclusion & Recommendation:

    From the detail analysis it seems that the DBL Group technically feasible, economically & commercially rewarding and financially viable. After implementation of the project will generate direct employment of .25& persons. AI the above measures of investment feasibility of the project indicate that it will be able to generate sufficient revenue from its operation to pay back debt obligation and annual operational expenses. The project is financially desirable & suitable for Bank Financing.

    7. Identifying about some Instrument and some information be as follows

     

    8. Dyeing & Finishing

    9. Management & Organization:

    The overall management of the company will be vested with the Board 4f Directors. The Board of Directors will be formulated company’s policies & guide lines for its day to day business operations. The Managing Director will be the executive head who will look after the business affairs and other logistic supports of the economy. However Managing Director will be assisted by the managerial and technical personnel who will be the directors of the company.

    ORGANIZATION CHART:

    Chapter Three

    1. Introduction

    The hundred percent export-oriented RMG industries have experienced phenomenal growth during the last 15 years. Within a very short period of time, it has attained great importance in terms of its contribution to GDP, foreign exchange earnings and employment and also as a vehicle of social changes. The export earning data of Bangladesh shows that in 1984-85, ready-made garment sector earned 12.39 %( $116 million) of the total export. This was raised to 36.46 %( $471 million) in 1989-90. This share rapidly went up to 53.36 %( $1064 million) in 1991-92. Surprisingly, the share showed no increase for the last three years. Bangladesh garments products are facing various barriers and difficulties in the international market. Garments’ contribution to the total export earning remained constant at around 52% for the years (52.84%) in 1994-95 and 52.63% in 1995-96. For the year 2004-05 the total amount of RMG export was ($5689.09 million). This is the current situation of RMG export from Bangladesh.

    2. Statement of Research Problem:

    The first ready-made garment factories in Bangladesh aimed at the export market were opened in the late 1970s by investors from other Asian countries whose exports had been restrained by quotas imposed by importing nations. By the mid-1980s, the ready-made garment industry had become a strong export earner. Garment exports brought receipts of only US$3 million in FY 1981, but by 1984 exports had risen to US$32 million, and the following year revenue soared to US$116 million. For FY 1985 and FY 1986, ready-made garments were the second biggest foreign exchange earner for Bangladesh after jute.

    The surge in Bangladeshi exports eventually caused a reaction among some industrial nations. Canada, the European Economic Community, and the United States expressed concern that inexpensive Bangladeshi garments were flooding their markets. In 1985, after a series of notices as called for by multilateral agreements, the United States–which was the destination of about 25 percent of Bangladesh’s garment exports–began imposing quotas on Bangladeshi garments, one category at a time.

    Bangladeshi manufacturers, working with the government, organized with remarkable speed and efficiency to adapt to changing conditions. They policed themselves to stay within quotas, allocating production quotas according to equitable criteria, and began diversifying their production into categories where there were not yet quotas: for example, cotton trousers, knitwear, dresses, and gloves. After a period of adjustment, during which some of the least well-established firms closed and workers were laid off, the industry began stabilizing, and growth continued at a more moderate pace. Exports in FY 1986 rose another 14 percent, to US$131 million, and prospects were good for continued growth at about that rate.

    The ready-made garment industry in Bangladesh is not the outgrowth of traditional economic activities but emerged from economic opportunities perceived by the private sector in the late 1970s. Frustrated by quotas imposed by importing nations, such as the United States, entrepreneurs and managers from other Asian countries set up factories in Bangladesh, benefiting from even lower labor costs than in their home countries, which offset the additional costs of importing all materials to Bangladesh. Bangladesh-origin products met quality standards of customers in North America and Western Europe, and prices were satisfactory. Business

    flourished right from the start; many owners made back their entire capital investment within a year or two and thereafter continued to realize great profits. Some 85 percent of Bangladeshi production was sold to North American customers, and virtually overnight Bangladesh became become the sixth largest supplier to the North American market.

    After foreign businesses began building a ready-made garment industry, Bangladeshi capitalists appeared, and a veritable rush of them began to organize companies in Dhaka, Chittagong, and smaller towns, where basic garments–men’s and boys’ cotton shirts, women’s and girls’ blouses, shorts, and baby clothes–were cut and assembled, packed, and shipped to customers overseas (mostly in the United States). With virtually no government regulation, the number of firms proliferated; no definitive count was available, but there were probably more than 400 firms by 1985, when the boom was peaking.

    After just a few years, the ready-made garment industry employed more than 20,00000 people. According to some estimates, about 80 percent were women, never previously in the industrial work force. Many of them were woefully underpaid and worked under harsh conditions. The net benefit to the Bangladeshi economy was only a fraction of export receipts, since virtually all materials used in garment manufacture were imported; practically all the value added in Bangladesh was from labor.

    Country’s RMG producers have been steadily moving towards high value sophisticated items like high quality suits, jackets, branded jeans items, embroidered ladies’ wear etc. They are now producing a wide range of garments items and have expanded their market worldwide. Increasing at the rate of 27% per year over the . last several years, utilizing quota and diversifying their products into non-quota items, the country presently holds 6th largest apparel exporter status in the USA while 51h largest in the European Union (EU).

    Japan has been a very quality conscious market in the world. Bangladesh very recently has proved itself to be prospective in RMG export to Japan also. In 199495, export of RMG to Japan from Bangladesh jumped up to US$ 5.61 million or by 168% of the previous years. It shows that the apparel producers are gradually catching up with quality requirement of the buyers in the international market.

    WE followed by EU led the major share of the country’s RMG export market from the very beginning. But during 1995, EU overtook the US. Among countries in EU, Germany has been topping the list over last several years followed by UK, France, Italy and The Netherlands. In 1995, Germany imported apparels worth US$ 317.86 million against US$ 245.39 million in 1994. Only Shirts and T-shirts that Germany imported in 1995 were worth US$ 202.36 million. As single country, however, US have been the highest apparel importing country for Bangladesh.

    3. Ready Made Garments Export Condition in Brief:

    The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is the only recognized trade body that represents the export oriented garment manufacturers and exporters of the country. Struck by the 70s’ political turmoil in Sri Lanka and price hike in other Asian countries, garment buyers in the international markets explored the potential of the newly born Bangladesh. Fortunately, with the timely policy support from the government, entrepreneur’s talent and efforts as well as the labor of the work force, the ready-made garment (RMG) industry could impressively succeed and the buyers got confidence in it. Now its development rate is, on an average, 20% per annum. With a huge supply of cost-effective labor force, country’s economic factors are in favor of development in this relatively low capital and high labor intensive industry. Starting in late 70s as a small nontraditional sector of export. Ready-made Garment (RMG) emerged as a promising export earning sector of the country by the year 1983. Bangladesh at that time lacked a pectoral trade body, non-government in nature, free from traditional bureaucracy, to help the sector to boost up the country’s foreign exchange earnings. Entrepreneurs and the government in the post independence years felt and emphasized the urgent need to develop non-traditional items of export for helping the struggling economy. As a result, 1977 marked the birth of Bangladesh Garment Manufacturers and Exporters’ Association (BGMEA). Since its humble inception with only nineteen (19) garment manufacturers and exporters, BGMEA has grown into a strong and dynamic body. Today it proudly declares registered membership of more than 2700 garment manufacturers and exporters. Of the total 2700 units, about 1932 garment factories. are located in Dhaka while about 155 and 415 factories are located in Naryanganj and Chittagong respectively. Factories are located in Dhaka while about 155 and 415 factories are located in Naryanganj and Chittagong respectively. These 2700 garment factories having about 1.5 million workforces is earning 73% of the country’s total foreign currency. About 15 million people are directly dependent on this sector. The growth of Freight Transport, Bank, Insurance, hotel etc. in the country are the gift of the garment industry. In a nutshell, the garment industry has become the pivot of the country’s economy. The fundamental objective of BGMEA, however, is to establish a healthy business environment for a close and mutually beneficial relationship between the manufacturers, exporters and importers in the process ensuring a steady growth in the foreign exchange earnings of the country. To this end, BGMEA has been playing a very strong role to lead the industry in concurrence with the government. The following are the regular activities of BGMEA for its members, owners, apparel buyers and other partners.

    4. Bangladesh: Special Feature

    The competitive strength of a firm or a country in the market depends on its specific comparative advantage(s) which its competitors do not have. A particular uniqueness of a supplier shapes up its strategic advantage profile. In case of Bangladesh, this uniqueness is the unlimited availability of unusually cheap but usable labour. It is the abundant supply of the comparatively cheap labor that stands out as the significant strength. The RMG industry by its nature, is a low technology but labour intensive industry. The workers can be employed at very low wages, not only in comparison with other competitor countries, but also in comparison with other domestic industries in Bangladesh. In domestic market as well, the wages of the workers of the RMG industry happen to be the lowest.

    The External Threats

    Bangladesh has successfully established a remarkable presence in the world markets, particularly in the US and EU markets. If one analyses its external threats and opportunity profile, one finds that its powerful competitors will try to influence the trading environment in such a way as will create hurdles for Bangladesh to retain or improve its competitive edge: This hurdle can take numerous forms. Broadly, these are discussed in two categories: (1) Phasing out of MFA and (2) Other non-tariff barriers.

    (1) Phasing Out of MFA

    It seems that the phenomenal growth of RMG exports from Bangladesh has become a threat to its powerful competitors. Naturally, they (the competitors) are preparing to snatch away the markets from Bangladesh with aggressive and “innovative” business strategies. They will certainly take advantages of the new provisions included in the final Acts of Uruguay Round. One such provision is the phasing out of the MFA.

    Before we can answer the question whether the phasing out of MFA will be a threat to Bangladesh, we need to understand the origin and meaning of MFA (Multifibre Agreement). The GATT did not originally include textile and apparel industries in its principles of MFN (Most Favoured Nation). The Uruguay Round (UR) decided to integrate textile and RMG industries into GATT system. As is well known, GATT/WTO prohibits not only unjustified tariff barriers but all forms of non-tariff barriers including imposition of “quota”. In sixties, while GATT principles prohibited discrimination between the trading partners, it allowed certain exceptions to GATT principles on the ground of “fairness”. Such an exception is WA. To achieve this goal, a special provision known as MFA was instituted. Under the MFA provisions, GATT allowed the USA and other importers of RMG to impose quota restrictions. The MFA has been in place since 1974. Later on when trade liberalization policy started riding high, the arguments for phasing out the MFA were put foreword by those countries which were hurt by it.

    (2) Other Non-Tariff Barriers

    The final Acts of the Uruguay round (UR) negotiations expanded, integrated and strengthened the GATT principles of reducing / eliminating all forms of trade barriers with a view to increase world trade. It is easier to identify and remove trade restrictive tariff barriers because they take so many and such subtle forms that . multilateral negotiators face more disagreement than agreement on their definitions. For example, customs evaluation procedures suitable in a particular country may be interpreted as deliberately created non-tariff barriers by its trading partners. Similarly, there is a scope for “misinterpretations” of subsidies given to exporters by the respective government. The child labor, environmental and human right issues are also susceptible to similar “misinterpretation.

    Quota System:

    For decades the world’s garment trade has been governed by a system of quotas. It limited the amount efficient countries like China could export to the big markets of the United States and Europe. The original intention was to protect the garment industries in the West. But the effect was to guarantee less developed countries like Bangladesh a slice of the trade. Quotas were abolished from 1 January 2005. Retailers are now free to buy from whatever country can make garments for the lowest price. It could mean cheaper clothes for consumers but the pain will be felt in slums in the developing world.

    Competitor

    Competition has become intense in the garment industry at present. Garment industry is emerging rapidly in Taiwan, Hong Kong, Singapore and Korea in Asia. Thailand, Malaysia, Indonesia, Philippines and Sri Lanka have found the garment industry more attractive to develop their economy from 70’s decade. Vietnam has become a potential entrant in garment industry throughout the world.

    Threat from Various Regional Organizations (Such as NAFTA, EEC, EFTA, etc.) The trend of the modern world is regionalism to strengthen the economy of the member countries through co-operation. North American Free Trade Association has been signed recently and the main initiator of NAFTA is the USA, who is the main buyer of garment from Bangladesh. According to the treaty of NAFTA, USA will invest its domestic resources to develop their economy by using 60% of their own raw materials through utilizing the low cost labor of Mexico. So, it is a potential threat to the garment industry of Bangladesh. On the other hand, EC countries have already declared a single currency for European Common Market called ECU (European Currency Unit) to protect the interest of the member countries through co­operation. This sort of protectionism is great threat to the garment industry of Bangladesh, because Germany, Britain, Denmark, Norway, Belgium, Italy, etc. are buyers of the garment of Bangladesh.

    Scarcity of Raw Materials:

    There is no alternative of ample supply of raw materials in order to become self­sufficient in any industry. The raw materials of the garment industry of Bangladesh is foreign dependent. Bangladesh has to import raw materials of garments from abroad in order to process it in Bangladesh. About 70% of garment export income has to be spent for the raw materials. Moreover, the export and import policy of Bangladesh is very weak. So, the scarcity of raw materials for the garment industry’ in Bangladesh is a great threat.

    Political Instability:

    Bangladesh is not a stable country politically. Political instability is a great threat for any industry of our country. Frequent strikes and hartals are great obstacles for the growth of any industry. The production cost increases and productivity decreases because of frequent hartals and strikes. Garment producers cannot keep their contract with buyers because of hartals and strikes. Hartals and strikes have become a common phenomenon of Bangladesh.

    5. Bangladesh economy to grow at 6 percent despite key challenges: IMF

    Bangladesh’s economy is expected to grow six percent next fiscal year despite the abolition of quotas for textile exports that was predicted to cause massive job losses. The economy grew 5.5 percent in the fiscal year ended June 30. The IMF forecast is in line with a finance ministry budget estimate in June that said the economy was recovering from devastating floods last summer and had coped well in textile exports deposit the loss of quotas that opened up competition with larger rivals Such as China and India.

    The international textile quota system, known as the Multifibre Arrangement, was abolished at the end of December 2004 prompting predictions that as many as one million jobs would be lost in Bangladesh.

    In the year to June 2004, Bangladesh exported goods worth 7.56 billion dollars with textiles accounting for 75 percent. “Looking forward, (the IMF) underscored that Bangladesh faces the key challenges of accelerating growth and maintaining macroeconomic stability while overcoming the potentially significant impact of the MFA phase-out” the IMF said.

    6. The Conference of LDCs

    With the phasing out of Multi-Fibre Agreement (MFA), the readymade garment industries of the countries, which have weak textile base, are feared to be in the brink of an uneven challenge. There have been widespread concerns by the exporters and experts about the possible fate of the countries garment exports, which, the experts think can only get special support if more preferential access to the US market, the biggest destination of local RMG products, could be achieved.

    With that aim in view, the BGMEA took the pioneering role in placing a trade bill in the US congress, which, if passed into law, will benefit 14 LDCs including

    Bangladesh. To strengthen the efforts, the association has taken a landmark decision to hold a conference of the stakeholder LDCs in Dhaka in June to garner their support in favor of the bill.

    Meanwhile, tremendous response has been received from the invitees. It is indeed a vivid demonstration of the wisdom of the current BGMEA leadership, which is expected to be culminated into having a joint declaration participant at the end of the conference.

    7. The products of LDCs: low-price garments in a higher-quality market

    In clothing as in cotton fabrics, the LDCs tend to focus on exporting standard products such as T-shirts, men’s shirts, and woven and printed fabrics, for which price is the main determinant of success and in-depth knowledge of fashion and design trends is not essential. However, in recent years a change has been taking place in the developed markets, away from cheap imports towards better-finished, higher-quality casual fashion and more individual clothing, the opposite of LDC garment exports.

    Nevertheless, Bangladesh has a number of ‘champion’ export products (i.e., achieving high growth in a dynamically expanding market), particularly women’s knitwear. Haiti, another example of a textile-exporting LDC, has been doingvery well with exports of cotton T-shirts and women’s clothing. Its garment exporters are increasingly exporting sophisticated items like high-quality suits, jackets and branded items. This has helped them to penetrate Japan’s extremely quality conscious market. Bangladesh has shown that it is possible to move successfully up the value chain by exporting finished products. In 1999, it was by far the largest single LDC exporter of finished, woven fabrics with 85% cotton or more, weighing up to 200 g/m2.

    Govt trying to overcome problems in RMG sector

    Speakers at a seminar said the government is making all out efforts to overcome the problems of garments sector and trying for duty free and quota free access of Bangladeshi goods to the US and European markets.

    The sector is the main foreign currency earner, which earned 70 per cent of the country’s total exports last year. EPB Vice President said that Bangladesh has got duty free access to Australia from 1st July. It is the 4th country to give duty free opportunity for Bangladesh products. Earlier Canada, Japan and Norway have given duty and quota free access of Bangladeshi products.

    8. Bangladesh made faster economic growth

    The World Bank on Sunday said Bangladesh made faster economic growth in last two financial years and predicted that the projected 5.5 per cent growth of this year’s gross domestic product (GDP) was `very likely’ to be achieved owing to good rice harvests, reports BSS. The export performance also marked a steady progress with 16.2 percent increase in first seven months of the current fiscal. The export of ready made garments (RMG)- both woven and knitwear-has picked up due to increase in global demand and the consolidation process in the industry, which earns over 70 per cent export earnings.

    9. The Fastest Growing Export Sector of The Country

    Starting in late seventies, the apparel industry of Bangladesh now accounts for over 64% of the country’s total export earning. Country’s apparel export rose to US$2628 million in 1996 from a mere US$6 million in 1981. To about 30 countries around the world, Bangladesh presently exports ready-made garments, with over 45% to USA, 50% to the countries in EU and 3% to Canda and rest to the other countries of the world. Country’s apparel export has been growing on an average at the rate of 25% for last several years. The country, last year ranked 6th larget apparel exporter to the USA the EU.

    Bangladesh Garment Export

    There are about 2500 export oriented ready-made garment industry in Bangladesh those are clustered over mainly Dhaka and Chittagong. Such distribution offers buyers advantage to choose the right manufacturers and exporters, throuhout the year, with minimum effort.

    Garment Factory in Bangladesh

    Those are the findings that find after analyzing the whole situation.

    10. Statement of the current “Export data of Readymade Garments of Bangladesh”.

    Chapter Four

    Learning part

    1. Yarn Manufacturing Process

    Textile mills purchase cotton and receive the bales from gin yards or cotton warehouses. These mills start with raw bales of cotton and process them in stage until they produce yarn (fibers twisted into threads used in weaving or knitting) or cloth (fabric or material constructed from weaving or knitting).

    The first stage is in the opening room. Here, bales are opened and laid in a line on the floor, side by side, near a cotton opening machine. This machine travels along the line of opened bales, puling fibers to be sent to a mixing machine and them on to the carding system.

    Carding is the process of pulling the fibers into parallel alignment to form a thin web. High speed electronic equipment with wire toothed rollers performs this task. The web of fibers is eventually condensed into a continues, untwisted, rope-like strand called a silver. These silvers then continue to a combing machine. Here, the fibers shorter than half-inch and impurities are removed from the cotton.

    This process makes the silver smoother so more uniform yarns can be produced. The drawing or pulling of this sliver is next. Cotton trivia khaki is derived from a Hindu word that means “dust color”. Originally, khaki referred to a dull yellow-brown cotton or wool uniform fabric used for its camouflage effect.

    The sliver is drawn out to a thinner strand and given a slight twist to improve strength, then wound on bobbins (spools wound with the thread like product for storage). Having completed this process. It is now called roving. The roving bobbins are now ready for the spinning process.

    Spinning is the last process in yarn manufacturing. Today’s mills draw and twist the roving into yearn and place it on bobbins. They do this quite efficiently. A large, modern mill can produce enough yarn of thread in 30 days to wrap around the earth 23000 times or go to and return from the moon 235 times. With the use of automatic winding, the yarn bobbins are transferred to large bobbins called cheese cones can be stored until they are needed in the weaving process.

    The weaving process uses yarn that, depending on how it lies in the woven goods. These yarn may now be either a warp or a weft yam. Warp refers to yarns that run lengthwise in woven goods. In preparation of warp yarns for weaving, hundreds of yarn strands are wound from cheese cones onto a large warp beam. Yearns on this beam are then coated with a sizing compound (a starch mixture) to add strength for weaving. The sized yarns are then wound onto a loom beam that will be placed on the loom (a machine used to interlace yarns to from cloth). Weft is the yarn that runs crosswise in woven goods and may be referred to as filling yarn. Sizing is not placed on weft because flexibility is needed in the weaving process. In today’s most modern mills, the weft is fed into the loom from cheese cones with air-jets at such a high speed that its movement cannot be seen.

    The woven cloth from the loom, called greign or grey , is whitish but has a natural yellow tint. This cloth is further treated by various means to improve its appearance and feel, and then either bleached, dyed or printed to produce the fabrics used in various products seen on store shelves.

    There are three basic weaves that are used. The plain weave, the most common, is produced by passing the weft yarn over and under each warp yarn, alternating each row. This is used for cotton print cloth, sheeting, muslin and more. The twill weave is produced by interlacing yarns in an angle to form straight, diagonal ridges across the fabric. The satin weave, has a surface that consists mostly or warp yarn which is passed over and under all but one weft yarn that intersects in a regular or irregular formatting, not a straight line.

    This weave produces a fabric with a smooth surface. It is used for upholstery, home decorating and fashionable apparel.

    Knitting is another method of turning yarn into fabric. Knit fabric is constructed of yarns made into loops (stitches) which are linked together by the use of needles. There are two basic types of knitted fabric. The weft knit fabrics are made with yarns forming loops the width of the fabric on a circular machine, producing jersey knit used in T-shirts and underwear. The warp knit fabrics are produced by feeding yarns to form loops in a lengthwise direction and are used for tricot fabrics and cotton lace. Knitted fabrics are softer and more flexible than woven fabrics. Making them ideal for sweaters, active sportswear and hosiery.

    2. Fabrics Manufacturers

    Knitted Fabric

    Knitting is one of the ways of turning thread or yarn into clothes. Knitted fabric completely consists of horizontal parallel courses (crosswise) or yarn. These courses are joined to each other by interlocking loops where a short loop of one course of the yarn is wrapped over the bight of another course.

    Knitted fabric is obtained either by hand knitting process or then by machine. In hand knitting process, a base series of twisted loops of yarn are made on a knitting needle before starting the process. A second needle is then used to reach through each loop in succession to snag a bight of yarn and pull a length back through the loop. Knitting by machine use a different mechanical system producing nearly identical results.

    Knitted fabric composites show higher impact tolerance compared to the traditional composites or even to woven fabric composites. It is believed that the hand knitting originated among the nomads of the Arabian Peninsula about 1000 BC.

    Type’s o knitted fabrics:

    Weft knitted fabric-It is either made by hand or machine by looping together the lengths of the yearn. This supports the fabric to become stretchy and comfortable. Weft-knitted fabrics are used in socks. T-shirts an jumpers.

    Warp knitted fabric- It is made by machine only. The loops, in this kind of fabrics interlock along the length of the fabric. It is only slightly stretchy and it do not ladders. These are used as swimwear, underwear etc.

    Advantages of Knit Wears:

    Because of casual and soft in nature as well as inherent good properties such as hygienic properties, fashionable design and color, knit wears have become the popular wear all over the world. Knit wears are informal but fashionable usually with short sleeves. Knit wears are commonly made of knitted fabrics of single jersey, Ribs, Interlock, etc due to the specifications in raw materials by using lower count of yam, construction of fabrics and stitching. Knit wears possess certain properties which are essential for good apparels; some special advantages of knitted-wears are given below:

    1) Knit garment products are softer and more comfortable;

    2) Knit wears/garments are usually used as underwear

    garments i.e. used for soft skin abrasion.

    3) Usually lower count of yam is used for knitting fabrics.

    So, knitwear has more socking capability.

    4) More profitable production can be made due to lower

    project cost and cheaper management cost.

    5) Knitting wears can be handled more easily while using

    and washing. ,

    6) Its market price is comparatively cheaper.

    Manufacturing process:

    For setting up Composite Industries consists of Knitting unit, Fabric Dyeing Finishing unit and Garments unit. The product of one unit will be the raw material of other unit:

    The sequential process from yam manufacture to Garments product may be described as follows!

    For Knitting Unit:

    Knitting machine is various types where various design produces. Fabrics will also be produce in the circular -Knitting machines by altering some attachments mainly changing of camas. Rib Knitting and Interlock (double Knitting) fabrics will be produces in the Rib circular and Interlock Knitting machine.

    Flat Knitting fabrics for collar and cuff will be ‘produced in the flat Knitting machine. After the Knit fabrics is produced, it is inspected in running condition while passing over a table of the inspection machine. The technology involved in Knitted fabrics is fairly simple which may be seen in the following flow process chart:

    Process Flow Chart

    Yarn storing in cone form

    Rib Knitting

    Circular Knitting

    Face side inside turning of the knitted fabrics

    3. Fabric Dyeing and Finishing Unit:

    The technology involved in dyeing finishing of Knitted fabrics may be seen as below;

    Face side inside

    Turing of the Knitted

    fabrics

    Scouring /Bleaching

    Washing

    Bleached fabric(white)

    Dying Was king

    Ballooning & Squeezing/Hydro

    Extractor

    Drying and heat setting stuttering

    Calendaring/Softening

    Compacting & Shrinkage Controlling

    Inspection

    Folding & baling

    Garments Making;

    The operation process with two outputs i.e. T-shirts and Polo shirts are pre-sewing and finishing. A typical process flow-chart for Garments making is shown below: Process Flow Chart for Garments Making

    Fabric

    Fabric lying on Layers & clipping

    Cutting of individual parts as per approved pattern

    Sorting & Bundling sizeable for mass sewing

    Sewing of collar, cuff Sleeve to shirt

    Sewing of size label, washing instruction, Brand label

    Button holding & stitching (in case of Polo-shirt)

    Loose thread cutting/inspection Ironing (Finishing)

    Folding

    Packing in carton

    Ready for Export

     

    4. Production flowchart

    Sampling

    Price Officer to buyer

    Order confirmation

    Procurement of raw materials

    Stores

    Knitting Machines

    Grey Fabric quality control

    Grey Fabric quality control

    Grey Fabric Batch room

    Dyeing floor

    Dyeing winch

    Water squeezer

    Dryer

    Compactor

    Finish Fabric quality control

    Fabric stores

    Cutting floor

    Cutting quality control

    Sewing input

    Sewing output QC Table

    Ironing

    Folding/ Hangar

    Poly

    Assortment

    Carton

    Internal Inspection

    Final Inspection by buyer

    Shipment

    5. Garments Quality control flow chart

    Received finish fabric

    Checking finish fabric

    Marker

    Laying

    Cutting

    Numbering

    Checking

    Bounding

    Cutting Quality Audit

    Input

    Enpost Measurement checking

    Table inspection

    Alter / Rectification

    Sewing quality audit

    Iron

    Enpost checking for finishing

    Quality audit for workmanship

    Basic Measurement check

    Folding

    Poly/ Hangar

    Metal Detector checking

    Carton

    Carton quality audit

    Internal final inspection

    6. Garments Planning:

    To establish a garments factory the location choice is an important factor for correct manufacturing, worker management and proper transport system.

    The following are some of the factors which will influence the choice of location:­

    · Availability of worker.

    · Availability of housing facility ( In Bangladeshi system it is not provided by any garments authority)

    · Availability of staff amenities.

    · Availability of transport.

    · Availability of materials.

    · Availability of cover-van parking space.

    · Adequacy of circulation.

    · Availability of services.

    · Gas

    · Electricity

    · Water

    · Drainage

    · Disposal of waste

    · Suitability of land and climate.

    · Local building and planning regulation.

    · Safety requirements.

    · Site cost.

    · Political situation.

    · Special grants.

    According to the place and types of manufacturers goods the building shape has been Chosen. Here mentioned both the advantages of single and multi-story building. It depends on the size of the garments factory, which prefers most.

    7. Benefit of team in garments:

    · Increase the group activities in production.

    · Makes a competition among the team worker.

    · Workers get satisfaction to work.

    · Instrumental benefits.

    8. Control

    Control is a regulation of organizational activities so that some targeted elements of performance remains within acceptable limits.

    Purposes of control:

    · Adapting to environmental changes.

    · Limiting the accumulation of errors.

    · Coping with organizational completes.

    · Minimizing cost.

    · Keeping the organizational work on track (according to

    plan)

    In garments sector the control is divided in three sections.

    · Production control.

    · Overall/Operational control.

    · Financial control

    Overall/Operational control:

    · Preliminary control

    · Screening control

    · Post action control

    Preliminary control:

    Preliminary control concentrates on the resources-financial, material, and human and information-that the organization brings in form the environment. Preliminary control attempts to monitor the quality or quantity of these resources before they enter the organization.

    Screening control:

    Screening control focus on meeting standards for products or service quality or quantity during the actual transformation itself. Screening control relies heavily on feedback process.

    Post action control:

    Post action control focus on the outputs of the garments after the transformation process is complete. Coming’s old system of Post action control-final inspection after the product is completed. Although corning abandoned its Post action control system, this still may be an effective method of control, primarily if a product can be manufactured in only one or two steps or if the service is fairly simple and routine. Although Post action control alone. may not be as effective as preliminary or screening control, it can provide management with information for future planning.

    Financial control:

    Financial Control is the control of financial resources as they flow into the garments (i.e., revenues, investments), are held by the garments (i.e., working capital, retained earning), and flow out of the garments (i.e., pay expenses). Business must manage their finances so that revenues are sufficient to cover costs and still return a profit to the firm’s own

    9. Prepare a garments budget:

    Budget is a numerical expression. A good budget can provide a good exported or productive garment. Without budget a garments can’t run correctly. Only by the help of a good budget the goals can come out. Budget helps to take correct decision and divers the organization properly in right way. Budget also, shows the capacity of garments in productive market. Only a suitable and acceptable budget can run the garments correctly. For this reason budget is essential for the garments.

    The processes of preparing budget in garments are as follows:

    · Submission of budget request by the units to division head.

    · Integration of unit budget and consolidated into division budget.

    · Forwarding of division budget to budget committee.

    Chapter Five

    Conclusion & Recommendation

    1. Conclusion and Recommendation

    In order to sustain the smooth growth and development of the garment industry of Bangladesh, Government should play a key role to offer a good export policy. Otherwise the production, employment, earning of foreign currency and economic development of the country will be affected seriously. Some recommendations have been offered to face the problems of the garment industry of Bangladesh.

    Regarding the problem of RMG sector I’ve identified some recommendation for the betterment of this sector. The recommendations are as follows:

    · The Government of Bangladesh should play a key role for the expansion of the market of garment by diversified items for manufacture and export. It is very important fact that there are many items in the RMG product lines which Bangladeshi entrepreneurs have not yet started production. Leather items, life jackets, gloves, bags etc. are among few such items. Among other items are umbrella, nylon school bags and jackets, ice sport kits and wears, staffed toys, high competitive market fashion garments are examples. There are numerous such items not yet touched by our entrepreneurs.

    · All out efforts would be made and steps taken for production and export of high priced readymade garments in the light of the prevailing market demand.

    Immediate steps shall be taken to establish a Fashion Institute pending establishment of the Fashion Institute measures will be taken, under special arrangements, to extend expert services to match the actual demand. Liberal credit may be considered for capacity building and hiring technology for producer of high quality garments.

    · Product-Specific decisions: Readymade Garments

    Provisions have been made for the exporters of readymade garments to retain in their respective foreign currency accounts the portion of their export earnings required for meeting the expenses on importing fabrics and other accessories through back-to-back letter of credit. The exporters that way shall be saved from incurring losses by first converting their export earnings to Taka and then re­converting the same to foreign exchange for payment of import bills on raw materials.

    For making hand-woven sweaters of natural and synthetic wool imported under customs and permission would be accorded to take up such wool outside the bonded area, provided the concerned firm furnishes a bank guarantee for equivalent amount of customs duty leviable on such raw materials.

    · Labor Productivity Improvement.

    However, it is to be noted that the lower material procurement cost may not be enough for Bangladesh to maintain its competitive edge in international markets. Bangladesh must increase productivity, which is lower than many of its competitors. It is true that wages are low in Bangladesh, but it does not necessarily mean that relatively low wages automatically lead to higher productivity. Wages are only one of the determinants of labor productivity. Time required by the

    Workers to perform a task is another important determinant. Available efficiencies indicate that Bangladeshi workers are not as those of Hong Kong, South Korea and Sri Lanka. The workers’ skills and supervisors’ managerial efficiency are higher in those countries than in Bangladesh. In addition, those countries use the latest technology, for example, computerize sewing machines, design facilities, etc. but Bangladesh uses relatively older technology.

    Other Strategic Implications

    · There are potential problems with supplies and financing. A conglomeration or a strategic alliance of domestic firms or with foreign firms or both is the only feasible solution. This tie-up-marketing will ensure long-term business interest to the domestic producers.

    · Most of the exporters do not provide good post sales services or are bent on relational marketing. The exporters and entrepreneurs have to take measures in this context.

    · The exporters are willing to form joint ventures, but they are more keen to get financial benefits than technological benefits. Exporters should be taught or given necessary counseling in taking the advantage of technology transfer. EPB can take further progressive role and arrange training, workshop, interviews and field works in various capacities.

    · Import of samples for each category of garments:

    At present, facility exists for duty free import of 20 pieces of samples for each category of garments subject to a maximum of 100 pieces. Imported samples are, however, subject to mutilation at the customs paid.

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    Export performance of readymade garments sector of Bangladesh

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    Export performance of ready made garments sector of Bangladesh

    Executive summary

    In the newly created opportunity for doing business in trade, industries and services the private sector was attracted more to export sector. A dynamic and vibrant private sector is crucial to rapid and sustained economic growth as well as the development of export sectors in the era of globalization.

    Garments Industry is directly related with Textile, Spinning, Dyeing, Printing and knitting sectors. In Bangladesh there are 3800 Garments factory and 1920 buying houses and more or less near 2000000 (Twenty Lacs) people related with this sector. Bangladesh in not highly developed in garments sector for lacking of appropriate raw materials and modern technology. Now – a – days Bangladesh ‘ can improve this sector gradually. A several number of modern garments industry introduces modern technology with computerized quality control systems which turn this sector in golden future. When the garments business introduce in Bangladesh it was primitive step for industrial sector in there. It was a challenged because in that period a few entrepreneur who had ability but couldn’t brave to take risk. So it was so difficult. Several garments are start their activities by some manual machineries and use of raw hand manpower but now a days it have a huge number of automatic machine and they have the ability to produce a huge number of readymade garments with high quality. In Internship report crack work in several steps.

    Now – a – days the scenarios are gradually changed. The foreign human rights organization influences the garments owner and BGMEA to rescue the use of child labor and influence to provide the basic salary up to the international level. That’s why foreign buyer are now interested to enter our market.

    In present there are 31% knit export is increased and beside this 13% woven garments export is increased. Now, Our Government is very much alert about the fact and offer various incentive program to the garments manufacturer. The Government also makes anti-rules for using child labor and takes various actions to reduce to the unethical practices in this sector.

    Chapter One

    1. Origin of the Report

    The report title “Export performance of readymade garments sector of Bangladesh” has been prepared as a practical fulfillment of MBA Degree in Daffodil International University. Student are required to undertake and internship program. For this purpose each of there is attached with or organization. During the internship a student has to prepare a report on the organization where he is assigned. Has also to undertake and were of investigation o the organization for detailed study.

    The basic purpose of this attachment is to expose the student to the real business world. This exposure acquaints his with the practices of modern business world. This exposure is very helpful is seeing for oneself how things move and to find the gap as well as the similarities between theoretical and practical knowledge.

    2. Aim and objectives of the study

    The main objectives of this internship report is to provide on “Export performance of readymade garments sector of Bangladesh”

    · To know the export performance of Bangladesh garments in international market;

    · To identify the difficulties and barriers faced in the international market;

    · To identify possible threats to the Bangladesh garments in the international market in near future;

    · To identify the opportunities of the Bangladeshi garments that may be realized in the international market.

    · To recommend the measurers needed to be taken for increasing the export volume.

    · To Know the current RMG export status of Bangladesh.

    · To full fill the course requirement

    3. Methodology

    · Bookles and Brchures of BATEXPO’ 2005 held on 29-01- October 2005

    · Expolitz.com Garments-Bangladesh (Date as of September 1988)

    · www.bgmea.com

    · bangladeshgarments.info

    · News letter o BGMEA issue March 2005

    · www.google.com

    · Bangladesh country paper on Ready Made Garments Industry of Bangladesh Presented by: Md. Hossain Ali, Economic Consultant the Dhaka Chamber of Commerce and Industry.

    · BBC NEWS World south Asia Bangladesh garments aim to compete.htm

    · BGMEA (1996), Booklets and Brochures of BATEXPO’ 96 held on 3-5 October, 1996.

    · Siddiqi, H.G.A. (1995), Emerging Competitors and in Global Apparel Markets: Strengths, Weakness, Opp0ortunity and Threat Analysis, Keynote paper presented at the BATEXPO’ 95, October 4-5, 1995.

    · International Trade forum-The quarterly magazine of the International Trade Centre Textiles and Garments.htm.

    4. Scope of the study

    The assigned to do Internship program in “DBL Group” this internship program designed by the school of business Daffodil International University together practical knowledge about overall activities of the DBL group at corporate office Dhaka my project was limited in “Exports Performance of Readymade Garments Sector of Bangladesh. How ever studied all the main functional areas of the company they are: Admin department, Marketing Department and other valuable work in garments factories. Also introduce with companies service polices and program also observed in interaction general manager with other functional department o the company.

    5. Limitations of the study:

    From the beginning to end the study has been conducted with the indentation of making it is a complete and truthful one. However many problems appeared in the way of conducting the study. During the study it was not possible to visit the whole area covered by the company although the financial statements and other information regarding the study have been consider.

    The study considers followings limitations:

    · All the department of corporate office was not physically visited.

    · All the concerns personnel of the company have not been interviewed.

    have been assigned to perform internship program Head Office of “DBL Group” in this office export related work are not practiced. This is why acquiring practical knowledge about export activities was not consummated.

    Chapter Two

    1. History of the Company (DBL Group).

    DBL Group is 100% export oriented knit garments manufacturing composite unit. the group is in business since 1991. All the products undergo a stringent quality inspection procedures at each level of production process. The fabrics are Oeko-Tex certified. the company increase domestic production for local consumption as well as fro export. The company fiscal and monetary benefits to attract the investor for Investment in the industrial sector. particularly benefits to attract much emphasis for setting up 100% exports oriented products. Which will contribute to earning/saving the foreign currency of the country.

    The garments sector occupies major portion in the economy of Bangladesh. DBL Group in advantage position having cheap & sufficient skill alb our & mechanical personnel. The company good and wide markets un the country as well as worldwide.

    2. Product Quality:

    In the export market supply of quality product is considered to be prime determinant for successful marketing of the product. It is generally believed that the buyers do not sacrifice quality for the sake of price. As such, quality of the product must be ensured to compete in the export market. The sponsors of the company to remain always conscious about the quality, design etc. of fabrics. To produce quality fabrics they are required to use proper imported and local raw materials, right –type machinery and to employ experienced and skilled personnel. The quality control section of the project must be equipped with the required and necessary quality control equipment so that at every stage of production quality of the product may be ensured; otherwise, it may difficult for the project to penetrate their product successfully in the international market unless quality is not maintained properly.

    3. The project purposes and designs

    DBL Group setting up a Composite Textile Industries consists of Knitting unit, Fabric Dyeing Finishing unit and Garments unit. The project will produce Knitted Fabric, beached Dyed finished Fabrics and Knitwear apparels like as T-Shirt and polo-Shirt in Garments section.

    The project has most modem and sophisticated machinery in the section of knitting for producing quality fabrics, most modern and sophisticated machinery also included in the dyeing finishing unit to produce quality product. Finally the fabrics will be using in the garments unit to produce T-Shirt, Polo-shirt and high value knit wear.

    4. Product Mix and Production Capacity:

    The annual attainable capacity of the proposed project based on three shift operation for Knitting section & Dyeing and Finishing section and one shift operation for Garments section per day and working for 300 days in a year.

    The annual saleable product of the proposed project based on three-shift operation per day of 8(eight) hours each shift and working for 300 days in a year both for Knitting and Dyeing & Finishing unit and Garments section is 10 hours per day at 100% capacity.

    5. Raw materials

    The project will be a Composite unit consisting Knitting unit, Fabric dyeing & finishing unit and Garments unit. The product of spinning unit i.e. 2411, 26/1 & 30/1 combed or material for knitting unit ,Various kinds of Does and Chemicals like as Reactive Dyes, Salt, Caustic Soda, Soda ash, Wax, Hydrogen Per-Oxide, Detergent, Softener agent etc will be the basic raw material for its fabric dyeing and Finishing unit, which will be imported. The Dyed and Bleached fabrics are the basic raw materials of its Garments unit, which will be received from its dyeing and finishing unit.

    6. Conclusion & Recommendation:

    From the detail analysis it seems that the DBL Group technically feasible, economically & commercially rewarding and financially viable. After implementation of the project will generate direct employment of .25& persons. AI the above measures of investment feasibility of the project indicate that it will be able to generate sufficient revenue from its operation to pay back debt obligation and annual operational expenses. The project is financially desirable & suitable for Bank Financing.

    7. Identifying about some Instrument and some information be as follows

    8. Dyeing & Finishing

    9. Management & Organization:

    The over all management of the company will be vested with the Board 4f Directors. The Board of Directors will be formulated company’s policies & guide lines for its day to day business operations . The Managing Director will be the executive head who will look after the business affairs and other logistic supports of the economy. However Managing Director will be assisted by the managerial and technical personnel who will be the directors of the company.

    ORGANIZATION CHART:

    Chapter Three

    1. Introduction

    The hundred percent export-oriented RMG industries have experienced phenomenal growth during the last 15 years. Within a very short period of time, it has attained great importance in terms of its contribution to GDP, foreign exchange earnings and employment and also as a vehicle of social changes. The export earning data of Bangladesh shows that in 1984-85, ready-made garment sector earned 12.39 %( $116 million) of the total export. This was raised to 36.46 %( $471 million) in 1989-90. This share rapidly went up to 53.36 %( $1064 million) in 1991-92. Surprisingly, the share showed no increase for the last three years. Bangladesh garments products are facing various barriers and difficulties in the international market. Garments’ contribution to the total export earning remained constant at around 52% for the years (52.84%) in 1994-95 and 52.63% in 1995-96. For the year 2004-05 the total amount of RMG export was ($5689.09 million). This is the current situation of RMG export from Bangladesh.

    2. Statement of Research Problem:

    The first ready-made garment factories in Bangladesh aimed at the export market were opened in the late 1970s by investors from other Asian countries whose exports had been restrained by quotas imposed by importing nations. By the mid-1980s, the ready-made garment industry had become a strong export earner. Garment exports brought receipts of only US$3 million in FY 1981, but by 1984 exports had risen to US$32 million, and the following year revenue soared to US$116 million. For FY 1985 and FY 1986, ready-made garments were the second biggest foreign exchange earner for Bangladesh after jute.

    The surge in Bangladeshi exports eventually caused a reaction among some industrial nations. Canada, the European Economic Community, and the United States expressed concern that inexpensive Bangladeshi garments were flooding their markets. In 1985, after a series of notices as called for by multilateral agreements, the United States–which was the destination of about 25 percent of Bangladesh’s garment exports–began imposing quotas on Bangladeshi garments, one category at a time.

    Bangladeshi manufacturers, working with the government, organized with remarkable speed and efficiency to adapt to changing conditions. They policed themselves to stay within quotas, allocating production quotas according to equitable criteria, and began diversifying their production into categories where there were not yet quotas: for example, cotton trousers, knitwear, dresses, and gloves. After a period of adjustment, during which some of the least well-established firms closed and workers were laid off, the industry began stabilizing, and growth continued at a more moderate pace. Exports in FY 1986 rose another 14 percent, to US$131 million, and prospects were good for continued growth at about that rate.

    The ready-made garment industry in Bangladesh is not the outgrowth of traditional economic activities but emerged from economic opportunities perceived by the private sector in the late 1970s. Frustrated by quotas imposed by importing nations, such as the United States, entrepreneurs and managers from other Asian countries set up factories in Bangladesh, benefiting from even lower labor costs than in their home countries, which offset the additional costs of importing all materials to Bangladesh. Bangladesh-origin products met quality standards of customers in North America and Western Europe, and prices were satisfactory. Business flourished right from the start; many owners made back their entire capital investment within a year or two and thereafter continued to realize great profits. Some 85 percent of Bangladeshi production was sold to North American customers, and virtually overnight Bangladesh became become the sixth largest supplier to the North American market.

    After foreign businesses began building a ready-made garment industry, Bangladeshi capitalists appeared, and a veritable rush of them began to organize companies in Dhaka, Chittagong, and smaller towns, where basic garments–men’s and boys’ cotton shirts, women’s and girls’ blouses, shorts, and baby clothes–were cut and assembled, packed, and shipped to customers overseas (mostly in the United States). With virtually no government regulation, the number of firms proliferated; no definitive count was available, but there were probably more than 400 firms by 1985, when the boom was peaking.

    After just a few years, the ready-made garment industry employed more than 20,00000 people. According to some estimates, about 80 percent were women, never previously in the industrial work force. Many of them were woefully underpaid and worked under harsh conditions. The net benefit to the Bangladeshi economy was only a fraction of export receipts, since virtually all materials used in garment manufacture were imported; practically all the value added in Bangladesh was from labor.

    Country’s RMG producers have been steadily moving towards high value sophisticated items like high quality suits, jackets, branded jeans items, embroidered ladies’ wear etc. They are now producing a wide range of garments items and have expanded their market worldwide. Increasing at the rate of 27% per year over the . last several years, utilizing quota and diversifying their products into non-quota items, the country presently holds 6th largest apparel exporter status in the USA while 51h largest in the European Union (EU).

    Japan has been a very quality conscious market in the world. Bangladesh very recently has proved itself to be prospective in RMG export to Japan also. In 199495, export of RMG to Japan from Bangladesh jumped up to US$ 5.61 million or by 168% of the previous years. It shows that the apparel producers are gradually catching up with quality requirement of the buyers in the international market.

    WE followed by EU led the major share of the country’s RMG export market from the very beginning. But during 1995, EU overtook the US. Among countries in EU, Germany has been topping the list over last several years followed by UK, France, Italy and The Netherlands. In 1995, Germany imported apparels worth US$ 317.86 million against US$ 245.39 million in 1994. Only Shirts and T-shirts that Germany imported in 1995 were worth US$ 202.36 million. As single country, however, US have been the highest apparel importing country for Bangladesh.

    3. Ready Made Garments Export Condition in Brief:

    The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is the only recognized trade body that represents the export oriented garment manufacturers and exporters of the country. Struck by the 70s’ political turmoil in Sri Lanka and price hike in other Asian countries, garment buyers in the international markets explored the potential of the newly born Bangladesh. Fortunately, with the timely policy support from the government, entrepreneur’s talent and efforts as well as the labor of the work force, the ready-made garment (RMG) industry could impressively succeed and the buyers got confidence in it. Now its development rate is, on an average, 20% per annum. With a huge supply of cost-effective labor force, country’s economic factors are in favor of development in this relatively low capital and high labor intensive industry. Starting in late 70s as a small nontraditional sector of export. Ready-made Garment (RMG) emerged as a promising export earning sector of the country by the year 1983. Bangladesh at that time lacked a pectoral trade body, non-government in nature, free from traditional bureaucracy, to help the sector to boost up the country’s foreign exchange earnings. Entrepreneurs and the government in the post independence years felt and emphasized the urgent need to develop non-traditional items of export for helping the struggling economy. As a result, 1977 marked the birth of Bangladesh Garment Manufacturers and Exporters’ Association (BGMEA). Since its humble inception with only nineteen (19) garment manufacturers and exporters, BGMEA has grown into a strong and dynamic body. Today it proudly declares registered membership of more than 2700 garment manufacturers and exporters. Of the total 2700 units, about 1932 garment factories. are located in Dhaka while about 155 and 415 factories are located in Naryanganj and Chittagong respectively. Factories are located in Dhaka while about 155 and 415 factories are located in Naryanganj and Chittagong respectively. These 2700 garment factories having about 1.5 million workforces is earning 73% of the country’s total foreign currency. About 15 million people are directly dependent on this sector. The growth of Freight Transport, Bank, Insurance, hotel etc. in the country are the gift of the garment industry. In a nutshell, the garment industry has become the pivot of the country’s economy. The fundamental objective of BGMEA, however, is to establish a healthy business environment for a close and mutually beneficial relationship between the manufacturers, exporters and importers in the process ensuring a steady growth in the foreign exchange earnings of the country. To this end, BGMEA has been playing a very strong role to lead the industry in concurrence with the government. The following are the regular activities of BGMEA for its members, owners, apparel buyers and other partners.

    4. Bangladesh: Special Feature

    The competitive strength of a firm or a country in the market depends on its specific comparative advantage(s) which its competitors do not have. A particular uniqueness of a supplier shapes up its strategic advantage profile. In case of Bangladesh, this uniqueness is the unlimited availability of unusually cheap but usable labour. It is the abundant supply of the comparatively cheap labor that stands out as the significant strength. The RMG industry by its nature, is a low technology but labour intensive industry. The workers can be employed at very low wages, not only in comparison with other competitor countries, but also in comparison with other domestic industries in Bangladesh. In domestic market as well, the wages of the workers of the RMG industry happen to be the lowest.

    The External Threats

    Bangladesh has successfully established a remarkable presence in the world markets, particularly in the US and EU markets. If one analyses its external threats and opportunity profile, one finds that its powerful competitors will try to influence the trading environment in such a way as will create hurdles for Bangladesh to retain or improve its competitive edge: This hurdle can take numerous forms. Broadly, these are discussed in two categories: (1) Phasing out of MFA and (2) Other non-tariff barriers.

    (1) Phasing Out of MFA

    It seems that the phenomenal growth of RMG exports from Bangladesh has become a threat to its powerful competitors. Naturally, they (the competitors) are preparing to snatch away the markets from Bangladesh with aggressive and “innovative” business strategies. They will certainly take advantages of the new provisions included in the final Acts of Uruguay Round. One such provision is the phasing out of the MFA.

    Before we can answer the question whether the phasing out of MFA will be a threat to Bangladesh, we need to understand the origin and meaning of MFA (Multifibre Agreement). The GATT did not originally include textile and apparel industries in its principles of MFN (Most Favoured Nation). The Uruguay Round (UR) decided to integrate textile and RMG industries into GATT system. As is well known, GATT/WTO prohibits not only unjustified tariff barriers but all forms of non-tariff barriers including imposition of “quota”. In sixties, while GATT principles prohibited discrimination between the trading partners, it allowed certain exceptions to GATT principles on the ground of “fairness”. Such an exception is WA. To achieve this goal, a special provision known as MFA was instituted. Under the MFA provisions, GATT allowed the USA and other importers of RMG to impose quota restrictions. The MFA has been in place since 1974. Later on when trade liberalization policy started riding high, the arguments for phasing out the MFA were put foreword by those countries which were hurt by it.

    (2) Other Non-Tariff Barriers

    The final Acts of the Uruguay round (UR) negotiations expanded, integrated and strengthened the GATT principles of reducing / eliminating all forms of trade barriers with a view to increase world trade. It is easier to identify and remove trade restrictive tariff barriers because they take so many and such subtle forms that . multilateral negotiators face more disagreement than agreement on their definitions. For example, customs evaluation procedures suitable in a particular country may be interpreted as deliberately created non-tariff barriers by its trading partners. Similarly, there is a scope for “misinterpretations” of subsidies given to exporters by the respective government. The child labor, environmental and human right issues are also susceptible to similar “misinterpretation.

    Quota System:

    For decades the world’s garment trade has been governed by a system of quotas. It limited the amount efficient countries like China could export to the big markets of the United States and Europe. The original intention was to protect the garment industries in the West. But the effect was to guarantee less developed countries like Bangladesh a slice of the trade. Quotas were abolished from 1 January 2005. Retailers are now free to buy from whatever country can make garments for the lowest price. It could mean cheaper clothes for consumers but the pain will be felt in slums in the developing world.

    Competitor

    Competition has become intense in the garment industry at present. Garment industry is emerging rapidly in Taiwan, Hong Kong, Singapore and Korea in Asia. Thailand, Malaysia, Indonesia, Philippines and Sri Lanka have found the garment industry more attractive to develop their economy from 70’s decade. Vietnam has become a potential entrant in garment industry throughout the world.

    Threat from Various Regional Organizations (Such as NAFTA, EEC, EFTA, etc.) The trend of the modern world is regionalism to strengthen the economy of the member countries through co-operation. North American Free Trade Association has been signed recently and the main initiator of NAFTA is the USA, who is the main buyer of garment from Bangladesh. According to the treaty of NAFTA, USA will invest its domestic resources to develop their economy by using 60% of their own raw materials through utilizing the low cost labor of Mexico. So, it is a potential threat to the garment industry of Bangladesh. On the other hand, EC countries have already declared a single currency for European Common Market called ECU (European Currency Unit) to protect the interest of the member countries through co­operation. This sort of protectionism is great threat to the garment industry of Bangladesh, because Germany, Britain, Denmark, Norway, Belgium, Italy, etc. are buyers of the garment of Bangladesh.

    Scarcity of Raw Materials:

    There is no alternative of ample supply of raw materials in order to become self­sufficient in any industry. The raw materials of the garment industry of Bangladesh are foreign dependent. Bangladesh has to import raw materials of garments from abroad in order to process it in Bangladesh. About 70% of garment export income has to be spent for the raw materials. Moreover, the export and import policy of Bangladesh is very weak. So, the scarcity of raw materials for the garment industry’ in Bangladesh is a great threat.

    Political Instability:

    Bangladesh is not a stable country politically. Political instability is a great threat for any industry of our country. Frequent strikes and hartals are great obstacles for the growth of any industry. The production cost increases and productivity decreases because of frequent hartals and strikes. Garment producers cannot keep their contract with buyers because of hartals and strikes. Hartals and strikes have become a common phenomenon of Bangladesh.

    5. Bangladesh economy to grow at 6 percent despite key challenges: IMF

    Bangladesh’s economy is expected to grow six percent next fiscal year despite the abolition of quotas for textile exports that was predicted to cause massive job losses. The economy grew 5.5 percent in the fiscal year ended June 30. The IMF forecast is in line with a finance ministry budget estimate in June that said the economy was recovering from devastating floods last summer and had coped well in textile exports deposit the loss of quotas that opened up competition with larger rivals Such as China and India.

    The international textile quota system, known as the Multifibre Arrangement, was abolished at the end of December 2004 prompting predictions that as many as one million jobs would be lost in Bangladesh.

    In the year to June 2004, Bangladesh exported goods worth 7.56 billion dollars with textiles accounting for 75 percent. “Looking forward, (the IMF) underscored that Bangladesh faces the key challenges of accelerating growth and maintaining macroeconomic stability while overcoming the potentially significant impact of the MFA phase-out” the IMF said.

    6. The Conference of LDCs

    With the phasing out of Multi-Fibre Agreement (MFA), the readymade garment industries of the countries, which have weak textile base, are feared to be in the brink of an uneven challenge. There have been widespread concerns by the exporters and experts about the possible fate of the countries garment exports, which, the experts think can only get special support if more preferential access to the US market, the biggest destination of local RMG products, could be achieved.

    With that aim in view, the BGMEA took the pioneering role in placing a trade bill in the US congress, which, if passed into law, will benefit 14 LDCs including

    Bangladesh. To strengthen the efforts, the association has taken a landmark decision to hold a conference of the stakeholder LDCs in Dhaka in June to garner their support in favor of the bill.

    Meanwhile, tremendous response has been received from the invitees. It is indeed a vivid demonstration of the wisdom of the current BGMEA leadership, which is expected to be culminated into having a joint declaration participant at the end of the conference.

    7. The products of LDCs: low-price garments in a higher-quality market

    In clothing as in cotton fabrics, the LDCs tend to focus on exporting standard products such as T-shirts, men’s shirts, and woven and printed fabrics, for which price is the main determinant of success and in-depth knowledge of fashion and design trends is not essential. However, in recent years a change has been taking place in the developed markets, away from cheap imports towards better-finished, higher-quality casual fashion and more individual clothing, the opposite of LDC garment exports.

    Nevertheless, Bangladesh has a number of ‘champion’ export products (i.e., achieving high growth in a dynamically expanding market), particularly women’s knitwear. Haiti, another example of a textile-exporting LDC, has been doingvery well with exports of cotton T-shirts and women’s clothing. Its garment exporters are increasingly exporting sophisticated items like high-quality suits, jackets and branded items. This has helped them to penetrate Japan’s extremely quality conscious market. Bangladesh has shown that it is possible to move successfully up the value chain by exporting finished products. In 1999, it was by far the largest single LDC exporter of finished, woven fabrics with 85% cotton or more, weighing up to 200 g/m2.

    Govt trying to overcome problems in RMG sector

    Speakers at a seminar said the government is making all out efforts to overcome the problems of garments sector and trying for duty free and quota free access of Bangladeshi goods to the US and European markets.

    The sector is the main foreign currency earner, which earned 70 per cent of the country’s total exports last year. EPB Vice President said that Bangladesh has got duty free access to Australia from 1st July. It is the 4th country to give duty free opportunity for Bangladesh products. Earlier Canada, Japan and Norway have given duty and quota free access of Bangladeshi products.

    8. Bangladesh made faster economic growth

    The World Bank on Sunday said Bangladesh made faster economic growth in last two financial years and predicted that the projected 5.5 per cent growth of this year’s gross domestic product (GDP) was `very likely’ to be achieved owing to good rice harvests, reports BSS. The export performance also marked a steady progress with 16.2 percent increase in first seven months of the current fiscal. The export of ready made garments (RMG)- both woven and knitwear-has picked up due to increase in global demand and the consolidation process in the industry, which earns over 70 per cent export earnings.

    9. The Fastest Growing Export Sector of The Country

    Starting in late seventies, the apparel industry of Bangladesh now accounts for over 64% of the country’s total export earning. Country’s apparel export rose to US$2628 million in 1996 from a mere US$6 million in 1981. To about 30 countries around the world, Bangladesh presently exports ready-made garments, with over 45% to USA, 50% to the countries in EU and 3% to Canda and rest to the other countries of the world. Country’s apparel export has been growing on an average at the rate of 25% for last several years. The country, last year ranked 6th larget apparel exporter to the USA the EU.

    Bangladesh Garment Export

    There are about 2500 export oriented ready-made garment industry in Bangladesh those are clustered over mainly Dhaka and Chittagong. Such distribution offers buyers advantage to choose the right manufacturers and exporters, throuhout the year, with minimum effort.

    Garment Factory in Bangladesh

    Those are the findings that find after analyzing the whole situation.

    10. Statement of the current “Export data of Readymade Garments of Bangladesh”.

    Chapter Four

    Learning part

    1. Yarn Manufacturing Process

    Textile mills purchase cotton and receive the bales from gin yards or cotton warehouses. These mills start with raw bales of cotton and process them in stage until they produce yarn (fibers twisted into threads used in weaving or knitting) or cloth (fabric or material constructed from weaving or knitting).

    The first stage is in the opening room. Here, bales are opened and laid in a line on the floor, side by side, near a cotton opening machine. This machine travels along the line of opened bales, puling fibers to be sent to a mixing machine and them on to the carding system.

    Carding is the process of pulling the fibers into parallel alignment to form a thin web. High speed electronic equipment with wire toothed rollers performs this task. The web of fibers is eventually condensed into a continues, untwisted, rope-like strand called a silver. These silvers then continue to a combing machine. Here, the fibers shorter than half-inch and impurities are removed from the cotton.

    This process makes the silver smoother so more uniform yarns can be produced. The drawing or pulling of this sliver is next. Cotton trivia khaki is derived from a Hindu word that means “dust color”. Originally, khaki referred to a dull yellow-brown cotton or wool uniform fabric used for its camouflage effect.

    The sliver is drawn out to a thinner strand and given a slight twist to improve strength, then wound on bobbins (spools wound with the thread like product for storage). Having completed this process. It is now called roving. The roving bobbins are now ready for the spinning process.

    Spinning is the last process in yarn manufacturing. Today’s mills draw and twist the roving into yearn and place it on bobbins. They do this quite efficiently. A large, modern mill can produce enough yarn of thread in 30 days to wrap around the earth 23000 times or go to and return from the moon 235 times. With the use of automatic winding, the yarn bobbins are transferred to large bobbins called cheese cones can be stored until they are needed in the weaving process.

    The weaving process uses yarn that, depending on how it lies in the woven goods. These yarn may now be either a warp or a weft yam. Warp refers to yarns that run lengthwise in woven goods. In preparation of warp yarns for weaving, hundreds of yarn strands are wound from cheese cones onto a large warp beam. Yearns on this beam are then coated with a sizing compound (a starch mixture) to add strength for weaving. The sized yarns are then wound onto a loom beam that will be placed on the loom (a machine used to interlace yarns to from cloth). Weft is the yarn that runs crosswise in woven goods and may be referred to as filling yarn. Sizing is not placed on weft because flexibility is needed in the weaving process. In today’s most modern mills, the weft is fed into the loom from cheese cones with air-jets at such a high speed that its movement cannot be seen.

    The woven cloth from the loom, called greign or grey , is whitish but has a natural yellow tint. This cloth is further treated by various means to improve its appearance and feel, and then either bleached, dyed or printed to produce the fabrics used in various products seen on store shelves.

    There are three basic weaves that are used. The plain weave, the most common, is produced by passing the weft yarn over and under each warp yarn, alternating each row. This is used for cotton print cloth, sheeting, muslin and more. The twill weave is produced by interlacing yarns in an angle to form straight, diagonal ridges across the fabric. The satin weave, has a surface that consists mostly or warp yarn which is passed over and under all but one weft yarn that intersects in a regular or irregular formatting, not a straight line.

    This weave produces a fabric with a smooth surface. It is used for upholstery, home decorating and fashionable apparel.

    Knitting is another method of turning yarn into fabric. Knit fabric is constructed of yarns made into loops (stitches) which are linked together by the use of needles. There are two basic types of knitted fabric. The weft knit fabrics are made with yarns forming loops the width of the fabric on a circular machine, producing jersey knit used in T-shirts and underwear. The warp knit fabrics are produced by feeding yarns to form loops in a lengthwise direction and are used for tricot fabrics and cotton lace. Knitted fabrics are softer and more flexible than woven fabrics. Making them ideal for sweaters, active sportswear and hosiery.

    2. Fabrics Manufacturers

    Knitted Fabric

    Knitting is one of the ways of turning thread or yarn into clothes. Knitted fabric completely consists of horizontal parallel courses (crosswise) or yarn. These courses are joined to each other by interlocking loops where a short loop of one course of the yarn is wrapped over the bight of another course.

    Knitted fabric is obtained either by hand knitting process or then by machine. In hand knitting process, a base series of twisted loops of yarn are made on a knitting needle before starting the process. A second needle is then used to reach through each loop in succession to snag a bight of yarn and pull a length back through the loop. Knitting by machine use a different mechanical system producing nearly identical results.

    Knitted fabric composites show higher impact tolerance compared to the traditional composites or even to woven fabric composites. It is believed that the hand knitting originated among the nomads of the Arabian Peninsula about 1000 BC.

    Type’s o knitted fabrics:

    Weft knitted fabric-It is either made by hand or machine by looping together the lengths of the yearn. This supports the fabric to become stretchy and comfortable. Weft-knitted fabrics are used in socks. T-shirts an jumpers.

    Warp knitted fabric- It is made by machine only. The loops, in this kind of fabrics interlock along the length of the fabric. It is only slightly stretchy and it do not ladders. These are used as swimwear, underwear etc.

    Advantages of Knit Wears:

    Because of casual and soft in nature as well as inherent good properties such as hygienic properties, fashionable design and color, knit wears have become the popular wear all over the world. Knit wears are informal but fashionable usually with short sleeves. Knit wears are commonly made of knitted fabrics of single jersey, Ribs, Interlock, etc due to the specifications in raw materials by using lower count of yam, construction of fabrics and stitching. Knit wears possess certain properties which are essential for good apparels; some special advantages of knitted-wears are given below:

    1) Knit garment products are softer and more comfortable;

    2) Knit wears/garments are usually used as underwear

    garments i.e. used for soft skin abrasion.

    3) Usually lower count of yam is used for knitting fabrics.

    So, knitwear has more socking capability.

    4) More profitable production can be made due to lower

    project cost and cheaper management cost.

    5) Knitting wears can be handled more easily while using

    and washing. ,

    6) Its market price is comparatively cheaper.

    Manufacturing process:

    For setting up Composite Industries consists of Knitting unit, Fabric Dyeing Finishing unit and Garments unit. The product of one unit will be the raw material of other unit:

    The sequential process from yam manufacture to Garments product may be described as follows!

    For Knitting Unit:

    Knitting machine is various types where various design produces. Fabrics will also be produce in the circular -Knitting machines by altering some attachments mainly changing of camas. Rib Knitting and Interlock (double Knitting) fabrics will be produces in the Rib circular and Interlock Knitting machine.

    Flat Knitting fabrics for collar and cuff will be ‘produced in the flat Knitting machine. After the Knit fabrics is produced, it is inspected in running condition while passing over a table of the inspection machine. The technology involved in Knitted fabrics is fairly simple which may be seen in the following flow process chart:

    Process Flow Chart

    Yarn storing in cone form

    Rib Knitting

    Circular Knitting

    Face side inside turning of the knitted fabrics

    3. Fabric Dyeing and Finishing Unit:

    The technology involved in dyeing finishing of Knitted fabrics may be seen as below;

    Face side inside

    Turing of the Knitted

    fabrics

    Scouring /Bleaching

    Washing

    Bleached fabric(white)

    Dying Was king

    Ballooning & Squeezing/Hydro

    Extractor

    Drying and heat setting stuttering

    Calendaring/Softening

    Compacting & Shrinkage Controlling

    Inspection

    Folding & baling

    Garments Making;

    The operation process with two outputs i.e. T-shirts and Polo shirts are pre-sewing and finishing. A typical process flow-chart for Garments making is shown below: Process Flow Chart for Garments Making

    Fabric

    Fabric lying on Layers & clipping

    Cutting of individual parts as per approved pattern

    Sorting & Bundling sizeable for mass sewing

    Sewing of collar, cuff Sleeve to shirt

    Sewing of size label, washing instruction, Brand label

    Button holding & stitching (in case of Polo-shirt)

    Loose thread cutting/inspection Ironing (Finishing)

    Folding

    Packing in carton

    Ready for Export

     

    4. Production flowchart

    Sampling

    Price Officer to buyer

    Order confirmation

    Procurement of raw materials

    Stores

    Knitting Machines

    Grey Fabric quality control

    Grey Fabric quality control

    Grey Fabric Batch room

    Dyeing floor

    Dyeing winch

    Water squeezer

    Dryer

    Compactor

    Finish Fabric quality control

    Fabric stores

    Cutting floor

    Cutting quality control

    Sewing input

    Sewing output QC Table

    Ironing

    Folding/ Hangar

    Poly

    Assortment

    Carton

    Internal Inspection

    Final Inspection by buyer

    Shipment

    5. Garments Quality control flow chart

    Received finish fabric

    Checking finish fabric

    Marker

    Laying

    Cutting

    Numbering

    Checking

    Bounding

    Cutting Quality Audit

    Input

    Enpost Measurement checking

    Table inspection

    Alter / Rectification

    Sewing quality audit

    Iron

    Enpost checking for finishing

    Quality audit for workmanship

    Basic Measurement check

    Folding

    Poly/ Hangar

    Metal Detector checking

    Carton

    Carton quality audit

    Internal final inspection

    6. Garments Planning:

    To establish a garments factory the location choice is an important factor for correct manufacturing, worker management and proper transport system.

    The following are some of the factors which will influence the choice of location:­

    · Availability of worker.

    · Availability of housing facility ( In Bangladeshi system it is not provided by any garments authority)

    · Availability of staff amenities.

    · Availability of transport.

    · Availability of materials.

    · Availability of cover-van parking space.

    · Adequacy of circulation.

    · Availability of services.

    · Gas

    · Electricity

    · Water

    · Drainage

    · Disposal of waste

    · Suitability of land and climate.

    · Local building and planning regulation.

    · Safety requirements.

    · Site cost.

    · Political situation.

    · Special grants.

    According to the place and types of manufacturers goods the building shape has been Chosen. Here mentioned both the advantages of single and multi-story building. It depends on the size of the garments factory, which prefers most.

    7. Benefit of team in garments:

    · Increase the group activities in production.

    · Makes a competition among the team worker.

    · Workers get satisfaction to work.

    · Instrumental benefits.

    8. Control

    Control is a regulation of organizational activities so that some targeted elements of performance remains within acceptable limits.

    Purposes of control:

    · Adapting to environmental changes.

    · Limiting the accumulation of errors.

    · Coping with organizational completes.

    · Minimizing cost.

    · Keeping the organizational work on track (according to

    plan)

    In garments sector the control is divided in three sections.

    · Production control.

    · Overall/Operational control.

    · Financial control

    Overall/Operational control:

    · Preliminary control

    · Screening control

    · Post action control

    Preliminary control:

    Preliminary control concentrates on the resources-financial, material, and human and information-that the organization brings in form the environment. Preliminary control attempts to monitor the quality or quantity of these resources before they enter the organization.

    Screening control:

    Screening control focus on meeting standards for products or service quality or quantity during the actual transformation itself. Screening control relies heavily on feedback process.

    Post action control:

    Post action control focus on the outputs of the garments after the transformation process is complete. Coming’s old system of Post action control-final inspection after the product is completed. Although corning abandoned its Post action control system, this still may be an effective method of control, primarily if a product can be manufactured in only one or two steps or if the service is fairly simple and routine. Although Post action control alone. may not be as effective as preliminary or screening control, it can provide management with information for future planning.

    Financial control:

    Financial Control is the control of financial resources as they flow into the garments (i.e., revenues, investments), are held by the garments (i.e., working capital, retained earning), and flow out of the garments (i.e., pay expenses). Business must manage their finances so that revenues are sufficient to cover costs and still return a profit to the firm’s own

    9. Prepare a garments budget:

    Budget is a numerical expression. A good budget can provide a good exported or productive garment. Without budget a garments can’t run correctly. Only by the help of a good budget the goals can come out. Budget helps to take correct decision and divers the organization properly in right way. Budget also, shows the capacity of garments in productive market. Only a suitable and acceptable budget can run the garments correctly. For this reason budget is essential for the garments.

    The processes of preparing budget in garments are as follows:

    · Submission of budget request by the units to division head.

    · Integration of unit budget and consolidated into division budget.

    · Forwarding of division budget to budget committee.

    Chapter Five

    Conclusion & Recommendation

    1. Conclusion and Recommendation

    In order to sustain the smooth growth and development of the garment industry of Bangladesh, Government should play a key role to offer a good export policy. Otherwise the production, employment, earning of foreign currency and economic development of the country will be affected seriously. Some recommendations have been offered to face the problems of the garment industry of Bangladesh.

    Regarding the problem of RMG sector I’ve identified some recommendation for the betterment of this sector. The recommendations are as follows:

    · The Government of Bangladesh should play a key role for the expansion of the market of garment by diversified items for manufacture and export. It is very important fact that there are many items in the RMG product lines which Bangladeshi entrepreneurs have not yet started production. Leather items, life jackets, gloves, bags etc. are among few such items. Among other items are umbrella, nylon school bags and jackets, ice sport kits and wears, staffed toys, high competitive market fashion garments are examples. There are numerous such items not yet touched by our entrepreneurs.

    · All out efforts would be made and steps taken for production and export of high priced readymade garments in the light of the prevailing market demand.

    Immediate steps shall be taken to establish a Fashion Institute pending establishment of the Fashion Institute measures will be taken, under special arrangements, to extend expert services to match the actual demand. Liberal credit may be considered for capacity building and hiring technology for producer of high quality garments.

    · Product-Specific decisions: Readymade Garments

    Provisions have been made for the exporters of readymade garments to retain in their respective foreign currency accounts the portion of their export earnings required for meeting the expenses on importing fabrics and other accessories through back-to-back letter of credit. The exporters that way shall be saved from incurring losses by first converting their export earnings to Taka and then re­converting the same to foreign exchange for payment of import bills on raw materials.

    For making hand-woven sweaters of natural and synthetic wool imported under customs and permission would be accorded to take up such wool outside the bonded area, provided the concerned firm furnishes a bank guarantee for equivalent amount of customs duty leviable on such raw materials.

    · Labor Productivity Improvement.

    However, it is to be noted that the lower material procurement cost may not be enough for Bangladesh to maintain its competitive edge in international markets. Bangladesh must increase productivity, which is lower than many of its competitors. It is true that wages are low in Bangladesh, but it does not necessarily mean that relatively low wages automatically lead to higher productivity. Wages are only one of the determinants of labor productivity. Time required by the

    Workers to perform a task is another important determinant. Available efficiencies indicate that Bangladeshi workers are not as those of Hong Kong, South Korea and Sri Lanka. The workers’ skills and supervisors’ managerial efficiency are higher in those countries than in Bangladesh. In addition, those countries use the latest technology, for example, computerize sewing machines, design facilities, etc. but Bangladesh uses relatively older technology.

    Other Strategic Implications

    · There are potential problems with supplies and financing. A conglomeration or a strategic alliance of domestic firms or with foreign firms or both is the only feasible solution. This tie-up-marketing will ensure long-term business interest to the domestic producers.

    · Most of the exporters do not provide good post sales services or are bent on relational marketing. The exporters and entrepreneurs have to take measures in this context.

    · The exporters are willing to form joint ventures, but they are more keen to get financial benefits than technological benefits. Exporters should be taught or given necessary counseling in taking the advantage of technology transfer. EPB can take further progressive role and arrange training, workshop, interviews and field works in various capacities.

    · Import of samples for each category of garments:

    At present, facility exists for duty free import of 20 pieces of samples for each category of garments subject to a maximum of 100 pieces. Imported samples are, h

    " 123,"

    FAMILY STRUCTURE POLICY

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    An introduction to social policy

    Social policy refers to the study of social welfare and how it relates to politics and the society.

    The United Kingdom is a unitary state where the central government controls all the activities of government. Demographic changes in the society have strong implications on government policy as far as sound decision-making is concerned. These changes come in form of divorce rates, decline in marriage as the fundamental institution of society, rise in cohabitation and many others. Irwin, S. (1999)

    In each administrative region we have a secretary of state and administrative departments situated in the central government with respective assemblies and executive.

    Laws in these administrative regions differ from one region to another. For example laws which apply in England and Wales tend to differ from those in Scotland and Northern Ireland. Social services in the UK are under the health board but changes do occur frequently.

    The main government departments dealing with social policy in the UK are as follows.

    Central government

    The central government is in charge of National organisations and Local government

    Parliament is responsible for Primary legislation, Local authorities’ and London boroughs

    Cabinet Office undertakes reforms in the Public service

    The Treasury in charge of economy policy of the government and financing

    Department of Health provides healthcare, social services and community care.

    Department for Work and Pensions Is responsible for national insurance, social assistance and creation of employment.

    Department for Communities and Local Government is in charge of Local government; Urban policy; Housing and environmental health

    Ministry of Justice – Law and order

    Department for Children, Schools and Families -manage Schools; Education welfare; Learning disability (5-18); children’s services

    The administration of welfare in the UK

    The administration system in the UK has undergone major reforms with the first phase covering the 1960s and 1970s where by planning and control of public expenditure was shifted to treasury.

    The second phase between 1980s and 1990s saw the restructuring of the civil service and the administration of welfare.

    The British social policy was dominated by poor laws way back from 1598 to 1948 for instance the Elizabethan poor law of 1601 provided for a compulsory poor rate, creation of overseers of relief and “setting the poor on work”.

    FAMILY STRUCTURE

    According to research there has been notable decrease in the percentage of people living in households comprising the traditional family unit. Around 2001 Chinese and Asian communities had families with greater proportion of married couples; while on the other hand other ethnic groups like the black, white Caribbean had the greater proportion of cohabiting couples.

    In the year 2004 according to statistics eight out of 10 people in the UK lived in a family household but however the same statistics indicate the there is a decline in this form of structure because for past 40 years there has been an increase in the number of people living alone. This trend has been accelerated by high divorce and cohabitation rates. Increase in the number of breakouts and the number of births occurring outside marriage has had a hand in this trend.

    Since 1972 the proportion of children living in larger families has declined

    Different ethnic groups differ in terms of size of household for instance Asian households tend to be bigger that other ethnic groups and can comprise of even three generations.

    About 12% of births in the UK in the year 1980 were outside marriage.

    By the year 2000 the figures had increased to about 41% making UK the leading country with such births in the EU. Most of these births are as a result of cohabitation.

    About household chores, women spend about four hours in activities such as washing, cooking, and ironing. This is about one and a half hours more than that of men.

    CHANGES IN THE FAMILY STRUCTURE

    Changes if family structure comes about in terms of composition and size of households. For instance there is change from 2 parent families to single parenthood. Maternal employment is also evident in the UK whereby mothers go out to look for paid employment. Other changes are in form of:

    Changes in employment and household resourcing

    In the UK for the past decades there have been trends in polarisation especially for women at individual level and at the level of household. There has been a notable alteration of gender in relation to education, employment and household resourcing.

    Growth in participation of post-compulsory education has also been witnessed for the past few decades party associated with employment opportunity structure family relations of partial dependence and obligations.

    Some of the factors contributing towards income inequalities include:

    Marriage cohabitation and divorce

    A steady decline in marriage has been noted since early 1970s in the UK.Postponement of marriage has been observed in some household and it is mainly contributed to by cohabitation. Continued growth has had an impact on people’s perception concerning morality and living arrangements. Within cohabiting unions child bearing has become very common. The UK has the highest divorce rates in the entire European union .Marital ties are increasingly being based on emotions and romantic love rather than material necessity.

    Living apart together -this is a term used to refer to people having a partner in what is understood to be a sexual relationship. It is similar to co-residential cohabitation or living together because the two parties regard themselves as a couple (Murphy and Wang 1999).

    Lone parenthood

    Sociologists have continued to regard lone parenthood as an indicator of family change. By 1991 around 20% of all families with dependent children were headed by a lone parent. This growth was due to increase in divorce rates, single parents and never married parent. ( McKay and Marsh 1994).

    Fertility

    In the UK there was marked rise in fertility during the post war period then a decline in fertility. Two major components of the rise in fertility are the change in family size and the period for parenthood. Most women born in Britain in the late 1940s have remained childess.This trend has been cited by sociologists as important. (ONS 1997; and Irwin 1999).

    EFFECTS OF CHANGES IN THE FAMILY STRUCTURE ON SOCIAL POLICY

    Key in the implications of these changes in the family is the explosion of the non-marital child bearing.

    Changing of family structures has led to legislations by the government for instance the family law in Scotland.

    Poverty and disadvantage have serious implications on the social policy that seeks to create a level playing field in the nation and especially for the children Boheim, R. and Ermisch, J. (1998). Child poverty is firmly on the agenda of many European countries. It entails strategies which aim at increasing the income for low income earners with children. This is by promoting policies which will increase employment for poor families. Hall, R., Ogden, P.E. and Hill, C. (1999) A successful strategy should seek a balanced approach whereby improved benefits and improved incentives.

    For many years the rights of a child have been on top of the agenda for EU recently measures have been put in place to establish a comprehensive strategy to promote and effectively implement the rights in both internal and external policies.

    Women with high qualifications are likely to enter into partnership at later years than those at low levels of education or the non- educated. Also those women who are less educated are likely to have high divorce rates than those with high education.

    Working mothers have an impact on the Childs well- being. It brings additional income and lifts many families out of poverty. Those who grow up poor early are likely to leave home early and are likely to be less educated.

    Despite widespread economic growth and progress in poverty reduction, in the UK the child remains the most vulnerable population. This because they are at high risk of living in poverty with the changing structure and composition of the family. Children are missing out on the on political and economic agenda. Participatory approaches should therefore be initiated involvement of all stakeholders including particularly the children and young people. The perspectives of children from single parenthood should be included in policy formulation and implementation so as to combat poverty.

    CONCLUSION

    In the UK today households are made in many different ways and people have a variety of patterns of working.

    The current patterns and trends in familial lifestyles are key determinants of the level of developments in employment and patterns of inequality. Changes in composition of households are key demographic indicators of changing living standards and lifestyles.

    These changes remain top on the agenda for the government so as to institute measures aimed at reducing poverty levels for instance the government has put children at its centre of its social policy agenda. This is evident by increasing the levels of in-work support for low -income parents and initiating programmes to support parents from disadvantaged areas.

    REFERENCES

    www2.rgu.ac.uk/publicpolicy/introduction/uk.htmDownloaded 28/04/2008

    www.agf.org.uk/pubs/pdfs/1383Ageingweb.pdf Downloaded 28/04/2008

    www.leeds.ac.uk/CAVA/papers/wsp7b.pdf Downloaded 29/04/2008

    www.deafnessatbirth.org.uk/content2/support/diversity/03/index.html Downloaded29/04/2008

    Cooper, W. (1999) LFS Household Data: Spring 1998 Analyses Labour Market Trends (January)

    31-40.

    Hutton, S. (1994) Men’s and women’s incomes: evidence from survey data Journal of Social

    Policy 23 (1): 21-40.

    " 124,"

    FASHION CHILDREN FAMILY

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    Fashion victims? Children and consumption: when looking at families and family life today, sociologists often ignore some key family members–children. An important new study has begun to look at the way children shape their identities through their role as consumers: a case, perhaps, of ‘we are what we buy’?. Sharon Boden, Christopher Pole, Jane Pilcher and Tim Edwards. Sociology Review 15.1 (Sept 2005): p28(4).

    Full Text :COPYRIGHT 2005 Philip Allan Updates

    Sociologists have long been interested in consumption, that is, how we shop, where our purchasing ‘needs’ come from, how we treat the products we buy and how consuming shapes out lives. Running alongside the study of the behaviour of consumers is a concern to understand what factors shape the marketplace and what the cultural intermediaries (television, print media, advertising campaigns) are that ‘promote’ its value to us.

    The rise of the ‘tweenager’

    Consumption studies have largely focused on adults and have neglected children as independent, active consumers worthy of study. Children, however, have increasing purchasing power and status as ‘new consumers’ in what has come to be known as the rise of the ‘tweenager’. Taking children’s clothes as a case in point, large-scale surveys, such as those undertaken by Mintel Market Intelligence (2003), confirm that this market is growing strongly (by 5% in 2002 compared with 2001). Retail competition is intense, with both designer labels (e.g. John Rocha, DKNY and Burberry) and everyday low-price retailers (e.g. Matalan, Asda and Tesco) proving to be huge growth sectors.

    Another useful source, www.juststyle.com, reports that in 2003 the UK children’s clothing market was worth 6.02bn [pounds sterling], accounting for 18.9% of the UK’s total clothing expenditure, with ‘fashion’ wear rather than traditional children’s wear being the growing sector. This translates on the high street into a shift away from traditional chains such as Adams and Marks & Spencer to shops offering trendier, more covetable items (often celebrity copy-cat clothes) such as New Look and George at Asda. Lifestyle brands, such as Quicksilver and Billabong, which produce suif- and skateboard-related clothing, are making their mark as fashionable alternatives to bland, casual clothing lines. These figures show that, far from being absent from fashion consumption, children are very much present and active in driving forward the children’s wear industry.

    This leads to a situation in which the status of children–and, indeed, the nature of childhood itself–is unable to be considered apart from the highly commercialised and media-saturated society that typifies the industrialised world. Sociological questions therefore need to be raised to understand the nature of consumption for children and how their corresponding ‘new’ status in the marketplace may alter how they behave and how they are treated as social actors.

    Key concept

    A number of sociological issues are raised and can be analysed through the lens of children’s fashion consumption. These include:

    * social inclusion and exclusion within peer relations

    * changing power dynamics of the family and household

    * identity construction and performance in childhood

    * the commercialisation of the lifecourse and lifestyles

    Researching children’s consumption

    Having highlighted the growing significance of children’s consumption not simply in economic terms but more broadly in relation to key sociological concepts, we now offer a brief overview of our research project, which aims to provide insight into the link between children and consumption.

    Funded through the ESRC/AHRB Cultures of Consumption research programme, the study examines the practices and experiences of children in relation to buying clothes. In doing so, we are advancing understanding of the ways in which the home is penetrated by consumption, especially in relation to the ways in which children and parents act and connect as consumers. We are also adding to the existing knowledge of the political and cultural importance of children as consuming agents.

    The key questions guiding this research are:

    * What are the roles of children in choosing and buying their own clothes? How are these roles expressed and how have they changed over time?

    * In what ways do children engage with the concept of ‘fashion’ and to what extent does it drive their wants and purchases?

    * How does fashion consumption alter the parent-child relationship and structure patterns of household consumption?

    Research methods

    Our data collection methods were selected to make the child the focus of the study (see also Box 1). We employed a range of participatory, qualitative methods designed to capture how children experience consumption in the context of their families.

    Box 1 Ethics and research with children

    When researching with children, certain ethical issues must be taken

    into account.

    * Avoid seeing the child as an ‘object’ rather than a ‘subject’ or

    ‘social person’ acting in the world in their own right,

    * Protect the child’s interests during the research.

    * Be attentive to the different experiences and competencies

    of the child and the adult researcher.

    * Establish a safe and effective rapport between researchers and

    children/families, based on trust, with the assurance that data

    will be treated sensitively.

    * Ensure that the aims and objectives of the research are

    transparent and beyond question, not only at the time of seeking

    access to children but throughout the research process.

    Source: adapted from E Christensen and A. Prout (2002) ‘Working with ethical symmetry in social research with children’, Childhood, Vol. 9, No. 4

    The research focused on the consumer behaviour of 15 children, aged between 6 and 15, who were located in eight families spread across England. They were visited five times by a member of the research team. Specifically, activities undertaken with these children during such visits included:

    * unstructured discussions covering a wide range of topics, including shopping for clothes, trying to negotiate purchases with parents, imitating the images of pop stars and sports stars, and keeping up with the latest fashion trends

    * write and draw project-based work in which children were given the opportunity to express creatively their clothing ‘likes’ and ‘dislikes’

    * a wardrobe audit, in which children actively presented their clothes to the researcher and explained to them both the processes leading up to the purchase and how/if the garment was being worn

    * photography–children were given disposable cameras to record any new clothing purchases and to depict any aspect of fashion that was important to them

    Besides these child-centred research methods, the researchers observed relevant family activities, such as shopping trips and browsing through clothing catalogues. We conducted interviews with mothers based on the ‘diaries’ they had been completing during the study, and spoke to a number of people who work in the children’s wear industry and are responsible for producing and promoting the clothes.

    Clothes, gender and parents’ concerns

    The approach outlined above provided us with a large amount of relevant and richly detailed data which will contribute to sociological debate in the areas of consumption, childhood and fashion. Some issues arising from our study include the ways in which children and their parents use clothing in the construction and embodied expression of gendered identities. Here, using our varying sources of data, we have been looking at children’s displays of femininity or masculinity, how children relate to their age and the process of growing up, and how these things can be viewed in either a positive or a negative light.

    Perhaps the most substantive issue to arise in this respect is how parents label some girls’ clothes as ‘too provocative’, Items such as ‘bras’, ‘thongs’, ‘low-cut tops’, ‘miniskirts’, ‘skimpy things’, ‘cropped tops’, ‘really short clothes’ have all been identified by parents as inappropriate clothing for children. Parents consider them inappropriate because they encourage children to be looked at and thought of in a sexualised way.

    In the focus groups we held with parents (which formed part of the process of family selection for the year-long study) mention was made by them of paedophiles, ‘weirdos’ and ‘the wrong sort of people’ giving ‘the wrong sort of attention’ to children who dress in the sorts of items listed above. Items such as high heels, which are thought to accentuate the female figure, were frowned upon. A related problem identified by parents is that the styling of girls’ clothes has been changing over recent years to mimic that of adults–‘mini-mums’ outfits’ was the phrase used by one mother.

    Children clothes and identify construction

    The issue of clothes in relation to modesty and respectability was significant for the girls themselves. They expressed worries about wearing clothes that exposed too much bare skin or that appeared ‘too old’ for them–formulating clothing-personality associations: the wearing of an ‘inappropriate’ garment might reflect a side of their personality they wanted to disguise or were net yet at ease with. More broadly, this demonstrates how material culture can be a narrative resource in children’s expressions: children speak about clothes in ways that (they feel) illuminate their identities. Children’s accounts of their preferences and their use of clothing have, in turn, shed light upon issues such as taste and style, and the importance of fashion to image, lifestyle and belonging to either gender.

    Unlike girls’ fashions, boys’ fashions seem consistent, unthreatening and net so overtly ‘gendered’ as their female counterparts. Other gender-based issues to emerge from our study include:

    * the differences in clothing design, including fabric, colour and styling, which culturally demarcate girls and boys in modern consumer cultures

    * the faster physical development of girls and the related problems of sizing

    * the adoption of same-sex role models and fashion icons

    * the significance attached to label culture and branded sportswear

    Both boys and girls, it seems, have the capacity to discriminate in relation to clothing quality and style from an early age and, in the course of the study, they offered independent appraisals and critiques of the fashion marketplace and of particular labels. They drew attention to the potential social dangers of purchasing poor-quality, unfashionable or inappropriate clothing. In the interview in Box 2, the Nike brand is used to influence the teenager Joseph’s perceived popularity and to wrap a protective veil over his physical body that deflects attention to the commodity of the sign (in this case, the well-known Nike ‘swoosh’).

    Box 2 Constructing style

    Joseph (aged 15) used ‘Nike style’ to encourage others to

    gaze upon, envy and copy his look, encouraging in his peers

    a type of conspicuous consumption of himself. His comments

    reveal a self-reflexive sense of pride and achievement in

    constructing a stylish appearance.

    Researcher: What do you mean by ‘looking flashy’?

    Joseph: You’ve got good style clothes and, you know, shiny

    like this … looks cool…. I’ve got an outfit upstairs which

    is … I call it … flasher, I’ll show you that if you want.

    Researcher: Yeah?

    Joseph: Yeah, like that. People–when you’re walking about the

    street–they’d look at you and go, ‘Oh, look at that!’

    Researcher: You would like that? … You like that sort of thing?

    Joseph: Yeah. When I was wearing that coat yesterday, everyone

    was doing that. So that was a good vibe.

    Early analysis suggests a link between the perceived social significance of labels and clothing type and the processes of growing up. Some children come to reject former signifiers of their childhood in an attempt to ‘age up’ into a more teenage style. For boys, a greater symbolic value seems to attach to constructing a ‘cool’ image through wearing sports and surf/skate clothes.

    For girls, this has taken the form of ‘turning against’ Barbie and other labels perceived as childish (see Box 3).

    Box 3 ‘Turning against’ Barbie

    The following interview from the Leicester research is an

    example of a 7-year-old female from a rural village ‘turning

    against’ Barbie (a brand of clothing and accessories which is

    an offshoot from the Barbie doll) as proof of no longer being

    a little girl. Megan is pushing away and rejecting a former

    signifier of her childhood in an attempt to ‘age up’ into a

    more teenage style.

    Researcher: [Have you got] Anything with Disney on or Barbie?

    Megan: No, no no! Definitely net Barbie!

    Researcher: You don’t like Barbie?

    Megan’s mother: No. She used to.

    Researcher: Why don’t you like Barbie?

    Megan’s brother William, aged 9: She used to have this top

    with Barbie on.

    Megan: She’s too little for me.

    Researcher: But you used to like her. Maybe she’s okay for

    little girls?

    Megan’s mother: Yeah, I think I would say a year ago she

    stopped. Se everything that has Barbie on Megan doesn’t like.

    Researcher: We’ve got a few sporty tops here, like these fleeces.

    Megan’s mother: Yeah, that one has got ‘Boston’ on. That’s had

    some wear.

    Megan: Well, I think that’s quite sporty and this one I like.

    Conclusion

    The relationship of children to fashion consumption throws up a fascinating range of sociological issues, from the changing power relations between children, their peers, their parents and the marketplace, to the use-value (to keep warm and dry) and sign-value (to look good) of clothes for children’s identity construction. The ever expanding opportunities and invitations of consumer culture are negotiated by children as part and parcel of everyday life.

    There are, to be sure, many paths open to social researchers wanting to develop an understanding of how contemporary consumer culture operates. In this article, we have presented an overview of out own study, which prioritises children’s experiences of ‘consuming’ clothes. The study has already given many interesting insights into the nature, processes and consequences of consumption for children and childhood.

    Signposts

    There is relatively little material available to students on the sociology of childhood, so this will be a welcome addition. The authors look at a particular and relatively new aspect of childhood–children as consumers. The material provides useful information for discussions on the role of children in the family, the power of the mass media and marketing organisations, the development of gender roles and ideas of ‘self’, as well as highlighting issues about the considerable gap between the better-off and the poor and marginalised groups of society.

    There are political issues as well, not least concerns over the trend to make ever younger children, particularly girls, adopt semi-adult styles of dress and become conscious of body image. If, as the postmodernists suggest, society is increasingly concerned with ‘style’ and outward appearances, this article shows that even some of the youngest members of society are affected.

    Some of the research methods outlined in the article could be adopted as the basis for interesting coursework, although students taking this route should be aware of the ethical issues of using young children as subjects and should discuss their ideas with their teachers before embarking on their research.

    Reference and further reading

    Boden, S., Pole, C., Pilcher, J. and Edwards, T. (2004) ‘New consumers? The social and cultural significance of children’s fashion consumption’, ESRC Cultures of Consumption Working Paper Series, www.consume.bbk.ac.uk

    Featherstone, M. (1991) Consumer Culture and Postmodernism, Sage.

    Gunter, B. and Furnham, A. (1998) Children as Consumers, Routledge.

    Martens, L., Southerton, D. and Scott, S. (2004) ‘Bringing children (and parents) into the sociology of consumption’, Journal of Consumer Culture, Vol. 4, No. 2, pp. 155-182.

    Russell, R. and Tyler, M. (2002) ‘Thank heaven for little girls’, Sociology, Vol. 36, pp. 619-637.

    The authors involved in this research project are all based in the Sociology Department at the University of Leicester.

    " 125,"

    FAST CARGO SERVICES LTD.

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    Introduction:

    Fast Cargo Services Ltd. is working very well in the market of garments as well as other diversified business sectors. Here in my internship program, I am happy to understand about the import and export activities.

    My job responsibilities of internship were to analysis of import export through EPZ in Bangladesh. In the report. I have quota Ted-all the necessary information that is regarding to the import & export of pacific group with EPZ. So, the analysis of EPZ through pacific group had a visualization of entire EPZ activities indeed.

    In next discussion we will find out all the relevant activities of EPZ through the analysis of experts in pacific group.

    My internship topic is “FAST CARGO SERVICES LTD.” So in my Intemship report it is resort it is very important to analysis the domestic and international transaction, both government and private sector, between two or more countries indeed.

    International business is all commercial transaction- private and government, between two or more countries. Private companies undertake such transactions for profit, governments may or may not do the same in their transactions. These transactions include sales, investments, and transportation.

    Exporting is sending goods from one country to another and importing is bringing goods and services into one country from another. Export result in the receipt of money or claim on money, and imports result in the payment of money or claims.

    CHAPTER-1
    Exporting to Foreign Market And its strategy by the analysis of pacific group
    A company’s choice of entry mode to a foreign market depends on different factors, such as-pacific group works like;
    Ownership advantages of the company.
    Location advantages of the market. and
    The internationalization advantages that result from integrating transactions within the company.

    – Ownership advantages are specific assets, international experience and the ability to develop differentiated products.
    – Location advantages of the market are a combination of market potential and investment risk.
    – Intemationalization advantages are the benefits of holding on to specific assets or skills within the company and integrating them into its activities rather then licensing or selling them.

    In general, companies that have low levels of ownership advantages either do not enter foreign markets or use low risk entry modes such as exporting. Perhaps the simplest mode of internationalizing a demoting business is exporting the most common form of international business activity. The strong emphasis on exporting in the multinational firms indicates that exporting is a vital part of international business. Exporting is the process of sending goods or services from one country to other countries for use or sale there.

    Exporting offers a firm several advantages. First, the firm can control its financial exposure to the host country market as it deems appropriate. Little or no capital investment is normally needed as long as the firm closer to hire a host country firm to distribute its products. In this case the firm’s financial exposure is often limited to start up costs associated with market research, locating & choosing its local distributor and/or local advertising plus the value of the goods and services involved in any given overseas shipment.

    Second, exporting permits a firm to enter a foreign market gradually, thereby allowing it to asses local conditions fine – tune its products to meet the idiosyncratic needs of host country consumers. If its exports are well received by foreign consumers, the firm may use this experience as a basis for a more extensive entry into that market.

    Firms may have proactive or reactive motivations for exporting. Proactive motivations are those that pull a firm into foreign markets as a result of opportunities available there.

    Reactive motivations for exporting are those that push a firm into foreign markets, often because opportunities are decreasing in the domestic market. However the choice of exporting as an entry mode is not just a function of these ownership, location and internationalization’s advantages. It also must fit the companies overall strategy. Companies consider there questions before deciding to export.
    What does the company want to gain from exporting?
    Is exporting consistent with the company goals?
    What demand will exporting place on its key resources management and personnel, production capacity and financing and how will there demands be met?
    Are the expected benefits worth the costs or would company resources be
    better used for developing new domestic business?

    These are strategic questions that must take into account global concentration, synergies & strategic motivations.

    Characteristics of Exporters from the view point of Fast Cargo Services Ltd.:
    Research conducted on the characteristics of exporters has resulted in two basic conclusions, and the analyst of Fast Cargo Services Ltd. figured out that,
    The probability of being an exporter increases with company size, as defined
    by revenues.
    Export intensity, the percentage of total revenues coming from exports, is not positively correlated with company size. The greater the percentage of exports to total revenues, the greater the intensity.

    The first conclusion is based on the idea that small companies can grow in the domestic market without having to export if they are to increase sales. Firm size is not the most important factor in determining the propensity to export, the number of countries served and export intensity. Factors such as the risk profile of management and industry factor is as important as size. In other words, managers who are more likely to take a risk are also more likely to engage in exporting and companies are more likely to engage in exporting if they are operating in industries in which the leading companies are exporters. The large companies, such as General Electric, Boeing, and General Motors are still the biggest exporters. But small companies are expanding the export capability. Small business now makes up 88 percent of U.S. exporters and it accounts for one-fifth of the value of U.S exports.

    Companies export goods and services for several reasons, such as­-
    1. Expanding Sales:
    Companies export primarily to increase sales revenues. This is true for services companies as well as manufacturers. Many of the former such as accountants, advertisers, lawyers and consultants, export their services to meet the needs of clients working abroad.

    2. Achieves Economics of Scale in Production:
    Companies that are capital and research intensive such as Bio-technology, Pharmaceutical companies

    must export to achieve economies of scale by spreading their R&D expenditures over a large sales area.

    3. Less risk then FDI: Some companies export rather than invest abroad because of the perceived high risk of operating in foreign environments.

    4. Allows the company to diversify sales locations: Finally many companies exports to a variety of markets as a diversification strategy. Economic growth is not the same in every market, export diversification can allow a company to take advantage of strong growth in one market to offset weak growth in another.

    Forms of Exporting:
    Exporting activities may take several forms including­-
    1. Direct Exporting.
    2. Indirect Exporting.
    3. Intracorporate Transfers.

    Direct Exporting: Direct exporting involves sales to customers either distributors or end-users located outside the firms home country. Research suggests that in one third cases a firms initial direct exporting to a foreign market is the result of an unsolicited order. However, its subsequent direct exporting typically results from deliberate efforts to expand its business internationally. Through direct exporting activities, the firm gains valuable expertise about operating internationally and specific knowledge concerning the individual countries in which it operates.

    Direct Export Through The Internet & E-Commerce: Electronic commerce is an important way for companies to export their products to end-users. E-Commerce will be specially important for SMEs (Small & Medium Size Enterprises) that can’t afford to establish an elaborate sales network internationally.

    Through Internet exporting companies can establish homepages in different languages to target audiences.

    Indirect Exporting:` Indirect exporting are sold to an intermediary in the domestic market, which then sells the goods in the export market. In other words indirect exporting occurs when a firm sells its product to a domestic customer, which in turn exports the product in either its original form or a modified form. A firm may sell goods to a domestic wholesaler who then sells them to an overseas firm. A firm also may sell to a foreign firm’s local subsidiary, which then transports the first firm’s products to the foreign country.

    Intracorporate Transfers: A third form of export activity is theintracorporate transfer which has become more important as the sizes of MNCs have increase. An intracorporate transfer is the selling o` goods by a firm in one country to an affiliated firm in another.

    Intracorporate transfers are an important part of international trade. They account for about 40 percent of all U. S merchandise exports & imports.

    CONSIDERATIONS OF EXPORTE.

    In considering exporting as its entry mode, a firm must consider many other factors besides which form of exporting to use, including –

    1. Government Policies. 2. Marketing Concerns.
    3. Logistical Considerations.
    4. Distribution Issues.

    1) Government Policies: Government policies may influence a firm’s decision to export. Export promotion policies, export financing programs, and other forms of home country subsidization encourage exporting as an entry mode.

    2) Marketing Concerns: Marketing concerns, such as Image, distribution, and responsiveness to the customer, may also affect the decision to export. The choice of exporting is also influenced by a firm’s need to obtain quick and constant feedback from its customers. On the other hand, producers of goods such as personal computers must continually monitor the marketplace to ensure that they are meeting the rapidly changing needs of their customers. For example- Korean manufacturer Hyundai shifted its production of personal computers from Korea to united States because it needed to be closer to its U.S. customer base.

    3) Logistical Considerations: Logistical considerations also enter into the decisions to export. The firm must consider the physical distribution costs of warehousing, packaging, transporting. and distributing its goods as well as its inventory carrying costs and those of its foreign customers.

    4) Distribution Issues: A final issue that may influence a firm’s decision to export is distribution. A firm experienced in exporting may choose to establish its own distribution networks in its key markets. For example- Japanese consumers electronics manufacturers like Sony, Minolta and Hitachi typically rely on wholly owned host country subsidiaries to distribute their products to wholesalers and retailers in the Quad countries.

    A firm- particularly a smaller business or one just beginning to export- often lacks the expertise to market its products abroad, so it will seek a local distributor to handle its products in the target market. The distributor must have sufficient expertise and resources to successfully market the firm’s products.

    CHAPTER-2

    Stages of Export Development:
    Many companies begin exporting by accident rather than by design. Consequently, they tend to encounter a number of unforeseen problems. They also may never get a chance to see how important export can be. For this reasons, developing a good export strategy is important.
    Export procedures of Fast Cargo Services Ltd. through EPZ

    When non exporters complain about the complexity of export procedures, they generally are referring to documentation. Instead of the two documents- freight bill and bill of lading, to which they are accustomed when shipping domestically, they suddenly are confronted by five to six times as many documents for a foreign shipment. “Fast Cargo Service Ltd.” is a popular saying in the industry. Although the extra burden may be handled by the traffic department, many firms give all or at least part of the work to a foreign freight forwarder.

    Foreign freight forwarder
    Foreign freight forwarders act as agents for exporters. They prepare documents, book space with a carrier, and in general act as the firm’s export traffic department. If asked, they will offer advice about- markets, import and export regulations, the best mode of transport, and export packing and will supply cargo insurance.

    Export Documents
    Correct documentation is vital to the success of any shipment. For discussion purposes, we shall divide them into two categories:
    A. Shipping documents; and
    B. Collection documents.

    A. Shipping documents

    Shipping documents are prepared by exporters or their freight forwarders so that the shipment may pass through the exporting countries’ customs, be loaded on the carrier, and sent to its destination. They include:
    1.The domestic bill of lading;
    2. Export packing list;
    3. Export licenses;
    4. Export bill of lading;
    5. Insurance certificates.

    Inasmuch as the first two documents are nearly the same as those used in domestic traffic, we shall limit our discussion to the export licenses, export bill of lading, insurance certificates.
    Export licenses
    All exported goods require either
    General license; or
    Validated Export license.

    a. General license
    Most products can be exported under the General license for which no special authorization is necessary. The correct general license symbol is merely written in the Shipper’s Export Declaration. This documents indicate that there is an authorization to export and also provides the statistical information.

    b. Validated Export license
    For strategic materials and all shipments to communist countries, a validate export license is mandatory. This is a special authorization for a specific shipment and is issued only up on formal application to the Office of Export Administration.

    Export bill of lading
    The export bill of lading serves a dual purpose:
    ## It is a contract for carriage between the shipper and the carrier.
    ## It is evidence of title to the merchandise.
    Bill of lading are generally called­

    1.Air-way bills;
    2.Ocean bills.

    – Ocean bills
    – Ocean bill of lading may be either:
    ** Straight; or
    ** To Order.

    **A Straight Bill of Lading is nonnegotiable, and the person only stipulated in it may obtain the merchandise upon arrival.

    ** An Order Bill of Lading, however is negotiable. It can be endorsed like a check or left blank. In this case, the holder of the original bill of lading is the owner of the merchandise.

    Sight draft or letter of credit shipments require `to order” bills marked “Clean on Bard” by the steamship company, which means that there is no apparent damage to the shipment and it has actually been loaded n the vessel.

    Insurance certificates
    The insurance certificate is evidence that insurance coverage has been obtained to protect the shipment from loss or damage while in transit. Unlike domestic carriers, ocean – going steamship companies assume n responsibility for the merchandise they carry unless the loss is caused by their negligence. Marine insurance on an international transaction may be arranged by either – the exporter or the importer, depending on the terms of sale. Frequently, the laws of a country require the importer to buy the insurance in order to protect the local insurance industry, and to save foreign exchange.

    Broadly speaking, there are three kinds of marine insurance:
    1. Basic Named Perils- include perils of the sea, fires, jettisons, explosions, and hurricanes.
    2. Broad Named Perils- include theft, pilferage, no delivery, breakage, and leakage in addition to the basic named perils.
    3.All Risks- cover all physical loss or damage from any external cause and is more expensive than those previously mentioned.
    4. War Risks-are covered under a separate contract.

    The occasional exporters, for fire sake of convenience, will ask the forwarder to arrange for insurance, but when shipments begin on a regular basis, the shipper can economize by going directly to a marine insurance broker. The broker, acting as the shipper’s agent, will draw up a contract to fit his needs from among the hundreds of clauses that are available. Because neither the policies nor the premiums are standard, it is highly recommended that the exporter obtain variouss quotations.

    B. Collection documents.
    These are the documents that the seller is required to provide the buyer in order
    to receive payment. For:

    ** A letter of credit transaction, the collection documents must be submitted to a bank.

    ** A documentary draft, anyone may be designated to act on the seller’s behave. A few exporters send their drafts overseas to a representative or bank for collection, but it is preferable to have a bank in the exporter’s country forward them to their bank in the city of destination.

    ** First of all, the collection costs are less because the correspondent bank charges the exporter’s bank less than it would charge the exporter.

    ** Second, because the correspondent relationship between the banks, the foreign bank will generally exert a greater effort to collect the money on time. The documents required for collection vary among countries and among customers, but some of the most common are:

    1.Commercial Invoices;
    2.Consular Invoice;
    3.Certificates of origin;
    4.lnspection Certificates;
    5. Bill of Exchange.

    1.Commercial Invoices
    Commercial invoices for export orders are similar to domestic invoices but include additional information such as:
    The goods’ origin;
    Export packing marks; and
    The clause stating that the goods will not be diverted to another country.

    Invoices for letter of credit sales will name the bank and the credit numbers. Some importing countries require the commercial invoices to be in their language and be visaed by their local consul.

    2. Consular Invoice

    A few countries require both the commercial invoice and a special form called the consular invoice. These forms are purchased from the consul, prepared in the local language of the country, and then visaed by the consul.

    3.Certificates of Origin
    Despite the fact that the commercial invoice carries a statement regarding the origin of the merchandise, a number of foreign governments require a separate certificate of origin. This document is commonly issued by the local chamber of commerce and visaed by the consul.

    4.Inspection Certificates
    -Inspection certificates are frequently required by buyer of grain, food stuffs, and live animals.

    Designing an Export Strategy
    Designing an export strategy can help managers avoid making the costly mistakes mentioned above.

    Figure, given below, shows an International Business Transaction Chain.

    Import Country
    Export Country
    1. Request for goods
    2. Receipt of order and
    2.a. Export intermediary’s customs brokers freight forwards.

    3. Inland Shipping. A Truck B. Rail. C. Air. D. Water.
    4. Seaport/Airport (export)
    A. Warehouse B. Insurance. C. Customer

    D. Loading. E. Port Authority/Con
    5. Shipping.
    6. Seaport/ Airport (Import)
    A. Unloading B. Port Authority/Control

    7. Financial transaction
    Buyer’s bank receives shipping invoice.
    Money is credit to seller’s bank.

    8. Import intermediary custom’s broker.

    9. Custom’s release

    10. Inland Shipping. A. Truck. B. Rail. C. Air. D. Water.

    11. Receipt of goods by buyer.
    A successful export (and import) strategy must take each element of the transaction chain into consideration.

    To establish a successful export strategy, management must.

    1. Assess the company’s export potential by examining its opportunities and resources. First of all, the company needs to determine if there is a market for its goods and services. Next it needs to make sure it has enough

    2. Obtain expert counseling on exporting most governments provide assistance for their domestic companies, although the extent of commitment varies by country. Other government agencies also assist exporters. As a company’s export plan increases in scope, it probably will want to secure specialized assistance from banks, lawyers, freight forwarders, export management companies, export trading companies, and others.

    3. Select a market or markets. This key part of the export strategy may be done passively or actively.

    Passively
    The company learns of markets by responding to requests from abroad that result form trade shows, advertisements, or articles in trade publications.

    Actively
    A company can find newer markets for its goods, by attending different seminars relating to international business affairs and some other issues. For example, Grieve’s Calabrese took a more active approach by selecting Southeast Asia as an area for export development as a result of a seminar he attended featuring the U.S. ambassadors to the ASEAN countries. A company also can determine the markets to which products like its own are correctly being exported. For example, in the U.S. setting U.S. ambassadors to the ASEAN countries. A company also can determine the markets to which

    products like its own are currently being exported. For example, in the U.S. Setting, U.S. Census foreign trade statistics identify the markets for different classifications of exports, and the National Trade Data bank (NTBD) provides specific industry reports for different countries. The NTDB is updated monthly, so potential exports can get the most recent studies. Similar forms of assistance are found in other countries.

    4. Formulate and implement an export strategy. In this step, a company considers its export objectives (immediate and long term), the specific tactics it will use, a schedule of activities and dealings that enable it to achieve its objectives, and the allocation of resources that allows it to accomplish the different activities. Then it implements the strategy by getting the goods and services to foreign consumers.

    The development of the plan depends on the nature of the company. For a small or medium-size company, the plan usually gets the attention of the top levels of management, as was the case with Grieve Corporation. Larger companies might establish a separate export department to deal with the export of ai1 products. Research has shown that commitment precedes success in exporting, and the development of an export department is one indicator of commitment by top management.

    Export Shipments
    All too often, newcomers to exporting are so preoccupied with the flow of documents that they fail to concern themselves with the physical movement of their goods. As long as the carrier delivers their shipments in good condition at a reasonable cost, they are satisfied. However, the tremendous advance in materials handing techniques over the past two decades such as containerization, RO-RO and LASH not only offer opportunities for cost savings but also enable exporters to reach markets which the previously could not serve.
    Containerization

    Containers are large boxes 8´8 feet in cross section, by either 10,20 or 40 feet which the seller fills with the shipment in his or her own warehouse. They are then sealed and are not opened until the goods arrive at their final destination. Over the long voyage, the containers, but a tractor trailer or a railroad for delivery to shipped where huge earns will load of aboard ship. From the port of entry railroads or trucks will deliver the container, often unpinned even for custom’s inspection, to the buyer’s warehouse where officials will examine the shipment. Not only is handling time reduced but also the risks of damage and theft are minimized. Both air and water carriers encourage the use of containers by charging lower rates for containerized shipments.

    Ocean shipping
    Ro-RO. Another innovation in cargo handling is the RO-RO (Roll On-Roll Off) ship which permits loaded trailers and any equipment on wheels to be driven onto this specially designed vessel_ RO-RO service has brought the benefits of containerization to ports which have been unable to invest in the expensive lifting equipment required for containers.

    LASH. Something similar to PO-RO is the LASH (Lighter Aboard Ship) vessel which gives customers located on shallow inland waterways access to ocean freight service. Sixthly foot-long barges are towed to inland ports, loaded, and towed back to deep water where they are loaded aboard the anchored LASH vessel. LASH service has been especially useful when adequate port facilities are lacking, because the vessel carrying the barges is able to load and unload offshore.

    Air Shipments
    Air freight has bad a profound effect on international business because shipments which once required 30 days now arrive in one day. Huge freight planetary payloads of 200,000 pounds, most of which goes either in containers or on pallets. Airlines guarantee overnight delivery from New York to many European airports and claim that their planes can be completely loaded or unloaded within 45 minutes.

    Although air freight rates are higher than ocean rags, when total costs of the two modes are compared, it frequently turns out that shipping by air is less expensive. Components of the total cost which may be lower for air than for f ocean freight are: (i) insurance rate, (2) customs duties when they are calculated on gross weights, (3) packing, and (4) inventory costs. In addition, the necessity for warehousing at the destination is often eliminated. Illustrates how the total cost of air freight may be lower.

    Even when the total costs based on these items are higher for air freight, it still may be advantageous to ship by air when factors other than the conventional expense, inventory, and capital are considered:

    1. Production and opportunity costs, although somewhat more difficult to calculate, are property a part of the total cost. Getting the product more quickly to the buyer results in faster payment which, speeds up the return on investment and improves cash flow. The firm’s capital is released more quickly and can be invested in other profit-making ventures or can be used to repay borrowed capital, thus reducing interest payments. Production equipment may be assembled and sent by air so that it may go into production sooner without the transit and set-up delays associated with ocean shipments.

    2. The fume may be air dependent; that is, export business is possible only because of air freight. Suppliers of perishable food products to Europe, Japan, and the Middle East are in this category as are suppliers of live animals (newly hatched poultry and prize bulls). Without air freight, these furor would be out of business.

    3. The products may be air dependent when the market itself is perishable. Consumer products with extremely short life cycles (high fashion and fad items) are examples, but many industrial products also fit in this category. A compute, for example, is perishable to the extent that the time it losses between the final assembly and the installation at the customer’s location is time that is not earning income (leasing fee).

    4. The sales argument which assures the customer that spare parts and factory technical personnel are available within a few hours is a store one for the exporting firm which has to compete with overseas manufacturers.

    Table: Sea-Air total cost comparison (shipment of spare part)

    Ocean Freight (with Warehousing) Air Freight (No Warehousing)
    Warehouse administrative costs $850 –
    Warehouse rent 1,400 –
    Inventory costs
    Taxes and insurance 630 $330
    Inventory financing 240 160
    Inventory obsolescence 1,500 850
    Seller’s warehouse and handing
    costs 1,550 950
    Transportation 350 2,000
    Packaging and handing 250 100
    Gargo insurance 60 30
    Custom duties 110 107
    Total $6,940 $4,527

    Total Systems concepts
    The total systems approach goes beyond the total cost approach to consider in addition to costs, the possible effect that a physical distribution decision may have on the other functional areas of the firm, Furthermore, an analysis of the

    impact of such a decision on the channel members and the final customers is made. The application of this concept to exporting is creating marketing opportunities that previously were thought to be nonexistent.

    Potential Pitfalls Of Exporting
    To understand the elements in an export strategy, some major problems that exporters often face. The attacks of September 11 have reminded traders how risky exporting can be. In the days following the attacks, it was nearly impossible for traders to send or receive goods. From problems that are common to international business in general and not unique to exporting, such as language and other cultural factors, the following are mistakes companies new to exporting most frequently make:

    Failure to obtain qualified export counseling and to develop a master international marketing plan before starting an export business.
    Insufficient commitment by top management to overcome the initial difficulties Gnd financial requirements of exposing.
    Insufficient care in selecting overseas agents or distributors.
    Chasing orders from around the world instead of establishing a base of profitable operations and orderly growth.
    Neglecting the export business when the domestic market booms.
    Failure to treat international distributors on an equal basis with their domestic counterparts.
    Unwillingness to modify products to meet other countries regulations or -cultural preferences.
    Failure to print service, sales and warranty messages in locally understood languages.
    Failure to consider use of an export management company or other marketing intermediary when the company does not have the personnel to handle specialized export functions.
    CHAPTER-3

    Export Policy ‘Of Bangladesh:
    The Export Policy 1997-2002 has been designed to operate in the imperatives and opportunities of the market economy with a view to maximizing export growth and narrowing down the gap between import payment and export earning. The following are the salient features of the policy:

    Major Objectives:
    To achieve optimum growth of national economy through increase of exports.
    To narrow down the gap between export earnings and import payments.
    To undertake timely steps to produce goods at a competitive price.
    To take highest advantage of entering into globalize international market.
    To make items more attractive to the market through product diversification and quality improvement.
    To establish backward linkage industries and services.
    To simplify export procedures, and rationalize and strengthen export incentives.
    To develop an export infrastructure.
    To develop trained human resources in the export sector and
    To raise the quality and grading of export products up to international standard.
    Strategies:
    General:
    Simplifying export procedures and helping private sector achieve efficiency, Government’s role is to facilitate.
    Providing facilities for technological development, productivity increase, cost reduction etc. for attaining internationally accepted standards of quality.
    Ensuring maximum use of local raw materials and encouraging establishment of backward linkage industries.
    Participation in international trade fairs, exhibitions, and sending trade missions with a view to consolidating Bangladesh position in the existing market and creating new market.
    Encouraging export of new categories of high value added RMG and encouraging BGMEA for establishing of a Fashion Institute.
    Organizing regularly international trade fairs and exhibitions.
    Development and expansion of infrastructure conducive to export.
    Necessary technical and practical training for development of skilled manpower.
    Extending technical and marketing assistance for development of new products and for finding appropriate marketing strategies.
    Promotion of High Value Added Leather and Leather Goods

    Providing various facilities including bonded warehouse facilities for import of raw materials to 100% export oriented leather industries.
    Promotion of Shrimp
    Extension and modernization of traditional/semi-intensive method of shrimp cultivation and ensuring quality standard as per buyer’s requirements.
    Promotion of Jute and Jute Goods
    Extensive publicity on jute goods as environment friendly natural fiber and diversification of uses.
    Promotion of Tea
    Undertaking programs for establishing brand name and developing linkage established blending and distributing agents.

    Promotion of Agro-based Products
    Undertaking programs for raising production, quality, standard and expansion of export markets.

    Promotion of Electrical and Electronic Goods
    Building and ensuring conducive infrastructure.

    Promotion of Engineering and other Consultancy Services and Sub­contracting
    Involving Bangladeshi missions abroad in obtaining contracts.

    Export Promotion Councils/Committees
    A National Committee on export at the highest level will review the export situation, and provide necessary direction and resolve problems.
    Task Force under the chairmanship of the Minister for commerce has been formed for immediate attention and action on export related problems.
    An export council has been formed with a view to exchanging ideas with chambers, exporter’s associations and private sector organizations in formulating policy decisions.
    A task force will also be formed to recommend measures for accelerating export of items identified under thrust sector and crush programs.
    Commodity councils will be formed for jute, tea, shrimp. RMG, and leather and leather products.

    Facilities to be given to Thrust Sector Thrust Sectors
    Leather and leather goods industries.
    High priced and high value added RMG.
    Computer software,
    Agro-processing sector.

    Leather and Leather Goods
    Leather manufacturing units will be modernized in order to enable them to produce increased quantities of finished leather from raw hides.
    Steps will be taken to establish supporting industries producing necessary chemicals and other inputs within the country.
    The existing Leather Technology Institute will be modernized so as to be used as a Common Facilities Centre’ for the leather industries.
    Necessary credit facilities will be extended for setting up leather goods industries. All credits will be brought under the umbrella of a single bank.
    Import of raw hides including wet blue and pickled leather shall continue to be permitted and shall be exempt from the prevailing customs duty and import license fee.
    Facilities for BMRE and other transformation process shall be made available to all tanning units to enable them to switch over by 2000 to processing of crust/finished leather from wet blue leather.

    Readymade Garments
    All out efforts would be made and steps taken for production and export of high priced RMG as per market demand.
    Immediate steps will be taken to establish a Fashion Institute.
    Liberal credit may be considered for capacity building and hiring of technology for production of high quality garments.

    Computer Software
    For development of human resources in the software computer science course will be introduced in all universities and BITs.
    An information technology village having multifaceted facilities will be set up.
    Appropriate provisions on protection of intellectual property rights will be incorporated in the existing copyright Act.

    Agro Processing
    Development activities under the recently established ‘Hortex Foundation’ will be extended.

    Export Incentives
    Several new incentives and facilities have been made available to the exporters along with the existing ones.

    Fiscal Incentives

    Restructuring of the Export Credit Guarantee Scheme(Ecgs)
    At present EGGS covering risk on export credit as well as probable commercial and political risks occurring abroad are available. These schemes are not giving desired result due to existence of various complicates. Therefore these schemes will be restructured.

    Convertibility of Taka

    Taka has been made convertible. Earnings from the trading account shall be freely convertible into foreign exchange for import of goods. Exporters will be allowed gradually to retain their foreign exchange earnings at higher proportion in their own foreign currency accounts.

    Utilization of Foreign Exchange by Exporters

    Proportion of foreign exchange that an exporter can retain in his foreign account has been raised from 20% either to 40% of his FOB earnings or at a rate fixed by the government after review. The following table are showing Export Target:

    EXPORT TARGETS (COMMODITY-WISE) FOR FINANCIAL YEARS 2002-2003 THR000H2O42-2003
    (In Million US dollar)
    Commodity 1998-99 1999-2000 2000-2001 2001-2002 2002-2003
    Readymade Garments 2500 2756 3010 3280 3590
    Jute goods 307 312 314 317 319
    Leather 205 225 240 280 330
    Frozen food 320 350 380 400 420
    Knitwear 983 1178 1412 1687 2010
    Raw Jute 125 132 140 150 160
    Tea 40 42 48 50 55
    Chemicals 94 98 100 102 102
    Petroleum products 10 10 10 10 10
    Engineering products 18 21 23 25 28
    Agricultural products 132 32 35 37 40 42
    Handicrafts 18 8 9 9 10 10
    Others 1378 378 462 617 824 1024
    Total: 5020 5630 6340 7175 8100

    * Rate of Exchange : US $ 1.00 = Taka 45.00

    For Example: An export oriented Readymade Garments Industries of Bangladesh follows the following export strategy:

    This industry used the following Documents:
    Commercial Invoice.
    Packing List.
    Bill of Leading.
    Certificate of Origin.
    Inspection Report.
    Beneficiary Certificate.

    Raw Materials Import: Yarn, Polybag, Level, Handbag, Cartoon, Gamtep, P.P. belt, Tag pin, Zipper, Button and others.

    Constraints Faced by the Exporters of Bangladesh:
    Infrastructural constraints
    Financial Constraints
    – Export Finance.
    – Transportation Cost.

    Bureaucratic Constrains.
    Government Bureaucracy.
    Bank Bureaucracy.
    Marketing Constraints
    Trade Information. Market Intelligence.
    Regulatory Constraints.
    Regulatory Services.
    Generalized Constraints.
    Backward Linkage/ Import raw material.
    Quality and Quantity. Skilled Labor force.
    Investment Incentives.
    Political Unrest ( Hartal, Trade Union)
    CHAPTER -4

    IMPORT STRATEGY:
    Importing: Importing is the bringing of goods and services into a country and results in the importer paying money to the exporter in the foreign country.

    Types of Imports: There are two basic types of imports­
    (1) Industrial and consumer goods and services to independent individuals
    and companies that are not related to the foreign exporter.
    (2) Intermediate gods and services to companies that part of the firm’s global
    supply chain.

    Companies imports goods and services because –
    They can be supplied to the domestic market at a cheaper price,
    They can provide better quality than competing goods manufactured in the domestic market,
    Specialization of production and export to markets around the world is more efficient than manufacturing every product in every market. For example, Nike buys shoes manufactured in several Asian countries, including Korea, Taiwan, China, Thailand, Indonesia, and Vietnam, because of the cheaper cost. It would be impossible to manufacture the same product on an industrial country and be able to sell it at ‘ a reasonable price because of the relatively high labor costs.
    ∎ Companies import products that are not available in the local market.

    Types of Importers: There are three broad types of importers­
    (1) Those that are looking for any product around the world to import and sell. They might specialize in certain types of products- such as sports equipment or household items- but they are simply scanning the globe4 and looking for any product that will generate positive cash flow for them.
    (2) Those that are looking for foreign sourcing to get their products at the cheapest price.
    (3) Those that are use foreign sourcing as part of their global supply chain.

    The Import process: The import process basically mirrors the export process. It involves both strategic and procedural issues. In fact, the export business plan could easily be adapted to make it an import business plan. Under the import process, first, managers need to research the potential markets, both in terms of the countries themselves and the suppliers. Second, they need to determine the legal ramifications of importing the products, both in terms of the product themselves and the countries from which they come. Third, they also need to deal with third-party intermediates, such as freight forwarders and customs agents, and finally, they need to arrange financing for the purchase.

    THE ROLE OF CUSTOMS AGENCIES:

    When importing goods into any country, a company must be totally familiar with the customs operations of the importing country. “Customs” are the country’s import and export procedures restrictions, not its cultural aspects. The primary duties of customs service are the assessment and collection of all duties, taxes, and fees on imported merchandise, the enforcement of customs and related laws, and the administration of certain navigation laws and treaties. As a major enforcement organization, it also deals smuggling operations and is increasingly involved and helping protect against foreign terrorist attacks.

    An importer needs to know how to clear goods, what duties to pay, and what special laws exist regarding the importation of products. On the procedural side, when merchandise reaches the port of entry, the importer must file documents with customs officials, who assign a tentative value and tariff classification to the merchandise. It is almost art form for companies to figure out of the tariff classification that will give them the lowest possible tariff. Then customs officials examine the goods to determine whether there are any restrictions on their importation. If there are restrictions, the goods may be rejected and be prevented from entering the country. If the goods are allowed to enter, the importer pays the duty and the goods are released. The amount of the duty depends on the product’s country of origin, the type of product, and other factors.

    A customs broker or other import consultant can help an importer minimize import duties by­

    Valuing products in such a way that they qualify for more favorable duty treatment. Different product categories have different duties. For example, finished goods typically have a higher duty than do parts components.
    Qualifying for duty refunds through drawback provision. Some exporters use in their manufacturing process imported parts and components on which they paid a duty.
    Deferring duties by using bonded warehouses and foreign trade zones. Companies do not have to pay duties on imports stored in bonded warehouses foreign trade zones until the goods are removed for sale or used in a manufacturing process.
    Limiting liability by properly marking an import’s country of origin. Because governments assess duties on imports based in part on the country of foreign, a mistake in marking the country of origin could result in a higher import duty.

    IMPORT DOCUMENTATION:

    When a shipment arrives at port, the importer must file specific documents with the port director in order to take title to the shipment. (Take title means the importer receives the products without purchasing them-that is, without laying ‘out any money). Importers must submit documents to customs that determine whether the shipment is released and what duties are assessed. So, there are two different types of documents:­

    those that determine whether customs will release the shipment.
    those that contain information for duty assessment and statistical purposes.

    The specific documents that customs requires vary by country but include an entry manifest, a commercial invoice, and a packing list. For example, the exporter’s commercial invoice contains information .such as the port of entry to which the merchandise is destined; information on the importer and exporter; a detailed description of the merchandise, including its purchase price; the currency used for the sale; and the country of origin.

    THIRD-PARTY INTERMEDIARIES:
    Third-party intermediaries are the companies that facilitate the trade of goods but that are not related to either the exporter or the importer. A company that either export or is planning to export must have some expertise, but not every company may have this skill. So, they must decide whether its internal staff will handle certain essential activities or if it will contract with other companies. Regardless, the following functions must occur.
    Stimulate sales, obtain orders, and do market research
    Make credit investigations and perform payment-collection activities
    Handle foreign traffic and shipping
    Act as support for the company’s overall sales, distribution, and advertising staff.

    Handling these functions internally can be costly and can require expertise a company doesn’t have. Most companies initially use external specialists and intermediary organizations to assume some or all of these functions, before developing intemal capabilities.

    Specialists are useful for such duties as preparing export documents, preparing customs documents in the importing country, and identifying the best means of transportation. They may perform more extensive roles, including taking ownership of foreign bound goods and/or assuming total responsibility got marketing and financing exports.

    Before discussing intermediary organizations, let we know about exporting. Exporting may be either direct or indirect.

    Direct Selling:
    Direct exports are goods and services sold to an independent party outside of the exporter’s home country. In other words, direct selling is when an exporter sells through representatives, to distributors, to foreign retailers, or to final end users. Exporters undertake direct selling to give them greater control over the marketing function and to earn higher profits. Direct intermediaries involve sales representatives, distributors, or retailers.

    Sales representatives: sale representative sells products in foreign markets on a commission basis, without assuming risk or responsibility. He/she may have exclusive rights to sell in a particular geographic area or may have to compete with other sales representatives that represent the firm.

    Distributors: A distributor in a foreign country is a merchant who purchases the products from the manufacturer and sells them at a profit. Distributors usually carry a stock of inventory and service the product. They also usually deal with retailers rather than end users in the market.

    Companies should consider the following points about each potential foreign sales representative or distributor.

    The size and capabilities of its sales force
    Its sales record
    An analysis of its territory
    Its current product mix
    Its facilities and equipment
    Its marketing policies
    Its customer profile
    The principles it represents and the importance of the inquiring company to its overall business
    Its promotional strategies

    Foreign retailers: Exporters can also sell directly to foreign retailers. Usually these products are limited to consumer lines, but-the growth of large retail chairs around the world has facilitated the export of products to the large chains, which gives the exporter instant coverage to a wide area. j

    End users: Exporters can also sell directly to end users. A good way to generate such sales is by printing up catalogs of by going to trade shows, or such sales can be generated when foreign buyers either get company brochures or respond to advertisements in trade publications.

    A company that has sufficient financial and managerial resources and decides to export directly rather than working through an intermediary must set up a solid organization. This organization may take any number of forms, ranging from a separate international division, to a separate international company, to full integration of international sales force that is separate from the domestic sales force because of the different types of expertise required in dealing in foreign markets.

    Direct Exporting Through the Internet and Commerce:
    Electronic commerce is an important way for companies to export their products to end users. A study conducted by Forester Research found that 7 percent of ‘ revenues from world-wide trade in 2002 was from e-commerce. E-commerce is easy to start, it provides faster and cheaper delivery of information, it provides quick feedback on new products, it helps to improve customer service, it is available to a global audience, it helps to level the field of competition, it can be a strategic tool to access different markets, it’s cheaper than a phone call, and it helps establish electronic data interchange (EDI) with both suppliers and customers.

    Indirect Selling:
    In indirect selling, the exporter sells goods directly to or through an independent domestic intermediary in the exporter’s home country that exports the products to foreign markets. The major types of indirect intermediaries are listed bellow­-

    Export Management Company (EMC),
    Export Trading Company (ETC),
    Freight forwarders.
    Webb-pomerene Association,
    Manufacturer’s agents,
    Export agents,
    Export and Import brokers.

    Export Management Company (EMC):
    An export management company (EMC) is firm that acts as its client’s export department. It often uses the manufacturer’s own letterhead in communicating with foreign sales representatives and distributors. An EMC’s staff typically is knowledgeable about the legal, financial, and logistical details of exporting. The EMC primarily obtains orders for its clients’ products through the selection of appropriate markets, distribution channels, and promotion campaigns. It collects, analyzes, and furnishes credit information and advice regarding foreign accounts and payment terms. It may also take care of export documents, arrange transportation (including the consolidation of shipments among multiple clients to reduce costs), set up patent and trademark protection in foreign countries, and assist in establishing alternative forms of doing business, such as licensing or joint ventures. EMCs usually concentrate on complementary and noncompetitive products so that they can present a more complete product line to a limited number of foreign importers.

    EMCs usually operate in one of two ways:
    1. Some act as commission agents for exporters. They handle the details of shipping, clearing customs, and document preparation in return for an agreed-upon, fee. In this case, the exporter normally invoices the client and provides any necessary financing it may need.

    2. Others take title to the goods. They make money by buying the goods from the exporter and reselling them at a higher price to foreign customers. Such EMCs may offer customer financing and design and implement advertising and promotional campaigns for the product.

    Limitations of EMC: We may mention some limitations of EMCs­-
    A manufacturer that uses an EMC may lose control over foreign sales because it id passing off that responsibility to an independent party.

    If the EMC does not actively promote the product, the company will not generate many exports.

    To overcome these limitations, the manufacturer needs to balance the desire for control with the cost of performing the export functions directly.

    International Trading Companies:
    An international trading company is a firm directly engaged in importing and exporting a wide variety of goods for its own account. It differs from an EMC in that it participates in both importing and exporting activities. By buying goods in one country and selling them in a second, an international trading company provides the gamut of necessary exporting and importing services. These include market research, customs documentation, international transportation, and host country distribution, marketing, and financing. Typically, international trading companies have agents and offices worldwide. The economic intelligence information they glean from these far-flung operations is one of their most potent competitive- weapons.

    The most important international trading companies in the global market place are-­

    ∎ Sogo sosha: Japanese trading company sogo sosha acquire goods by importing them from other countries or by giving the goods manufactured and then reselling them in both domestic and foreign markets. The sogo sosha are an integral part or the trading arms of the Japan’s keiretsu system- Japanese business groups that are networks of manufacturing, service, and financial companies. There operations expanded significantly beyond exporting to include investing in production and processing facilities, establishing fully integrates sales systems ff certain products, expanding marketing activities, and developing large bases for the integrated processing of raw materials.

    An example of the type of activities that the Japanese trading companies pursue is the joint purchase by Itochu Corporation and Arco of the western U.S. coal operations of Coastal States Energy Company.
    Chaebol: The second one is Chaebol. Chaebol are the Korean business groups that are similar to keiretsu and also contain a trading company as part of the group. They are trying hard to challenge the sogo shoshas in the trading company market.

    Export Trading Company (ETC):
    ETCs are like EMCs. They are like independent distributors that match up buyers and sellers. They tend to operate on the basis of demand rather than of supply. They identify domestic suppliers who can fill orders in overseas markets. An ETC looks for as many manufacturers as it can find to supply overseas customers. Because ETCs could control the foreign distribution of products and collaborate with producers of competing products, they could be open to antirust allegations.

    Foreign Freight Forwarders:
    A foreign freight forwarder is an export or import specialist dealing in the movement of goods from producer to consumer. A freight forwarder is an agent for the exporter in moving cargo to an overseas destination, known as the travel agents of cargo. The typical freight forwarder is the largest export intermediary in terms of value and weight handled.

    The services it offers are more limited than those of an EMC. Freight forwards are specialize in the physical transportation goods, arranging customs documentation and obtaining services for their clients. They obtain the best routing and means of transportation based on space availability, speed, and cost.

    Trey will get the products prom the manufacturing facility to the air or ocean terminal and then overseas. They use different transportation modes- surface freight (truck and rail), ocean freight, airfreight. The movement of goods across different modes from origin to destination., is known as intermodal transportation. The forwarder secures space on planes of ships and necessary storage prior to shipment, reviews the letter of credit, obtains export licenses, and prepares necessary shipping documents. It also may advise on packing and labeling, purchase transportation insurance, repack shipments damaged en route, and warehouse products, which saves the exporter the capital investment of warehousing. They don’t take title to the goods or act as a sales representative in a foreign market.

    The freight forwarder usually charges the exporter a percentage or the shipment value, plus a minimum charge dependent on the number of services provided. They also receives a brokerage fee from the carrier.

    Using a freight forwarder is usually less costly for an exporter than providing the service internally. It also can get exporters shipping space more easily and consolidate shipments to obtain lower rates.

    Webb-Pomerene Association:
    It is group of U.S. firms that operate within the same industry and that are allowed by law to coordinate their export activities without fear of violating U.S. antitrust laws. First authorized by the Export Trade Act of 1918, A Webb­Pomerene association engages in market research, overseas promotional activities, freight consolidation, contract negotiations, and other services for its members and selling the goods in foreign markets on the association’s behalf. .In addition to the intermediaries that provide abroad range of services to international exporters and importers, numerous other types of intermediaries, including the following, offer more specialized services:

    Manufacturers’ agents solicit domestic orders for foreign manufacturers, usually on a commission basis.

    Manufacturers’ export agents act as a foreign sales department for domestic manufacturers, selling those firms’ goods in foreign markets.
    Export and Import brokers bring together international buyers and sellers of standardized commodities. Companies whose have not the required degree of skills and expertise to deal with institutions and documentation may elect to work through a broker. The import broker helps an importer clear customs. It obtains various government permissions and other clearances before forwarding necessary paperwork to the carrier that is to deliver the goods to the importer. This list is by no means complete. Indeed, specialists are available to provide virtually every service needed by exporters and importers in international trade.

    TOP GLOBAL TRADING COMPANIES, 2003.

    2003
    REVENUE – 2003
    PROFITS- PROFIT
    -%OF:­
    REVENUE
    GLOBAL
    500
    RANK COMPANY COUNTRY (S N11LLIONS) ($ MILLIONS) RANK
    12 Mitsubishi Japan 105,814 482 0-5

    13 Mitsui Japan 101,206 443 0-6

    17 Itochu Japan 91,177 242 0-8
    23 Sumitomo Japan 77,140 362 0—-4
    25 Marubeni Japan 71,757 -931 (1)-16
    28 E.ON Germany 66,453 1,834 3…….1

    74 Nissho Iwai Japan 43,703 10 0…….13

    118 Samsung South Korea 33,212 32 0………..11

    219 Hyundai South Korea 21,702 -186 (1)………..15

    248 LG International South Korea 19,516 26 0___10.
    255 Tomen Japan 19,073 38 0- 9

    273 Toyota Tsusho Japan 18,040 70 0 7

    289 SK Global South Korea 17,214 -95 (1) 14

    305 Nichimen Japan 16,437 11 0–12

    311 Sinochem China 16,164 82 1- 3

    329 COFCO China 13,004 131 1- 2

    Import Policy of Bangladesh.:
    Bangladesh government is concern about developing market economy according to the GATT agreement. To increase export and easy investment; a long term, helpful, consistent import policy is necessary. For this purpose the present government has taken step by introducing 5 years policy (1997-2002) instead of 2 years policy. By giving up control policy, government take some liberalize policy that easy and simple than previous one.

    Objectives of the policy:
    Important objectives of the policy are­
    1. To introduce an import policy that is consists with market economy and GATT agreement.
    2. To arrange the import of basic industrial machineries and materials to enhance export.
    3. To ensure development of domestic companies and provide quality product to the customer at a reasonable price.

    General rules related to import:
    Control over product import: It ensure control on product imported by –
    Listing import restricted product.
    Listing conditionsl import product
    Free import product.

    General condition on product import:
    1. It is compulsory to use I.T.C. (Import Trade Control) number on product (6 digit).
    2. Origin of the product collection and restriction of shipment. Any kind of product originated from Israel is strictly prohibited to import in Bangladesh and no ship can be used belonging that country.
    3. Pre shipment inspection.
    4. Import at a competitive rate.
    5. Origin of the country: In every kind of imported product country of origin must clearly be printed on product.

    Source of fund:
    1. Cash foreign currencies.
    2. Foreign currencies of Bangladeshis.
    3. Fund of foreign aid.
    4. Barter.

    Methods of import:
    1. Import license/certificates.
    2. Import by LC(Letter of Credit).
    3. Import permit or clearance permit.
    4. Direct paying import by abroad Bangladeshi.
    5. Time period of Product shipment:

    Products should be shipment within a month of registration of L/C. Import related fees:
    I. UC permit fee: No UC permit fees would be paid up to product import
    value Tk. 100,000. And beyond this limit 2.50% permit fee would be paid.
    II. Certificate renew fee: There are Four types of certified, these are as
    follows:
    Class Amount Import
    Tk. Primary Registration
    Fee Tk. Annual Renew
    A 5 Lakes 500 500
    B 15 – 1500 15000
    50 – 3000 3000
    D 50 – 5000 5000

    CHAPTER-5

    Export Financing:
    From the exporters point of view, there are four major issues that relate to the
    financial aspects of exporting:
    The Price of the Product.
    The Method of Payment.
    The Financing of Receivables.
    Insurance.

    1. Product Price:
    Product pricing of exports entails many of the factors that managers consider in pricing their products for domestic markets. If the exporter bills in its own home country currency, the importer absorbs the foreign­ exchange risk and must decide weather to pass on any possible exchange-rate differences to the consumer. If the exporter bills in the currency of the importers country, the foreign-exchange risk falls on the exporter.

    Export pricing is influenced by:
    Exchange rates.
    Transportation costs.
    Duties.
    Multiple wholesale channels.
    Insurance costs.
    Banking costs.
    Antidumping laws.

    2. Method of Payment:
    The flow of money across national borders is complex and requires the use of special documents. Exporters and importers must deal in foreign exchange, and the transfer of funds .from one bank to another across national borders can be complicated and can take time.
    In descending order in terms of security to the exporter, the basic methods of payment for exports are­

    A. Cash in advance.
    B. Open Account.
    C. Consignment.
    D. Draft or Bill of Exchange.
    E. Letter of Credit.

    A. Cash in Advance: When the credit standing of the buyer is not know or is uncertain, cash in advance is desirable. However, very few buyers will accept these terms because part of their working capital is tied up until the merchandise is received and sold. Furthermore, they have no guarantee that they will receive what they ordered. As a result, few customers will pay cash in advance unless either the order is small or is for a product of special manufacture.

    B. Open Account: When a sale is made on open account, the seller assumes all the risk and therefore, these terms should be offered only to reliable customers in economically stable countries. The exporter’s capital, of course, is tied up until payment is received.

    C. Consignment: This follows the procedure well known in the United States by which goods are shipped to the buyer and payment is not made until they are sold. All of the risk is for the seller and terms such as these should not be offered without making the same extensive investigation of the buyer and country that is recommended for open account terms. Multinationals frequently sell goods to their subsidiaries on this basis.

    D. Draft or Bill of Exchange: When an individual or a company pays a bill in a domestic setting, it typically uses a check. This is also known as a ‘Draft’ or a commercial `Bill of Exchange.

    A draft is an instrument in which one party (the drawer) directs another party (the drawer) to make a payment.

    The drawer can either be a company like the importer or a bank. Documentary drafts and documentary letters of credit are often used to protect both the buyer and seller. They require that payment be made based on the presentation of documents conveying the title. If the exporter requests payment to be made immediately, called a Sight Draft. If the payment is to be made later-for example, 30 days after delivery-the instrument is called a Time Draft. A time draft is more flexible for the importer and more risky to the exporter. A time draft drawn on a bank and bearing the bank’s promise to pay at a future date is known as a Banker’s Acceptance. Banks assists in establishing and collecting a draft and usually charge the exporter a modest fee that range from about – eight to one-quarter percent of the value of the draft, with a minimum of $35 to $75 and a maximum of $150 to $200.

    E. Letter Of Credit: A letter of credit, abbreviated as L/C, stands at the center of international commercial transactions. Only cash in advance offers more protection to the seller than an export letter of credit. This is a document issued by the buyers bank which promises to pay the seller a specified amount when the bank has received certain documents stipulated in the letter of credit by a specified time.

    A letter of credit can be revocable or irrevocable.
    -A revocable letter of credit is one that can be changed by any of the parties.
    – Irrevocable letter of credit, which is a letter that cannot be canceled or changed in any way without the consent of all parties to the transaction. Exporter and importer may prefer an irrevocable letter of credit.
    -A confirmed letter of credit, the exporter has the guarantee of an additional bank, sometimes in the exporter’s home country, sometimes in a third country. It rarely happens that the exporter establishes the confirming relationship. Usually, the opening bank seeks the confirmation of the L/C with a bank with which it already has a credit relationship.

    Fig: Letter of Credit Relationships:
    Above the figure explains the relationships among the parties to a letter of credit. We can also explain this relationship by an example, of the U.S exporter and the French importer. The French importer applies to the Bank of Paris, for the issuance of a letter of credit. The Bank of Paris then undertakes a credit check of the importer. If the Bark of Paris is satisfied with her creditworthiness, it will issue a letter of credit. The Bank of Paris will charge the importer a fee for this service. This amounts to between 0.5% and 2% of the value of the letter of credit, depending on the importer’s creditworthiness and the size of the transaction.

    If the Bank of Paris is satisfied with the French importer’s creditworthiness, it will pay the U.S exporter for the merchandise as long `as it is shipped in accordance with specified instructions and conditions. At this point, the letter of credit becomes a financial contract between the Bank of Paris and the U.S exporter. The Bank of Paris then sends the letter of credit to the U.S exporter’s bank, say the Bank of New York.

    The Bank of New York tells the exporter that it has received a letter of credit and that he can ship the merchandise. After the exporter has shipped the merchandise, he draws a draft against the Bank of Paris in accordance with the terms of letter of credit, attaches the required documents and presents the draft to his own bank, the Bank of New York, for payment. The Bank of New York then forward the letter of credit and associated documents to the Bank of Paris. If all of the terms and conditions contained in the letter of credit have been complied with, the Bank of Pans will honor the draft and will send payment to the Bank of New York. When the Bank of New York receives the funds, it will pay the U. S exporter.

    As for the Bank of Paris, once it has transferred the funds to the Bank of New York, it will collect payment from the French importer. This example can be showed graphically as follows:

    3. Financing of Receivables:

    Although exporters would prefer to sell on the almost riskless letter of credit terms, increased foreign competition and the universally tight money situation are forcing them to offer credit. To do so, they must be familiar with the available sources and kinds of export financing, both private and public.

    a) Private Source: Commercial banks have always been a source of export financing through loans for working capital and the discounting of time drafts, but in recent years, new types of financing have been developed, these are discuss bellow:
    Factoring: This is a financing technique which permits the exporter to be more competitive by selling on open account rather than by means of the more costly letter of credit method.
    Under the export factoring arrangement, the seller passes its order to the factor for approval of the credit risk. Once the order is approved, the exporter has complete protection against bad debts and political risk. The customer pays the factor who, in effect, acts as the exporter’s credit and collection department. The period of settlement generally does not exceed 180 days.=
    Forfeiting: This is the term used to denote the purchase of obligations which arise from the sale of goods and services and fall due at some date beyond the 90-180 days that are customary for factoring. These receivables usually are in the form of trade drafts or promissory with maturates ranging from six months to five years.
    b) Government and government-assisted organizations:

    The Export-Import Bank (Eximbank) is a government institution which not only offers direct loans for large projects and equipment sales requiring long-term financing (over five years) such as commercial aircraft and power plants, but also provides medium-term (181 days to five years) and long term credit guarantees fix commercial bank financing.

    Ex-IM Bank offers four programs.
    1) Working capital guarantees.
    2) Export credit insurance.
    3) Guarantees of commercial loans to foreign buyers.
    4) Direct loan to foreign buyers.

    Other government incentives: There are other government incentives to trade which, although they are not strictly a part of export financing, certainly are closely related. These are-­

    Overseas Private Investment Corporation (OPIC)
    The Foreign Sales Corporation (FSC).
    The Foreign Trade Zone (FTZ).

    5. Insurance: There are two kinds of insurance that are used most often in exports.

    Insurance on transportation risks, damaging weather conditions, rough handling by carriers, and other hazards to cargo make insurance an important protection for exporters. The terms of sale determine whether the exporter or the importer is responsible for the insurance, and that should affect the cost of the export. Marine cargo insurance and air carrier insurance should be purchased to protect against damage or loss
    Political, Commercial and Foreign-Exchange Risk, some private sector insurance companies will cover these types of risks for established exporters with a proven track record, but government agencies tend to be the most important insurer for these risks. Political risks include war and expropriation. Commercial risks arise from buyer default and insolvency. Foreign-exchange risks arises when a fall in the value of the foreign currency results in the exporter receiving less of their own currency.

    Insurance premiums are based on the risk of the transaction, including the country where the risk has been incurred.

    COUNTER TRAD
    Definition:
    Counter trade is an alternative means of structuring an international sales when conventional means of payments are difficult, costly or nonexistent Counter trade denotes a whole range of barter like agreement; its principle is to trade goods and services for other goods and services when they cannot be traded for money.
    TYPES OF COUNTER TRADE
    With its roots in the simple trading of goods and services for other goods and services, counter trade has evolved into a diverse set of activities that can be categories as five distinct types of trading arrangement.

    1. Barter
    2. Counter purchase
    3. Offset
    4. Switch trading and
    5. Compensation or Buyback.

    1. Barter:

    Barter is the direct exchange of goods and\or services between two parties without a cash transaction. But barter has two main problems­-

    Goods Goods may not exchanged simultaneously
    The firm engaged in barter run the risk of having to accept goods they do not want, can not use, or have difficulty reselling at a reasonable price.
    2. Counter purchase:
    Counter purchase is a reciprocal buying agreement. It occurs when firm agrees to purchase a certain amount of materials back from a country to which a sales is made.

    3. Offset:
    Offset is similar to counter purchase in so far as one party agrees to purchase goods and services with a specified percentage of the proceeds from the original sales. The difference is that this party can fulfill the obligation with any firm in the country to which the sales is being made

    4. Switch trading:
    Switch trading refers to the use of a specialized third – party trading house in a counter trade agreement. Switch trading occurs when a third party trading house buys the firm’s counter purchase credits and sells them to another firm that can better use them

    5. Compensation or Buybacks:

    A buyback occurs when a firm builds a plant in a country or supplies technologies, equipment, training or other services to the country and agree to take a certain percentage of the plant’s output as a partial payments for the contract.

    Advantages of counter trade:

    Counter trade gives a firm a way to finance an export deal when other means are not available.
    When one currency is not convertible with other, then counter trade is occurs
    Counter trade is most attractive to large, diverse multinational enterprise’s that can use their worldwide network of contract to dispose of goods acquired in counter trade.

    Disadvantage of counter trade:
    The main disadvantage of counter trade is that the firm may receive unusable or poor quality goods that can not be disposed of profitability.

    Conclusion:

    Being an internee of Fast Cargo Services Ltd., I have learned a lot about the import & export process through the EPZ. Fast Cargo Services Ltd. let me introduced myself as an expert of import process indeed.

    Moreover, I have got some experience in the field of internship which is relevant garment industries in the perspective of Bangladesh. Fast Cargo Services Ltd. has diversified business sectors, so they needed such information that I collected by my internship report making. Beside that the Fast Cargo Serves Ltd. has a very good command in the business market of garments. As our country has a very positive attitude in garment sector, so the future plan regarding garment sector in Fast Cargo Services Ltd. is very fruitful in deed.

    In conclusion we can say that, once a company has identified the good or service it wants to sell, it must explore market opportunities, a process that entails a significant amount of market research. Next, it must develop a production or service development strategy, prepare the goods or services for market, determine the best means for transporting the goods or services to the market, sell the goods or services and receive payment. All of these steps require careful planning and preparation. Without a separate export staff, a company must rely on specialists to move goods and services from one country to another, agents or distributors to sell the goods or services and banks to collect payment. Companies may have many strategies both Export and Import when entering foreign markets.

    " 126,"

    FAST FOOD CULTURE IN OUR SOCIETY

    ","

    1.0.1.1 IUBAT- International University of Business Agriculture and Technology

    IUBAT is the first Non-government University of Bangladesh which was established on January 16, 1991. It has a permanent campus on 5.5 acres of land and is currently situated in 4 Embankment Drive Road, sector#10, Uttara Model Town, Dhaka-1230, Bangladesh. It was approved under the Non- Government University Act of 1992 and 1998. The university was founded by Prof. Dr. M. Alimullah Miyan.

    Mission of IUBAT is “Human resources development through appropriate teaching, training, and guidance as well as creation of knowledge conducive to socio-agro-economic development of developing societies in general and of Bangladesh in particular”.

    The university is internationally linked with 60 universities in Europe, America, Canada, Australia, Asia and Africa (IUBAT Bulletin, 2010). IUBAT is an English medium university and students are strictly asked to speak in English inside university campus. The programs run at IUBAT are MBA, BBA, BCSE, BSCE, BSEEE, BSME, BAEcon, BSAg, BSN, BATHM, DCSE and professional diplomas in accounting. IUBAT is situated on the bank of holy river Turag from where can be captured a panoramic view of the holy Isthema ground. The university has various facilities like transportation, advanced computer lab, well equipped lab of every departments and a library with various collection of books (IUBAT Bulletin, 2010).

    1.0.1.2 Uttara, Sector # 10, Dhaka

    Uttara is a Thana of Dhaka, the capital of Bangladesh. The name Uttara was derived from the Bengali word ‘Uttor’, which means north. It lies on the road to Gazipur and adjoins Shahjalal International Airport (Khan, 1994). Uttara is a residential area, having an area of 36.91 sq. km. There are fourteen different sectors in Uttara. Among which Sector # 10 is one of them. There is not any official authority under municipality in Sector # 10. But, there is a People Welfare office situated, which looks after the problems of people of Sector # 10. But this office does not fall under any government body. According to the information provided by this office there are many slum houses that reside on the bank of Turag River that runs along Uttara Sector # 10. But there is not any official record for this. The people living in the slums change their place frequently due to many reasons as natural calamities (flood), no money to stay, the land is occupied by some other bodies like construction companies Approximately, there are more than 500 families residing in slums around Sector # 10, Uttara (People welfare office, 2010).

    1.0.2 Scope of the study

    The scope of this research is limited to Slums of Uttara, Sector # 10, Dhaka and International University of Business Agriculture and Technology (IUBAT). I have just conducted a preliminary study in these areas to know about the consumption of fast food by these people in their daily life. In future, the findings from the research can be used to formulate different strategies to uplift the health of individuals.

    2.0 Background

    2.0.1 Introduction to Topic

    Studies have shown that with the consumptions of fast food, people are more likely to have health effects like obesity ( Li,2002, Bowman & Vinyard, 2004, Leeds Childhood Obesity Prevention and Weight Management Strategy, 2006, Bowman et.al., n.d., Grier et.al.,  2007)  heart diseases(Fast food and Heart Disease, n.d.) ,asthma (Breaking News24/7, 2009), stroke (Steenhuysen, 2009), type2 diabetes( Grace et.al.,2008). Mostly adolescents and adults are found to be affected by the fast foods. According to Transtheoritcal Model, behavior change is a process that occurs in the stages with people moving through different stages in a very specific sequence as they change. Consumption of fast food has become a behavior for the people so if they want to change or stay away from it they have to go through different change stages (Hayden, n.d.).

    We can observe that the perception and practice of people are not going along. The reasons behind it are the advanced generation that perceives fast food as smarter, as part of having fun, family influences which means the family consumes the fast food as their dietary pattern. Also, mass media has a great influence among people where role models are shown taking fast food and having good body figure (Dickson & Nicole, 2009). It is also found that with slow or fast music in a restaurant customers are attracted to the restaurant and spend more money on food, although they spent significantly more on drinks (Meiselman & MacFie, n.d.).

    2.0.1.1 Profile of Bangladesh

    Dhaka, the capital city of Bangladesh, is busy and highly populated city with many more advanced facilities than other parts of the Bangladesh. Schools, colleges and universities are found to be more in number here. People here are very busy and always in rush (Consumer Behavior in Fast Food Industry, n.d.). They do not have time to prepare healthy meals because they believe that preparation of healthy foods require long hours. They are simply too tired at the end of the day to prepare meals with good nutrition and suitable caloric value (Consumer Behavior in Fast Food Industry, n.d.). We can see many restaurants and fast foods shops around the city. It is found to be very easy to buy foods from outside from any fast foods shops for many families (Does fast food mean fat food, 2008). It has become a part of their life.

    “In Dhaka city for street vendors there is no policy that shows that street food

    Vending can also be understood as a means of employment. Street food vending is not regulated in Bangladesh but operates haphazardly without any systematic monitoring system (Faruque et al, 2010).” In study conducted by Faruque et al (Faruque et al, 2010 it was found that most of the vending shops (68%) were located on the footpath irrespective of areas surveyed and 30% vending carts were placed near the drain and 18% near the sewerage.

    In Bangladesh, this fast food culture started in the late eighties (Consumer Behavior in Fast Food Industry, n.d.). Day by day the intake of fast food is increasing and fast food places are getting popular. It can be easily estimated by the establishment of many fast food shops around Dhaka city.

    2.0.1.2 Definition

    Definition of Fast Food may vary from person to person. For some people fast foods mean anything that is cooked outside of the house. Some think fast foods are foods which are generally high in salt, fat, and refined carbohydrates and low in vitamins and minerals. Many people say that fast foods mean simply the American lifestyles (Consumer Behavior in Fast Food Industry, n.d.). Some say fast foods are meal with high saturated fat and low quality carbohydrates, white bread and lots of soda and low fiber content. It is also believed that fast foods represent a dietary pattern that is the opposite of what is recommended for a healthy body (Freiboth, n.d).

    For my study, the fast foods are any readymade foods that are served by fast foods shops like Kentucky Fried Chicken (KFC), American Fried Chicken (AFC), A&W, PIZZA HUT, PIZZA END, Fortune Fried Chicken (FFC), California Fried Chicken (CFC, McDonalds. The items include sandwich, burger, fried chickens, combo servings, cold drinks, fries, pizza and many more fat items. As my study population is slum area too, I have considered the readymade food available in shops like packed biscuits, chips, and local items like singara, samocha, chop which contain high fatty oils too as the fast food for my study.

    2.0.2 Literature Review

    A study conducted in India showed that many youngsters visit fast food shops for having fun and change. Although they gave preference for taste and nutritional values followed by hygiene, they felt that homemade food is much better than food served at fast food centres (Goyal, 2007). “Street foods vendors assure food security for low-income urban populations and provide a livelihood for a large number of workers who would otherwise be unable to establish a business for want of capital” (Faruque et al, 2010). But, it has also been recognized that street- food vendors are often poor, uneducated and lack the safe food practices in context of Bangladesh (Faruque et al, 2010).

    Fuzhong Li and his colleagues from Oregon Research Institute (ORI) have published a research article through the American Journal of Epidemiology which states that a high density of fast food outlets is associated with an increase of 3 pounds in weight and 0.8 inches in waist circumference among neighborhood residents who frequently ate at restaurants (Li, 2002). The researchers followed a sample of 1200 local residents’ ages 50-75 years old over a three year period using anthropometric and survey measures (body weight, perceptions etc). Researchers believe that those who are having fast food will gain weight and it will lead them to obesity. The study cannot be compared with mine as my study is between the age group 18-25 years of age and also I did not do any anthropometric assessments. Also, my study was just a short interview with some questions.

    Bowman & Vinyard in 2004 did a study among 20 years and older in U.S. The study was done to find out how and where people are eating. They compared results from two U.S. Department of Agriculture (USDA) surveys that were done 5 years apart. Those surveys showed that consumption of fast food has increased from 16% to 25%. They had higher body mass index than people who did not eat fast food and were more likely to be overweight.  The study can be an example that fast food consumption can lead to overweight. Hence, people should be aware of the items they eat when eating fast food.

    In one of the researches done by Bowman et al, it was found that obesity increases with the consumption of fast food (Dickson & Nicole, 2009).The result showed that fast food consumption was highly prevalent in both genders, all racial/ethnic and regions of the country. Children who ate fast food compared with those who did not eat fast food consume more total energy and had poorer diet quality on days with compared with children who did not eat fast food.  There are lots of causes for overweight and obesity, among which high intake of energy dense foods (fast foods) is one (Leeds Childhood Obesity Prevention and Weight Management Strategy, 2006).

    “Food Marketing to Children and Health” study done by Katherine L. Denlinger, 2008 as a course requirement had revealed the negative effects of food marketing to children. The health of children and youth in the United States has greatly declined over the past few decades. Around the whole many countries are experiencing high rates of childhood obesity. It has been found that many individuals who are obese as children are also obese as adults. One study found that about a third of obese preschool children and a half of obese school-age children become obese adults and this obesity has many negative affects including medical, emotional, and social consequences (Denlinger, 2008).

    Clare et al in their study “Prevention of type 2 diabetes in British Bangladeshis: qualitative study of community, religious, and professional perspectives” have found that one of the ways  to prevent diabetes is by adopting healthy lifestyles which is done by staying away from the high sugar and fat foods(Grace et al,2008). This study helps to conclude that without consuming fast food we can prevent ourselves from diabetes, which is a chronic disease. The study done by Kozyrskyz on “Fast-food negates anti asthma benefits of breastfeeding” suggests that the prevalence of fast food can increase twitchy airways and wheezing leading to asthma (Taragana, 2009).

    Fast foods are also the cause of heart disease and stroke. At the American Stroke Associations International Stroke Conference, study done by Morgenstern and colleagues in the year 2003 was presented, which had showed that the relative stroke rose one percent for each fast-food restaurant. During that time residents suffered a total of 1,247 ischemic strokes caused by blocked artery that obstructs the blood flow to the brain (Steenhuysen, 2009). They found that fast food have high amount of fat which flow in the blood and accumulates in the blood vessels with increasing year and creates a difficulty in the blood flow and leads to stroke.

    Not much research has been done among the age group specifically 18-25 years about the consumption of fast food. Moreover, In Bangladesh no any specific research has been done regarding the perception and practice of fast food among people.

    2.0.3 Rationale and Justification

    I could not find any research done before under this topic in Bangladesh.  However many researches were done and have been doing in other countries like the United States, the United Kingdom, Denmark, Canada, Australia. Most of the web sites are filled with the researches and articles written by European countries regarding the negative health effects of fast foods.  Actually these fast foods are the foods that are served in European and American continents  and gradually it has entered inside the developing countries like Bangladesh.

    Bangladesh is a developing country. So, the government is more concerned about the development of infrastructures like health, education, supply of clean drinking water. The main responsibility of the country is to fulfill the nutritional requirement and make the health services access to each individual. People think that the establishment of fast foods shops as a part of development because these are mostly found in developed countries. So, at this moment the country as well is not bothering about the fast food consumptions and its bad effects in the health of individual. When the condition will be more serious and prevalence of obesity, heart diseases, stroke, and diabetes will be seen dramatically risen then only this topic will get more attention from the researchers and the government as well.

    As a nurse, I have studied that consumption of fast foods can lead to many diseases. In hospitals we have to face many patients of obesity, heart diseases, asthma and diabetes. In fact every educated individual know that the consumption of fast foods is bad for health but still they want to have it in their diets. So, awareness programs should be conducted in the community. Serious steps should be taken in order to save the community from side effects of fast foods. Therefore, I would like to conduct a preliminary small study which explores the perceptions and practice of people about the fast food intake. This topic is a public health concern. If not treated in time we may very soon have lots of obese adults with chronic diseases like heart diseases, stroke, asthma and diabetes. In this case, findings from my study can be used for the patient teaching in the hospital setting during discharge planning as well as in the community setting. Hence, this study can be of great use.

    3.0 Research Purpose and Objectives

    3.0.1 The purpose of the Study

    The main purpose of my study is to explore the thinking of the people regarding the fast food consumption and how do they practice eating these foods. The study will try to find out whether or not there is relation between fast food consumption and economic and educational status of people.

    3.0.2 Specific Objectives

    The specific objectives of my study are as follows:

    3.0.3 Research question

    How do the students of IUBAT and slum population of Uttara, Sector # 10, Dhaka think and act regarding intake of fast food?

    4.0 Methodology

    4.0.1 Study design

    Both quantitative and qualitative study designs has been used in the study which makes it mixed study. My interview consisted of semi-structured questions. Some questions explored feelings and perceptions regarding this topic. Some questions evaluated the situation and condition for this topic which makes the study mixed.

    4.0.2 Study setting

    The study took place at IUBAT, International University of Business Agriculture and Technology, 4-Embankment Drive Road, Sector # 10, Uttara Model Town, Dhaka-1230, Bangladesh. Students were interviewed from the various places inside IUBAT premises. I also involved slum population from Uttara, Sector # 10, Dhaka.

    4.0.3 Study population

    My study population is the IUBAT students and the population living in the slums of Uttara, Sector # 10, Dhaka. Age group for my study is between 18-25 years.

    4.0.4 Sample size and selection

    I took 60 participants. I involved 30 IUBAT students where male and female students were of equal number and 30 participants of age group 18-25 years from the slum area. For selecting my participants from IUBAT, I selected various places. For example, I stood at the entrance of the IUBAT, library. I selected every 3rd student who came out from the library. I talked with them about the objectives of my research. Once they agreed to participate I continued my interview with them. Once I had finished interviewing that client then again I stood at the door and start counting from beginning and choose the 3rd   person to come out from library. If the chosen participant refused to participate then I picked up the one who came out right after that participant. I took my sample in a similar way from the lakeside entrance gate of IUBAT. I also talked with those students sitting in the IUBAT playground or lakeside arena. I talked with them about the objectives of my research and after they agreed to participate I continued my interview with them.

    For selecting the participants from the slum, I walked in the slum community of Uttara, Sector # 10, and talked with the elderly people or leader of the community about my research. After getting their permission, I talked with people of age group between 18-25 years about the objectives of my research. If they agreed to participate, I presented a consent form and proceed with my interview. I went on similarly until I got my saturated sample size. In my research, I have tried my best to minimize the bias.

    4.0.4.1 Research assistants

    I personally put up a notice at the IUBAT’s display board and invited for the volunteer to my study. I conducted the series of discussion with them and made sure that they have little idea about public health and are interested to assist me in my research. I also saw if they had the understanding level of the local spoken language so that it facilitates me in my research. Research assistant accompanied me during my research. He helped me take consent with the participants and create a healthy environment for taking my interview. But the whole interviews were taken by me.

    4.0.5 Data collection time frame

    The timeframe for my whole research study was 2 months that is from first week of March 2011 to the end of April 2011.  For the first month I was doing my data collection task and rest month was used for writing final report of my study.

    5.0 Methods

    5.0.1 Definition of Variables

    Perceptions means what people think about something, what are their feelings or views regarding the something or some situations or how they take the thing. Perceptions have lots of influences and effects on the people behaviors and in their daily activity life. It is measured as negative/positive or good/bad (dictionary.com).

    Practice means how much people act according to their thinking. As not all the time people work according to their thinking (dictionary.com).

    5.0.2 Data Collection Methods

    In depth interviews was carried out among participants. Semi structured questionnaire (Appendix II) was made regarding the consumption of fast food. I conducted my interviews on the working days of the week until we assessed the sample size.

    5.0.2.1 In-depth Interviews

    In depth interviews was carried out among the participants in their free time. Participants were asked series of questions in private and confidentially.

    5.0.3 Data Management and analysis

    My research assistant and I gathered the data. I have used the descriptive statistics like chart, tables and frequency distribution to analyze and organize the collected information. This will help to find the similarities and differences between the information collected and hence compare my results. Data has been managed in my own computer and password protected .As soon as the data analysis has been ended all the materials and the data obtained will be locked inside a cabinet in the nursing office, IUBAT.

    5.0.4 Dissemination of findings

    Findings done from the study will be kept as Nursing research findings for course (NUR 490) for the partial fulfillment of the Bachelor of Science in Nursing Program in International University of Business Agriculture and Technology (IUBAT). The research report will be made available in the library of College of Nursing, IUBAT. If the participants wish to know the results of the research, they will be provided with the information from findings at their own expenses by making a request to the authority.

    6.0 Ethical Clearance

    For my study ethical clearance was provided by the IUBAT authority. Also, as per the declaration of Helsinki as my research involves medical and human subjects, I have to be accordance with it protecting health and rights of people. For conducting the research we have to get a written permission from the concerned authority therefore I took a written permission from the IUBAT authority. Also, I have successfully completed my certification on web-based training course “Protecting Human Research Participants” conducted by the National Institutes of Health (NIH) office of extramural Research. And, I have also completed a 3 credit course of Nursing Research (NUR451), as part of course in my fourth year at the University from which I have an idea about conducting the researches in the community.

    Justice: Each participant has full right to understand that they can have their voluntary decisions about being the part of study. Hence, can refuse their participation at anytime during the study conducted.

    Privacy: Right to privacy has been maintained by keeping anonymity in the data provided by the participants. No participant has been identified with their name. We have not even included their name in our report. Right to fair treatment was maintained. One of us members was always available in case of any clearance required by the participant.

    Autonomy and respect: Right to self-determination was respected. Participants had the full right to ask questions, not to answer any one of the questions or terminate themselves from the study at any time.

    6.0.1 Confidentiality

    Notes, journals, and interview forms have all been kept in a safe place. I conducted an interview in a place where the participants felt free to share their views. All the data collected has been kept in the nursing office, IUBAT at the end of the study. I may ask the concerned authorities to store data for the future reference. At the end of the study the original data must be kept in a locked cabinet in the nursing office, IUBAT.

    6.0.2 Informed Consent

    My study involves the process of data collection by in-depth interview. Prior to the interview every participant were provided consent form. When they agreed then I approached and presented the informed consent forms to participants. This form was translated into Bengali to facilitate the process. (Appendix I)

    6.0.3 Risk and benefits

    My study does not involve the use of any harmful procedures and offensive words. There is no any physical harm concerned in my study. However, I was aware of the fact that some participants may feel shame or feel bored to participate in the research as they also need to find out some time for interview. Another risk may be that participant might think that I might disclose their information with the concerned authority and hence may hesitate to participate.

    Regarding benefits, there are no short term benefits for the clients but in the long term many new ideas can be formulated from the findings. Some participants might feel good that someone is concerned about the health and their problem connected with it. They may find it interesting and exciting because they have something changed in their normal routine and is being a part of a study. They might have satisfaction that their information is helping others. My interview might also raise awareness regarding fast foods. They might think like as I am doing the research there must be something very important issues or very serious problems related to fast food. So, they themselves may be more concerned to get the knowledge about fast foods and take the necessary steps to stay away from the fast foods consumptions.

    But, I am not here doing this study for the purpose of improving their lifestyles or their thinking. I am here just trying to find out their perception and practice of intake of fast food. The benefits of this research are indirect and not only to the group that have participated but also from them it can be passed to their family members and friends.

    The findings from this study might be taken in consideration by university and in future university might assess the quality of fast food available inside and beside the university area and hence will be helpful for all. This information collected can be used as a reference in future if any further studies are carried out in these areas about the fast food intake.

    9.0 Research Timeline

    The research time of my study was two months, from March 2011 to April 2011.

    Results

    Demographic data

    Religion: Five male from slums were Hindu and ten were Muslim. One male of IUBAT was Hindu and 14 were Muslim. Six female of slums were Hindu and nine were Muslim. Four female of IUBAT were Hindu and 11 were Muslim.

    Residence: All the participants from slum had their permanent home outside Dhaka city. Ten female students of IUBAT stayed in mess and five stayed with their family. Six male stayed with their family and nine male students stayed in mess with friends.

    10.0.1 Practice of Fast Food Intake

    10.0.1.1 How often do they eat fast food?

    Frequency SLUM IUBAT
    Male

    n(15)

    		 Female n(15) Male

    n(15)

    		 Female

    n(15)

     
    Everyday 8 3 6 5
    Twice a Day – – 1 1
    2/3 times a week 3 2 2 2
    4/5 times a week 2 3 1 2
    Sometimes 2 2 3 3
    When shopping – – 2 2
    When money in hand – 5 – –

    Table 1: Frequency of fast food intake

    From the study it was seen that different people had different frequency of eating fast food. Some of them ate every day, even twice in a day, others 2/3 times in a week, some greater than 3 times in a week. Some of them ate when they were out for shopping or were with their friends. Some people from slum ate when they had money in their hand.

    10.0.1.2 What time of the day do they eat fast food?

    Here, the participants answered different options. These were as follows:

    Time of the day IUBAT SLUM
    Male n(15) Female n(15) Male

    n(15)

     

    		 Female n(15)
    Morning 3 4 3
    Afternoon 5 7 4
    Evening 5 7 5 5
    Before evening prayer 4
    Not fix time 2 1 2 3

    Table –2: Time table for taking fast food

    From the above table, we can conclude that most of the participants ate fast food during afternoon and evening time. Some of the participants from slum took fast food before evening prayer as well. Some of them did not have any fix time of the day to eat fast food.

    10.0.1.3 What fast foods do they eat?

    To this question participants answered differently from slums and IUBAT.

    Name of items IUBAT SLUM
    Male n(15) Female n(15) Male n(15) Female n(15)
    Pizza, burger, French fries, patties, noodles, sandwich, 11 9
    Shingara/Samocha 4 6 2 2
    Pyaju/ Baiguni 5 4
    Tea 1 1
    Pan 1
    Others ( Biscuits/Bread/ Roti) 4 4
    Fruits 3 3

    Table- 3: Name of fast food items

    Most of the IUBAT students answered the fast food items like pizza, burger, fried chicken, French fries, Patties, noodles, sandwich.Some of IUBATians answered Shingara, pyaju, samocha. Slum people answered the food items like pyaju, Shingara, pan, tea, biscuits, bread, roti. Some of the slums think fruits also as fast food.

    10.0.1.4 Which is the favorite place to eat these foods?

    Name of place IUBAT SLUM
    Male

    n(15)

    		 Female n(15) Male n(15) Female n(15)
    Fast food centers (e.g. KFC, A&W, BFC etc.) 9 7
    Nearby food stall 2 4 5 6
    No specific favorites 4 4 10 9

    Table 4: Name of fast food place

    53.33% of IUBATians answered fast food centres like A&W, KFC, Bosundhara food court, Star kabab, North Tower. 20% of IUBATians answered nearby food stall. 26.67% of IUBATians did not have any specific favorites. 36.67% of Slum people answered nearby food stall. 63.34% of slum people had no specific favorite place.

    10.0.1.5 Do they eat in road side stalls?

    SLUM IUBAT
    Male

    n(15)

    		 Female n(15) Male

    n(15)

    		 Female

    n(15)
    Yes 15 15 13 12
    No 2 3

    Table 5: No. of people eating in road side stalls

    Almost all the people interviewed ate from road side stalls

    100% participants from slums ate from road side stalls

    83.34% of the participants from IUBAT ate in road side stall

    16.66% of the participants from IUBAT never ate anything from road side stalls

    What food do they eat in road side stalls?

    SLUM IUBAT
    Male

    n(15)

    		 Female n(15) Male n(15) Female

    n(15)
    Chotpote/Fuska
    Pyaju/Beguni
    Jhalmuri
    Achar
    Roti/Biscuit
    Others Aamra, Badam

    Table 6: Name of food items from road stalls

    Most IUBATians ate chotpote and Fuska. Some also ate pyaju, tea,  jhalmuri, badam and aamra as they reported

    Slum people ate achar, jhalmuri, roti, biscuit,  pyaju, beguni

    10.0.2Perception of Fast Food Intake

    What is fast food?

    Definition SLUM IUBAT
    Male n(15) Female n(15) Male n(15) Female n(15)
    Food that saves time 1 2 1
    Fried foods/yummy foods 3 1 3
    Modern food 2
    Easily available food 4 3 1
    Made by using lots of oil 2 4
    Fun time foods 2 1
    Dry foods/extra than regular meal 1 1
    Fatty food 1
    Food prepared outside home 1 1
    Junk food 2 4
    Takes less time to prepare/ Has vitamins 4 5 1

    Table 7: Definition of fast food

    There was different definition of fast food given by the participants. These are as follows

    Food that saves time=4

    Fried foods=7

    Modern food=2

    Easily available foods=8

    Made by using lots of oil=6

    Fun time foods=3

    Dry food=2

    Fatty food=1

    Food prepared outside home=2

    Junk food=6

    Food that has vitamins=10

    Why do you eat fast food?

     

    Reasons

    		 SLUMS IUBAT
    Male

    n(15)

    		 Female n(15) Male

    n(15)

    		 Female n(15)
    Like to eat 5 3 4 8
    Satisfy hunger 3 2 4 2
    Time pass 1
    When hungry/easily available/compulsion 1 3 2
    To save time 3 2
    When late to cook 1 3 1
    When feel like eating outside food 1 1
    Seeing others eat, I feel like eating 2 3
    Addiction due to extra ingredients 1
    When no food at home 3 1

    Table 8: Why do you eat fast food?

    There were different reasons provided in response to this question. These

    are as follows:

    Like to eat=20

    Satisfy hunger=11

    Time pass=1

    When hungry easily available=6

    Addiction due to extra ingredients=1

    To save time=5

    When late to cook=5

    When feels like to eat outside=2

    Seeing others eat I feel like eating=5

    When no food at home=4

    Why do you buy/eat from that particular place?

     

    Reasons

     

    		 SLUM IUBAT
    Male n(15) Female n(15) Male n(15) Female n(15)
    Nice hospitality 1 2
    Good food 3 2
    Fresh food available every time 1
    Good/peaceful environment 2 6 6
    Reasonable price 1 2 1 3
    Hygienic 1 2 1
    Easy access 1 2 3 2

    Table 9: Why do you like that particular place?

    Different answers were provided for the participant’s favorite place to buy or eat. 40% of total participants responded to this question from the slums. Among them 10%  answered hospitality, 6.67% answered good and peaceful environment, 10% reasonable price, 10% easy access, 3.33% for hygienic. 100% of total participants responded to this question from the IUBAT. Among them,16.67%  available good food, 40%  good and peaceful environment,13.33%  reasonable price, 16.67% easy access, 10% hygienic, 3.33% fresh food available every time

    Is there benefit to eating fast food?

    Different answers were collected for this question. Most of the people answered that the only benefit to eating fast food was saving time and it is readily available to satisfy our hunger. While few think that eating fast food can be taken as smartness as it can be eaten in public. Some slum people believe that fast food contains vitamins.

    Is there negative effect to eating fast food?

    Slums IUBAT
    Male n(15) Female n(15) Male n(15) Female n(15)
    Yes 10 9 15 15
    No 5 6

    Table 10: Negative effect of eating fast food

    All of the participants from IUBAT answered that fast food has negative effect. But, few people from slum said there is no any negative effect of eating fast food. 5 male and 6 female said ‘NO’ from Slum. 100% from IUBAT said ‘Yes’

    What do you like most about fast foods?

    The participants from SLUMS answered that fast food contains vitamin, it has different taste, easily available so they liked to eat. IUBAT students told that the food is tasty, takes less time to prepare, can satisfy the hunger, contains extra decoration, can be eaten even while we are walking on road which saves time, shows smartness, crispy, oily. Hence, they like fast foods.

    10.0.2.7 Are you concerned about the calories/fat when you eat fast food?

    SLUM IUBAT
    Male n(15) Female n(15) Male n(15) Female n(15)
    Yes 7 5
    No 14 5 7 10
    Yes BUT “I eat” 1 10

     

    Table 11: Concern about calories/fat

    40% of IUBAT students are concerned (they do not eat), 60% are not concerned. 63.33% of Slums are not concerned. 36.67% of slums know foods contain oil but still they eat.

     

    10.0.2.8 Do you find the price of fast food reasonable?

    SLUM IUBAT
    Male

    n (15)

    		 Female n(15) Male

    n(15)

    		 Female n(15)
    Yes 8 4 4 4
    No 7 11 11 11

    Table 12: Price of fast food, Is it reasonable?

    40% of the slums answered ‘yes’ and 60% answered ‘No’. 26.67% IUBATians answered ‘yes’ and 73.33% answered ‘No’.

    Does fast food have any effect on your health?

    Almost all of the participants answered ‘yes’ to this question. Some of them also experienced acidity and stomach ache after having these foods. People from slums said that fast foods if eaten more, causes harm ’pet betha’, ‘buk betha’. Students from IUBAT said that eating fast foods can lead to decrease in appetite, increase fat, increase weight if taken more, increases pimples, increases cholesterol, stomach ache, nausea/ vomiting.

    Fast Food consumption inside IUBAT premises

    Do they eat ‘fast food’ from IUBAT cafeteria?

    100% of the IUBATians answered ‘yes’.

    What are the common items they eat?

    Singara, Pyaju, tea, kancha morich, puri, roll, Samucha, chop, biscuit/coke, cake, rice, lunch items.

    How often do they take?

    Frequency IUBAT
    Male n(15) Female n(15)
    Everyday 11 6
    Once a week 2
    2/3 times a week 1 5
    Sometimes 2 2
    Suddenly 1

    Table 13: Frequency of fast food intake by IUBATians

    It was found that most of the students ate almost every day from the cafeteria.

    What time of the day do they take ‘fast food’?

    IUBAT
    Male n(15) Female n(15)
    Morning 1 1
    Evening 1 7
    Afternoon 4 7
    Lunch time 8 3
    When hungry 1 2

    Table 14: Timetable of fast food intake by IUBATians

    Most of the students were found to eat during afternoon, lunch time and evening time. 6.67% took at the morning and 10% took suddenly when they felt hungry.

    10.0.3.5    Are you conscious about calorie contained?

    12 male and 12 female answered ‘No’

    3 male and 3 female answered ‘Yes’

    Do You find the price of ‘fast food’ reasonable?

    Male n(15) Female n(15)
    No 7 4
    Yes 8 11

    Table 15 : Price of fast food perceived by IUBATians

    IUBATians told that they found the price of some items reasonable like singara, samocha while the prices of some items were reasonably high in comparison to the quantity supplied. These items include puri, sandwich, and parotha.

    36.66% told ‘no’

    63.34% told ‘yes’

    Have you faced any effects on your health after eating this food?

    Many students faced some problems after eating the foods from IUBAT Cafeteria as they have reported. These problems related to their health are as follows.

    Causes Male n(15) Female n(15)
    Acidity 4 5
    Nausea 1
    Stomach ache 2 3
    Vomiting 1
    Throat pain 1
    Not yet experienced 8 5

    Table 16 : Health problems faced after eating fast foods by IUBATians

    10.0.3.8   Do you have any other comments about the ‘fast food’ provided here?

    When asked question about giving any comments. Most of the students answered in the form of recommendations. Few of them did not give any comments. Some of the comments given were as follows.

    Increase the food items, especially vegetable items

    Price should be made less for some items

    Taste of food should be improved

    Hygiene should be improved

    Vegetable ingredients should be smashed properly, e.g. potato while making chop

    Increase the quality of sauce provided

    Stop the use of rancid oils

    Adjust the price of food with quality

    Provide more salad if more items of food is bought

    Add the bakeries items

    Set pure drinking water

    Need more space to sit

    Discussion

    11.0.1   Practice of Fast Food Intake

    From this small study conducted, it was found that practice of eating fast food differed a lot among IUBATians and slum people. As in this study, I have not separated the items of food provided in renowned fast food shops and readymade packed foods from Table I, it was seen that most of the participants ate ‘fast food’ almost every day. Slums eat when money in hand while IUBAT students eat as an alternative of their regular meal. Money may be the reason that slum people eat less frequently than students. The food that slum people ate was also quite different in comparison to that of IUBATians. This difference is all due to economic status and thinking of people. People from low economic classes do not have the capacity to go and eat in renowned and costly fast food centers like KFC, A&W, Bosundhara Food Court, North Tower etc. IUBAT students were all from good economic status so they could afford to go in fast food centres. Hence, the fast food place students preferred to eat was also different from those of slums.

    From my study I have found that some of the slums prefer to eat these foods before evening prayer (Table II). The reason may be that this was the free time to relax after work because most of these people do labor work in construction sites or as house maids. This may be the perfect time for them to rest from their work. Comparingly, students eat mostly during afternoon or evening. As most of the students, 63.34% were living with friends in mess away from family so they might feel easy to eat outside food rather than cooking themselves as it saves time for study as well. Regarding, the choice of food items some slums also think fruits as fast food. The reason may be that they have conception that ‘fast food’ is food containing extra vitamins than regular diet. As they know that fruits contain vitamins, may be for this reason they kept fruits as fast food.

    Eating in road side stall was a fashion for IUBATians. They ate Fuska and Chotpote from these places whereas it was a regular buying place for the slums from road side stalls as it costs low money. Study has shown that street vendors are common among low-income group of people (Faruque et al, 2010). Fuska was far too costly for slums. Also, the students of IUBAT were aware of the hygiene maintained at road side stalls. May be because of this, they ate only when compulsion from the road side stalls as they have reported.

    At the IUBAT, students at the fast foods almost everyday that was provided in the cafeteria. Those students who stayed away from their parents were found to take these foods more frequently than those who stayed with their parents. Many students were not concerned about the calories or fat contained in the diets. They ate it without any tension. Most of the students did not experience any effects in their health after eating the foods in canteen but some of them experienced acidity. The reason behind this may be that the students ate oily foods in an empty stomach. So, from here we can also conclude that rancid oil is being used for cooking in our IUBAT cafeteria. When oils are exposed to heat, light and air for long time they get oxidized and become rancid forming the free radicals in our diet which are destructive in nature (Healing crisis, 2004

    There were many recommendations put forward by the students regarding the food provided in canteen. Among which many students talked about enlarging the sitting space, adding the vegetable items in the menu, stopping the use of rancid oils, maintaining the hygiene etc. (Section 11.0.3.8). From these recommendations we can say that students are not fully satisfied with the service provided at IUBAT cafeteria. In other side we can say that students are concerned about their health, they are observing every small services provided.

    11.0.2   Perception of Fast Food Intake

    From this study conducted, it was seen that there was a great difference in the way the IUBATians and slums thought about taking of fast food. Most IUBATians preferred to go to renowned fast food centres while slums did not have any ideas about these fast food centres. They knew to eat fast food from either nearby shop or road side stalls. The definition of fast food varied among these two groups.

    From table 7, we can see that IUBATians gave the different definition of fast food as ‘junk food, crispy food, smart food, extra decorated food’ etc. Whereas most of the slums gave the same answer as ‘readily available foods’. Slum people also thought that these foods contain vitamins which will make them healthy. The reason they think this might be due to the advertisements they see on different media (Dickson & Nicole, 2009). So, we can tell that media is playing an important role in consumption of fast food. Most of the participants eat fast food as they feel like to eat (Table 8). Whatever the reason may be, to satisfy the hunger or by seeing others eat (slums) we can say that the fast food consumption culture is growing day by day in our society. It has collected huge fans.

    When asked about the preference of the place to eat fast food, we can see that good and sound environment of the place is adding to the preference of eating fast food (Table 9) in addition to nice hospitality and good food. Although the participants did not elaborate about what good environment means but study has shown that good music played in restaurant also adds to the long staying of customers and increase in food items as well (Meiselman & MacFie, n.d.). Also, it was found that although people talked about good food and environment around, most of them did not talk about the hygiene. It seemed people were less concerned about hygiene at big restaurants. Only 10% of IUBAT students were concerned (Table 9). So, may be people already believe that these renowned places are clean and hence, they need not concern about that.

    About liking to eat fast foods, many answers were collected. One of the students said “No family member tell us anything if we go and eat in KFC or other renowned fast food centre.” We can see from this statement that people of Dhaka city have started to prefer eating from fast food centres. One of the students told that “It helps to meet nutritional requirement like fats/calories.”Another student said “for people who need fats …its good!!!” From these we know that the students seem to know much about the contents of these foods that foods contain more fats and more calories. The slum did not give these complicated answers though. They simply answered that they ate to save time for work or these foods have different taste or even extra vitamins. So, they ate fast food.

    One said, “Eating fast food shows smartness, can be eaten anywhere in public”. One girl told “I like to eat fast food because you get to eat sauce freely”. This statement reflects the thought of young generation. They feel comfortable to eat these items in public whereas comparing some slum female reported that they ate these foods like singara, samocha by taking home, they did not eat in public places. So, here we can still understand that the culture and education has bounded these ideas. The slums still do not eat publicly due to shy or just people will think bad of them when eating outside. The educated students are carefree about these thoughts. Moreover, they feel smarter.

    When asked about the negative effects of fast food different answers were collected from IUBATians like “damage of teeth, increase in cholesterol, increase weight, increase acidity, nausea, abdomen cramps.” While slums reported about ‘buk betha’ and ‘pet betha’. From here we can understand that literate IUBATians seemed to know so many advanced medical effects of eating fast food. Few of them also reported that “Fast food has no effect if taken in right amount”.  “As a student the price of ‘fast food’ is too costly”, many students reported. This may be the reason that 73.33% of students did not find the price of fast food as reasonable whereas 60% from slums did not find the price reasonable. The reason may be people of slums are working and earning by their own although may be small amount while the students are running with their parents money.

    From the study we can analyze that some of the IUBATians understand that it is our mistake as we have taken oil in an empty stomach. Hence, causes acidity. Similarly, slums believe that eating fast food relieves the acidity caused. “When I do not get time to cook early morning, I buy from shop and eat as it prevents to form gas”. When we compare the two situations here, we can see that the two groups have perceived differently. Also, although the slums knew that the food contains oil, they used to eat those foods while few IUBATians who were conscious did not eat these foods after knowing it contains lots of oils. In prior to interviewing, I was expecting that most of the female participants of IUBAT are conscious about the calories. Surprisingly, from my study I found that male are more conscious than females (Table-11).

    From the study it was found that almost all people ate fast food that is prepared outside their home. Participants had the different view towards fast food. The food that slum people eat was not similar to the food that IUBATians eat. It was due to the economic difference and also education. Educated students are conscious about the fats and calories contained in the food and take food accordingly. The educated people think that eating fast food in public shows smartness while slum people prefer to eat at home. Slum people buy and take the food home. Most IUBATians seem to know about the effect of these foods but the uneducated slum is still unaware of the effects of fast foods.

    12.0 Recommendation

    People should be educated in public about the negative effects the fatty foods can have.

    Foods prepared using rancid oils (re- used oils) should be banned in public.

    Government should form a committee to check all the road side foods. As Street food vending is not regulated in Bangladesh but operates haphazardly without any systematic monitoring system (Faruque et al, 2010).

    Fast food centers should meet the standards of dietary contained in food.

    Every fast food stall should display the calorie contained in their menu. It is important to communicate the information about hygiene and nutrition value of fast food which will help in building trust in the food provided by fast food shops (Goyal, 2007).

    Regular exercise should be part of daily life as fast food.

    Advertisements in media should be given in proper way in order to promote health and not just the product.

    13.0 Conclusion

    In this preliminary study conducted among the slums and the IUBAT students, we could discover the various definitions of ‘fast food’. Fast food consumption was irrespective of gender or religion in my study.   From this study we can conclude that economic status and the level of education makes a great difference in the food we eat and our perception towards the food we take. Educated people are more concerned about their health. They have the updated knowledge about the effects of fast foods in our daily life.

    Eating fast food is like a fashion for the younger generation. They eat it to enjoy and have fun as well as it saves time. Slum people eat fast foods as they see others eating they also feel like to eat. They saved money for many days so that they can eat outside home. Most of the time they eat these foods in compulsion to save their time from work. They have the feeling like these foods contain more vitamins than the food we take in our regular diets. Educated people are conscious about the fats and calorie contained in fast foods while slum people even do not know what is ‘calorie’. Although some of them know about the fat contained they do not care to see it and eat without any tension.

    All the students of IUBAT ate the foods provided at the cafeteria. Many did not care about the calorie and fats contained in the foods provided. Students have recommended improving certain aspects of the cafeteria service. Increase in the sitting space and increase in food items especially vegetable items and bakeries were among the top lists provided (Section 10.0.3.8).

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    Financial Evaluation of a Project within Grameen phone, Network Operation

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    Financial Evaluation of a Project within Grameen phone, Network Operation

    Overview of the Organization (GrameenPhone Ltd.)

    2.1 Company Introduction:

    Grameenphone is the largest cellular operator in the country. It is a joint venture enterprise between Telenor and Grameen Telecom Corporation, a non-profit sister concern of the internationally acclaimed microfinance organization and community development bank Grameen Bank. Telenor, the largest telecommunications company in Norway, owns 55.8% shares of Grameenphone, Grameen Telecom owns the remaining 34.2% 2 and the other 10% shares belong to the general retail and institutional investors.

    GrameenPhone was the first company to introduce GSM technology in Bangladesh. It was offered the cellular license in Bangladesh by the Ministry of Posts and Telecommunications in the year 1996. Grameenphone launched its service on the Independence day, 26th March, 1997.

    It also established the first 24-hour Call Center to support its subscribers. With the slogan Stay Close, stated goal of Grameenphone is to provide affordable telephony to the entire population of Bangladesh.

    After almost 10 years of operation, Grameenphone had over 10 million subscribers and it is now the leading telecommunications service provider in the country with more than 29.97 million subscribers as of December 2010.

    In the fast-paced world of telecommunications, vibrant and dynamic Corporate Governance practices are an essential ingredient to success. Grameenphone believes in the continued improvement of corporate governance. This in turn has led the Company to commit considerable resources and implement internationally accepted Corporate Standards in its day-to-day operations.

    2.2 Shares:

    Fig 1: Distribution of GrameenPhone Share

    2.3 Vision and Mission Statements:

    2.3.1 Vision: To be leading provider of telecommunication services all over Bangladesh with satisfied customers and shareholders, and enthusiastic employees.

    2.3.2 Mission: Grameenphone Ltd. aims at providing reliable, widespread, convenient mobile and cost effective telephone services to the people in Bangladesh irrespective of where they live. Such services will also help Bangladesh keep pace with other countries including those in South Africa region and reducing her existing disparity in telecom services between urban and rural areas.

    2.4 Purpose of Grameenphone:

    · To receive an economic return on its investment.

    · To contribute to the economic development of Bangladesh where telecommunication plays an important role.

    2.5 History and Major Milestones:

    Time Stamp Milestone Achieved
    Mar-97 Started operation on the independence day of Bangladesh
    Jun-98 Launched M2M service (without PSTN)
    Aug-99 Launched first prepaid service in the country
    2001 Launched WAP service
    2002 Bangladesh Business Award for “Best Joint Venture Enterprise”
    Aug-03 Reached 1 million subscribers
    Oct-03 Launched Prepaid product with PSTN connectivity
    Aug-04 Reached 2 million subscribers
    Apr-05 Launch of Youth Product Djuice
    Apr-05 Launched Electronic Recharge System (Flexi Load)
    Sep-05 Launched EDGE and Voice SMS
    Jan-06 Launch of Business and PCO product
    Feb-06 Launch of Community Information Centers
    Jul-06 Launch of CellBazaar Service
    Feb-07 Re-launched Business Solution
    Feb-07 New VAS launch- Stock Information, Missed Call Alert
    Apr-07 Re-branding of Djuice
    Apr-07 Launched Pay for Me Service
    Oct-07 Reached 16 million subscribers
    Jan-08 Introduced Black Berry Service to Bangladesh
    Mar-08 Lowest on-net tariff offer
    Apr-08 Brand positioning and launching of ‘stay close’ campaign
    May-08 Launch of ‘Customer Care Campaign’
    Jun-08 Reached 20 million subscribers
    Jan-09 Launch of Phone Back Up and In-flight Roaming Service
    Feb-09 Launched GP Internet Modem
    Mar-09 Reached 21 million subscribers
    Apr-09 Launched Internet Modem
    Jun-09 Launched new Network campaign
    Sep-09 Launch of Grameenphone Handset
    Oct-09 Launch of Study Line Service
    Jan-10 New Prepaid Price Plan Campaign
    Mar-10 Mobitaka Brand launch with E-ticketing
    Apr-10 Launch of Internet Minipack
    Apr-10 Launch of Internet Minipack
    Apr-10 Introduction of New Generation Grameenphone Internet Modem
    May-10 Reached 25 million subscriber base
    Jun-10 1st Annual General Meeting of Grameenphone
    Jul-10 Shift to GP’s new Headquarter, GP House
    Jul-10 Launch of new Network Campaign
    Dec-10 Amar Desh Amar Gorbo event held on the occasion of Victory Day

    Table 1: History and Major Milestones of Grameenphone

    2.6 Strategy:

    Grameenphone basic strategy is coverage of both urban and rural areas. In contrast to the “island” strategy followed by some companies, which involves connecting isolated islands of urban coverage through transmission links, Grameenphone builds continuous coverage, cell after cell. While the intensity of coverage may vary from area to area depending on market conditions, the basic strategy of cell-to-cell coverage is applied throughout Grameenphone network.

    2.7 People:

    The people who are making it happen- the employees- are young, dedicated and energetic. All of them are well educated at home or abroad, with both sexes (genders) and minority groups in Bangladesh being well represented. They know in their hearts that Grameenphone is more than just about phones. This sense of purpose gives them the dedication and the drive, producing the biggest coverage and subscriber- base in the country. Grameenphone knows that the talents and energy of its employees are critical to its operation and treats them accordingly.

    2.8 Organogram:

    The success story of Grameenphone has been possible due to the alignment and commitment of the different departments collectively. The organization has the following departments to ensure the smooth operations of its services and achieve organizational goals.

    Fig. 2: GrameenPhone Organogram

    2.9 Values:

    · Caring for customers

    · Integrity

    · Sense of urgency

    · Creativity

    · Honesty

    · Empowerment

    · Courage

    2.10 Products offered by GrameenPhone:

    Grameenphone was the first operator to introduce the pre-paid mobile phone service in Bangladesh in September 1999. Besides smile, Grameenphone also offers a youth based mobile to mobile connectivity within Bangladesh named “Djuice” and postpaid mobile service called “Xplore Postpaid”.

    2.10.1 Prepaid and Postpaid Connections:

    Xplore : Xplore is a postpaid connection and is available with Mobile to Mobile with BTCL connectivity. BTCL incoming is absolutely free in Xplore.

    Shohoj : Grameenphone prepaid connection comes with this pre-activated package where you will be able to talk to any operator number at a low, flat rate of Tk 0.79.

    Bondhu : This package with the highest number of F&Fs allows you to talk to your near and dear ones at the lowest rate.

    Aapon : One can talk to over 25 million Grameenphone numbers at a very low rate of 49 Paisa per minute.

    Baadhon : Grameenphone Ltd. introduces a new package named Baadhon, designed to serve the rural population of Bangladesh.

    Smile: The Grameenphone Smile prepaid connection now gives you more freedom, more opportunities and more reasons to smile!!

    2.10.2 Business packages:

    Business Solutions: We are here to help you grow and win. No matter how unique or diverse your business is, we offer customized solution for you to win the tough war of business.

    Ekota : For Small and SOHO enterprises Grameenphone offers a unique package Ekota.

    GPPP: GP Public Phone is the package for PCO entrepreneurs.

    GPVP : Village Phone Program is a noble effort by tri party (GP-GTC-GB) to eliminate poverty by providing self-employment opportunity.

    2.10.3 Other Services:

    Internet: GP provides internet service in its coverage area. As it has EDGE/GPRS enabled network, any subscriber can access to internet through this network. Grameenphone was the first mobile operator in Bangladesh to offer EDGE services to its subscribers.

    BillPay: A service to enable users to pay their utility bills (Electricity, Gas etc) through mobile.

    CellBazaar: Services to enable users sell or buy products through mobile or internet. Various other services like Stock Information, Instant Messaging, SMS Based Alerts/Services, Voice-based Services, Downloads, Music, Cricket Updates, Web SMS, Mobile Backup etc.

    Chapter 3: Overview of Network Operation, Grameenphone:

    3.1 Structure of Technology Division:

    Technology division is a separate division in Grameenphone under Chief Technology Officer (CTO). The structure of it is as below

    Fig 3: Organogram of Technology Division

    3.2 Structure of Network Operation:

    Network Operation is separate department within Technology Division under Director, Network Operation.

    Fig 4: Organogram of Network Operation

    3.3 Functions of Network Operation:

    · O & M support of Network Elements

    · Running projects for installation of new Systems

    · Maintain GSM features for GSM network.

    · Software & hardware update/upgrade

    · Vendor escalation and trouble management

    Chapter 4: Project Management at GrameenPhone, Network operation

    At Network Operation, a typical project follows the following sequences:

    1. Formulation of Project Proposal

    2. Writing Project Memo

    3. Formulating the Project Plan and Follow-up

    4.1 Project Proposal:

    A project proposal is the first step to initiate a project. Project proposal is meant to obtain a goo d understanding of the project goals, outcomes etc. Project Proposal encompasses the following information

    · Project Name and Description

    · Financial Information like Capital Expenditure (CaPex), output in the format of Operation Expenditure (OpEx) Savings, Revenue etc.

    · Background, Project Goals, Limitations, Risk Factors, Stakeholders involved in the project.

    The project proposal for the Battery Units Addition project is as below

    Project information:

    Project name: Project code / project identification:
    Addition of 350 Battery Units in BTS Battery Addition
    Associated program or connection with other projects: Project type:
    Sponsor: Project Owner: Project Manager:
    CTO Department Head Faisal Aziz

    Key information:

    Total budget for project establishment / Scope definition / planning phase (kUSD): Charge to cost location(s): Stipulated total budget for entire project ( BDT):
    76 Mn BDT Operations/Technology 76 Mn BDT
    Expected financial benefit (could be expressed as IRR, NPV, payback time or other):
    OpEx Saving of 57 Mn BDT yearly with a Payback Period of 1.98 year. NPV will be BDT 38 Mn and Internal Rate of Return (IRR) and Return on Investment (ROI) will be 42% and 50% respectively.
    Start date for establishment / Scope definition / planning phase (D1): End date for establishment / scope definition / planning phase (D2): Stipulated date for delivery of project result (D4):
    October 6, 2010 October 10, 2010 April,2011
    Brief description of background and purpose: Focusing upon the goal of “Being Efficient in cost & resources” Technology team feels the necessity to reduce operational expense as much as possible. And with course of time we took a lot of initiatives to reduce the OPEX as well as overall Energy cost. But now management decided to go one step further in energy efficiency program and for this they want to go for addition of Battery Backup Unit as an alternative to Generators as the secondary source of power.

    The typical concept of using Generator as a backup to PDB supplied power for running BTS is not cost efficient, because it involves the high cost of fuel and maintenance. In addition, it is an obstacle towards becoming Green by reducing the emission of Carbon Dioxide, which Grameenphone promotes in every sphere of its business. Technology team took a strategy to replace 10% of its 12,000 Generator Backup Unit with Battery Backup Unit by 2012. These systems have the capacity to supply power for running BTS and Air Conditioner in case of a power outage for 48 hours. To implement it in Network we already had an RFQ. That RFQ was floated to 32 vendors and from that comprehensive evaluation we selected a pool of 9 vendors who fulfils the technical standards.

    But to achieve the best cost efficiency, we need to install these systems before awarding the maintenance contract (AMC) for the maintenance of these targeted generators to concerned vendors. So for sourcing of these systems technology team have a very short time. But as we already have done a RFQ for Battery Backup Unit and we have a selected pool of 9 technically competent vendors we can eliminate the Technical Evaluation phase and go for commercial evaluation directly. By doing that we can accelerate the whole process and be ready for sourcing a lot earlier. So we the technology teams are proposing for an E-auction directly to on board these systems.

    Note: Strategically we also want to include our partner Huawei with the list of competent vendor base upon following criteria:

    1. Huawei already have their BTS deployed with these kinds of Backup Power Source with other operators.

    2. Moreover Huawei is going to be the sole vendor for BTS. Exploring this product may bring more flexibility in maintaining BTS within their claimed temperature range. With their inclusion in commercial evaluation we will also have the opportunity to explore the better manageability of same vendor products.

    3. Our experiences from ongoing and previous projects suggest that it will be very difficult to source this huge no of Ventilation systems from local market within such a short time. So introduction of Huawei will bring more competition in commercial evaluation as well as will provide us to the opportunity to source world class products.
    Effect goal: OpEx Saving of 58 Mn BDT yearly after implementation for 3 years
    Key deliverables: RFQ, Vendor selection through Commercial Evaluation
    Limitations: Sourcing of all the required Battery Units within the timeline

    Risk factors:

    R. no. Creation date Risk description Activity / Action
    1 06/11/2010 Sourcing of all the Battery Units within agreed timeline
    2 29/11/2010 Capability of Vendors to produce amount with this high scale

    Relationship with other projects / partners:

    Project / partner: Description of relationship:
    Generator Maintenance Contract (AMC) The new Battery Units must be sourced and installed before the current Management Contract of existing Generators (AMC) approaches deadline.

    Realization of effect goals:

    Responsible for realizing effects (proposal): Department Head

    Resources in establishment / scope definition / planning phase:

    Role Name Unit Period (weeks) Engagement (%) Clarified with providing unit
    Project Manager Faisal Aziz Operations
    Project Member AAAAAA Operations
    Project Member BBBBBBB Operations
    Project Member CCCCCCC Operations
    Project Member DDDDDD Operations
    Project Member EEEEEEE Sourcing
    Project Member FFFFFFF Sourcing
    Project Member GGGGGG Implementation
    Project Member HHHHHHH Operations

    Steering Committee:

    Role Name Unit Comments
    Chairperson Chief Technology Officer Project Sponsor & Head
    Member Department Head Project Owner
    Member Head of Sourcing Member
    Member Head of Regional Operation & Maintenance, Operations Member
    Member Sourcing Member

    Reporting from Project Manager:

    Bi-Weekly meeting & Weekly status report by mail

    Authorization:

    Finalize Work scope, Launch RFQ, Evaluate & Assessment of Vendor Performance & Initiate Action To Improve, Financial Follow up

    Additional important information:

    Necessary resources to be selected & assigned as and when necessary from related teams

    Attachments to project proposal:

    Attachment

    no.

    		 Type document Document name/ ID (Saved As) Document format
    1 Project Goal Project Goal.Doc MS Word Documents
    2 Project plan (Tentative) MS Word Documents

    Signatures (Date and names):

    Project Sponsor:

    Approves strategic foundation and the above scope.

    Acceptance to start establishment /planning phase is provided:

    		 Chief Technology Officer
    Project Owner Department Head
    Project Manager

    Assumes the responsibility for the project according to the above scope.

    		 Faisal Aziz

    4.2 Memo:

    The next step involves writing a memo for the project. At Grameenphone Network Operation, an internal MIS tool is used to write the memo for approval from concerned stakeholders. Also, a Financial Evaluation Report is also needed to be submitted along with the memo for evaluation and approval. At any time, the initiator and other concerned stakeholders can view the approval status of the project.

    The memo of the project is as below

    Request Details

    Top of Form

    Category: Others
    Reference: TE-OP-OP-5485
    Title: 350 battery addition in BTS
    Amount: BDT 75,681,000
    Subject: Approval of Vendor Sourcing for 350 battery addition in BTS
    Description: Focusing upon the goal of “Being Efficient in cost & resources” Technology team feels the necessity to reduce operational expense as much as possible. And with course of time we took a lot of initiatives to reduce the OPEX as well as overall Energy cost. But now management decided to go one step further in energy efficiency program and for this they want to go for addition of Battery Backup Unit as an alternative to Generators as the secondary source of power.

    The typical concept of using Generator as a backup to PDB supplied power for running BTS is not cost efficient, because it involves the high cost of fuel and maintenance. In addition, it is an obstacle towards becoming Green by reducing the emission of Carbon Dioxide, which Grameenphone promotes in every sphere of its business. Technology team took a strategy to replace 10% of its 12,000 Generator Backup Unit with Battery Backup Unit by 2012. These systems have the capacity to supply power for running BTS and Air Conditioner in case of a power outage for 48 hours. To implement it in Network we already had an RFQ. That RFQ was floated to 32 vendors and from that comprehensive evaluation we selected a pool of 9 vendors who fulfils the technical standards.

    But to achieve the best cost efficiency, we need to install these systems before awarding the maintenance contract (AMC) for the maintenance of these targeted generators to concerned vendors. So for sourcing of these systems technology team have a very short time. But as we already have done a RFQ for Battery Backup Unit and we have a selected pool of 9 technically competent vendors we can eliminate the Technical Evaluation phase and go for commercial evaluation directly. By doing that we can accelerate the whole process and be ready for sourcing a lot earlier. So we the technology teams are proposing for an E-auction directly to on board these systems.

    Note: Strategically we also want to include our partner Huawei with the list of competent vendor base upon following criteria:

    2. Huawei already have their BTS deployed with these kinds of Backup Power Source with other operators.

    2. Moreover Huawei is going to be the sole vendor for BTS. Exploring this product may bring more flexibility in maintaining BTS within their claimed temperature range. With their inclusion in commercial evaluation we will also have the opportunity to explore the better manageability of same vendor products.

    3. Our experiences from ongoing and previous projects suggest that it will be very difficult to source this huge no of Ventilation systems from local market within such a short time. So introduction of Huawei will bring more competition in commercial evaluation as well as will provide us to the opportunity to source world class products.

    So we are proposing a list of technically competent vendors who should be directly contacted for Commercial Evaluation

    1. Rahimafrooz Energy Services Ltd.

    2. Electromechanical Service Ltd.

    3. Energypac Power Generation Ltd.

    4. Cross World

    5. Mega Power Engineering LTD.

    6. Navana Iterlinks Ltd

    7. Alliance Computer Ltd

    8. Swiftex Solution

    9. Electrocom Ideas and Technologies Ltd
    Requests Status: Pending
    Requested By: Faisal Aziz
    Request Date: 2010-10-07 10:55:52.0
    Attachment:
    Action History:
    Sequence Approver Name Action Comment Action Date
    9 CEO Pending
    8 Finance Head Pending
    7 Sourcing Head Pending
    6 Chief Technology Officer Pending 2010-10-14 17:14:49.0
    5 Head of Business Control APPROVED Along with this we need to float a new RFQ for this considering the volume of work and the experience from the first one. 2010-10-13 15:34:59.0
    4 Department Head (Network Operation) APPROVED 2010-10-10 14:07:09.0
    3 Unit Head APPROVED 2010-10-10 12:50:48.0
    2 Supervisor APPROVED 2010-10-10 12:36:33.0
    1 Faisal Aziz SUBMITTED Submitted 2010-10-07 11:02:42.0
    CC:
    • Supervisor
    • Unit Head
    Search Approver:
    Search Informed:

    Fig 5: Project Memo

    4.3 Project Plan:

    Project plan details the breakdown of different activities according to schedule and keeps track of those. The Project Plan for “Addition of 350 Battery Units in BTS” is as below

    Project information:

    Project name: Project code / project identification:
    Addition of 350 Battery Units in BTS Battery Addition
    Associated program or connection with other projects: Project type:
    Generator Maintenance Contract (AMC)
    Sponsor: Project Owner: Project Manager:
    Chief Technology Officer Department Head Faisal Aziz
    Limitations: · Timeline for sourcing is limited

    Fig 6: Project Plan

    Chapter 5: Financial Evaluation of the Project

    In a climate of increasing financial control, it is more important than ever that investment analysis is of a high standard. Investments can have many risks that can keep away many potential investors. To avoid this to happen, the most accurate financial/economical analysis has to be made. Financial evaluation is a rational method for making choices .Any good commercial organization should be able to identify more viable investment opportunities than it has money to invest in, so it has to choose which projects to fund.

    5.1 Objectives of Financial Evaluation:

    The objectives of economic evaluation are:

    · To decide which investments will make the best use of the organization’s money?

    · To ensure that the optimum benefits are available from each of these investments.

    · To minimize any risk to the organization.

    · To provide a basis for the later analysis of the performance of each investment.

    The process of economic evaluation:

    · Produces measures of the financial improvement that each project could make to the business.

    · Identifies the risks and uncertainties in each project.

    · Defines the expected costs and benefits.

    The decision maker can the use the results of the evaluation to choose between projects. Financial evaluation helps organizations make the right choices. However, as projects to improve energy efficiency are likely to be competing for funds against other projects, what is really being evaluated is project’s position within a list of possibilities. To give energy projects the best chance of being funded, an economic evaluation should be presented with the proposal. The decision maker will then be able to compare the benefits of the energy project directly with the other investment proposals.

    5.2 Key Stages in Financial Evaluation:

    Financial evaluation produce financial measures of the potential of each of the possible investments open to the organization. These measures can then be used to decide which projects should be funded and the priority they should be given. Financial evaluation tries to show the benefits of projects in relation to their capital costs; however, it is often difficult to find any single parameter which measures this. There are many different measures that can be used for economic evaluation, each of which highlights a different aspect of a project. No one measure is better than any other, and each as its strengths and weaknesses.

    5.2.1 Cash Flow:

    The first step in any economic evaluation is to gather the information on the project costs and benefits and calculate the cash flows. This gives a statement of how much money will be spent or will be earned in each year of the project.

    To determine the cash flow for a project, the costs and savings must be collected for the years in which they occur. The cash flow for each year is found by adding the savings (Positive amounts) to the costs (Negative amounts) for that year. According to the type of project, prediction of the cash flows becomes more or less difficult. There are even cases where a quantitative estimation is almost impossible and the financial evaluation becomes almost unfeasible.

    In our case study we considered battery cells as a substitution investment. The cost savings, namely the conservation and maintenance cost savings are known and they can be predicted with a satisfactory degree of accuracy.

    5.2.2 Financial Evaluation Techniques

    5.2.2.1 Net Present Value (NPV):

    NPV is the difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project. NPV analysis is sensitive to the reliability of future cash inflows that an investment or project will yield.

    Formula:

    The NPV is a financial parameter of particular interest to the financial manager, because it indicates the amount that the project will earn for the business over its expected lifetime in today’s money. If the NPV is positive, the project is viable. If the NPV has been calculated using a realistic discount rate, it can provide information on how to finance the project. For example, the current interest rate to borrow the capital required could be used as a realistic discount rate. If the NPV is negative, it would not be worthwhile borrowing the money for the project. A positive NPV would show the project could repay the loan and still give the investing organization a profit.

    5.2.2.2 Internal Rate of Return (IRR):

    IRR is the discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero. Generally speaking, the higher a project’s internal rate of return, the more desirable it is to undertake the project. As such, IRR can be used to rank several prospective projects a firm is considering. Assuming all other factors are equal among the various projects, the project with the highest IRR would probably be considered the best and undertaken first.

    The IRR measures the project’s profitability. It represents the rate of return that money would have to earn if invested outside, or elsewhere in the organization on another project, to be a better investment than the project being proposed. The higher the IRR, the better the project is As with NP, the IRR can help assess ways of financing the project. The IRR can be compared with the current interest rate for borrowing the capital required .If the IRR is lower than this interest rate, the project would lose money if it was financed by borrowing. If the IRR is greater than the cost of borrowing the capital, the project will generate enough income to repay the loan and still provide profit.

    5.2.2.3 Payback Period:

    It is the length of time required to recover the cost of an investment.

    Calculated as:

    The easiest financial parameter to calculate is simple payback, which is defined as the capital cost divided by the average annual savings. Using Payback has some obvious benefits like ease of calculation, tangibility and accuracy, but Payback has some serious disadvantages like it takes no account of any savings after the Payback period and it does not take into account any income from reselling the capital asset later on.

    Payback, however, is an useful screening method for projects. A project with a Payback of a few months clearly deserves further investigation, whereas a project with a Payback of 10 years would usually have little chance to receiving funding.

    5.2.2.4 Return on Investment (ROI):

    A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

    The return on investment formula:

    In the above formula “gains from investment”, refers to the proceeds obtained from selling the investment of interest. Return on investment is a very popular metric because of its versatility and simplicity. That is, if an investment does not have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken.

    ROI > 1 means that the is profitable

    ROI < 1 means that for the discount rate used the NPV < 0 and the project is not profitable.

    5.3 Financial Evaluation of the Targeted Project:

    In the Financial Evaluation of the project, Addition of 350 Battery Units in BTS, we have tried to determine whether the project is financially viable by calculating Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period and Return on Investment (ROI) by first determining the Cash Flows during the lifetime of the project. The following information have been taken into consideration while determining the Cash Flows

    1. 300 sets of batteries will be make 300 generators free. Therefore, 300 generators will be offloaded by adding these 300 sets of batteries.

    2. Battery lifetime has been considered as 36 months but savings is calculated for 32 months considering any los due to any unwanted situation.

    3. A portion of these 300 sets will be used just for addition with existing batteries to enhance capacity. Rest sets will be used as replacement of existing batteries where some cells are faulty.

    4. After installing 300 sets we’ll make 50 sets free from some sites which will be used to reduce outage in some additional sites.

    5. Fuel Cost/Running Hour (RH) is TK. 196 and TK. 225 for Generator and Non-AG (Outage Reduction) respectively.

    6. The Weighted Average Cost of Capital (WACC) has been accepted as 15.6% and the lifetime of the project has been taken as 3 years.

    7. All the figures are in TK.

    5.3.1 Capital Expenditure (CaPex):

    Serial No Item Code Item Name Requirement Stock Required Quantity Unit Cost Total Cost Equivalent BDT
    1 1009313 Battery-YUASA- GS SNS500C -(2V 500AH) 7,200 – 7,200 $146.00 $1,051,200 73,188,000
    2 1007479 Galvanize Battery Rack. Yuasa UXL-550 300 – 300 6,700.00 2,010,000 2,010,000
    3 1007881 PVC CABLE NYY, 1X50 RM (Black) 4,200 2,900 1,300 350.00 455,000 455,000
    4 1002245 Cable Shoe-50/10 3,000 1,600 1,400 20.00 28,000 28,000
    Total 75,681,000.35

    Table 2: Capital Expenditure Calculation

    5.3.2 Generator Deployment Plan:

    Head Major Battery Backup Deployment Plan Deployment Plan
    Sub Head Sub Overall Generator Off Loading Outage Reduction (Non AG Sites)
    Quantity Planned Quantity 350 300 50
    Jan Jan 0 0 0
    Feb Feb 0 0 0
    Mar Mar 0 0 0
    Apr Apr 300 300 0
    May May 50 0 50
    Jun Jun 0 0 0
    Jul Jul 0 0 0
    Aug Aug 0 0 0
    Sep Sep 0 0 0
    Oct Oct 0 0 0
    Nov Nov 0 0 0
    Dec Dec 0 0 0
    Q Planned Quantity 350 300 50

    Table 3: Generator Deployment Plan

    5.3.3 Detailed Breakdown of Savings:

    Head FUEL FUEL SAVINGS GENERATOR MAINTENANCE COST SAVINGS GENERATOR MOBILIZATION COST
    Sub Head Sub Overall Generator Off Loading Outage Reduction (Battery Re-use) Generator Off Loading Outage Reduction (Non AG Sites)
    Savings Savings / Unit / Month 8928.75 11760 3375 3002.552267 4500
    Jan January 0 0 0 0 0
    Feb February 0 0 0 0 0
    Mar March 0 0 0 0 0
    Apr April 0 0 0 0 0
    May May 3528000 3528000 0 900765.68 0
    Jun June 7224750 7056000 168750 1801531.36 225000
    Jul July 10921500 10584000 337500 2702297.04 450000
    Aug August 14618250 14112000 506250 3603062.72 675000
    Sep September 18315000 17640000 675000 4503828.4 900000
    Oct October 22011750 21168000 843750 5404594.08 1125000
    Nov November 25708500 24696000 1012500 6305359.76 1350000
    Dec December 29405250 28224000 1181250 7206125.44 1575000
    S Planned Savings 29405250 28224000 1181250 7206125.44 1575000
    Savings Head Electricity 0 0 0 0
    F Fuel* 11760 3375 0 0
    AGM Generator Maintenance** 0 0 3002.552267 0
    ACM A/C Maintenance 0 0 0 0
    R Rent 0 0 0 0
    O Other 0 0 0 4500

    Table 4: Savings Breakdown

    5.3.4 Saving Calculation:

    Generator Off Loading TABLE – A : Savings (Generator Off Loading)
    Possible Reduction of RH / Day 2.00 No of Sites 300
    Yearly Savings (Fuel) 42,336,000
    Fuel Cost Savings Fuel Cost / RH 196.00 Yearly Savings (Generator Maintenance) 10,809,188
    Monthly Savings 11,760.00 Total 53,145,188
    Maintenance Cost Savings Maintenance Cost / Year 36,030.63
    Monthly Savings 3,002.55
    Total Savings / Month 14,762.55
    Outage Reduction ( Battery Re-use) TABLE – B : Savings (Outage Reduction – Battery Re-use)
    Possible Reduction of PG Run / Day 0.50 No of Sites 50
    Yearly Savings (Fuel) 2,025,000
    Fuel Cost Savings Fuel Cost / RH 225.00 Yearly Savings (Generator Maintenance) 2,700,000
    Monthly Savings 3,375.00 Total 4,725,000
    Mobilization & Other Cost Savings Unit Cost / RH 300.00
    Monthly Savings 4,500.00
    Total Savings / Month 7,875.00
    Yearly Savings : A + B 57870188.16

    Table 5: Savings Calculation

    5.3.5 Cost Benefit Analysis:

    Description Investment Savings Year 1 Savings Year 2 Savings Year 3
    Year 2011 2011 2012 2013
    Exchange Rate
    (a) Cash Inflow
    Fuel 29,405,250 44,361,000 44,361,000
    Generator Mainten

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    Financial Inclusion Importance of Mobile Payment System Report

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    Financial Inclusion Importance of Mobile Payment System Report

    Introduction

    Financial Inclusion refers to the ability of individuals to access financial services. One of the major barriers to achieve financial inclusion in Bangladesh is providing the online money transferring facility as maximum people in rural areas do not maintain any formal bank account. The main problem of this research is how to provide online money transferring facility to the people who do not have any formal bank account.

    The main objective of this report is to find how mobile money transfer can be used to achieve financial inclusion. Secondary objective of this report are discussing the background Financial Inclusion, discussing the available mobile payment system in Bangladesh and analyzing the prospect of Mobile Payment System to achieve Financial Inclusion in Bangladesh.

    Only 19% people in rural areas have a formal bank account. So they can get online money transferring facility from Banks. This is a barrier for achieving financial inclusion in Bangladesh. The service of bKash can solve this problem immediately by giving access to money transfer facility to more than 50% of population with a mobile connection. The service is cost effective and quicker than Banks. bKash number of outlet is more than branches of bank in rural areas. And these outlets are open from 8a.m.–8 p.m where transaction time in banks is normally 10 a.m. to 4 p.m. So it is easier for both sender or receives to send or receive money through bKash. These facilities can play an important role in achieving financial inclusion in Bangladesh.

    In the chapter 1 of this report discuss definition and concepts of financial inclusion. In the second chapter discuss about overall status of financial inclusion in Bangladesh. In the third chapter I discuss some barrier in achieving financial inclusion. In the fourth chapter discuss detail process of transferring money through bKash and Banglalink. In the fifth chapter discuss the prospect of mobile payment system in achieving financial inclusion. In this chapter mainly discuss the advantages of mobile payment system. The last chapter is concluding remarks where give conclusion and recommendation of this report.

    All the data used in this report are secondary data. There is no information collected from field visit as primary data. This report mainly based on the information provided by websites of Bangladesh Bank, bKash and Banglalink. The theatrical part mainly based on internet publication, finance books and BB website.

    Chapter 1

    Definition and Concept of Financial Inclusion

    Concept of Financial Inclusion

    Financial inclusion has emerged as a tool to achieve inclusive growth for poverty reduction since 2005, a year that the UN has declared International Microcredit Year. Studies indicate that a positive correlation exists between financial development and economic growth. Current development theories suggest that greater financial inclusion can have a positive impact on the lives of the poor.

    Financial exclusion refers to the lack of access to financial services. It limits opportunities for employment and enterprise development and imposes a premium on the cost of basic services. Financial exclusion thus makes it difficult to reduce inequalities and alleviate poverty. Financial exclusion is a barrier to economic development. Financially excluded populations include marginal farmers, landless labors, unorganized enterprises, urban slum dwellers, migrants, senior citizens and women. Financial inclusion is thus a high priority policy goal for developing and developed countries in order to ensure stable and equitable economic growth.

    1.1 Definitions/Concept

    1.1.1 While the need to promote financial inclusion has received global importance, a consensus has not been reached on the definition of financial inclusion. The provision of financial services from banks is sometimes referred to as financial inclusion refers to a broader concept.

    1.1.2 United Nations (2006), in its blue book titled “Building Inclusive Financial Sectors for Development”, defines financial inclusion as the “access to the range of financial services at a reasonable cost for the bankable people and farms”. Basic financial services include savings, short and long-term credit, leasing and factoring, mortgages, insurance, pensions, payments, local money transfers and international remittances.

    1.1.3 Financial inclusion also refers to the ability of individuals to access appropriate financial products and services (House of Commons Treasury Committee, 2006). An understanding of appropriate financial products and services includes financial awareness, knowledge about banks and banking channels, facilities provided by the banks and advantages of using the banking channel. The Center for Financial Inclusion (CFI), an affiliate of US-based nonprofit ACCION International, argues that quality financial services in a full inclusive financial system would be provided at affordable prices, in a convenient manner, and with dignity for the clients. Mainstream providers considered as officially regulated and supervised entities provide quality products developing capacity and usage of financial services reflected in the perfect financial inclusive system.

    1.1.4 Rahman (2009) defines financial inclusion in Bangladesh as access to financial services from officially regulated and supervised entities in which banks and financial institutions are licensed by the Bangladesh Bank, MFIs by the Microcredit Regulatory Authority (MRA), registered cooperatives by the Department of Cooperatives; and official entities themselves including post offices and National Savings Directorate. Microfinance activities in Bangladesh, pioneered by Nobel laureate Dr. Yunus and replicated extensively worldwide, have been expanding the access of financial inclusion.<href=”#_ftn2″ name=”_ftnref2″ title=””>[2]

    1.1.5 Thus, the definitions of financial inclusion indicate that appropriate financial inclusion is multidimensional in nature offering quality financial services in a convenient way, extending access to all segments of the population and providing equal opportunities and reducing inequalities in an economy.

    1.2 Various criteria to measure the status of financial inclusion

    1.2.1 Studies (Mehrotra et. al 2009, Sarma, et. al 2010, and United Nation, 2006) use various criteria to measure the status of financial inclusion in an economy such as (i) outreach dimension and (ii) actual usage dimension. In terms of outreach dimension, there are two types of indicators: geographical penetration (number of bank branches or ATMs per 1000 square kilometers) and demographic penetration (number of bank branches or ATMs per 100000 people). More bank branches and ATMs per 1,000 square kilometers indicates smaller distances to nearest physical bank outlets and easier geographical access. Demographic penetration measures the average number of people served by each bank branch or ATM. Higher numbers imply that there are fewer clients per branch or ATM and also indicate easier access to bank’s services. Sarma et al. (2010) constructed a multidimensional index for measuring the degree of financial inclusion that includes information on bank penetration, availability of banking services and usage of the banking system. Demirgüc-Kunt et. al (2008) also compiled demographic and geographic penetration data on access of general banking branches or ATM booths.

    1.2.2 In terms of actual usage dimension the indicators are (i) number of loan accounts per 1000 people (ii) number of deposit accounts per 1000 people. These indicators measure the use of banking services/access to financial services. Another frequently used indicator of usage is the ratio of deposits/GDP or credit/GDP or (deposit + credit)/GDP. The measurement of financial inclusion depends on the level of development of a country and varies across countries/regions.

    1.2.3 In Bangladesh, as in other developing countries, indicators are measured in terms of outreach and actual usage dimensions. According to Rahman (2009), we also measure overall financial inclusion for Bangladesh. Bangladesh and an inclusive financial system may consider the following institutions in measuring access to financial services (Rahman, 2009):

    i) Banks and financial institutions supervised by the BB;

    ii) MFIs supervised by the Microcredit Regulatory Authority (MRA);

    iii) Credit cooperatives supervised by the registrar of cooperative societies;

    iv) Insurance companies supervised by Insurance Regulatory Authority

    v) Capital market institutions like investment banks, merchant banks, stock exchanges supervised by the Securities and Exchange Commission;

    vi) Post offices under the Post Office Department of the government offering savings, money transfer and insurance services; bureaus of National Savings Directorate of the government issuing government savings instruments.

    1.2.4 Insurance companies and capital market institutions are not the primary sources of clientele information for deposit-taking financial services; therefore, these need not to be included in measuring the extent of inclusion.

    1.2.5 A comprehensive primary measure of financial inclusion is, therefore, the coverage of deposit services which is measured by the number of deposit accounts/clients in deposit schemes in banks, MFIs, post offices as percentage of total population. The coverage of credit services is another benchmark in measuring the extent of inclusion, expressed in terms of gaps, exclusions and barriers in access to financial services.

    1.3 Importance

    1.3.1 Access to credit in the formal sector may also open up entrepreneurship opportunities for low income populations and increase the scope for investment.

    1.3.2 Linkages with the formal financial sector enable clients to access different credit, savings and insurance products with soft conditions provided by regulated institutions. In terms of cost, easy access to the formal financial sector reduces the growth of informal sector credit provided by moneylenders which can often be expensive and exploitive.

    1.3.3 An account can be used for multiple purposes including making payments for essential utilities, receiving benefits from government programs; therefore contributing to financial deepening.

    1.3.4 Studies suggest that access to financial services allows the poor to save money safely outside their homes, prevents the concentration of economic power with a few individuals and helps to mitigate the risks that the poor face as a result of economic shocks or natural calamities (Mehrotra et. al, 2009).

    Chapter 2

    Financial Inclusion in Bangladesh

    2.1. The Status of the Overall Financial Inclusion in Bangladesh

    Geographical penetration indicates that number of bank branch per 1000 square kilometer increased from 44.24 in 2005 to 53.34 in 2010. Number of ATM booth per 1000 square kilometer increased tremendously from 0.82 in 2005 to 14.43 in 2010 (Chart 1). In term of demographic penetration, number of branches per 100,000 populations increased from 4.67 in 2005 to 5.28 in 2010. Number of ATM per 100,000 populations increased from 0.09 in 2005 to 1.43 in 2010 (Chart 2). Trend in geographical and demographic penetration indicates that access to banking is increasing overtime in Bangladesh.

    Source: Islam and Mamun (2011), Financial Inclusion: The Role of Bangladesh Bank, Research Department Bangladesh Bank.

    Access to banking in rural areas in terms of bank branch expansion, number of deposit a/c, number of credit a/c was quite impressive during 2005-2010. Recent data show that in rural areas total rural bank branch grew, on average, about 3.39 percent during 2005-2010 as against the 4.75 percent growth in urban areas during the same period. Number of deposit account grew by 11.91 percent in rural areas between 2005 and 2010 while the same was 7.82 percent in urban areas during the same period. Number of credit account during the same period increased, on an average of 0.54 percent in rural areas as against 4.41 percent in urban areas during 2005-2010.

    Source: Islam and Mamun (2011), Financial Inclusion: The Role of Bangladesh Bank, Research Department Bangladesh Bank.

    In the rural areas, number of deposit account per 1,000 persons was 126.45 in 2005 which grew to 189.17 in 2010, while number of loan account decreased from 52.77 in 2005 to 50.82 in 2010 (Chart 3 and 4).

    Source: Islam and Mamun (2011), Financial Inclusion: The Role of Bangladesh Bank, Research Department Bangladesh Bank.

    Number of deposit and loan account per 1000 population were 241.52 and 61.57 respectively in 2005 which increased to 333.19 and 63.29 respectively in 2010 (Chart 7). The ratio of deposit-GDP increased from 42 percent in 2005 to 53 percent in 2010 while loan-GDP ratio increased from 32 percent in 2005 to 43 percent in 2010 (Chart 5 and 6).

    Source: Islam and Mamun (2011), Financial Inclusion: The Role of Bangladesh Bank, Research Department Bangladesh Bank.

    2.2. Outreach by Micro Finance Institutions

    Access to finance by MFIs is remarkable in Bangladesh. Latest data provided by MRA indicate that 550 MFIs operated 17 863 branch throughout the country (mostly in rural area) in June 2011. In June 2011, MFIs have 25.81 million clients of whom 18.45 million clients are women. Total outstanding savings mobilized by MFIs went to Taka 62.86 billion at the end of June 2011 which was Taka 27.53 billion in June 2007. Total loan disbursement stood at Taka 174.91 billion at the end of June 2011 which was Taka 86.95 billion at the end of June 2007 (Chart 8).

    Source: Islam and Mamun (2011), Financial Inclusion: The Role of Bangladesh Bank, Research Department Bangladesh Bank.

    Geographical penetration measured by branch per 1000 square kilometer stood at 123.56 branches at the end of June 2011 up from 93.43 at end June 2007. Population penetration indicates that 9.61 branches served per 100,000 populations in June 2007 which increased to 12.08 branches in June 2011 (Chart 9).

    2.3. Overall Financial Inclusion

    Rate of overall financial inclusion is increasing in modest pace. The overall financial rate is given in Table-1. It is observed that financial inclusion as percentage of total population increased from 39.76 percent in 2004 to 56.42 percent in 2010. In terms of adult population, it increased from 65.33 percent in 2004 to 87.23 percent in 2010 due to opening a significant number of 10 Taka account in the last two years.

    Table 1 : Status of Financial Inclusion in Bangladesh<href=”#_ftn4″ name=”_ftnref4″ title=””>[4]

    Year Adult Population (millions) Total population (millions) Population per bank branch (in number) Number of bank deposit A/Cs (millions) Deposit A/Cs as % of adult population Number of members in MFIs (millions) MFI members as % of adult population Number of members in cooperatives (millions) Cooperative members as

    % of adult population

    		 Financial inclusion as % of adult

    Population

    		 Financial inclusion as % of total

    Population
    1999

    2000

    2001

    2002

    2003

    2004

    2005

    2006

    2007

    2008

    2009

    2010

    		 73.16

    75.16

    77.18

    79.59

    80.80

    82.25

    83.80

    84.60

    87.08

    89.62

    92.24

    94.50

    		 111.46

    111.46

    123.15

    129.25

    133.40

    135.20

    137.00

    138.80

    140.60

    142.40

    144.20

    146.10

    		 18669

    18347

    19886

    20753

    21406

    21443

    21420

    21171

    20320

    20566

    19681

    18947

    		 27.30

    28.40

    30.10

    30.90

    31.30

    31.60

    33.10

    34.50

    35.70

    37.60

    38.97

    48.68

    		 37.32

    37.79

    39.00

    38.82

    38.73

    38.42

    39.50

    40.78

    42.02

    43.83

    42.25

    51.51

    		 14.63

    14.40

    18.82

    22.89

    20.83

    23.53

    24.90

    24.94

    		 18.11

    17.51

    22.46

    26.95

    24.52

    24.36

    26.99

    26.39

    		 7.65

    7.67

    7.57

    7.76

    7.92

    8.03

    8.22

    8.44

    8.64

    8.81

    		 9.91

    9.64

    9.37

    9.43

    9.45

    9.45

    9.68

    9.84

    9.37

    9.32

    		 66.21

    65.36

    71.41

    77.33

    74.36

    77.63

    78.61

    87.23

    		 40.10

    39.76

    43.68

    47.13

    46.05

    48.86

    50.28

    56.42

    Source: Rahman (2009b), Microcredit Regulatory Authority, Bangladesh Bureau of Statistics, and Scheduled Bank Statistics, Bangladesh Bank.

    Trend in technology adoption in banking services

    In order to provide banking service at lower cost and at shorter time to remote area, Banks have adopted various modern technology viz. installation of ATM, POS, introducing credit card and debit card, uses of mobile phone, internet banking, on line banking and tele-banking. It is observed that mobile banking is the potent instrument

    for increasing outreach and mobile phone is an ideal platform to increase of outreach of financial services to the rural population as their penetration is already large and growing (Mehrota, et. al, 2009). Recent survey data show that adoption of modern technology in banking services is impressive (Chart 10 and 11). Number of ATM booth increased from 118 in 2005 to 2855 at end June 2011. Number of POS also increased immensely from 3121 in 2005 to 17183 in June 2011. Number of debit and credit card clients increased from 0.11 million and 0.15 million in 2005 to 6.0 million and 0.61 million in June 2011 respectively. Number of mobile banking clients grew by about 62.0 percent to 0.21 million in June 2011. Out of 47 banks, 38 banks use modern facilities i.e., internet banking, online banking and tele-banking.

    Source: Islam and Mamun (2011), Financial Inclusion: The Role of Bangladesh Bank, Research Department Bangladesh Bank.

    Recent trend of mobile banking indicates that financial inclusion is scaling up in Bangladesh especially in rural area where no bank branch is available. Recent data show that number of mobile phone subscribers and tele-density have been increasing substantially overtime creating an opportunity for banks and MFIs to use the mobile technology in the financial services and serve unbanked people with lower costs specially in the rural areas (Chart 12 and13).

    Source: Islam and Mamun (2011), Financial Inclusion: The Role of Bangladesh Bank, Research Department Bangladesh Bank.

    2.4. Recent survey findings

    Institute of Microfinance (InM) conducted a survey on “Access to financial services in Bangladesh” in 2011 covering nearly 9000 households in 63 districts except Rangamati. The main findings of the survey are that the aggregate access to any financial services stood at 76.77 percent of which access to formal services is about 37 percent and access to quasi formal ( MFIs and co-operatives) is about 43 percent (Chart 14). Another finding of the survey shows that there is a s

    significant market overlapping both in formal and quasi formal market.

    Source: Islam and Mamun (2011), Financial Inclusion: The Role of Bangladesh Bank, Research Department Bangladesh Bank.

    Chapter 3

    Barriers to Financial Inclusion in Bangladesh

    Barriers to financial inclusion

    3.1 Identifying the barriers that prevent the lower income people in the country in accessing to the financial services provide hints as to which policies could be supportive in removing the barriers and broadening access. Measures for accessibility, affordability and eligibility can indicate the extent of barriers to the financial services in terms of deposits, loans, payments, locations, technology etc.

    3.2 Poor banking infrastructure: Keeping in view the number of financially excluded people, in Bangladesh, about half of the adult population is unbanked (48.49 percent) in terms of deposit accounts in the banks. The major barrier is geographical or physical access measuring the average distance from household to bank branch; however, the branches per 1,000 square kilometers could be used as crude indicator for providing an initial idea to the barriers of inclusion. For example, Spain has 96 branches per 100,000 people and 790 branches per 1,000 square kilometer, while Bangladesh has less than 7 branches (or ATM) per 100,000 population and about 67 branches (or ATM) per 1,000 square kilometer. A large section of the population who do not have any physical access to the banking services are in rural and remote areas in the country.

    3.3 Lack of proper documentation: Another barrier is lack of proper documentation including ID, proof of domicile and reference letter required to open a checking or savings account in Bangladesh, where many people do not have such documentation.

    3.4 Inadequate financial literacy or education: Financial literacy and awareness are very low in the country, particularly in rural areas; it makes a large segment of household difficult to get financial services from the banking system in terms of savings, credit and payments.

    3.5 High requirement of minimum balance: Many institutions have a minimum account balance requirement or fee for opening checking or savings account; consequently, many lower income people faces difficulty to maintain such balance enforcing to exclude themselves from the financial services. Though minimum amount to open a checking or savings account (2.28 and 0.89 percent of GDP per capital respectively) is lower in Bangladesh, it could be free for the poor people for broadening the extent of financial inclusion.

    3.6 Poor level of technological infrastructure: As a competitive and cost effective strategy, major banks focuses on large scale of loans instead of providing services for small size of loan; as a result, rational business decisions prevent a major portion of people from accessing loan services including SME and agriculture loan. Promoting technological and institutional innovations as a means could expand the financial system access and usage; however, less than 4 people per 1,000 populations in the country are using credit cards indentifying the technological and infrastructural weaknesses.

    3.7 Low income: There is still a large section of household in the country, particularly in rural areas, having extremely low level of income; therefore, those people are un-served from any financial institutions.

    3.8 Lack of suitable product structure of banks and MFIs: Appropriate financial products need to develop in reaching the unbanked population to the formal financial system.

    3.9 High cost of product: The cost of product of MFIs compared to that of banks

    (Interest rate) is still high indicating another important barrier for financial inclusion.

    3.10 Absence of credit bureau and insurance of MFI borrowers: Spreading of outreach by MFI is quite impressive in rural areas. But, there is no credit bureau for identifying overlapping borrowers and their indebtedness. At the same time, there is no

    micro insurance for credit borrowers.

    Chapter 4

    Mobile Payment System in Bangladesh

    bKash

    4.1. About bKash

    bKash Limited (a subsidiary of BRAC Bank) is a joint venture between BRAC Bank Ltd., Bangladesh, and Money in Motion LLC, USA. The ultimate objective of bKash is to ensure access to a broader range of financial services for the people of Bangladesh. It has a special focus to serve the low income masses of the country to achieve broader financial inclusion by providing services that are convenient, affordable and reliable.

    More than 70% of the population of Bangladesh lives in rural areas where access to formal financial services is difficult. Yet these are the people who are in most need of such services, either for receiving funds from loved ones in distant locations, or to access financial tools to improve their economic condition. Less than 15% of Bangladeshis are connected to the formal banking system whereas over 50% has mobile phones. These phones are not merely devices for talking, but can be used for more useful and sophisticated processing tasks.

    bKash was conceived primarily to utilize these mobile devices and the omnipresent telecom networks to extend financial services in a secure manner to the under-served remote population of Bangladesh.

    bKash is dedicated to provide financial services through an extensive network of community-based agents and existing technology, including mobile phones. The overall value proposition is simple: a safe, fast & convenient way to send and receive money, make payments anytime anywhere and store or safekeeping of your hard earned money.

    bKash is a Payment System Operator (PSO) License holder, and is regulated by the Bangladesh Bank. bKash maintains proper documentation to follow Money Laundering Prevention Act 2009, Anti Terrorism Act 2009 and Bangladesh Bank’s Guidelines on Mobile Financial Services (MFS) for Banks 2011, where applicable<href=”#_ftn5″ name=”_ftnref5″ title=””>[5].

    4.2. Company mission

    By providing financial services that are convenient, affordable and reliable, bKash aims to widen the net of financial inclusion. bKash wants to provide a solution for mobile financial services, built on a highly scalable mobile money platform, allowing people of Bangladesh to safely send and receive money via mobile devices.

    4.3. Partners

    banglalink
    Banglalink (Orascom Telecom Bangladesh Limited) is fully owned by Orascom Telecom Ventures Limited (OTV); the ultimate parent company of the group is vimpel.com, the 6th largest mobile phone operator in the world. Banglalink- the second largest GSM mobile operator of Bangladesh, commenced its commercial operation in February 2005 . It has already surpassed the 25 million customer landmark within only seven years of operation. Banglalink entered the market with a vision of bringing mobile telephony to the masses. Accordingly banglalink strives to understand consumers’ needs best and provides reliable & affordable communication solutions that make a difference in people’s lives.
    BRAC
    BRAC is currently the world’s largest non-governmental development organization. BRAC is currently present in all 64 districts of Bangladesh, with over 8 million microfinance group members, 37,500 non-formal primary schools and more than 70,000 health volunteers. BRAC provides its massive footprint all over Bangladesh to bKash to deliver financial services at the vicinity of the beneficiaries.
    Bill & Melinda Gates Foundation
    Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health with vaccines and other life-saving tools and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, it seeks to significantly improve education so that all young people have the opportunity to reach their full potential. Based in Seattle, Washington, the foundation is led by CEO Jeff Raikes and Co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett.
    Fundamo, a Visa company
    Fundamo is a wholly owned subsidiary of Visa Inc. and a leading platform provider of mobile financial services for mobile network operators and financial institutions. Fundamo’s Enterprise Mobile Financial Services platform has been deployed in more than 40 countries across Africa, Asia, and the Middle East, offering mobile financial services for person-to-person payments, bill payments, wireless airtime top-up, and ticketing. Fundamo is headquartered in Cape Town, South Africa.
    Grameenphone
    Grameenphone is the leading telecommunications service provider in Bangladesh with more than 36 million subscribers (November 2011). It is a joint venture between Grameen Telecom Corporation and Telenor of Norway which has operations in 12 other countries. Grameenphone was the first company to introduce GSM technology in Bangladesh in 1997.
    Robi
    Robi Axiata Limited is a joint venture company between Axiata Group Berhad, Malaysia and NTT DOCOMO INC, Japan. It was formerly known as Telekom Malaysia International (Bangladesh) which commenced operations in Bangladesh in 1997 with the brand name AKTEL. On 28th March 2010, the service name was rebranded as ‘Robi’ and the company came to be known as Robi Axiata Limited. Robi has over 12 million users in Bangladesh.
    ShoreBank International
    ShoreBank International delivers a broad range of financial services to financial institutions and their funders globally, dedicated to expanding access to capital for small businesses, entrepreneurs and households. The international consulting firm SBI partners with bKash to provide services at a large scale that will allow low income people in Bangladesh access to Financial Services. SBI received a $10 million grant from Bill and Melinda Gates Foundation to support bKash<href=”#_ftn6″ name=”_ftnref6″ title=””>[6].

    4.4. How to register with bKash

    Registration is an easy one time process. Once you are registered, you can use all bKash services. At the moment, registration is open to Robi and Grameenphone and banglalink subscribers. Soon, subscribers from other operators will also be able to use bKash.
    To register in bKash, please do the following –
    01. Go to any of your nearby bKash agent along with –
    a. Your mobile phone
    b. A copy of your Photo ID (National ID/Passport/Driving License)
    c. 2 copies of Passport size photographs
    02. After registration, you need to activate your wallet. Please see below –

    4.5. How to cash in bKash wallet

    You need to have money stored in your bKash Account to avail the bKash services. So, before doing any transaction, make sure you have sufficient balance in your account. For putting money in your bKash Account, follow the steps below –
    01. Go to any bKash Agent
    02. Let the agent know the amount you want to Cash In
    03. Write down your bKash Account Number and the Cash In amount in Agent Register
    04. Pay the amount of money you want to Cash In
    05. In exchange, the agent will send electronic money to your bKash Account. Cash In done!
    You and the Agent both will get confirmation message from bKash. Remember to put your signature in the Agent Register before leaving the counter.

    4.6. How to send Money to others wallet

    Send Money enables you to transfer money to other’s wallet. Follow the steps below –
    01. Go to bKash Menu by dialing *247#
    02. Choose ‘Send Money’
    03. Enter the wallet number you want to send money to
    04. Enter the amount you want to send
    05. Enter a reference about the transaction. Do not use more than one word, avoid space or special characters
    06. Now enter your wallet PIN to confirm the transaction
    07. Done! You and the Receiver both will receive confirmation message

    4.7. How to receive cash from agent

    If you have sufficient credit in your bKash Account, you can withdraw cash anytime from any bKash Agent. To Cash Out from your bKash Account –
    01. Go to any bKash Agent
    02. Let the agent know the amount you want to Cash Out
    03. Write down your bKash Account Number and the amount in Agent Register
    04. Dial *247# on your mobile for bKash Mobile Menu
    05. Choose “Cash Out”
    06. Choose “From Agent”
    07. Enter Agent’s bKash Account Number (ask the agent)
    08. Enter the amount
    09. Enter your bKash Mobile Menu PIN
    Done! You and the Agent both will receive confirmation message. Count the amount and put your signature in Agent Register before leaving the counter
    4.8. How to cash out from ATM
    You can withdraw cash anytime from any bKash enabled BRAC Bank ATM.
    ATM Cash Out Service Activation – To avail the ATM Cash Out service, you need to activate this feature from your bKash Mobile Menu. This is a one time action. To activate ATM Cash Out service, follow the steps below –
    01. Go to your “bKash Mobile Menu” by dialing *247#
    02. Go to “My bKash”
    03. Choose “Activate ATM”
    04. Enter a 5 digit new PIN. This PIN will be your “bKash ATM Cash Out PIN” and is better to be different than your “Mobile Menu PIN”
    05. Enter the PIN again to confirm
    You will see a confirmation message on your mobile that you have successfully activated the service.
    ATM Cash Out Request Generation –
    When the service activation is done, for each ATM Cash Out you will need to generate a “Security Code”. Here is how you do it-
    01. Dial *247# to access “bKash Mobile Menu”
    02. Choose “Cash Out”
    03. Choose “From ATM”
    04. Enter your “bKash Mobile Menu PIN” to request ATM Cash Out
    You will receive a Security Code on your mobile through SMS. This code will remain valid for one hour and can be used only once.
    Withdraw Cash from ATM –
    To withdraw cash from any bKash enabled BRAC Bank ATM, follow the steps below –
    01. Press the “bKash Cash Out” button at the left-bottom corner of the ATM Screen
    02. Select your language
    03. Enter your bKash Account Number
    04. Enter the amount you want to Cash Out (Minimum BDT 2,000 to Maximum BDT 20,000)
    05. Enter the “Security Code” you received through SMS
    06. Enter “bKash ATM Cash Out PIN”
    07. Check the information you entered and confirm
    08. Collect your cash and receipt
    You will receive a confirmation message in your mobile with the details of the ATM Cash Out transaction.

    4.9. Tariff

    Service Charges
    Registration No charge applicable
    Cash In No charge applicable
    Send Money (individual) Tk. 2.00 (for any amount)
    Cash Out from Agent 1.85% of Cash Out amount
    Cash Out from ATM 2% of Cash Out amount
    Payment (merchant) No charge applicable
    Transaction Limits
    Transaction Type Minimum Amount

    per transaction (Tk.)

    		 Maximum Amount

    per transaction (Tk.)

    		 Maximum Amount

    per day (Tk.)

    		 Maximum Amount

    per month (Tk.)
    Cash In 50 125,000 125,000 250,000
    Send Money 10 10,000 10,000 25,000
    Cash Out from Agent 50 125,000 125,000 250,000
    Cash Out from ATM 2,000 20,000 125,000 250,000
    Payment * NA NA NA NA

    4.10. Payment

    Customer can make payment from his own wallet to any small or big business entity who accepts bKash. For example, if you want to pay after shopping, use the following steps-
    01. Go to bKash Menu by dialing *247#
    02. Choose ‘Payment’
    03. Enter the business wallet number you want to pay to
    04. Enter the amount you want to pay
    05. Enter a reference against your payment (you can mention the purpose of the transaction in one word. Ex: Bill)
    06. Enter the counter number (the salesperson at the counter will tell you the number)
    07. Now enter your PIN to confirm
    08. Done! You will get a confirmation SMS

    4.11. bKash International Remittance

    bKash brings you the easiest and most convenient way of sending and receiving International Remittance.

    To send International Remittance from abroad to a bKash Account in Bangladesh:

    • Go to a participating Exchange House branch

    • Let the agent know that you want to send money to Bangladesh through bKash

    • Fill out the bKash related fields properly on the remittance request form available at the Exchange House

    • The Exchange House agent will help you complete rest of the process

    While sending remittance through bKash, please ensure that:

    • Recipient’s number is a bKash Account number and belongs to one of the operators who is partnered with bKash (currently GP, Robi or Banglalink ie 017, 018 or 019).

    • The destination bKash Account number is entered as the 11 digit Bangladeshi mobile number starting with 017, 018 or 019 e.g. 01XXXXXXXXX. The international dialing and country code should not be included i.e. there is no “+88”.

    • Recipient’s bKash account number is correct.

    • The number has been written clearly & correctly in the correct field.

    • The BDT Value of sent remittance does not exceed bKash standard transaction limits.

    Countries and Exchange Houses from which you can send Remittance to Bangladesh:

    • UAE

    – Al Rostamani International Exchange (ARIE)

    – Al Ahalia Money Exchange Bureau
    – Orient Exchange

    Note: To find your nearest exchange house branch, please click on the name of the respective participating exchange house above.

    To receive International Remittance on your bKash Account:

    • To receive International Remittance through bKash, first you need to have a bKash Account. To open a bKash Account, go to your nearby bKash Agent along with 2 copies of Passport size photographs, a copy of your Photo ID (National ID/Passport/Driving License) and

    your mobile phone (Robi/Grameenphone/Banglalink).

    • Communicate your bKash Account number to the sender. The sender will use this number for terminating the remittance amount.

    • When the money reaches your bKash Account, you will receive a confirmation message on your mobile phone.

    • No charge is applicable to receive International Remittance on your bKash Account. You have to pay bKash standard Cash Out Charge only when you need to withdraw money from bKash Agent or BRAC Bank ATM.

    Applicable Transaction Limits for sending/receiving International Remittance through bKash:

    Transaction Type Per Transaction Amounts Maximum Transaction Amounts
    International Remittance Minimum Maximum Per Day Per Month
    BDT 50 BDT 125,000 BDT 125,000 BDT 250,000

    • You may send larger amounts than the above limit by sending to multiple bKash Accounts of the recipient or any other person of his/her family.

    • A bKash Customer can keep a maximum amount of Tk. 150,000 in his/her bKash Account at any moment. For example, if s/he has Tk. 50,000 in his/her account, you can send him/her a maximum amount of Tk. 100,000 in Bangladeshi currency at that specific account.

    Banglalink Mobile Remittance

    4.12. Banglalink in collaboration with Dhaka bank ltd (dbl) and eastern bank ltd (ebl) jointly launched mobile remittance, the first ever for Bangladesh as well as for south Asia. This service is a highly secured, convenient, reliable, fast and cost-effective remittance system.

    4.13. Product Details

    Beneficiaries with banglalink mobile connections will be able to open mobile wallet accounts either at Dhaka bank or eastern bank from selected banglalink mobile cash points by submitting necessary identity documents and account opening forms. mobile wallet account holders can receive the remittance directly in their mobile wallet account. if the beneficiaries do not have banglalink mobile connections, they can still receive the remittance by receiving a secured and unique transaction reference number which is forwarded to them by the sender. in that case, the beneficiaries will have to go to the designated banglalink mobile cash points with proof of identification and request for the disbursement by submitting the transaction reference number, the exact amount and the bank name.

    4.14. Account Registration Process

    1. Fill up the registration form and put your signature (or thumb print). if a nominee is required get his/her signature as well
    2. a. provide the retailer with a copy of your passport size photograph (as well as a copy of your nominee‘s passport size photograph) and a photocopy of any one of the following photo identification documents. please bring the original valid photo identification document for verification:

    i) voter i.d./national i.d. ii) driving license iii) passport

    b. the photocopy of the photo identification document must be signed and dated by both you and the retailer

    1. you will receive a pin number through sms*
    2. in order to activate the mobile wallet account, you must change the pin number received through sms and create a pin number of your own

    4.15. Encashment Process

    1. Fill up the money encashment form
    2. Provide the retailer with a copy of any one of the valid photo identification documents. please bring the original valid photo identification document for verification:i) voter i.d./national i.d.

    ii) driving license

    iii) passport

    3. a. if you have a registered mobile wallet account:

    i) mention your registered banglalink number and the amount you wish to withdraw in the encashment form

    ii) verify your pin number for safe transaction

    ii) you will receive a confirmation sms from banglalink

    b. if you do not have a registered mobile wallet account:

    i) mention the name of the bank through which remittance came, the exact amount received and the transaction reference id (obtained from the sender) in the form

    1. Receive your money from the retailer
    2. a. retailer will sign the money encashment form in front of you

    b. sign the money encashment form (or thumb print)

    c. the photocopy of the photo identification document and encashment form must be signed and dated by both you and the retailer

    Mobile cash remittance with western union

    Banglalink in collaboration with Dhaka bank ltd (dbl) jointly launched mobile remittance through western union, the first ever for Bangladesh as well as for south Asia. This service is a highly secured, convenient, reliable, fast and cost-effective remittance system

    4.16. Mobile cash remittance with western union

    Beneficiaries with banglalink mobile connections will be able to open mobile wallet accounts at dhaka bank or from selected banglalink mobile cash points by submitting necessary identity documents and account opening forms. mobile wallet account holders can receive the remittance directly in their mobile wallet account.

    4.17. Account registration process

    1. Fill up the registration form and put your signature (or thumb print). if a nominee is required get his/her signature as well
    2. a. provide the retailer with a copy of your passport size photograph (as well as a copy of your nominee’s passport size photograph) and a photocopy of any one of the following photo identification documents. please bring the original valid photo identification document for verification:i) voter i.d./national i.d. ii) driving license iii) passport

    b. the photocopy of the photo identification document must be signed and dated by both you and the retailer

    1. you will receive a pin number through sms*
    2. in order to activate the mobile wallet account, you must change the pin number received through sms and create a pin number of your own

    Customers can pick-up money through Banglalink mobile in the following way:

    1. dial *777#
    2. press the reply button & enter pin and press the send button
    3. from the main menu select the mobile remittance option by presing the reply button and type 6 and press the send button
    4. press the reply button, type 1 and press the send button to select western union
    5. press the reply button, type 1 and press the send button to pick up money
    6. you will be asked to enter the mtcn number. press the reply button and enter the mtcn number (10 digits) provided to you by the sender and press the send button
    7. the screen will show the details of the transaction and ask for confirmation. press the reply button, type 1 and press the send button to confirm the pick up transaction.
    8. the screen will show “transaction successful” with the amount received in your wallet

    * in special cases the additional info may be required and it will be prompted in the screen for pick up transactions and the transaction may also be queued due to mismatch of information for a time period until western union verifies and make the transaction either successful or fail.

    3. Transaction enquiry

    a) mtcn

    b) sender first name

    c) sender last name

    1. dial *777#
    2. press the reply button & enter pin and press the send button
    3. from the main menu select the mobile remittance option by pressing the reply button and type 6 and press the send button
    4. press the reply button, type 1 and press the send button to select western union
    5. press the reply button, type 2 and press the send button for transaction enquiry
    6. you will be asked to enter the mtcn number. press the reply button and enter the mtcn number (10 digits) provided to you by the sender and press the send button
    7. you will be asked to enter the senders first name. press the reply button, type the senders first name and press the send button
    8. you will be asked to enter the senders last name. press the reply button, type the senders last name and press the send button
    9. the screen will ask you for confirmation. press the reply button, type 1 and press the send button
    10. the screen will show the status of the transaction

    * all the above mentioned services can only be performed from banglalink number

    4.18. How to take money out of your wallet

    1. Fill up the money encashment form

    2. Provide the retailer with a copy of any one of the valid photo identification documents. please bring the original valid photo identification document for verification: i) voter i.d./national i.d. ii) driving license iii) passport

    3. if you have a registered mobile wallet account:

    i) mention your registered banglalink number and the amount you wish to withdraw in the encashment form

    ii) verify your pin number for safe transaction

    iii) you will receive a confirmation sms from banglalink

    b. if you do not have a registered mobile wallet account:

    i) mention the name of the bank through which remittance came, the exact amount received and the transaction reference id (obtained from the sender) in the form

    1. receive your money from the retailer
    2. a. retailer will sign the money encashment form in front of youb. sign the money encashment form (or thumb print)c. the photocopy of the photo identification document and encashment form must be signed and dated by both you and the retailer

    the following items are not acceptable:

    a) photo i.d. that is past its expiration date

    b) photo i.d. that does not resemble the applicant

    c) student i.d.

    Chapter 5

    Prospect of Mobile Payment System

    5.1. Advantage of Mobile Payment System

    One of the major problems of providing financial service to rural people is in Rural areas maximum people don’t have any formal bank account so thy can not get the facility of transferring and receiving money through banking channel. In the rural areas, number of deposit account

    " 129,"

    Focus on Selection and Training Process Of Grameen Phone Ltd.

    ","

    view with charts and images

    This report have been tried to focus on Selection and Training Process Of Grameen Phone Ltd.

    Executive Summary

    We know that, Human Resource Management is the process of recruiting, hiring, training, compensation, appraising and developing employees.

    Like the other functions, Selection and training are essential functions of Human Resource Management. And in my internship report going to discuss about the selection and training process of Grameen Phone Limited.

    Grameen Phone maintains some steps in their selection process. By following this selection process company can recruit needed employees. All the divisions of GP follow this selection process to hire the employees.

    Selection process basically starts with the job advertisement given by the company and ends with the joining of employees.

    For selecting the employees’ company need to determine the budget, to determine the job description and responsibility for giving ease to the candidates about who should apply for the particular post, then collecting CV, short listing, take written test, interview, medical test, reference check, orientation, and last of all joining of the employee.

    Training is a process that brings a permanent change in learning and behavior which they could show by their performance in the work place. Training enables the company to adapt to changing conditions and be more effective in the market place.

    Training can provide employees with knowledge and skills to perform more effectively, preparing them to meet the inevitable changes that occur in their job.

    GrameenPhone arranges training programs to increase the actual level of performance at the expected level. It’s trying to keep its position in the market place, where it is now, by providing training to their employees.

    Thus, training is only an “opportunity” for learning.

    In this report mentioned a brief history of GP. Its establishment time, the founder of the company, the strategy of the company, its vision and mission, values, slogan, products and services, competitors, its Organogram, its divisions etc. all are discussed here very briefly.

    Chapter One

    1.1 Introduction

    GrameenPhone Ltd. is the largest leading cellular telecommunication company of Bangladesh. GrameenPhone (GP) offered a cellular license in Bangladesh by the Ministry of Post and Telecommunications on November 28, 1996. The company launched in service on March 26, 1997, the Independence Day of Bangladesh. Telenor, as the leading Telecommunications Company of Norway, owns 62% shares of GP and Grameen Telecom own 38% of the shares of GP.

    Now, after 11 years of successful operations, GrameenPhone is the largest mobile phone service provider in Bangladesh, with more than 18 million subscribers as of May 2011.

    GrameenPhone provides services to rural and urban customers across Bangladesh, where mobile telephony is acknowledged as a significant driver of socio-economic development, both for individuals and the nation.

    1.2 Origin of the Report

    After completing 4 years BBA program, organizational attachment of three months is must. So this report preparing and submitting is a partial requirement for completing the Bachelor of Business Administration (BBA).This report is an outcome of the three month long internship program conducted in GrameenPhone Ltd., the most reputed leading telecommunication company of the country. The decided to work on the selection and training process of the GrameenPhone Ltd. The report focuses on the overview of selection and training process. While working in the GrameenPhone the found that the standard selection and training process followed out by the GrameenPhone Ltd.

    1.3 Objectives of the study

    The main objective of study is to know the “Selection and Training Process Of GrameenPhone Ltd.“. And the other objectives are:

    ?To know a brief history of GP.

    ?To observe the working environment.

    ?To know about Telenor group.

    ?To know about its Shareholders.

    ?To find out the SWOT of GP.

    ?To know its vision, mission, and values.

    ?To know its products and services.

    ?To know about its Organogram.

    ?To know how the budget of selection is estimating.

    ?To know how need for recruitment is declared.

    ?To know what is expected while recruiting an employee.

    ?To know about the selection process of GP.

    ?To know how training need and objective are determined.

    ?To know how training objective can smooth the progress of training as well as help the trainee, the designer, the trainer, and the evaluator.

    ?To know some previous data related to training.

    ?To know the methods which are used to deliver training.

    ?To know the types and category of training.

    ?To know about the training process of GP.

    1.4 Scope of the study

    This internship is a requirement for achieving the Bachelor of Business Administration (BBA) degree that provides on the job experience to students. The starting my job on October 22, 2011 placed at GrameenPhone Ltd. as an internee for three months duration. Within only few days of my internship period, able to get familiar to the working environment of GrameenPhone Ltd.

    The scope of the study on Selection and Training Process Of GrameenPhone Ltd. is almost not possible to become familiarized with the total procedure of selection training of the GrameenPhone Ltd. within a short period of time.

    In this report have been tried to focus on Selection and Training Process Of GrameenPhone Ltd. The scope of the report encompasses the areas covered by the organization part, and evaluation part. Maximum effort has been carried out to focus on Selection and Training Process Of GrameenPhone Ltd., which has included in the internship part. The organization part starts with the history of GrameenPhone Ltd. and end with a brief discuss of divisions of the GrameenPhone Ltd.

    1.5 Methodology of the study

    The sources of information used are:

    Primary Data are collected through:

    ? Conducting oral discussion with the officers of the company.

    ? From the real experience of my selection process as an internee

    ? HR Manual of GP.

    Secondary Data collected from:

    ? Online information

    1.6 Limitations of the study

    Although the officials were so busy, GP gave me wholehearted cooperation in the time of internship also in preparing this report. It was such nice experience the gathered from GrameenPhone Ltd. But faced some problems. If these limitations were not been there, the report would have been more useful.

    The study has the following limitations:

    ? One of the main limitation of the study is insufficient access to information, which has disadvantaged the scope of the analysis required for the study.

    ? The time is insufficient to know in-depth.

    ? It was very difficult to collect the information from various personnel for their job restriction.

    ? There may be some personal mistake in the report. Because, some assumption was made due to the limitations of information

    ? Permission was not granted to use the various formats of forms related to selection and training process directly.

    Chapter Two

    2.1. An Overview of GrameenPhone Ltd.

    The idea of providing wider mobile phone access to rural areas was originally concieved by Iqbal Quadir. The insapired by the Grameen Bank microcredit model and envisioned a business model where a cell phone can serve as a source of income. After leaving his job as an investment banker in the United States, Quadir traveled back to Bangladesh, after meeting and successful raising money from New York based investor and philanthropist Joshua Mailman, and worked for three years gaining support from various organizations including Noble Peace Prize luareate Muhammad Yunus of Grameen Bank and the Norwegian telephone company, Telenor. He was finally successful in forming a consortium with Telenor and GrameenBank to establish GrameenPhone. Quadir remained a shareholder of GrameenPhone until 2004.

    GrameenPhone received a license for cellular phone operation in Bangladesh from the Ministry of Posts and Telecommunications on November 28, 1996. GrameenPhone started operations on March 26, 1997, the Independent Day in Bangladesh, with the purpose of enabling people to better communicate which ultimately contributes to national development. Telenor Norway, the leading Telecommunications Company of Norway owns 62% shares of GrameenPhone Ltd. Telenor has substantial international operations in mobile telephony, satellite operations and pay television services. It uses the expertise it has gained in its home and international markets for the development of emerging markets like Bangladesh. GrameenPhone Ltd. has been successful in its endeavors and is holding the position of market leader among the mobile operations in the country.

    GrameenPhone has made its expansion not only in the urban areas, but also it has stretched its network in the rural areas for the economic empowerment of the rural people. One such initiative is through collaboration with GrameenPhone Telecom, which owns 38% of shares of GrameenPhone. GrameenPhone Telecom, a not-for-profit company working in close collaboration with Grameen Bank, the internationally reputed bank for the poor, manages the Village Phone Program, through which GrameenPhone provides its GSM services to the fast growing rural customers.

    Additionally, Grameen Phone’s Community Information Center or CIC in short, which provides information and cellular services in rural and semi-urban communities, is also a successful program bringing such services to rural areas. CIC is basically local entrepreneur owned and managed shared data access point. It has established using GrameenPhone branding and connectivity. The 4 major target segments of GP CIC are 1.Farmers, 2.Students, 3.Women, and 4.Businessman. Within a short span of time since its inception GP has covered six divisions of the country.

    The company has been growing fast and at the same time being competitive. GP pledge for undertaking business challenges with great enthusiasm and search for avenues for continued growth. GP believe that subscribers are our greatest strength; therefore GP are committed to provide quality services to customers. GP are committed to make best utilization of investments for business development. Their human resources are considered as the most important assets who drive the business forward. GP acknowledge their hard work and commitment to achieve business goals.

    GrameenPhone is the largest mobile phone operator in Bangladesh, serving 20.8 million customers as of third quarter 2011.

    GrameenPhone at a glance:

    GrameenPhone Ltd.
    Type Limited
    Founded 1997
    Headquarters Celebration Point, Road # 113 A, Plot 3 & 5, Gulshan-2, Dhaka, Bangladesh
    Key people Oddvar Hesjedal, CEO
    Industry Telecommunication
    Products Telephony, EDGE, GSM
    Points of sales 90,000
    Employees 4681
    Customers 20.8 million as of third quarter 2011.
    Slogan We are here to help
    Website www.grameenphone.com
    Subscribers 16.5 Mn
    Revenue 5,450 crore BDT in 2010
    coverage 98% Population
    Base Stations More than 10,000
    Investment 11,150 crore BDT since 1997
    Contribution 10,140 crore BDT to national exchequer

    Table: GrameenPhone at a glance

    2.2. About Telenor

    Telenor is emerging as one of the fastest growing providers of mobile communications services worldwide with ownership interests in 12 mobile operators across Europe and Asia.

    Telenor is organised into three business areas; Mobile operations covering 12 countries, and Fixed-line and Broadcast services covering the Nordic region.

    Telenor holds 62 per cent of GrameenPhone, with Grameen Telecom Corporation owning the remaining 38 per cent. Telenor has played a pioneering role in development of cellular communications in Bangladesh.

    The Telenor Group

    2.3. Shareholders

    The shareholders of GrameenPhone contribute their unique, in-depth experience in both telecommunications and development. The international shareholder brings technological and business management expertise while the local shareholder provides a presence throughout Bangladesh and a deep understanding of its economy. Both are dedicated to Bangladesh and its struggle for economic progress and have a deep commitment to GrameenPhone and its mission to provide affordable telephony to the entire population of Bangladesh.

    Grameen Telecom -38%

    Telenor Mobile Communications AS -62%

    Figure: Shareholders of GrameenPhone

    GrameenPhone is a joint venture company comprising of:

    Telenor Mobile Communications AS: Telenor AS is the leading Telecommunications Company of Norway listed in the Oslo and NASDAQ Stock Exchanges. It owns 62% shares of GrameenPhone Ltd. Telenor has played a pioneering role in development of cellular communications. It has substantial international operations in mobile telephony, satellite operations and pay Television services. In addition to Norway and Bangladesh, Telenor owns GSM companies in Denmark, Austria, Hungary, Russia, Ukraine, Montenegro, Thailand and Malaysia. It has recently started a mobile phone operation in Pakistan. Telenor uses the expertise it has gained in its home and international markets for the development of emerging markets like Bangladesh.

    Grameen Telecom: Grameen Telecom, which owns 38% of the shares of GrameenPhone, is a not-for-profit company and works in close collaboration with Grameen Bank. The internationally reputed bank for the poor, has the most extensive rural banking network and expertise in microfinance. It understands the economic needs of the rural population, in particular the women from the poorest households. Grameen Telecom, with the help of Grameen Bank, administers the Village Phone Program, through which GrameenPhone provides its services to the fast growing rural customers. Grameen Telecom trains the operators, supplies them with handsets and handles all service-related issues. Grameen Bank currently covers more than 51,000 villages which are serviced by 1326 bank branches (December’ ‘04) all over the countryside. At the end of the year, the bank had 3.78 million borrowers, 95 percent of whom were women. Grameen Telecom’s objectives are to provide easy access to GSM cellular services in rural Bangladesh, creating new opportunities for income generation through self- employment by providing villagers with access to modern information and communication based technologies.

    2.4. SWOT Analysis of GP

    SWOT Analysis is an important analysis for any organization, in which four basic objectives as strengths, weaknesses, opportunities and threats are considered for the specific firm in order to ensure that the firm can understand its position in the competition ground and thus can take necessary precautions.

    A SWOT analysis for GrameenPhone Ltd. is conducted as follow:

    a. Strengths:

    -Availability of Backbone Network (Optical fibber).

    -Financial Soundness.

    -Market Leader.

    -Brand Name / Grameen Image.

    -Skilled Human Resource.

    -Largest Geographical Coverage.

    -Good Human Resource and Infrastructure, installation all over the country through Bangladesh Railway and Grameen Bank.

    -Access to the widest rural distribution network through Grameen Bank.

    -High Ethical Standard.

    b. Weaknesses:

    -Mixture of different cultures is used as an excuse not to solve problems.

    -Too much inside out thinking in the company.

    -Different departments not working together.

    -Poor interconnection with BTTB.

    -Complicated price structure.

    -Billing System can’t handle sophisticated billing.

    -No long-term Distribution/Channel strategy.

    c. Opportunities:

    -Economic growth of Bangladesh.

    -New and better interconnection agreement.

    -Huge need for telecom services.

    -Increased intentional activities in Bangladesh.

    -Future privatization of the fixed network.

    -New international gateway.

    -Demand for inter-city communication

    -Growth in other operator will give more connection.

    d. Threats:

    -More rigid government regulations.

    -More influence of competitors on the fixed network

    -Change of government might lead to competitors having more clout

    -Devaluation of Taka

    -National catastrophes.

    -Sabotage of installation.

    -Non-co-operation of government and fixed PSTN (Public Service Telephone Network).

    -Risk of fire in GP’s Installations.

    -Price war.

    -Non-availability of funds.

    -BTTB has limited capacity for interconnections.

    2.5. Company Vision

    Company vision is: “We’re here to help”.

    We exist to help our customers get the full benefit of communications services in their daily lives.

    In GrameenPhone, this means:

    -Making things simpler for our customers

    -Continue Innovation

    -Provide full communication solutions

    -Continue as a partner in development for Bangladesh

    2.6. Company Mission

    Company mission is: “We will lead the industry and exceed customer expectations by providing the best wireless services, making life and business easier.”

    2.7. Company Values

    Grameen Phone has the following values that all employees must understand and should adhere in work situation.

    -Make it easy

    -Keep Promises

    -Be Inspiring

    -Be respectful

    2.8. Corporate slogan of GP

    GrameenPhone’s slogan is-

    “We’re here to help”

    2.9. Products and services of GP

    Over the years, GrameenPhone has always been a pioneer in introducing new products and services in the local market. GrameenPhone provides supplementary services or products with its core product. Its main core product is SIM which connects people with its network.

    GP is now offering some pre paid and post paid services:

    ? Prepaid

    i. smile ( mobile to ,mobile connectivity within Bangladesh)

    ii. smile ( nationwide and international mobile and land line connectivity)

    iii. djuice ( a youth based mobile to mobile connectivity within Bangladesh)

    iv. Business Solution (designed especially for the business community in Bangladesh)

    # Edge facility:

    Both SMILE M@M & SMILE PSTN can avail Edge Package1 (P1) & Edge Package2 (P2)

    ?Post paid

    ? Xplore postpaid: It is for businessmen or entrepreneurs.

    ?xplore Package 1 (nationwide and international mobile and landline connectivity)

    ?xplore Package 2 (nationwide and international mobile and landline connectivity)

    ?Supplementary products and services

    ?Recharge

    -Flexi-Load

    -Scratch Card

    ?Hardware

    -Genuine Handsets

    -GPRS and EDGE Modem

    -Accessories (Charger, Battery etc)

    ?Value Added Services

    One can use his mobile phone for many other purposes than making voice calls. With GrameenPhone’s VAS, one can use his mobile phone to:

    ?Bill Payment

    Subscribers can pay his/her post paid bill of any amount at any GrameenPhone Center or authorized outlays.

    2.10. Media used by GP

    GP also use both ATL & BTL method to be connected with its customers. Their TV, radio, newspaper, magazine ads are always informed about the offers of GP packages. GP also use dangler, bunting, and billboards to remind customers about the offers.

    These media GP use as a bridge to reach to the customers.

    2.11. GP’s Website:

    GP developed a strong website for its customers. It’s full of information; all information about GP is available here. And the website is very lucrative. One can ask questions and can get answer; not only that through the website one can apply for the job too. All information is available in the address.

    GP’s web address for the customers: http://www.GrameenPhone.com.

    2.12. Organogram of GP

    GP’s Organogram is restructured on November 11, 2011, due to the change of its CEO. Before that, CEO of GP was Anders Jensen. The GrameenPhone Board of Directors has appointed Oddvar Hesjedal (58) as the company’s new Chief Executive Officer on November 10, 2011. He takes up the position immediately, succeeding Anders Jensen, who in September announced his decision of shortening his tenure as CEO for family related reasons.

    Thus, GP’s new Organogram is-

    Figure: Organogram of GP

    Chapter Three

    Chapter three is all about the analysis of my report topic. As my report is about selection and training process of GP, I’m describing them one after another. Here, at first, I discussed about selection process in part one and right after accomplishing part one, I discussed about training process in part two.

    Part One

    ? Selection Process Of GP

    Selection is the process of gathering information for the purpose of evaluating and deciding who should be employed in particular jobs.

    According to the book of Mr. David A. Decenzo and Mr. Stephen P. Robbins, named Human Resource Management, the selection process typically consists of eight steps.

    These are as follows:

    1. Initial screening interview,
    2. Completion of the application form,
    3. Employment tests,
    4. Comprehensive interview,
    5. Background Investigation,
    6. Conditional job offer,
    7. Medical/Physical exam, and
    8. Permanent job offer.

    GP, as a complete organization, has its own standard recruiting process.

    3.1. Number of Employees in HR division

    In HR Division, there are 223 employees who are doing their job with great efficiency and responsibility.

    3.2. Estimating Recruitment Budget

    Every department has its own budget for recruiting employees which is fixed from earlier the department recruited employees. Such as, business control department has fixed recruitment budget to recruit 10 employees, but it has 9 employees. In this case, it has still sufficient budget to recruit one more employee if it required.

    3.3. Declaration of need for Recruitment

    Basically, need for new recruitment is declared by the concerned department, because only that department can measure the pressure of work and tries to reduce the work load by dividing the work among the employees for avoiding delay of work and meeting the time line it wants to reach.

    So, when it feels that it needs more manpower to get the job done more efficiently within the scheduled time, then it declares need for recruitment to the HR.

    3.4. Expectation of an Employer

    To select an employee for the particular post the employer expects that the candidate will be the one who has all the skills and knowledge that was required or mentioned in the job description and responsibilities published in media.

    3.5. Employment Procedures

    Now, a discussion about GP’s employment procedures or selection processes are given below-

    The Resourcing and Employer Branding (R&EB) department under Human Resources Division ensures that employment policy is enforced and practiced consistently.

    The total recruitment process timeline is 29 working days. HR will maintain an active database incorporating skills inventory of employees that may be used as a starting point from recruiting from within.

    The Steps of GP’s Recruitment are as follows-

    -Requisition to Publish Add,

    -Application Receive,

    -Sorting, Listing, and Serial,

    -Short Listing & Communication for interview,

    -Written Test & Interview,

    -Weight age, Checking & Scoring,

    -Medical, Reference Check & Selection,

    -Orientation Program, and

    -Placement or employee joining.

    Now, the steps of Recruitment & Approximate Duration that normally followed by GP are given below:

    Steps Start Duration End
    Requisition to Publish Add 0 5 5
    Application Receive 6 7 12
    Sorting, Listing, and Serial 13 3 15
    Short Listing & Communication for interview 16 2 17
    Test & Interview 18 4 21
    Weightage, Checking & Scoring 22 2 23
    Medical, Reference Check & Selection 24 2 25
    Orientation Program 26 3 28
    Placement or appointment 29 1 29

    Table: Steps of Recruitment & Approximate Duration

    Figure: Steps of Recruitment & Approximate Duration

    The process of selection followed by GP, which begins with Requisition to Publish Add and ends with Placement, are discussed below-

    3.5.1. Job Advertisement

    The market communication section is responsible for designing and finalizing the advertisement layouts, with approval by HR Director, After receiving a requisition and posting of a job advertisement, candidates are usually given seven days to apply, which can be extended is deemed necessary.

    3.5.1.1. Media used to advertise

    Advertise for job vacancy can be given by many media; such as Web site of companies own web site, the national dailies, and web site of various career consulting firms(www.bdjobs.com; www.jobstreet.com; www.jobsA1.com etc.)

    GP’s job advertisements are published in GrameenPhone career site and in the national dailies conforming to company policy and communication guidelines indicating the position and requirements.

    GP gives ad in its own GP web site, that is- www.grameenphone.com.

    Here, the job seeker open an account by fulfilling a form of CV and after completing all the steps he gets an user name and password, which helps him or able him to update the CV time to time whenever he feels it needed, to see the jobs as well as the job description and responsibilities; and apply for preferred job.

    GP’s website also gives some job offers for its internal employees for their promotions, which is not visible for external job seekers. This is named as ‘Grow Within’.

    3.5.2. CV Screening/Short Listing

    After closing of a job advertisement, R&EB collects and compiles applications. The applications are profiled against the given job advertisement and sent to the user department for further screening. Short listing criteria include:

    Once the CV are evaluated and forwarded to R&EB, GP are checked against the profile and set for assessment.

    3.5.2.1. Declaration of the Interview

    By making call and sending mail to the candidates (both internal and external), who has selected by initial screening process, are informed for the written test.

    3.5.3. Written Test

    Written test is conducted to evaluate the candidate’s functional knowledge, analytical ability, written language skills, and certain job-related competencies. Minimum score of the written test, interview and assessment is 60%. However, this may be increased or decreased in case the candidate pool is abundant/scarce of majority fails to qualify the minimum score. Any deviation must be duly justified and documented.

    HR R&EB formulates the final test script in consultation with the user department. Evaluation of HR section is done by a qualified assessor; the same from the concerned department.

    3.5.3.1. Form of written test

    The form of written test is determined according to the nature of the vacant post; such as, if the test is for any engineering post, then the questions will be analytical; and if the test is for any finance related post, then the question will be a case study with some related questions, etc.

    3.5.4. Interview

    Another short listing is created after examining all the exam papers of written test. Those candidates are to be called who have met the required score.

    All interviews must confirm to company standard and guidelines to select the benefits.

    It is preferred that internal candidates should inform their respective supervisor before attending interview session.

    3.5.4.1. The process of interview

    The process of interview followed by GP is given below.

    3.5.4.1.1. Interview Board

    It is expected that interview board members have a good understanding of the following:

    · Assessment tools and methods

    · Assessment criteria

    · Ability to evaluate objectively

    · Understanding of the position and competency requirements

    The ideal size of an interview board is three however, in certain cases, exceptions can be made. With exception of HR as Resourcing is their functional expertise and responsibility, it is required that other board members be at least one level up from the position applied i.e. for interview of Deputy Manager the board members from concerned department should at least be Managers.

    3.5.4.1.2. Screening Interview

    Screening interviews are short sessions (5-15 minutes) that help assessors’ make an initial judgement about a person’s aptitude, competencies, attitude, and most importantly job fit. The size of the interview board can be from one to three.

    3.5.4.1.3. First Level Interviews

    The first formal interview/viva session in the assessment process, the 1st level interview (15-30 minutes) evaluates on similar criteria except that it delves in to more detailed analysis of a person’s job and personality fit. In most cases the final decision is made at this level. For up gradation interviews, a cross-functional board member is required.

    3.5.4.1.4. Assessment Centre

    Assessment centre is ideal for evaluating a candidate’s functional and behavioral performance, especially on-the-job and team performance. Competencies of candidates are assessed by company standards. The basic assessment criteria are similar. Component includes a case analysis (group or individual), presentation, and formal interview.

    3.5.4.1.5. Final Interview

    In certain cases, a final interview may be required. Senior members of the concerned department/division are usually present during these sessions to make the final selection.

    The flow of this process depends on job requirement and may be agreed upon by consultation between R&EB and concerned department. However, recruitment of regular entry-level officers must include a written test. In certain cases assessment centre may substitute for the written test as it includes multiple assessment tools. It is required that candidates be called at least two days before any assessment; for deputy managers and above it should be preferably higher. All candidates must be assessed jointly by HR R&EB and line function regardless positions.

    3.5.4.2. Most Preferred Form of Evaluating Candidates

    Though both the written test and verbal interview are used to evaluate a candidate for the particular post, but GP prefer verbal interview to evaluate the candidate.

    3.5.5. Selection

    Once a candidate is selected through assessment and mutual agreement of the board; R&EB will process and compile the assessments and communicate with concerned assessors for final approval. In certain cases, approval may be immediate.

    3.5.6. Medical Test

    All the selected candidates are required to go through a medical test from GrameenPhone enlisted diagnostic centre at company’s expense.

    In case of referred case (for anomaly) a team is formed for HSE for observation and follow-up to declare “fit for employment”. If the report is acceptable he/she will be allowed to join otherwise would be sent for supplementary medical screening. In case of negative report is acceptable to decline the employment of that candidate.

    3.5.6.1 Tests recommend for medical

    GP basically recommend medical test for those candidates who are selected for the particular post after giving both the written test and interview. The tests are- HBs ag, Blood Group, etc.

    3.5.7. Information and Reference Check

    After getting the medical test, who have negative (–ve) result in the report, references are checked that GP used in their CV.

    For selection of Deputy Managers and above, R&EB will verify certain information as provided in the job application such as educational degree, work experience, and last employment status. Reference request letters are sent out to HR of the concerned company or referees designated by the candidate.

    3.5.8. Final Selection

    Based on positive report on health status from the medical centre, and positive reference check, the candidate is finally selected for appointment.

    3.5.9. Employment Offer and Salary Fixation

    At this stage, the selected candidate is offered employment with GrameenPhone. The salary is fixed based on salary range in each job grade based on individual’s knowledge, special skills, and work experience.

    3.5.10. Orientation

    New employee Orientation covers the activities involved in introducing a new employee to the organization and to his or her work unit. When a regular employee joins the Company, then GP organizes Orientation Program for its newly recruited employees. HR Development will arrange an orientation program. The representatives from each division will make divisional presentation. Preferably each employee should attend the next available orientation program within 6 months from the date of his/her joining.

    The individual needs to be introduced to his/her job as well as to the Company. In the orientation program, the company discloses about the company’s rules and regulation which includes:

    On the orientation ceremony the Chief Executive Officer (CEO) gives a short speech to the new employees. His speech includes:-

    -Welcome employees

    -Provide a vision of the company

    -Introduce company culture

    -Convey that the company cares about employees etc.

    The HR manager and the HOD also give speech to the new employees. GP instruct new employees how GP work, when and where to report, provides information about benefits choices. HR manager ensure employees about career development and training etc

    3.5.10.1 Training program for newly recruited employees

    GP does not organize any training program for its newly recruited employees.

    3.5.11.Employee Joining

    A Personal Information Form should be filled up by the finally selected candidate. The information provided in this form must be true and complete, failure to provide correct information is subject to disciplinary action according to Company policy

    R&EB and HR Operations will ensure that the employee on joining furnishes all pertinent documents. The personnel file shall comprise of (but not limited to) the following:

    3.5.11.1. Appointment Letter/ Employment Agreement

    HR will issue an appointment letter/agreement to the selected candidate for regular job and for short term Contact employees. The appointment letter must include:

    3.5.11.2. Appointment Authority

    Appointment authority is defined as the right and responsibility to make decisions with respect to recruitment, and the issuance and signing of all relevant correspondence with employee during hiring.

    The appointment endorsement for different level of employment must be made as per the following authority level:

    Position Approval Level
    Director CEO
    AGM-Deputy Director Director, HR
    DGM & below AGM, HR-R&EB

    Table: Appointment Endorsement

    3.5.11.3. Release Order

    Clearance/release letter must be submitted to HR at the time of joining. This is to avoid potential legal complications arising due to non-acceptance of registration by the person’s previous employer.

    3.5.11.4. Provision Period for New Recruited Employees

    At first, GP’s new recruited employees have to work under the provision period.

    3.5.11.4.1. Duration of Provision Period

    The duration of the provision period for the newly recruited employees is 1-6 Months.

    Part Two

    ? Training Process

    Training is a process that brings a permanent change in learning and behavior which GP could show by their performance in the work place. This usually means changes in specific knowledge, skill, and attitudes. Training is defined as any attempt to improve performance on a currently held job.

    Training enables the company to adapt to changing conditions and be more effective in the market place. Training can provide employees with knowledge and skills to perform more effectively, preparing them to meet the inevitable changes that occur in their job.

    As a part of individual development plan, the Training Policy provides a guideline to facilitate job specific functional improvement, development of managerial competencies, understanding of the cross-functional processes and/or other general areas that need to be improved.

    Thus, training is only an “opportunity” for learning.

    Each and every renowned company, manufacturer or international marketer, now a day, arrange training programs to increase the actual level of performance at the expected level. GP are trying to improve their position in the market place by providing training to their employees.

    GrameenPhone is one of them and it organizes and provides training to its employees to improve current skills and behavior, and also to increase abilities in relation to some future positions or jobs usually at management level.

    i. Higher Productivity

    ii. Better Quality of work

    iii. Less Learning Period

    iv. Cost Reduction

    v. Reduced Supervision

    vi. Low accident rate

    vii. High Morale

    viii. Personal Growth

    ix. Improved organizational climate

    3.6. Training Department of GP

    GP has a training department of its own. The name of training department is Technical Training.

    The foundation of Technical Training department is-

    Division: Networks Department: Planning Section: Technical Training, GrameenPhone Ltd.

    3.7. Number of Employees in Training Department

    There are two employees in the training department.

    3.8. Training Need Analysis

    Training need analysis is determined by actual basis. When the concerned department feel training is needed GP organize training program for their employees to cope with the inevitable changes.

    3.9. Determining Training Objectives

    Developing good training objectives takes time, effort, and careful thought.

    Training objective is usually determined by the concerned department, because it better knows what lacking it’s facing and what kind of training can help them to recur to the no. one position as it was.

    According to the Book of Mr. P. Nick Blanchard and Mr. James W. Thacker, named Effective Training Systems, Strategies, and Practices, the majority of HRD specialist agree that training objectives are important from a number of stakeholder perspectives; such as the:

    3.10.1 Trainee

    3.10.2 Designer of training

    3.10.3 Trainer

    3.10.4 Evaluator of training

    3.9.1. The trainee

    Trainees benefit from training objectives for a number of reasons, including the following:

    3.9.2. Training Designer

    Once the training objective has determined, the concerned department gives the responsibility to the trainer to design the training. The trainer designs the training by considering all the needed factors to meet the objective. The training objectives directly translate the training needs into training outcomes.

    3.9.3. The Trainer

    Trainers are normally the employees of GP and both local and foreign trainers, who take different types of training programs. With clear learning objectives, the trainer can facilitate the learning process more effectively. Clear, specific objectives allow the trainer more readily to determine how well the trainees are progressing and make the appropriate adjustments.

    Name of the Institutes Local Trainers Foreign Trainers
    Ericsson þ
    HUAWEI þ
    Guidance view þ
    CISCO Valley þ
    NEC þ
    NSN þ
    ORNET þ
    Telefocal þ

    Table: Use of Trainers for Training

    3.9.4. The Evaluator

    Employees of training department of GP are the evaluators, who evaluate the output of training comparing with the objective of training determined as before of training. Evaluating training is much easier when objectives are used, because these objectives define the behaviors expected at the end of training.

    3.10 Data’s of training

    Some Data’s of previous years related to training are shown with the help of table.

    Years 2010 2011
    No. of training 145 58
    Training (inside of country) 43 33
    No. of trainees 563 896
    Training (outside of country) 102 25
    No. of trainees 168 48

    Table: Data related to training of previous years

    Analysis of data’s are given below:

    3.10.1. No. of Training

    In 2010, one hundred forty five training programs were held. And in 2011, fifty eight training programs were held. It shows that the no. of training held in a year is decreasing. Number of training depends on the need of the training. This decreasing rate of training is shown by the following figure:

    Figure: Training Organized by GP

    3.10.2. Training held in Countries

    Training organized by GrameenPhone held not only in Bangladesh but also in foreign country. Discussions of them are as follows-

    ? In BD:

    Training that organized inside the country emphasized on to know about the job environment, nature of the customer, demands etc. to train up an employee. GrameenPhone provided his employees training, forty three times in 2010, and thirty three times in 2011.

    ? In Foreign country:

    With the demand of new technologies and supports that are needed to get the job done appropriately and in an easier way GP find outs a satisfactory way to encourage its employees by sending them abroad for training and purpose is to use learning and transfer of training back to the job. GP sent its employees one hundred & two times in 2010, and twenty five times in 2011 in abroad for training.

    # Numbers of training held in Bangladesh and in foreign country are shown by the following figure:

    Figure: Training held in Countries

    3.10.3. No. of trainees

    Number of trainees sent to the training inside and outside of the country is given below-

    ? In BD:

    GrameenPhone had provided training to increase the job proficiency of its employees. Their data shows that, number of trainees was five hundred & sixty three in 2010, and one hundred & sixty eight in 2011.

    ? In Foreign country:

    GrameenPhone had sent trainees to other countries, eight hundred & ninety six employees in 2010, and forty eight employees in 2011.

    # Numbers of trainees in Bangladesh and in foreign country are shown by the following figure:

    Figure: No. of Trainees Trained in Countries

    3.11. Level Training Emphasized

    At which level training emphasized it’s totally depend on the types of training. Because, training is carried on actual need basis. For example, on a new project training is needed, then on that project there can be entry, mid and top level employee involved.

    3.12. Training Method prefer to deliver training

    According to the Book of Mr. P. Nick Blanch

    " 130,"

    Focus on the employee job satisfaction at Beximco Pharmaceuticals Ltd

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    view with charts and images

    Focus on the employee job satisfaction at Beximco Pharmaceuticals Ltd

    Introduction

    1.1 Preface

    Beximco Pharmaceutical Ltd. or BPL is the leading pharmaceutical manufacturing in the country. It all began in 1980 when BPL, first product made under license of Bayer AG, Germany rolled out of a small manufacturing plant in Tongi, Dhaka. Product made under license of Upjohn Incorporated, USA followed. After its initial years of struggle it broke ground with the launching of its own product in 1983. The journey continued and barrier after barrier were crossed, challenges were faced and overcome to transform BPL into what it is at present. Today, BPL holds a 15% share in the domestic market after competing with such Multinational Giants as Glaxo, Welcome, Novartis, Hoecsht, Rhone Poulenc Rorer, Fisons etc. BPL manufactures and markets a high quality and cost-effective range of about 80 formulations covering all major therapeutic groups. The commissioning of BPL’s Basic Chemicals Unit in 1990, established a very significant milestone in the history of the country’s chemical industry.

    It not only met 90% of the country’s demand for two vital raw materials, ampicillin and amoxycillin but also started selling these to overseas markets, including South Korea and Malysia. BPL received the Export Gold Trophy in 1994-95 for its export of these two basic chemical making it the first pharmaceutical company in Bangladesh to win the Export Trophy

    Human Resources are part and parcel of an organization. An organization can not move these resources. A particular person never does a work well until he has keen interest and love for the work. Such interest and love can be generated by applying force on someone or may self-prompted. While the former may be true in some cases it is transitory and ineffective, the latter has more lasting and conducive impact. Thus the question arises about the satisfaction level of a person for a job.The tried to find out the answer of the question though this research.

    This report is focus on the employee job satisfaction at Beximco Pharmaceuticals Ltd. of distribution.

    1.2 Origin of the Report

    Today, practical experience is as much essential as academic education that enables someone to be successful business executive especially in the glove, competitive business environment. In order to gather Knowledge and exposure regarding the organization culture, behavior the business students have to be go internship after the successful completion of their business degree.

    1.3 Objectives of the proposed study:

    Objectives are as follows:

    o To know getting maximum results with minimum efforts.

    o Increasing the efficiency of factors of production.

    o Maximum Prosperity for employer and Employees

    o Human betterment & social justice

    o To find the weaknesses associated with the management of assets and liabilities of the company

    o To perfect management of distribution system in chemical industries.

    o To know the how to problem to solve arising the problem.

    1.4 Scope of the Study:

    The report intends to asses the position of overall pharmaceuticals market in Bangladesh, with special reference to Beximco Pharmaceuticals Ltd.The report is prepared with a view to provide a brief but complete idea about pharmaceutical industries position of several pharmaceuticals companies. For this purpose data was collected from primary and secondary sources. The readers will also understand the different management, marketing situations, export positions, economic situations, social contributions etc. about selected pharmaceutical companies. Some findings and recommendations have been mentioned in the report to get a clear picture about overall credit card market in Bangladesh.

    1.5 Limitation of the Study:

    The limitation and constraints faced while conducting this study are below:

    · The industry data was not available.

    · The internship has been made for two month long duration but it is very much difficult to set true practical experience about the real business world with in this short span of time.

    · Due to cost restriction, the study is concentrated in selected areas only distribution department of Beximco Pharmaceutical Ltd.

    · Sampling error may occur due to the utilization of convenience sampling.

    · The carried out such a study for the first time so inexperience is one of the main constrains of the study.

    In spite of all these limitations have to put the best effort as far as possible

    1.6 Data collection and its sources:

    Secondary data was collected from following sources:

    o Annual Reports.

    o Monthly Reviews of DSE and Internet.

    o Working Papers.

    o Office Files.

    o Selected Books.

    o Printed Forms.

    o Published & Unpublished Documents.

    Methodology
    Using Data:

    The report is based on information collected from both primary and secondary data sources. To make the report more meaningful and presentable, both the following sources of data and information have been used widely:

    a) The Primary Sources:

    b) The Secondary Sources:

    The analyzed selected sections and tried to identify problems associated with each section. The have also recommended some suggestions regarding these problems. At first have prepared this draft report and will submit it to tutor then based on the feedback will submit the final report.

    Chapter -2

    2.1. Origin of Beximco Group

    Taking Bangladesh to the World…

    Today the BEXIMCO Group (“BEXIMCO” or the “Group”) is the largest private sector group in Bangladesh. BEXIMCO was founded in the 1970’s by two brothers – Ahmed Sohail Fasiur Rahman and Ahmed Salman Fazlur Rahman. Since the early days, the Group has evolved from being primarily a commodities trading company to a leading, diversified group with a presence in industry sectors that account for nearly 75% of Bangladesh’s GDP. BEXIMCO’s corporate mission is “Taking Bangladesh to the world”.

    As BEXIMCO has grown over the years, the flagship platform now has operations and investments across a wide range of industries including textiles, trading, marine food, real estate development, hospitality, construction, information and communication technologies, media, ceramics, aviation, pharmaceuticals, financial services and energy. The Group sells its products and services in the domestic Bangladesh market as well as international markets. BEXIMCO is the largest employer in the private sector in Bangladesh and employs over 48,000 people worldwide.

    The BEXIMCO name has now become one of the most recognizable brand names in Bangladesh. It is synonymous with innovation, trust and quality. The Group consists of four publicly traded and seventeen privately held companies. The publicly traded companies – Bangladesh Export Import Company Limited, Beximco Pharmaceuticals Limited, Shinepukur Ceramics Limited and Beximco Synthetics Limited – have a combined market capitalization of approximately $625.41 million. The Group had total revenues of $834 million in the year ended December 31, 2010.

    BEXIMCO encompasses one of South Asia’s largest vertically integrated textile and garment companies. The Textile division is a fully integrated manufacturer of cotton and polyester blended garments for men, women and children, both for domestic and export markets. BEXIMCO is also the largest exporter of pharmaceuticals in Bangladesh with a presence in 45 countries. The Pharmaceuticals division manufactures and sells generic pharmaceutical formulation products, active pharmaceutical ingredients (API) and intravenous (IV) fluids. The Group is also the largest ceramics exporter and has an investment in GMG Airlines, the largest private commercial airline in Bangladesh and in Unique Hotels & Resorts, which owns the Westin Hotel in Bangladesh.

    State-of-the-art manufacturing plants located in the vicinity of Dhaka provide the Group with a highly cost effective manufacturing base. A majority of its plants are in the BEXIMCO Industrial Park, a vertically integrated self-contained facility. This facility provides ready access to captive power generation, water purification, liquid nitrogen, waste water treatment and other key infrastructure. The Group’s global clients include some of the world’s best known brands including BT, BASF, Chevron, Calvin Klein, H&M, JC Penney, Macys, Zara, UNICEF, Royal Doulton and Villeroy & Boch.

    BEXIMCO is well positioned to capitalize on strong growth across industries in both the domestic and global markets. Each Group company is managed by an independent, professional team with significant depth of experience. Management teams have established a clear strategic plan that will further strengthen the overall platform. BEXIMCO intends to leverage its market position and global scale, further diversify operations into highly profitable sectors, capitalize on the domestic growth opportunity and selectively pursue international opportunities going forward.

    In recognition of its corporate success and creation of shareholder value, the BEXIMCO Group has and continues to make significant contributions to Bangladesh’s society. Sponsored organizations include “Proyash”, a specialized institute that works for the holistic development of children with special educational needs and “Gono Sahajjo Songstha”, an institution that provides education for the underprivileged. BEXIMCO was also an official sponsor of the Bangladesh National Cricket team for the ICC Cricket World Cup 2011 and also the official title sponsor of the FIFA friendly match between Argentina and Nigeria held in September, 2011.

    2.2. Mission and Vision of Beximco Group

    Mission:

    Organization mission refers managements customize answer to the question what is our business and what will it be? A mission statement broadly outlines the organization’s future direction and service as a guiding concept for what the organization is to do and to become.

    “Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that in the final analysis we are accountable to each of the constituents with whom we interact namely our employees, our customers, our business associates, our fellow citizens and share holders.”

    Vision Statement:

    Vision is the long-term outlook i.e. management expectation of an Organization’s Position over the next 5 to 10 years. The vision of BEXIMCO reflects in the Chairman following statement (Groups Annual Report 2000).

    “If there is one characteristic that has typified the BEXIMCO approach it is Vision to be the best of our nature and human resources. A vision to establish our group and country as a respected and valued regional presence

    2.3.Figure: Corporate structure of Beximco Group.

    2.4.List Of Major Companies including the Beximco Group:

    Division Company
    Textile Division Padma Textile Mills Ltd.
    Beximco Synthetics Ltd.
    Beximco Apparels Ltd.
    Beximco Knitting Ltd.
    Beximco Textiles Ltd.
    Beximco Denims Ltd.
    Beximco Fashions Ltd.
    Beximco Fabrics Ltd.
    Chemical Division Beximco Pharmaceuticals Ltd.
    Pharmatek Chemicals Ltd.
    I & I Services Ltd.
    Real Estate & Construction Division Beximco Engineering Ltd.
    Shinepukur Holdings Ltd.
    Trading Division Bangladesh Export Import Ltd.
    Beximco Holdings Ltd.
    Jute Division New Dacca Industries Ltd.
    Sonali Ansh Ltd.
    Esses Exporters Ltd.
    Marine foods Division Beximco Foods Ltd.
    Beximco Fisheries Ltd.
    Information Technology Divisions Beximco Softech Ltd.
    Beximco Systems Ltd.
    Beximco Computers Ltd.
    Bangladesh Online Ltd.
    Others Shinepukur Ceramics
    Gammatech Ltd.

    Table: Major companies of Beximco Group

    The number of companies in each division is different. The companies of Beximco group in relation to division have been elaborated as follows:

    Beximco Textile Division:

    From fiber to fabric, the BEXIMCO Textile is a truly integrated undertaking. The Textile Division has the capability to offer a complete product range for the export and domestic textile markets. The goal of the Textile Division is to become the preferred partner the for source of high quality fabrics and clothing from Bangladesh. With highly advanced technology and emphasis on developing local human resources, the Textile Division has the potential to make an important contribution to the nation’s growing ready made garments export sector.

    Beximco Jute Division:

    The golden fiber provided the genesis of today’s BEXIMCO Group. As one of the staple exports of Bangladesh over the years, jute has been a mainstay of the country’s economic landscape. The BEXIMCO jute Division is the world’s largest jute yarn and twine manufacturer and exporter with 12% of the world jute and twine trade. Annual exports are currently over 20,000MT. BEXIMCO was the pioneer in manufacturing specialized jute yarn and twine for Ax Minister carpet and continues to explore new product and market opportunities worldwide. Until the jute business has got the setback in international market this division was one of the prime contributor to the group and the country as well.

    Beximco Real Estate & Construction Division:

    The two critical needs of the country for the next decade and beyond are infrastructure and housing. The Real Estate and Construction Division aims to develop service and product offerings, which are second to none in its areas of core concentration.

    BEXIMCO Engineering Ltd.(BEL)has been providing high quality civil engineering and consulting services to both the government and private sector for over a decade and was the largest sub-contractor on the historic 4.8 km. Long Jamuna Bridge. The firm is also involved in a number of road development and infrastructure projects.

    Shinepukur Holding Ltd. Real Estate Division although real-estate developers have mushroomed in Dhaka and other urban areas over the years, Shinepukur Holdings Real Estate division was begun with mission to segment the real-estate market and develop demographically specific housing projects.

    Marine Foods Division:

    Diversification into milk-fish production to supplement the traditional harvests of tiger prawn and sea bass has been a boon for Beximco Fisheries Ltd. With the pilot project in the coastal Cox’s Bazar area in full swing, the year has been better than the past years for the Marine Food Division. This group added significantly to the group through success in fisheries business. The turnover of the group was also boomed by the contribution of the export of marine foods to international market.

    Beximco Trading Division:

    This division holds the initial business trend of Beximco, indeed. It looks for the opportunity of import-export commodities that have the in the market. This division is really dynamic and high profit contributing to the group with a brand portfolio that includes Wartsilla SA ( generation equipment), Arjo Wiggin’s ( security & treasury papers) of France, and Dupont Inc.( Chemicals), Sterling Diagnostic Imaging Inc.( film products) and Valvoline Inc.( petroleum products and industrial lubricants) of the USA. The Trading Division also represents overseas marine food buyers acting as a source of agent on their behalf and providing quality control.

    Beximco IT Division:

    The companies included in this Division are Beximco Computers, Beximco Systems, and BOL online. Beximco Computers Ltd. is still the nation’s largest volume re-seller of IBM PCs. With the launch of a new version of Bexi Bank, an integrated multi-user, multitasking banking application system Beximco Computer Ltd.’s software is in use at over 300 branches of 15 major banks nationwide.

    Beximco’s first foray into education, Beximco Systems Ltd. is joint venture collaboration with the largest information technology institute of India, NIIT. Molded after NIIT’s highly successful training centers across India, the NIIT Centers in Bangladesh have the highest growth rate of any NIIT facility for enrollment levels in its short courses and degree programs.

    Bangladesh Online Ltd.(BOL), Beximco’s Internet Company launched its operation in August of 1998. The company has the fastest access among ISPs in Bangladesh. This division to serve groups interests in the most booming sectors of the world that is Information Technology. Since it started operation it proceeded very fast and became the market leader soon. It is pioneer company in Bangladesh to offer complete solution of automation. It also introduces the brand IT products to this country.

    Beximco Group established a very significant milestone in the history of the country’s chemical industry. The plant not only met 90% of the country’s demand for two vital raw materials, ampicillin and amoxycillin but also started selling these to overseas markets. BPL received the Export Gold Trophy in 1994-95 for its exports of these two basic chemicals making it the first pharmaceutical company in Bangladesh to win the Export Trophy.

    This division is involved with the following companies:

    · Beximco Pharmaceuticals Ltd.

    · I & I Services Ltd.

    · Pharmatek Chemicals Ltd.

    Beximco Pharmaceuticals Ltd.

    Beximco Pharmaceuticals Limited was incorporated in Bangladesh as a public company with limited liability, on 17th March 1976 and commercial operation on 1st October 1980. The company went for public issue of shares in 1985, and its shares are listed in the stock exchanges in Bangladesh. And it is the leading pharmaceutical manufacture in Bangladesh. BPL started its operations in 1980 with product made under license of Bayer AG Germany; products made under license of Upjohn Inc. USA followed. Beximco Groups of as the name reveals not only produce drugs, they are also producing many other items like Textile, Holding, Marinated food etc. They are growing 15% (approx.) per year. Growth of any industry more than 10% is considered high growth industry all over the world. This rapid Growth rate is the second highest growth rate compared to the garment industries of our country. Principal Activities and Nature of operations; The company owns and operates a modern Pharmaceuticals drugs and medicines and sells them in the local and foreign markets.

    While Pharmaceutical companies in many developed countries have lost their luster; the business is still highly attractive in Bangladesh. Beximco pharmaceuticals is an industry leader in Bangladesh Pharmaceutical Industry. Many of its products are brand leaders in their respective fields. The current status of BPL is that it is one of the largest producers of quality medicines both at home and abroad. It is engaged in manufacturing, marketing and export of pharmaceuticals finished products and raw materials. BPL products are sold more than 16 countries across 3 continents (Asia, Europe, and Africa). The company continuously investing in the latest technology and manufacturing facility to meet the growing demand for its product and it is constantly expanding its already diversified product portfolio to better serve the community.

    Pharmatek Chemicals Ltd.

    Pharmatek Chemicals Ltd. is the leading bulk producer of Paracetamol on Bangladesh. It caters to almost 60% of the local market and supplies its products to both national and multinational companies operating in Bangladesh. The company is managed and operated by BPL under a long-term management contract.

    I & I Services Ltd.

    I & I Services Ltd. is the distribution wing of the Chemical Division. It maintains a large distribution network and covers 20,000 customers nationwide every month. A highly sophisticated order processing system, logistic facilities in terms of vehicles, depots and a team of professional sales staff keep pace with the ever-increasing market demand for timely execution of orders and quality services.

    2, 5.Background of Pharmaceuticals Industry:

    The pharmaceuticals sector is a high technology and knowledge-intensive industry in Bangladesh. The industry has two-tier structure. The largest firm accounts for the majority of the R&B investment in the industry and hold the majority of patents. There are a large number of smaller firms producing mostly for local markets. The pharmaceuticals industry is heavily regulated.

    Once a product is brought to market, pharmaceuticals companies spend heavily on marketing and promotion. The larger drug companies maintain a large sales force, which makes direct regular contacts with individual prescribing physicians and other pharmaceuticals decisions makers. The money spent on marketing is huge. Pharmaceuticals marketing efforts are not only directed at physicians and consumer; drug companies have also sought to directly influence pharmacist to induce customer to change their drug consumption habits.

    The nature of competition in this industry differs between the two sets of firms. The second tier of firms holds fewer patents and relies primarily on manufacturing off patent generic medicals medicines or patent medicines under lenience. Competition between these firms takes the conventional from of competition on price, cost efficiency and quality. It contrast, a few large research-based pharmaceutical companies invest heavily in R&D and hold the bulk of the patents, and can often enjoy substantial market power while these patents are in force. For these companies, competition is not primarily on the basis of price, but rather on the basis of marketing and innovation. Theses companies compete to develop entirely new drugs, which treat new medical conditions, improve upon existing drugs, or serve as substitute for existing patented drugs. Some large pharmaceutical companies in these tiers export and compete in international markets.

    The scenario of pharmaceutical industry can be depicted in two parts-before the Drug policy ordinance, 1982 and after the drug policy ordinance, 1982. Before the ordinance there were 177 pharmaceutical companies in the country but local production is used to be dominated by multinational drug companies that manufactured 75% of total production. 25 medium sized national companies manufactured about 15% of total production. 133 small local based companies produced the remaining10%. The multinational companies where fully armed with modern technology for producing sophisticated essential drugs, but they were only engaged, a large extent, in formulation of simple drugs including many useless products. At that time, the unregulated drug market of the country had very little of favorable conditions for pharmaceuticals to over price their products. Near monopoly market conditions mean that local firms could not compete effectively with these multinational market tycoons.

    A grate change was noticeable in the pharmaceutical industry after the drug policy ordinance of 1982. The total national production of pharmaceuticals has risen by a substantial 63%; the value of essential drugs made in national factories has gone up to 140% over the four years. At present there are 250 national based and 7 multinational based pharmaceutical companies in Bangladesh.

    2.6.Top Fifty pharmaceutical companies in Bangladesh:

    Top Pharmaceutical Company of Bangladesh: 2011

    Tk (Crore) Share Growth %
    Rank Total Market 7,186 100.00 24.30
    1 SQUARE 1,378 19.18 23.54
    2 INCEPTA PHARMA 650 9.05 32.17
    3 BEXIMCO 620 8.62 40.33
    4 OPSONIN PHARMA 355 4.94 26.09
    5 ESKAYEF 348 4.84 24.82
    6 RENATA 340 4.73 29.63
    7 ACME 319 4.44 17.34
    8 A.C.I. 293 4.08 18.81
    9 ARISTOPHARMA 286 3.99 21.63
    10 DRUG INTERNATIONAL 270 3.75 18.18
    11 SANOFI AVENTIS 185 2.57 8.77
    12 GLAXOSMITHKLINE 140 1.95 10.84
    13 ORION PHARMA LTD. 140 1.94 31.47
    14 NOVO NORDISK 128 1.79 27.72
    15 HEALTHCARE PHARMA 126 1.75 33.20
    16 GENERAL 117 1.63 19.25
    17 SANDOZ 109 1.51 12.25
    18 POPULAR PHARMA 94 1.31 54.53
    19 NOVARTIS 94 1.30 46.01
    20 IBN SINA 93 1.29 19.49
    21 NUVISTA PHARMA 83 1.16 37.93
    22 UNIMED &UNIHEALTH 68 0.94 22.80
    23 SUN PHARMA 60 0.84 54.63
    24 GLOBE 57 0.80 24.72
    25 BIO PHARMA 56 0.78 21.07
    26 ROCHE 50 0.70 42.24
    27 RADIANT PHARMA 41 0.57 71.73
    28 PACIFIC 41 0.57 18.46
    29 JAYSON 38 0.52 10.97
    30 BEACON PHARMA 37 0.52 18.11
    31 SMC 33 0.46 -1.25
    32 ORION INFUSION 32 0.45 12.26
    33 OPSO SALINE 30 0.42 1.85
    34 KEMIKO PHARMA LTD. 29 0.41 4.68
    35 NAVANA 29 0.40 -1.94
    36 DELTA PHARMA 27 0.38 53.11
    37 SERVIER 27 0.37 23.61
    38 SOMATEC 23 0.33 4.37
    39 RANGS PHARMA 22 0.31 -3.85
    40 LIBRA 21 0.30 -4.70
    41 ALCO PHARMA 21 0.29 5.44
    42 APEX PHARMA 20 0.28 38.84
    43 PHARMADESH 19 0.26 80.09
    44 SILVA PHARMA 14 0.19 -1.21
    45 MEDIMPEX 12 0.17 -50.53
    46 EDRUC 11 0.15 -19.17
    47 ZISKA 10 0.15 -0.71
    48 WHITE HORSE PHARMA 10 0.14 81.65
    49 RAK PHARMA LTD. 8 0.12 441.79
    50 ASIATIC 8 0.12 65.29
    * Others * 162 2.24 0.00

    2.7.A Brief History of Beximco Pharmaceuticals Ltd.

    Beximco Pharmaceuticals Limited was incorporated in Bangladesh as a public company with limited liability, on 17th March 1976 and commercial operation on 1st October 1980. The company went for public issue of shares in 1985, and its shares are listed in the stock exchanges in Bangladesh. And it is the leading pharmaceutical manufacture in Bangladesh. BPL started its operations in 1980 with product made under license of Bayer AG Germany; products made under license of Upjohn Inc. USA followed. Beximco Groups of as the name reveals not only produce drugs, they are also producing many other items like Textile, Holding, Marinated food etc. They are growing g15% (approx.) per year. Growth of any industry more than 10% is considered high growth industry all over the world. This rapid Growth rate is the second highest growth rate compared to the garment industries of our country. Principal Activities and Nature of operations; The company owns and operates a modern Pharmaceuticals drugs and medicines and sells them in the local and foreign markets.

    While Pharmaceutical companies in many developed countries have lost their luster; the business is still highly attractive in Bangladesh. Beximco pharmaceutical is an industry leader in Bangladesh Pharmaceutical Industry. Many of its products are brand leaders in their respective fields. The current status of BPL is that it is one of the largest producers of quality medicines both at home and abroad. It is engaged in manufacturing, marketing and export of pharmaceuticals finished products and raw materials. BPL products are sold more than 16 countries across 3 continents (Asia, Europe, Africa). The company continuously investing in the latest technology and manufacturing facility to meet the growing demand for its product and it is constantly expanding its already diversified product portfolio to better serve the community.

    2.8 Pharmatek Chemicals Ltd.

    Pharmatek Chemicals Ltd. is the leading bulk producer of Paracetamol on Bangladesh. It caters to almost 60% of the local market and supplies its products to both national and multinational companies operating in Bangladesh. The company is managed and operated by BPL under a long-term management contract.

    2.9 I & I Services Ltd

    I & I Services Ltd. is the distribution wing of the Chemical Division. It maintains a large distribution network and covers 20,000 customers nationwide every month. A highly sophisticated order processing system, logistic facilities in terms of vehicles, depots and a team of professional sales staff keep pace with the ever-increasing market demand for timely execution of orders and quality services

    2.10. Mission statement of BPL:

    BPL has a remarkable mission statement, which is being seriously pursued in its thoughts and actions. An increasing amount of contribution is ploughed back into social causes BPL’s commitment, duties and responsibilities to the human society and nation.

    When human society continuing to improve it should not be benefited to BPL itself, but it should positively contribute to the nation and society where we live. The BPL authority believes that they manufacture and sell medicine to provide health, happiness, and smile back in life of their fellow citizens. We intend to help realize the ultimate aspiration for lifetime of good health. It is BPL’s responsibility to ensuring a healthier tomorrow for the people, which they believe as their responsibility.

    Organization mission refers managements viewpoint towards is our business. A mission statement broadly outlines the organization’s future direction and serves as a guiding concept for what the organization is to do and to become.

    “Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that in the final analysis we are accountable to each of the constituents with whom we interact namely our employees, our customers, our business associates, our fellow citizens and shareholders.”

    2.11. Vision Statement:

    Vision is the long-term outlook i.e. management expectation of an Organization’s Position over the next 5 to 10 years. The vision of BEXIMCO reflects in the Chairman following statement (Groups Annual Report 2000).

    “If there is one characteristic that has typified the BEXIMCO approach it is Vision to be the best of our nature and human resources. A vision to establish our group and country as a respected and valued regional presence.”

    2,13. Company profile of Beximco Chemical Division

    Year of Establishment :: 1976
    Country of Incorporation :: Bangladesh
    Commercial Production :: 1980
    Status :: Public Limited Company
    Business Lines :: Manufacturing and marketing of pharmaceutical Finished Formulation Products, Large Volume Parenterals and Active Pharmaceutical Ingredients (APIs)
    Main Country of operation :: Bangladesh
    Corporate Headquarter & Registered Address :: 17 Dhanmondi R/A, Road No. 2, Dhaka- 1205, Bangladesh

    Phone : +880-2-8611891 (5 lines)

    Fax : +880-2-8613470

    Email : info@bpl.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it
    Operational Headquarters :: 19 Dhanmondi R/A, Road No. 7, Dhaka- 1205, Bangladesh

    Phone : +880-2-8619151 (5 lines), +880-2-8619091 (5 lines)

    Fax : +880-2-8613888

    Email : info@bpl.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it

    Website : www.beximcopharma.com
    Overseas Offices & Associates :: Australia, Bhutan, Cambodia, Chile, Ghana, Hong Kong, Indonesia, Jordan, Kenya, Kuwait, Malaysia, Myanmar, Nepal, Pakistan, Philippines,Saudi Arabia, Singapore, Sri Lanka, Vietnam and Yemen
    Authorized Capital (Taka) :: 9,100 million
    Paid-up Capital (Taka) :: 2517.6 million
    Number of Shareholders :: Around 93,000
    Stock Exchange Listings :: Dhaka and Chittagong Stock Exchanges of Bangladesh and AIM of London Stock Exchange
    Number of Employees :: 2,507
    TIDM: (Tradable Instrument Display Mnemonic) :: BXP
    Date shares were admitted to trading ::
    Dhaka Stock Exchange : 3 July, 1985
    Chittagong Stock Exchange : 11June, 1995
    AIM ( Alternative Investment Market) : 21 October,2005
    ISIN :: US0885792061

    2.14. Management Structure:

    BEXIMCO CHEMICAL DIVISION

    CHART: TOP LEVEL ORGANOGRAM

    HRD

    Here,

    MD = Managing Director

    CFO = Chief Financial Officer

    COO = Chief Operating Officer

    HRD = Human Resource Department

    FSD = Financial Systems Department

    DS = Director, Sales

    DC = Director, Commercial

    D MKT = Director, Marketing

    D MFT = Director, Manufacturing

    2.15. Composition of the Board:

    The Board of Directors

    A S F Rahman Salman F Rahman Nazmul Hassan

    Chairman Vice Chairman Managing Director

    Iqbal Ahmed Director

    Mohammad Abul Qasem Director

    Osman Kaiser Chowdhury Director

    Abu Bakar Siddiqur Rahman Director

    Dr. Farida Huq Director

    Barrister Faheemul Haq Director

    Advocate Ahsanul Karim Director

    Dr. Abdul Alim Khan Independent Director

    A dedicated Management committee and Executive Committee make sure that BEXMCO PHARMA achieves its target with sheer professionalism. The committees are:

    · Management Committee

    · Executive Committee

    · Company Secretary

    o The Management Committee:

    Nazmul Hassan Managing Director

    Osman Kaiser Chowdhury Member of the Board of Directors

    Ali Nawaz Chief Financial Officer

    Afsar Uddin Ahmed Director, Commercial

    Rabbur Reza Director, Marketing

    Lutfur Rahman Director, Works

    Zakaria Seraj Chowdhury Director, Sales

    Mohd. Tahir Siddique Executive Director

    A R M Zahidur Rahman Executive Director, Production

    Jamal Ahmed Choudhury General Manager, Accounts & Finance.

    The Executive Committee:

    Osman Kaiser Chowdhury Member of the Board of Director

    Nazmul Hassan Managing Director

    Ali Nawaz Chief Financial Officer

    Afsar Uddin Ahmed Director, Commercial

    The Company Secretary:

    Md. Asad Ullah, FCS

    1976: Company

    incorporated

    1980: Commenced 1983: Launched own 1985: Listed with Dhaka

    Manufacturing Bayer brands. Stock Exchange.

    AG of Germany and

    Upjohn Inc. of USA

    products.

    1992: Commenced 1993: Russia became 1996: IV unit (former

    Export operation with first export destination Beximco Infusions

    APIs. For formulation products Ltd.) Received

    ISO 9001

    Certification from

    TUV-Cert, Germany.

    1998:Become first pharma 2001: First Bangladeshi 2003: Became first com-

    company to win “National pharma company entering pany to introduce anti-

    Export Trophy (Gold)” for into Singapore, one of the HIV drugs in Bangladesh;

    export excellence. most regulated markets in diversified into anti-

    Asia. cancer therapeutic class.

    2005: Became first 2006: Launched CFC 2007: The US FDA

    Bangladeshi company free ozone-bengin HFA standard oral solid plant

    to get admission to based inhalers as the commissioned.

    Alternative Investment first company in

    Market (AIM) of London Bangladesh.

    Stock Exchange (LSE)

    through issuance of

    GDRs.

    2008: Only Bangladeshi company to receive GMP certification

    from Gulf Central Committee for Drug Registration, Executive

    Board of the Health Ministers’ Council for GCC states.

    2.17Product and service:

    Product type:

    They have different kinds of product variety and assortments like, Tablets, Capsules, Dry Syrup, Powder for suspension, cream, ointments, suppositories, metered dose nasal sprays, large volume intravenous fluids, metered dose in halers, etc. ensuring the global standard of quality.

    Product variety:

    Product Range:

    1. Analgesics and Antipyretic,
    2. Anti Infective,
    3. Cardio Vascular,
    4. Central Nervous System,
    5. Cough and Cold,
    6. Diabetics,
    7. Gastro Intestinal,
    8. Intravenous fluids,
    9. Musculoskeletal,
    10. Oncology, figure: BPL Office.
    11. Respiratory,
    12. Skin Care,
    13. Vitamins and Minerals supplement.

    4.18 Corporate Social Responsibility

    · The guiding philosophy of our CSR activities is doing our best in what we do and at the same time helping others in doing what they do. With this in mind, our CSR strategy is that we should manufacture highest quality medicines, our modus operandi should be compassionate for all the people and all our activities should be such that these are benevolent for our society and benign to our environment.

    · Corporate social responsibility is an integral part of our business strategy which is reflected in their mission statement. Every employee of their company knows that the company does not view its success and achievements in financial terms only, but also in term of its deep relation with the society.

    · Each year, an increasing amount of contribution is ploughed back into social causes demonstrating Beximco Pharma’s commitment to the nation. More importantly the company’s contribution extends beyond one-time donation to ongoing participation as reflected in our partnership with NGOs working for AIDS patients, in supporting sports, and in raising disease awareness among the people.

    · They donated medicine worth millions of taka to victims in national and international calamities. Donation of medicines to victims of earthquake in Pakistan and victims of tsunami in Sri Lanka are worth mentioning.

    Differential Edge of BPL

    · World class manufacturing facility

    · Highest GMP standards

    · Outstanding product quality

    · Sophisticated formulation technology

    · Diversified dosage forms & products

    · Significant investment in R & D

    · Excellent customer services

    · Responsible care for the environment

    · Commitment to the people & the society

    4.19 Commitment of BPL

    One of the primary goals of BPL is to contribute to keep the earth clean. BPL is aware of its responsibility of caring for the environment. BPL is committed to green operation and its facilities are carefully designed and operated to prevent all forms of pollution. BPL continuously strives to improve performs and optimize the use of all material and human resources there by minimizing adverse impact on environment.

    4.20. International Markets

    We are the largest exporter of pharmaceutical products from Bangladesh and received National Export Trophy (Gold), the highest national accolade for export, for record three times. We commenced international market operations with the export of Active Pharmaceutical Ingredients (APIs) to Hong Kong in 1992 and finished formulation products in 1993. We first exported intravenous fluids in 1995 to Russia and Vietnam. Beximco Pharma is the only pharmaceutical company in Bangladesh having its operation

    in Singapore

    Along with selling products to regular retail outlets, we also supply products to renowned hospitals and institutions in many countries, including Raffles Hospital, and K K Women & Children Hospital in Singapore, MEDS and Kenyatta National Hospital (KNH) in Kenya, Jinnah Hospital, and Agha Khan Hospital in Pakistan.

    Another important business activity of Beximco Pharma is the contract manufacturing for major international brands of leading multinational companies.

    Products registered in / exported to:

    Asia

    Singapore

    Hong Kong

    Myanmar

    Cambodia

    Nepal

    Sri Lanka

    Pakistan

    Philippine

    Bhutan

    Iran

    South Korea

    Taiwan

    Thailand

    Vietnam

    		 Africa

    Kenya

    Ghana

    Somalia

    Botswana

    Mozambique

    Pacific Island

    Fiji

    Papua New Guinea

    Solomon Island

    Kiribati

    		 Middle East

    Yemen

    Jordan

    Latin & Central America

    Chile

    Belize

    Guatemala

    Eastern Europe

    Georgia

    Russia

    Ukraine

    We aim to build Beximco Pharma as a world-class manufacturer of pharmaceutical products for operating in domestic and international markets, including Least Developed Countries (LDCs), developing and developed countries like USA and

    We believe that entry into developed markets in particular will lead to significant sales and profit growth.

    BPL operates through extensive departmentalization that has helped it to sustain its position as one of the leading pharmaceuticals in Bangladesh. Most believe that the success rate is partially dependent on the smart, energetic and enthusiastic people, who direct, control and monitor these departments. The departments are described as following manner.

    1. Strategic Brand Management
    2. Purchase Department
    3. Sales Department
    4. Planning and Inventory Control Department
    5. Medical Service Department
    6. MIS Department
    7. Training Department
    8. Multimedia Department
    9. International Marketing Department
    10. Human Resources Department
    11. Finance and Account Department
    12. Distribution Department
    13. Fine Chemicals
    14. Commercial
    15. General Management
    16. Department of Engineering & Technology
    17. Marketing Department
    18. Business Researches & Development

    Strategic Brand Management (SBM):

    Strategic Brand Management (SBM) department includes the activities of marketing and sales promotion of both BPL and BIL (Beximco Infusion Limited). The head of the department guides all product officers. The activated that are preformed by SBM department are:

    Purchase Department & Inventory controls Department:

    Purchase Department is one of important department of Beximco. The purchase department deals with all the purchase (pharmaceuticals raw materials, packaging materials, office equipment, machinery’s etc.) of the organization. This department interacts directly with the planning production and financing department. Finance department develops cash flow at the beginning of the year. The sales department

    fixes the sales target. Based on the information provided by the planning department, the purchase department prepared the import authorization formats. Then the format is sent to be the director (commercial) for approval. After as L/C is opened all information about its latest status is documented in a ‘purchase consignment (PC) folder’ preserved by the purchase department. And for the monitoring (Current status and information record) of all L/C, such books are essential.

    The purchase department operate two types of purchase, those are:

    The activities of the purchase department are:

    · Estimated and calculation the cost of necessary raw materials based on planning departments order.

    · Split out the whole years demands for raw materials on monthly basis.

    · Negotiate for cash with the finance department.

    · Take decision which product purchase from the local market and which from import.

    · It arranges for bidding to the supplies, which involves close interaction with the planning department.

    · Along with the planning department it has to corporate through the whole process to purchasing raw materials from available sources.

    It also involves about the machinery requirements for a specifics production process and their purchasing.

    Sales Department:

    Sales department forecast the sales. The major responsibilities of this department are, preparing the strategies for expense budget through SBM, and generating the demand in the market through MR. The main goal of sales department is sales achievement.

    The flow chart of the operational structure of the department is mention in the following:

    The responsibilities of the Sales manager (SM) are as follows:

    · Forecasting demand.

    · Approving and designing territory and region.

    · Critical customer handling that is beyond the authority of the RSE, ASE and MPE.

    · Maintaining good relation with the chemists association.

    · Donation handling.

    · Strategy making and sharing with other department.

    · Make the meeting RSE, ASE and MPE with doctors by HR department.

    · Identify the lower turnover territory and give input to improve the territory.

    The responsibilities of the Regional Sales Executive (RSE):

    The Responsibilities of the Medical Promotion Executive (MPE):

    1. They are responsible for prescription generation by the doctors.
    2. They make the segmentation of the doctors by class A (doctors having patients more than 30 and less than 30 a day), and Class C (doctors having patient less than 20 a day) based on the business potentiality of the Doctors.
    3. They design call plans according to the action plan regarding which product is to be promoted, which benefit is to be promoted and to which doctor is to promote that.

    Call Doctors Generate Prescription Sells products

    Marketing Department:

    Beximco Pharma, undoubtedly one of the leading pharmaceutical companies over the last two decades, has made the nation proud with over 400 products in its portfolio. A set of highly qualified and driven Brand executives look after these brands making each stand out on its own through quality, affordability and usefulness.

    Depending on the therapeutic category, there are five ‘Center of Excellences’, each of which, in turn is coordinated by a separate head of department.

    The responsibilities of the head of the departments are as follows:

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    Foreign Exchange Activities of Al-Arafah Islami Bank Ltd

    ","

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    “Foreign Exchange Activities of Al-Arafah Islami Bank Ltd.”

    Executive summary

    This internship report is a partial requirement for the Bachelor of Business Administration program. The report is based on 90 days (3rd October 2010 to 3rd January 2011) working experience on Al-Arafah Islami Bank Limited (AIBL). It was assigned in the Nayapalton (VIP) Road Branch, Dhaka of AIBL. This report gives a clear idea of the activities, operation strategies and the performance of AIBL’s foreign exchange activities. There are several variable taken for analysis of the report which are number of letter of credit opening, irrevocable letter of credit, commission on foreign exchange, volume of import, back-to-back L/C, foreign documentary bills for purchase, export finance, volume of export, foreign currency deposit, exchange gain, foreign remittance etc.

    The data has been collected from primary & secondary sources. Primary sources are group discussion, practical work experience, case study & interview. Secondary sources are DSE library, several books and periodicals related to the banking sector, Bangladesh Bank’s reports, different circulars sent by the head office of AIBL, annual reports of AIBL and other private banks.

    The analysis of AIBL’s performance in foreign exchange transactions has been conducted based on the trend analysis, factor analysis & comparative analysis.

    The report consists of six parts. The first part describes the introductory matters of a formal report which includes acronyms & abbreviations, rationale of the study, limitations etc.

    The second part gives a concise description of the organization. These include origin & evaluation of AIBL, Islami banking system, concepts & principles etc. To their point of view – “Islam provides us a complete lifestyle. Main objective of Islamic lifestyle is to be successful both in our mortal and immortal life. Therefore in every aspect of our life we should follow the doctrine of Al-Quran and lifestyle of Hazrat Muhammad (sm.) for our supreme success.” Al-Arafah Islami Bank (AIBL) started its journey in 1995 with the said principles in mind and to introduce a modern banking system based on Al-Qur’an and Sunnah.

    A group of noted Islamic scholar, economist, writer and ex-bureaucrat of Bangladesh Govt. Mr. A. Z. M. Shamsul Alam is the founder chairman of the Bank. His progressive leadership and continuous inspiration provided a boost for the bank in getting a foothold in the financial market of Bangladesh .A group of 26 dedicated and noted Islamic Personalities of Bangladesh are the member of executive council of the Bank. Al-Arafah Islami Bank Ltd. (AIBL) has 46 Branches and 1033 employees (as on December 2007). Its authorized capital is 2500 million Tk. and paid up capital is taka 1153 million Tk.

    The third part gives a brief description of macroeconomic environment including the financial sector of Bangladesh & foreign exchange activities by the country.

    The economy of Bangladesh has once again faced a great challenge mainly for the devastating natural and other catastrophes combined with political uncertainties, abolition of quota regime of readymade garments industries, abnormal price-hike of imported commodities including oil.

    Some brief foreign exchange information of the country is:-

    Exports (2006-07): US$ 12177.86 mn.

    Imports (2006-07): US$ 17156.80 mn.

    Trade Deficit: US$ 4978.90 mn .

    Foreign Exchange Reserve: US$ 5514.60 mn. 

    Remittance: US$ 3447.32 mn.

    The fourth part of the report analysis the theoretical aspects of foreign exchange transactions of AIBL. There are three kinds of foreign exchange transactions- Export, Import & Remittance. Foreign exchange business starts with a Letter of Credit (L/C). The part also describes various terms used in foreign exchange business like back-to-back L/C, FOB, understanding, shipment, LIM, LTR etc.

    According to Imports and Exports (Control) Act, 1950, the officer of the chief controller of import and export provides the registration (IRC) to the importer. After obtaining this, a person has to secure a letter of credit authorization (LCA) from Bangladesh Bank and then the person becomes a qualified importer. He is the person who requests or instructs the opening  of bank to open an L/C. He is also called opener or applicant of the credit.

    AIBL is an authorized dealer (AD) to operate foreign exchange transaction. With the legal formalities the bank serves the customers with export, import & remittance services. In the process of providing remittance services, it sells and buys foreign currency, the convertion of one currency into another takes place at an agreed rate of exchange , which the banker quote one for buying and another for selling. There are various types of income of the bank in Foreign Exchange Sector.

    The main concentration of the report is in the fifth part. In this part the performance of the bank has been assessed in the foreign exchange business. The analysis was done with some stated principles some of which are specific assumptions. The assumptions were:

    (i) Local commercial banks (PCB)

    (ii) Foreign banks (FB)

    (iii) Govt.’s specialized banks

    Selected banks are – Dhaka Bank Ltd., National Bank Ltd., AB Bank Ltd., Standard Chartered Bank, HSBC, City Bank N. A., Sonali Bank Ltd. & Basic Bank Ltd.

    The growth statistics shows that the economic downturn in 2005 & 2008 has influenced the whole banking industry.

    In the comparative analysis it was revealed that:–

    However, a brief performance overview on deposit & investment division of the bank revealed that the bank is heavily concentrating on deposit schemes. With the advantage of religious belief hence Islamic Banking concept, the bank has an edge in deposit schemes which is a strong success factor of the bank.

    The working environment of AIBL is very conductive and friendly. Although they don’t maintain strict hierarchical protocol among the staffs, the environment is much more relaxed & easy. The staffs are specialized in their respective fields. Each of them works on their own and there is close supervision from the top. The motivation of the employees comes from the very sense of responsibility.

    The sixth part ends up the report with major findings & complementary remarks.

    The human resource division is lacking to ensure modern independent work environment as women are especially discouraged to join the bank’s workforce. However, to their view, they don’t like to see women working outside the home as Islami Shariah doesn’t allow it.

    Chapter 01

    1. Introduction

    Banking system occupies an important place in a nation’s economy. A banking institution is indispensable in a modern society. Financial institutions are very much essential for the overall development of a country. Especially banks play an important role in the field of promotion of capital, encouragement of entrepreneurship, generation of employment opportunities etc. Market economy or free economy is a widely used-concept about the present economy of Bangladesh. The country adopted the concept in the late seventies with the privatization of significant number of enterprises. The practices of free market economy started from the eighties with the changing of the world economy. A number of initiatives were taken from the nineties to increase the competition and efficiency in money market, relaxation of unwanted rules & regulations, improvement of loan related law and other situations to improve the financial base of the banks of the country. In recent times the banking sector over the world has been undergoing a lot of changes due to deregulation, technological innovation, globalization etc. Banking sector in Bangladesh is lagging behind in adopting these changes.

    1.1 Sources of Data:

    This study is mainly based on secondary data available from the various relevant journals, annual reports of Al-Arafah Islami Bank Ltd, DSE library and publications of other relevant institutions. However the bank was a tough source of data as they lack of a useful website & some excuses of confidentiality.

    (a) Primary sources of data:

     (b) Secondary sources of data:

    1.2 Objectives of the Study:

    1.2.1 General Objectives:

    1.2.2 Specific Objectives:

    1.3 Limitation of the Study:

    The study was thorough & systematic but there were some problems which can be the limitation factors for the significance of the study:

    Chapter 02

    2. Background of AIBL

    2.1 Vision of AIBL:

    To be a pioneer in Islamic Banking in Bangladesh and contribute significantly to the growth of the national economy.

    2.2 Mission of AIBL:

    2.3 To attain the above vision and mission AIBL follows the following:

    Marketing Strategies:

    2.4 History of Al-Arafah Islami Bank (AIBL):

    Islamic ideology encourages us to succeed in life here & hereafter. To achieve this success we must follow the way dictated by the “Holy Quran” and the path shown by Prophet Muhammad (SM). With this goal in view AL Arafah Islami Bank Ltd was established (registered) as a public limited company on 18 June, 1995. The inaugural ceremony took place on 27 September, 1995. The authorized capital of the Bank is TK.2500.00 million and the paid up capital is TK.1153 million. Some very renowned Islamic personalities and pious businessmen of the country are the sponsors of the bank. The total paid up capital was invested locally.

    The Bank is committed to contribute significantly in the national economy. It has made a positive contribution towards the towards the socio-economic development of the country by opening 46 branches off which 16 are authorized dealer (AD) throughout the country.The equity of the bank stood at TK.2037 million as on 31 December 2008, the manpower was 1033 and the number of shareholders was 12013.

    The Bank conducts its business on the principles of Musaraka, Bai-Muazzal, and hires purchase transactions approved by Bangladesh Bank. Naturally, its modes and operations are substantially different from those of other conventional commercial Bank. There is a Shariah council in the Bank who maintains constant vigilance to ensure that the activities of the bank are being conducted on the precepts of Islam. The Shariah council consists of prominent Ulema, reputed bankers, renowned lawyers and eminent economist.

    2.5 Special Features of AIBL:

    2.6 Management Al-Arafah Islami Bank Ltd.:

    There are numerous boards & committees to handle the bank’s management decisions & tasks (detailed list is given in appendix). The management includes the following:

    (i) Operating body

    (ii) Executive committee

    (iii) Audit committee

    (iv) Shariah council

    2.6.1 Hierarchy of the Executive Body of AIBL:

    2.6.2 Branch Location all over Bangladesh:

    Currently the bank is operating with 46 branches scattered over the country. The detailed branch name & geographical locations are provided by graph:

    2.7 Corporate Culture & CSR:

    The bank has a friendly work environment which is not usual in other commercial banks. However the efficiency of the employees & a strict corporate protocol is not present in the bank. The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture has developed but not been imposed; it has rather been achieved through their corporate conducts.

    (a) Shariah Board:

    Shariah Council of AIBL consists of 5 members specialized in Fiqhul Muamalat (Islamic Commercial Law) according to guidelines given by the Bangladesh Bank to ensure whether all banking operations are transacted in accordance with Islami Shariah, Qur’an, Sunnah, Ijma, and Iztihad.

    In the year 2007 the Shariah Council has complied various decisions taken by the council on different matters at different times under the caption “Islami Banking Shariah Nitimala (1995-2006)” and prepared a Shariah Manual and published which is first of its kind in Bangladesh. Shariah Council advices everybody concerned to comply with Shariah requirements and renders all out efforts to increase the standard of services rendered to the clients.

    (b) Welfare Projects of AIBL:

    Al-Arafah Islami Bank also runs some welfare project which they term as their corporate social responsibility (CSR). Here are some brief descriptions of the projects:

    (i) Staff Welfare Project:

    The Bank always kept a careful eye on the economic security and benefit of its staffs & officers. The Bank operates a contributory provident fund, a social security & benevolent fund and a gratuity fund for its employees. In the year 2007 Tk. 7.5 lac was paid to wife of late Mr. Shahidul Islam, AVP & former branch manager of Joydevpur Branch from bank’s social security & benevolent fund. Till now a total of Tk. 30 lac has been paid from the fund to the families of late officers & staffs of the bank.

    (ii) Al-Arafah Islami Bank Foundation:

    The Bank has a foundation launching philanthropic activities: Al-Arafah English Medium Madrasah and Al-Arafah Islami Bank Library are major two wings for launching philanthropic activities.

    (iii) Al-Arafah English Medium Madrasah:

    Al-Arafah English Medium Madrasah has been established by the Al-Arafah Bank Foundation with a view to building next generation according to the ideals of peace and equality of Islam and to establishing banking and other aspects of life in the way of Islam. The prime aim of this madrasah is to contribute towards building human resource and in the broader sense to ensure human welfare. With this view Al-Arafah Islami Bank Foundation has established an English Medium Madrasah at Dhanmondi in 1999. Such institution up to O level of its kind is for the first time in Bangladesh.

    (iv) Al-Arafah Islami Bank Library:

    Library is the carrier and reservoir of knowledge. Al-Arafah Islami Bank has shown that other than generating profit, it can also contribute significantly in the field of providing good source of knowledge by establishing a public library at 32, Topkhana Road, Chittagong Bhaban (1st floor), Dhaka, thus strengthening social development. It is placed in sound and healthy surroundings. It harbours 23,000 books of reference for the researchers, students, professionals, bankers, physicians, engineers, politicians, writers or journalists, even for the kids. It is open to all from the year 2000 and well located & accessible to everybody. It procured some exceptional collection of books on Religion, Economics, Banking, Computer Science, Business Administration, Sociology, English & Arabic language and juvenile literature in Bangla, English, Urdu & Arabic which are very rare.

    Education is the harmonious development of body, mind & soul. If religion is not attached to it the real attitude towards life and values will fail to develop. It is mandatory to learn Elm-e-Din to govern our life in the right way of Islam. To fulfill this noble intention Al-Arafah Islami Bank Library started Dars-ul-Quran (Teachings of Quran) program. This program will cover translation with detail explanation of Quran starting from Sura Fatiha upto Sura Nas gradually. Dars-ul-Quran program takes place every Monday after Magrib prayer.

    Other than this Al-Arafah Islami Bank Library arranges shows of feature films or documentary films on Islamic life & culture.

    2.8 Workforce of AIBL’s Nayapalton (VIP) Road Branch:

    2.9 Information Technology of AIBL:

    AIBL started providing on-line general banking services to the clients from 23 May 2008 through a network of all branches in the country using satellite based communication links. This bank is a member of the Society for Worldwide Interbank Financial Telecommunications (SWIFT).All of the Authorized Dealer Branches has SWIFT connectivity. The bank will introduce a few more products for the client, such as SMS banking, Tele-banking, Internet Banking etc in near future. To present the overall picture of the bank to the Depositors, Shareholders, and Investment Clients and Well wishers in home and abroad transparently bank has designed a web site named as www.al-arafahbank.com.

    The bank presently uses “ABABIL” as banking solution software. However the software is not so much sophisticated. Very often the software related problems hamper the operations.

    2.10 Classification of Bank’s Products:

    Products
    Miscellaneous
    Advances
    Deposits
    International banking
    Consultancy
    Self-custody, Sale of drafts, Standing instruction, Trusteeship.etc.
    L/C, Foreign currency
    Non-fund oriented
    Fund oriented
    Tax, Consultancy, Merchant banking project, Counseling, Investment counseling
    Term deposits
    Guarantees, Letter of credit.
    Terms loans, Clean loans, Bills discounting, Pre shipment, Post shipment, Lines of credit- Secured, Unsecured, Overdraft.

    2.11 Services provided by AIBL:

    The importance of mobilizations of savings for the economic development of our country can hardly be over emphasized. We considered savings and deposits as lifeblood of the bank. More the deposit, greater is the strength of the bank. The bank intends to launch various new savings scheme with prospect of higher return duly supported by a well-orchestrated system of customer services. The bank would cater to the credit needs of individuals as well as corporate clients. Initially it will emphasize on trade finance, which would be short term and self-liquidating in nature. Considering the importance of foreign trade in our national life, financing and handling of export & import business and also handling of foreign remittance business would be given top most priority. Moreover the bank operates all of its activities under the rules and regulations of Islamic Shariah. The services provided by the Al-Arafah Islami Bank Ltd. are given bellow: –

    Bank services
    Export

    Import

    Remittance
    SOD General loan, House building loan, Lease finance, Hire purchase, CC hypo, Staff loan, CCS etc.
    General banking
    Foreign exchange
    Credit/advance
    Different accounts open, issues of DD. TT. PO, Clearing,

    FD, Different Scheme etc.

    2.12 Growth of AIBL:

    Figure in Million Tk.
    Sl. No. Particulars 2004 2005 2006 2007
    01. Authorized Capital 1000.00 1000.00 2500.00 2500.00
    02. Paid-up Capital 586.96 677.94 854.20 1153.18
    03. Reserve Fund 488.96 542.22 835.98 1091.95
    04. Deposits 10108.28 11643.66 16775.33 23009.13
    05. Investment 8150.16 11474.41 17423.19 22906.37
    06 Import 9337.49 12631.60 18821.40 27042.72
    07 Export 3639.34 4932.90 9142.70 12714.91
    08. Profit before Tax and Provision 348.89 548.20 969.77 756.18
    09. Profit after Tax and Provision 154.76 262.90 470.02 347.31
    10. Total Assets 12874.61 15336.89 21368.16 30182.32
    10. Earnings per Share 26.36 38.78 55.02 30.12
    11. Dividend Bonus 15.50% Bonus 26% Bonus 35% Bonus 20%
    12. Number of Employees 803 771 912 1033
    13. Number of Branches 40 41 46 46

    2.12.1 Deposit:

    The total deposit of AIBL is increasing sharply. The total deposit of bank was Tk. 23009.13 million at 31st December 2007 as against Tk. 16775.33 million at 31st December 2006 recording growth of 37.16% of which Tk. 685.50 million was bank deposit and general deposit was 22323.63 million Tk. The graph shows that the deposit collection rate is dramatically increasing year to year:

    2.12.2 Investment:

    The investment of the Bank stood at Tk. 22906.37 Million as on 31st December 2007 as against Tk. 17423.19 Million in the previous year showing an increase by 31.47%. The growth of Investment from 2004 to 2007 is shown graphically. Graph shows that every year the bank earns a huge amount of income from Investment Account.

    2.12.3 Operating Profit:

    The Bank earned operating profit of Tk. 756.18 million during this year 2007 before the pre-tax profit of the bank during the year 2006 was Tk. 969.77 million and thus the bank attained negative growth of 22.02% in respect of operating profit. The growth of operating profit for the year 2004 to 2007 graphically given below:

    Political unrest, economic recession and many other factors badly affected the total banking sector, so that it earned lower profit than the previous year.

    2.12.4 Dividend:

    The Bank has been paying Dividend every year since 1998 just after conversion of a public limited company. The Board of Directors of the Bank recommended 20% stock dividend in the year 2007, which was lower than the previous year because of lower operating profit. Dividend for different years shown below graphically:

    2.12.5 Export:

    The total export earnings in 2004 were Tk.3639.34 Million and in 2007 it was Tk.12714.91 Million. So it is seen that the export earnings was 3.49 times in 2007 than that of 2004. It is also depicted from the figure.

    2.12.6 Import:

    The total Import earning in 2004 was Tk.9337.49 Million and in 2007 it was Tk.27042.72 Million. So it is seen that the Import earnings was 2.9 times in 2007 than that of 2004. It is also depicted from the figure.

     2.12.7 Human Resources:

    The total number of human resources in 2004 was 771 and in 2007 it was 1033.So number of employees in AIBL has increased by 262 employees from the year 2004 to 2007, which is shown below graphically:

    2.12.8 Branches:

    The total number of Branches in 2004 was 40 and in 2007 it was 46. So number of Branches in AIBL has increased by 6 Branches from the year 2004 to 2007, but in 2007 there were no addition of Branches. This is shown below graphically:

    Chapter 03

    3. Industry Overview

    3.1 Global Economy:

    Every firm’s operation is connected with the world, as a bank it is more affected by global economy.

    3.1.1 Global Competitors:

    As the banking sector of our country involves global partner, our domestic banking sectors have to compete with the international competitors .So, it should provide services matching with the improved international quality. If they are able to do so, they are able to gain higher earnings. Financial performances of some other global banks, operated in Bangladesh, are quite better than the two banks, which is a potential threat for this company.

    3.1.2 Socio-economic Phenomena:

    Two important socio-economic variables are Political Condition and Taste Pattern.The world is now in an unstable economic condition. And the main reason behind it is the terrorism, which is the product of political condition. The economy of a county is biased by its political condition. As maximum countries are economically unstable, the whole world is economically unstable. As the environment, technology and income level are changing now day by day, the taste pattern of the world customer is also changing rapidly. To keep pace with this rapid change our concerned banks are also trying to do something new which may help them to survive in the present changing world strongly.

    3.1.3 Foreign Exchange Rate:

    Though there is no huge change in the world economy, the economies of various countries are fluctuating rapidly. And this fluctuation effects the exchange rate of that country’s currency with dollar. Some of them are rising against dollar rapidly and some are falling. Foreign exchange rate of dollar in Bangladesh is comparatively very high ($1 = TK. 70). As banking sector is the main financial sector, the change in foreign exchange rate deeply affects our economy.

    3.2 Bangladesh Economy

    The economy of Bangladesh has once again faced a great challenge mainly for the devastating natural and other catastrophes combined with political uncertainties, abolition of quota regime of readymade garments industries, abnormal price-hike of imported commodities including oil. Side by side, the inflationary trend across the global economy together with the apprehension of sluggish growth further deepened the challenge.

    Basic Information:

    Currency: Taka (Tk.)
    GDP at Current Price: Tk. 4674.97 billion (US$ 68.05 billion)
    Annual per capital GDP: US$ 482
    GDP growth rate at (1995/96) constant price: 6.51 percent
    Agricultural growth rate at constant price: 2.95 percent
    Industrial/Mfg growth rate (% of GDP): 11.19 percent
    Large & Medium scale Industry: 11.56percent
    Small scale Industry: 10.28percent
    Service sector growth:
    Rate of GDP at current price: 12.45 percent
    Inflation rate (12 month average): 8.65 percent
    Domestic savings rate of GDP: 20.46 percent
    National savings rate of GDP: 29.15 percent
    Investment rate of GDP: 24.33 percent
    Exports (2006-07): US$ 12177.86 mn
    Imports (2006-07): US$ 17156.80 mn
    Trade Deficit: US$ 4978.90 mn
    Foreign Exchange Reserve: US$ 5514.60 mn
    Remittances: US$ 3447.32 mn

    Foreign Investment:

    Direct: US$ 263 mn
    Portfolio: US$ 48 mn
    Bank rate: 5.0 per cent
    Broad Money (M2): 222042.60 crores
    Total No. of Limited Co.
    Public Limited Co: 35,000
    Private Limited Co.: 23,000
    Principle Industries :

    Garments, Pharmaceuticals, Textiles, Paper, Manufacturing, Newsprint, Fertilizer, Leather and Leather goods, Sugar, Cement, Fish processing, Steel & Chemical industries etc.

    Major export items:

    Garments, Tea, Jute, Frozen shrimps, Leather products, Newsprint, paper, Naphtha, Urea, etc.

    Principle import items:

    Fuel, Rice, Wheat, Cotton & Textile, Petroleum products, Fertilizer, Staple fibers, yarn etc.

    3.2.1 Banking Sector:

    The commercial banking system dominates Bangladesh’s financial sector with limited role of Non-Banking Financial Institutions and the capital market. The Banking sector alone accounts for a substantial share of assets of the financial system. The banking system is dominated by the 4 Nationalized Commercial Banks, which together controlled more than 54% of deposits and operated 3388 branches (54% of the total) as of December 31, 2004. Out of the 5 specialized banks, two (Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank) were created to meet the credit needs of the agricultural sectors while the other two (Bangladesh Shilpa Bank (BSB) & Bangladesh Shilpa Rin Sangtha (BSRS) ) are for extending term loans to the industrial sectors. Twenty-eight financial institutions are now operating in Bangladesh. Of these institutions, 1 (one) is govt. owned, 15 (fifteen) are local (private) and the other 12(twelve) are established under joint ventures with foreign participation.

    3.2.2 Import Situation of Bangladesh over the year:

    3.2.3 Export Performance of Bangladesh over the year:

    Year Total Export Growth
    1997-1998 18813.04 0.00%
    1998-1999 23416.38 24.47%
    1999-2000 25491.10 8.86%
    2000-2001 28818.52 13.05%
    2001-2002 34858.74 20.96%
    2002-2003 34366.14 -1.41%
    2003-2004 37915.45 10.33%
    2004-2005 44827.22 18.23%
    2005-2006 53233.97 18.75%
    2006-2007 70746.35 32.90%

    3.2.4 Export Policy of Bangladesh:

    (i) Export Policy Objectives:

    The principal objectives of the export policy are as follows :–

    (ii) Export Policy Strategies:

    (iii) Export Incentives:

    Chapter 04

    4. Foreign Exchange Division of AIBL

    4.1 Foreign Exchange Operations:

    Foreign exchange is the means and methods by which rights to wealth in a country’s currency are converted into rights to wealth in another country’s currency. In banks when we talk of foreign exchange, we refer to the general mechanism by which a bank converts currency of one country into that of another. Foreign Exchange Department (FED) of Bangladesh Bank issues license to scheduled banks to deal with foreign exchange. These banks are known as Authorized Dealers. If the branch is authorized dealer in foreign exchange market, it can remit foreign exchange from local country to foreign countries. So Al-Arafah-Islami Bank Ltd.’s Principal branch is an authorized dealer.

    There are three kinds of foreign exchange transaction:

    (a) Import

    (b) Export

    (c) Remittance.

    4.2 Import:

    To import, a person should be competent and an importer. According to Import and Export Control Act, 1950, the Office of Chief Controller of Import and Export provides the registration (IRC) to the importer. In an international business environment, buyers and sellers are generally unknown to each other. So seller of goods always seeks security for the payment of his exported goods. Bank gives export guarantee that it will pay for the goods on behalf of the buyer if the buyer does not pay. This guarantee is called ‘Letter of Credit’ (LC). Thus the contract between importer and exporter is given a legal shape by the banker through ‘Letter of Credit’.

    4.2.1 Import Registration Certificate (IRC):

    The first thing one need to carry on a business of import is called Import Registration Certificate. But registration is not required for import goods, which do not involve remittance of foreign exchange like medicine, reading materials etc. can be imported without registration by the users within monetary limit. Documents required for Import Registration Certificate are as follows —

    4.2.2 Functions of Import Section:

    The form IMP contains the followings:-

    4.2.3 Letter of Credit:

    Definition:

    A letter of credit is a letter issued by a bank (known as the opening or the issuing bank) at the instance of its customer (known as the opener) addressed to a person (beneficiary) undertaking that the bills drawn by the beneficiary will be duly honored by it (opening bank) provided certain conditions mentioned in the letter have been complied with.

    4.2.3.1 Parties to the L/C:

    Importer Who applies for L/C
    Issuing Bank It is the bank which opens/issues a L/C on behalf of the importer.
    Confirming Bank It is the bank, which adds its confirmation to the credit and it is done at the request of issuing bank. Confirming bank may or may not be advising bank
    Advising or Notifying Bank It is the bank through which the L/C is advised to the exporters. This bank is actually situated in exporter’s country. It may also assume the role of confirming  or negotiating bank depending upon the condition of the credit.
    Negotiating Bank It is the bank, which negotiates the bill and pays the amount of the beneficiary. The advising bank and the negotiating bank may or may not be the same. Sometimes it can also be confirming bank.
    Accepting Bank It is the bank on which the bill will be drawn (as per condition of the credit). Usually it is the issuing bank.
    Reimbursing Bank It is the bank, which would reimburse the negotiating bank after getting payment and instructions from the issuing bank.

    4.2.3.2 Mechanism of L/C operation:

    Indenter
    Exporter (Seller)
    Importer (Buyer)
    Issuing Bank
    Advising bank/Confirming Bank/Negotiating bank
    Paying bank
    Contract
    Issue of L/C
    Forward documents
    Makes payment

    Steps for Import L/C Operation:

    Step 1:

    Registration with CCI&E:

    • For engaging in international trade, even trader must be first registered with the Chief Controller of Import and Export.

    • By paying specified registration fees to the CCI&E, the trader will get IRC/ERC (Import/Export Registration Certificate) to open L/C with bank. This IRC is a must.

    Step 2:

    Determination terms of credit:

    • The terms of the letter of credit are depending upon the contract between the importer and exporter. The terms of the credit specify the amount of credit, name and address of the beneficiary and opener, exchange-period time of the bill, mode of shipment and destination, nature of credit, expiry date, name and number of sets of shipping documents etc.

    Step 3:

    Proposal for Opening of L/C:

    To have an import LC limit an importer submits an application to department to AL-ARAFAH-ISLAMI Bank. The proposal contains the following particulars:

    Step 4:

    Application by Importer to the Banker to Open Letter of Credit:

    • For opening L/C, the importer is required to fill up a prescribed application form provided by the banker along with the following documents:-

    1. L/C Application Form 7. Authority to Debit Account
    2. Filled up L/C Form 8. Filled up Amendment Request Form
    3. Demand Promissory Note 9. IMP Form
    4. Pro-Forma Invoice 10. Insurance Cover Note and Money Receipt
    5. Tax Identification Number 11. Membership Certificate
    6. Import Registration Certificate 12. Rate Fluctuation Undertaking

    Step 5:

    Opening of L/C by the Bank for the Opener:

    • Taking filled up application form from the importer.

    • Collects credit report of exporter from exporter’s country through his foreign correspondence there.

    • Opening bank then issues credit by air mail/TELEX/SWIFT followed by L/C as asked by the opener through his foreign correspondent or branch, at the place of beneficiary. The advising bank advises the L/C to the beneficiary on his own form where it is addressed to him or merely hand over the original L/C to the beneficiary if it is so addressed.

    Step 6:

    Shipment of Goods and Lodgment of Documents by Exporter:

    Then exporter ships the goods to the destination of the importer country and sends the documents to the L/C opening bank through his negotiating bank. Generally the following documents are sent to the Opening Banker with L/C:

    1. Bill of Exchange 6. Packing List
    2. Bill of Lading 7. Advice Details of Shipment
    3. Commercial Invoice 8. Pre-shipment Inspection Certificate
    4. Certificate of Origin 9. Vessel Particular
    5. A certificate stating that each packet contains the description of goods over the packet. 10.Shipment Certificate

    Step 7:

    Lodgment of Documents by the Opening Bank from the Negotiating Bank:

    After receiving the documents, the opening banker scrutinizes the documents. If any discrepancy found, it informs the importer. If importer accepts the fault, then opening banker calls the importer to retire the documents. At this time many things can happen. These are indicated in the following:

    • Discrepancy found and the importer accepts :- No problem occurs in lodgment.

    • Discrepancy found but the importer not agreed to accept :- In this case, importer protests and sends back all the documents to the exporter and request him to make changes in the specified manner. Here, the banker is not bound to pay because the documents send by the exporter is not in accordance with the terms of L/C.

    • Documents are OK but the importer is willing to retire the documents :- In this case, bank is obligated to pay the price of exported goods. Since importer did not pay for the bill of exchange, this payment by bank is one kind of credit to the importer and this credit in banking is known as PAD.

    • Everything is O.K.

    " 133,"

    Foreign Exchange Operation of Social Islami Bank Limited

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    “Foreign Exchange Operation of Social Islami Bank Limited”

    Chapter 01

    1. Introduction

    Social Islami Bank Limited (SIBL) is a banking company registered under the companies Act 1994 with its head office in 15 Dilkusha C/A, Dhaka-1000.The bank operates as a scheduled bank under a banking license issued by the Bangladesh Bank. The Bank started its operation from 22 November, 1995. SIBL is a capitalized new generating Bank with an authorized capital of Taka 4000 Million and paid up capital of Taka 585 million as of December 2007. In the formal corporate sector, this Bank would, among others, offer the most up-to date banking services through opening of various types of deposit and investment accounts, financing trade, providing letters of guarantee, opening letters of credit, collection of bills effecting domestic and international transfer, leasing of equipment and consumer durables, hire purchase and installment sale for capital goods, investment in low-cost housing and management of real estates, participatory investment in various industrial, agricultural , transportation, educational and health projects and so on. In the non-formal and non-corporate sector, it would, among others, involve in cash WAQF Certificate and development and management of WAQF and MOSQUE properties and Trust funds. For coordinating my internship I have been placed in Social Islami Bank Limited, IDB Bhaban Branch, Dhaka. There are 3 sections in IDB Bhaban Branch. They are: (i) General Banking, (ii) Investment Department and (iii) Foreign Exchange Department. Accordingly I shall work in all of the sections,  shall devote my utmost effort and attention to learn the banker’s functions. After completion of the internship, I will render all knowledge to present the report on overall banking system of Social Islami Bank Limited: ‘A Special Focus on Fund Management’. The report is divided into seven chapters:

    (i) Introduction

    (ii) Organization

    (iii) Branch Operation

    (iv) Online Banking

    (v) Performance, Ratio and SWOT Analysis

    (vi) Project Analysis of Fund Management

    (vii) Concluding Remarks.

    In the organizational part, will briefly describe overview of the organization’s historical background, functions, business philosophy, ownership pattern, foreign correspondents and overseas operations and benefits provided to customers by the organization. Branch operation part will describe the product and service provided to the customers by a branch.

    This report is originated as the requirement of Social Investment Bank Ltd.

    1.1 Objectives of the Study:

    (a) Primary Objectives:

    Primary objective of this report is to comply with the requirements of the Social Islami Bank Ltd. on the Foreign Exchange Department and the activities of this department. However, the objective behind this study is something broader.

    (b) Secondary Objectives:

    The secondary objectives of the study are summarized in the following manner:

    1.2 Methodology:

    This report has been prepared on the basis of experience gathered during the period of internship from April 13, 2011 to May 20, 2011. For preparing this report, I have undergone group discussion, collected data, sent some questionnaires to the selected officers, and interviewed with some of them. I also studied different circulars and files of the bank.

    1.3 Sources of the Data:

    In order to make the report more meaningful and presentable, two sources of data and information have been used widely.

    (i) Primary Sources:

    The primary sources are as follows:

    (ii) Secondary Sources: 

    The secondary sources of the data and information are as follows

    1.4 Limitations:

    The limitations of the study are given below:

    Chapter 02

    2.Introduction:

    Generally, by the word “Bank” we can easily understand that the financial institution which deals with money. But there are different types of banks like: Central Banks, Commercial Banks, Savings Banks, Investment Banks, Industrial Banks, Co-operative Banks etc. However, when we use the term “Bank” without any prefix, or qualification, it refers to the ‘Commercial Banks’. Commercial Banks are the primary contributors to the economy of a country. So we can say Commercial Banks are profit-making institutions that hold the deposits of individuals & business in checking & savings accounts and then use these funds to make loans. For these people, the government is very much dependent on these banks as the financial intermediary.

    As Banks are profit-earning institutions, they collect deposit at the lowest possible cost and provide loans and advances at a higher cost. The difference between these two is the profit for the bank.

    Banking sector is expanding its hand in different financial events every day. At the same time the banking process is becoming faster, easier and the banking arena is becoming wider. As the demand for better service increases day by day, they are coming with different innovative ideas & products. In order to survive in the competitive field of the banking sector, all banking organizations are looking for better service opportunities to provide their fellow clients. As a result, it has become essential for every person to have some idea on the bank and banking procedures.

    Internship program is essential for every student, especially for the students of Business Administration, which helps them to know the real life situation. For this reason, a student takes the internship program at the last stage of the bachelor’s degree, to launch a career with some practical experiences.

    2.1 Genesis of Islamic Banking in Bangladesh:

    In August 1974, Bangladesh signed the Charter of Islamic Development Bank and committed itself to reorganize its economic and financial system as per Islamic Shariah.

    In January 1981,the then President of People’s Republic of Bangladesh while addressing the 3rd Islamic Summit Conference held at Makkah and Taif suggested, ‘’The Islamic countries should develop a separate banking system of their own in order to facilitate their trade and commerce.’’

    This statement of the President indicated favorable attitude of the Government of the People’s Republic of Bangladesh towards establishing Islamic bank and financial institution in the country.

    Earlier in November 1982, a delegation of IDB visited Bangladesh and showed keen interest to participate in establishing a joint venture Islamic Bank in the private sector. They found a lot of work had already been done and Islamic banking was in a ready form for immediate introduction. Two professional bodies of Islamic Economics Research Bureau (IERB) and Bangladesh Islamic Bankers Association (BINBA) made significant contributions towards introduction of Islamic banking in the country.

    They came forward to provide training on Islamic banking to top bankers and economists to fill-up the vaccum of leadership for the future Islamic banks in Bangladesh. They also held seminars, symposium and workshops on Islamic economics and banking throughout the country to mobilize public opinion in favor of Islamic banking.

    Their professional activities were reinforced by a number of Muslim entrepreneurs working under the aegis of then Muslim Businessmen Society (now reorganized as Industrialist & Businessmen Association). The body concentrated mainly in mobilizing equity capital for the emerging Islamic bank.

    At last, the long-drawn struggle to establish an Islamic bank in Bangladesh became a reality and Islami bank Bangladesh Ltd. was established on 30th March, 1983 in which 19 Bangladeshi national, 4 Bangladeshi institutions and 11 banks, financial institutions and government bodies of the Middle East and Europe including IDB and two eminent personalities of the Kingdom of Saudi Arabia joined hands to make the dream a reality.

    Chapter 03

    3. Organizational Overview

    3.1 Historical Background of Social Islami Bank Limited:

    Social Islami Bank Limited was established under the rules & regulations of Bangladesh Bank & the Bank Companies’ Act 1991, on  22nd November, 1995 with the leadership of Mr. Dr. M. A. Mannan, founder chairman who had a long dream of floating a commercial bank which would contribute to the social-economic development of our country. He had a long experience as a good banker. A group of highly qualified and successful entrepreneurs joined their hands with the founder chairman to materialize his dream. Indeed, all of them proved themselves in their respective businesses as most successful star with their endeavor, intelligence, hard working and talent entrepreneurship.

    3.2 Vision:

    Social Islami Bank Limited started its journey with the concept of 21st century Islamic participatory in three sector banking model:

    Finally, ‘’Reduction of Poverty Level’’ is our vision, which is a prime object as stated in Memorandum of Association of the Bank with the commitment ’Working Together for a Caring Society’’.

    3.3 Mission:

    3.4 Functions OF SIBL:

    3.5 Organization Structure of SIBL:

    3.6 The Ownership Pattern:

    This is a private sector commercial Bank providing comprehensive range of banking services. The bank is owned as follows:

    3.7 Human Resource:

    There is no alternative to skilled and trained manpower in service industry. Bearing this in mind the well educated, promising and honest workers are being appointed and trained. Bank has given top priority to develop skilled manpower and introduce them with modern technologies with the purpose of developing quality customer services. The Bank has undertaken program to train up its employees of all scetion at its own Training Institute. A highly experienced person was appointed as Director (Training) of the Institute in the year 2001 with the task of formulating various training modules. Steps are being taken to shift the Institute to separate premises for facilitating training activities. Side by side, both inland and foreign training  imparted during the year as usual. A highly experienced, well educated and motivated workforce is playing a vital role towards the growth of the Bank deserves appreciation. The number of Executives and Officers as on 31st December, 2008 was 512 against 455 as on 31st December, 2007.

    3.8 Training Institute:

    Well educated people are needed to achieve the objectives of a firm. With a view to building enthusiastic and skilled work force, Social Islami Bank Training Institute was established on 24th October, 1996 at Shyamoli, Dhaka. Every year the Institute trains sufficient number of employees. Besides the new employee/officer, it is possible to train SIBL’s existing employee/officer. There is a library in SIBL. There is about 2 thousand books remain in this library. Accounting, Management, Marketing, and Computer related books are in this library. In 2007, 1383 officers and no-officers were trained.

    3.9 Foreign Correspondents of SIBL:

    In order to gain maximum advantage from Foreign Exchange related businesses, the Bank has entered into correspondent relationship with almost all major 122 Banks of 109 countries of the world like Standard Chartered Bank, American Express Bank Limited, HSBC, HBZ Finance, Mashreq Bank PSC, Dresdner Bank AG and with local banks in Pakistan, India, Nepal, Bhutan etc. with whom we have advising, reimbursing and confirming arrangement.

    3.10 Overseas Operations of SIBL:

    Social Islami Bank has set up joint venture Exchange Company named Gulf Overseas Exchange Co. Ltd, in Oman contributing 25% of its paid up capital. The present paid up capital of the company is Riyal Omani 1, 82,000.00. The Chairman of the company is the ex-minister of the government of Oman. The exchange company, established in 1985, now has three branches in Oman and is being managed fully by officials of SIBL. The company is running in profit. SIBL is also exploring possibilities of opening branches in the Middle East, Switzerland and USA. SIBL has entered into a Management contract with a Kuwati Exchange company to provide management and technical services. SIBL has acquired equity and management of Nepal Arab Bank Ltd. which is the largest and highly profitable Private Commercial Bank in Nepal.

    3.11 Products & Services:

    3.12 Non-Formal and Voluntary Sector Banking Programs:

    Since the opening of the Bank on 22nd November 1995, Non-Formal sector has started implementing its programs in various areas. Those are as follows:

    (i) Environment-friendly Program: Tokai Project:

    The project has a special strategic value. Till December 1995 only one group consisting of six members was formed at Hossain Market, Utter Badda, Gulshan Thana. Group savings from the members is under process. Formation of more groups of ‘Tokai Pannaya Bavshee’ (Tokai goods Traders) is under process at different areas including Hossain Market.

    (ii) Real Life Non-Formal School of Management:

    As a part of environment- friendly program, the bank is committed to educate the Tokai and this has a worldwide strategic value. Till December 1995, one Tokai Non-Formal School has been started at Hossain Market, Uttar Badda, Gulshan, Dhaka with 30 students with a view to giving them real-life education with Islamic orientation. In the process of learning, the Tokai developed propensity for savings. As a result they are regularly depositing a small portion of their income as savings.

    (iii) Mosque Property Development Program:

    Construction of Mini Market at Kazi Bari Mosque, Uttar Khan, Uttara, Dhaka, consisting of 4 shops has been completed where Bank has invested Tk.1.28 laces. Recovery rate in this sector is 100 percent.

    (iv) Capital Market Instruments-Securitization of Voluntary Sector:

    In the voluntary sector, the bank is in the process of organizing Voluntary Capital Market Operation for mobilization of necessary fund and in the process of developing the following financial instruments with different sets of rules in conformity with Shariah:

    The value of all the bonds and Qarz-e-Hasna Certificate are guaranteed by the Bank against surrender of the instruments on maturity.

    3.13 Rural Credit Program:

    Agriculture is the main driving force of economy in Bangladesh. And the whole economic growth of the country depends on the development, modernization and investment of money in this connection. As a non-government financial institution SIBL has been actively participating in rural credit program in the economic activities for large population of the country since 1992. SIBL has been working intensively in collaboration with Barindra Multipurpose Development Authority by conducting the Rural Credit program particularly in Rajshahi, Naoga, Chapainawabgonj and the northern part of the country in general. In the last 10 years bank has distributed the credit for Tk.69.85 million. The recovery of loan in this project is 94%. In 2001 bank has distributed the loan for Tk.7.00 million. This is the first program for any private bank. Moreover, SIBL has been participating in Agro-Based Industries and Technology Development project loan financed by USAID since 1996.

    3.14 SIBL Branches:

    City Name Sl.No Branches Name Address
    01 Principal Branch 15, Dilkusha C/A, Dhaka -1000
    02 Gulshan Branch Nafi Tower (1st Floor)53, Gulshan South C/A, Gulshan Avenue, Gulshan-1, Dhaka
    03 Babu Bazar Branch 31, Nawab Yousuf Road, Naya Bazar,Dhaka
    04 Moulvi Bazar Branch 77/7, Wahid Center (1st Floor) , Moulvi Bazar, Dhaka
    05 Begum Rokeya Sarani Branch Bangladesh Lions Foundation Bhabanh, 3/c,

    West Agargaon, Begum Rokeya Sarani, Dhaka
    06 Panthapath Branch Level – 2, Block – A, Bashundhara City 13/Ka/1, Panthapath , Dhaka
    07 Foreign Exchange Branch 141-143, Motijiheel C/A, BIWTA Bhaban, Dhaka
    Dhaka 08 Dhanmondi Branch House # 84, (Old-176), Road # 7/a (old-14),

    Satmasjid Road, Dhanmondi R/A, Dhaka.
    09 Nawabpur Road Branch 82, Nawabpur Road(1st Floor), Nawabpur Road, Dhaka.
    10 Uttara Branch Latif Emporium, 27 Uttara C/A, Road # 7,Sector- 3, Uttara, Dhaka.
    11 Mirpur Branch Plot No-29-30, Block-Kha,Main Road (Goal Chakhar-10), Mirpur, Dhaka.
    12 Banani Branch 48 Kamal Attaturk Avenue (Ground & 1st Floor). Banani, Dhaka-1213
    13 Qaderia Tayebia Madrasha Branch 9/2A Madrasha Road, Joint Quarter, Block -F, Mohammadpur, Dhaka-1207
    14 Rosulpur Branch 49 Rosulpur, Kutubkhali Donia, Jatrabari, Dhaka
    15 Rampura Branch Modina Tower (Opposite TV Center), West Rampura DIT Road, Thana- Khilgoan, Dhaka.
    16 Islampur Branch 108, Islampur Road Lion Tower(3rd Floor) Kotoyali, Sadorghat, Dhaka
    17 New Eskaton Road Branch 27, New Eskaton Road Branch, Moghbazar, Dhaka
    18 Galimpur SME/Krishi Branch Ward No-6, Galimpur, Nobabgonj, Dhaka
    19 Dhamrai SME/Krishi Branch Holding No: A/6, Ward No-3, Dhamrai, Dhaka
    20 Savar Branch Yousuf Tower (2nd Floor), 35 Tatti, Dilkhusha Bagh, Savar Bus Stand, Savar, Dhaka.
    21 Hasnabad Branch Hasnabad Super Market, Suvadda, Keranigonj, Dhaka.
    Keranaiganj 22 Keranaiganj Branch East Aganagor Mosque Market (Suvidda), P.O: Keranigonj, Dhaka
    23 Sonargaon Branch Haji Jalal Tower(1st Floor), Mogra Para, Sonargaon, Narayangonj.
    Narayangonj 24 Fatullah Branch Fatullah Bazar, Narayangonj.
    25 Gopaldi Branch Gopaldi Bazar, P.S: Araihazar,

    Dist: Narayangonj.
    26 Narayangonj Branch 3 No. S M Maleha Road, Rupshi Height, Tan Bazar , Narayangonj.
    27 Bhulta SME/Krishi Branch Ward No-1, Bhulta, Rupgonj, Narayangonj.
    28 Agrabad Branch Quaderi Chamber 37, Agrabad C/A, Chittagong.
    29 Khatungoj Branch 96, Khatungoj, Chittagong.
    30 Halishahar Branch VIP Plaza, Plot # 5/4, Road # 2, Block –G, Halishahar Housing Estate, Halishahar, Chittagong.
    31 Jubilee Road Branch Haque Market(1st Floor)610/1, Jubilee Road, Chittagong.
    Chittagong 32 Lohagara Branch Mostofa City, Lohagara, Chittagong.
    33 Patherhat Branch Patherhat , Noapara, Raozan, Chittagong.
    34 Nanupur Branch Nanupur Bazar, P.O: Nanupur, P.S: Fatikchari, Dist: Chittagong.
    35 GEC Mour Branch CDA Avenue, East Nasirabad, GEC Mour, Chittagong.
    36 Hathajari SME/Krishi Branch Haji M Siddik Market, Block-B, 3rd Floor, Hathajari Bus stand, Hathajari, Chittagong.
    37 Barayearhat SME/Krishi Branch Holding No-161/162 Ward No-4, Barayearhat, Mirsorai, Chittagong.
    38 Bibir Hat SME/Krishi Branch North Dhorong, Ward-3, Fotikshori, Chittagong.
    39 Chok Bazar Branch 174/A Choteshori Road, Mannan Tower (1st & 2nd Floor), Chok Bazar, Kotoali Chittagong.
    Rajshahi 40 Rajshahi Branch 219, Shaheb Bazar Main Road, Rajshahi.
    Khulna 41 Khulna Branch 22, Sir Iqbal Road, G.M. Baksh Tower (Ground Floor), Khulana City Corporation, Khulna.
    42 Paik Gacha Branch Main Road ,Paik Gacha, Khulna.
    Sylhet 43 Sylhet Branch 781, Karima Mansion, Dargah Gat, Sylhet-3100
    44 South Surma Branch Baipass Road, P.O: Sylhat Sadar, P.S: South Surma , Sylhet.
    Bogura 45 Bogra Branch Bhandary Monjil, 776, Rangpur Road, Borogola, Bogra.
    46 Dupchacheya Branch Jobeda Shopping Complex ( 2nd Floor ), C.O Office Bus Stand, Dupchacheya, Bogura.
    47 Sirajong Branch Zaman Complex, S.S. Road, Sirajgonj.
    Sirajgonj 48 Chandaikona Branch Pabna Bazar, Raigonj, Sirajgonj.
    49 Shahjadpur SME/Krishi Branch ALhaj Razzak Plaza, Monirampur Bazar, Shahjadpur, Sirajgonj.
    50 Elliotgonj Branch Elliotgonj Bazar, P.O: Elliotgonj, P.S: Dawudkhandi, Dist: Comilla.
    Comilla 51 Comilla Branch 95/96 ,Chawk Bazar(2nd Floor), P.O: Chawk Bazar, P.S: Kotowali, Comilla.
    Noakhali 52 Chowmuhoni Branch Hossain Market, 276-284, D.B. Road, Chowmuhoni Powrosova, Begumgonj,

    Noakhali
    Chandpur 53 Chandpur Branch Faisal Shopping Complex, Bishnudi, Chandpur Bus Stand, Thana- Chandpur, Dist- Chandpur
    54 Hajigonj Branch Hajigonj Bazar, Maa Plaza, Degree College Road, Hajigonj Chandpur.
    55 Kochuya SME/Krishi Branch Holding No-111, Ward No-8, Kochuya, Chandpur.
    Joshor 56 Nowyapara Branch Nurbagmor Bus stand, Joshor-Khulna Main Road, Avaynagor, Pouroshava, Joshor.
    57 Joshor Branch 36 Railroad (Chowrasta), Holding-36, Joshor
    58 Monirampur SME/Krishi Branch Holding No-2145, Ward No-3, Monirampur, Joshor.
    Cox’s Bazar 59 Cox’s Bazar Branch Evan Plaza(in front of Cox’s Bazar Pourashva), Thana Road, Cox’s Bazar
    Bagerhat 60 Mollahhat SME/Krishi Branch Village:-Garfa, P.O: Mollahhat, Union: Udaypur, Ward No-5, District: Bagerhat.
    Shatkhera 61 London Plaza, Boro Bazar Road, Shatkhera. Village:-Garfa, P.O: Mollahhat, Union: Udaypur, Ward No-5, District: Bagerhat.
    Dinajpur 62 Dinajpur Branch. Holding No-1191/1150, Lilirmor Dinajpur Sodor Dinajpur.
    Norshandi 63 Madhobdi SME/Krishi Branch. Madhobdi Plaza, Madhobdi Bazar, Norshandi.
    Gaibandhaganj 64 Gobindoganj SME/Krishi Branch. Holding No-318, Ward No-6, Gobindoganj, Gaibandha.

    3.15 Branch Business Volume on 31.10.09:

    No Particular Taka
    1 Deposit 887460029.41
    2 Investment 244643349.75
    3 Foreign Exchange 154601378.13
    4 Income 88607050.95
    5 Expenditure 76736410.31
    6 Profit 11870640.64
    7 Cash Position 5509867.51

    Source: SIBL, Annual Report 2009

    Chapter 04

    4. Foreign Exchange

    Foreign exchange is the means and methods by which rights to wealth in a country’s currency are converted into rights to wealth in another country’s currency. In banks when we talk of foreign exchange, we refer to the general mechanism by which a bank converts currency of one country into that of another. Foreign Exchange Department (FED) is the international department of Bangladesh Bank which issues license to scheduled banks to deal with foreign exchange. These banks are known as Authorized Dealers. If the branch is an authorized dealer in foreign exchange market, it can remitt foreign exchange from local country to foreign countries. Therefore, Social Islami Bank, Principal branch is an authorized dealer.

    There are three kinds of foreign exchange transaction:

    4.1 Import:

    To import, a person should be competent to be an importer. According to Import and Export Control Act, 1950, the Office of Chief Controller of Import and Export provides the registration (IRC) to the importer. In an international business environment, buyers and sellers are generally unknown to each other. So seller of goods always seeks security for the payment of his exported goods. Bank gives export guarantee that it will pay for the goods on behalf of the buyer if the buyer does not pay. This guarantee is called Letter of Credit. Thus, the contract between importer and exporter is given a legal shape by the banker’s Letter of Credit.

    4.1.1 Letter of Credit:

    A letter of credit is a letter issued by a bank (know as the opening or the issuing bank) at the instance of its customer (known as the opener) addressed to a person (beneficiary) undertaking that the bills drawn by the beneficiary will be duly honored by it (opening bank), provided certain conditions mentioned in the letter have been complied with.

    4.1.2 Parties to the L/C:

    Importer Who applies for L/C.
    Issuing Bank It is the bank which opens or issues a L/C on behalf of the importer.
    Confirming Bank It is the bank which adds its confirmation to the credit and it is done at the request of issuing bank. Confirming bank may or may not be advising bank.
    Advising or Notifying Bank It is the bank through which the L/C is advised to the exporters. This bank is actually situated in exporter’s country. It may also assume the role of confirming or negotiating bank depending upon the condition of the credit.
    Negotiating Bank It is the bank, which negotiates the bill and pays the amount of the beneficiary. The advising bank and the negotiating bank may or may not be the same. Sometimes it can also be confirming bank.
    Accepting Bank It is the bank on which the bill will be drawn (as per condition of the credit). Usually it is the issuing bank.
    Reimbursing Bank It is the bank, which would reimburse the negotiating bank after getting payment and instructions from issuing bank.

    4.1.3 Steps for Import L/C Operation:

    This is an 8 steps operation.

    (i) Step 1 :

    Registration with CCI&E:

    (ii) Step 2 :

    Determination Terms of Credit:

    (iii) Step 3 :

    Proposal for Opening of L/C:

    To have an import L/C limit, an importer submits an application to the department of Social Islami Bank Ltd. The proposal contains the following particulars:

    (iv) Step 4:

    Application by Importer to the Banker to open Letter of Credit:

     For opening L/C, the importer is required to fill up a prescribed application form provided by the banker along with the following documents:

    1. L/C Application Form 7. Authority to Debit Account
    2. Filled up LCA Form 8. Filled up Amendment Request Form
    3. Demand Promissory Note 9. IMP Form
    4. Pro-forma Invoice 10. Insurance Cover Note and Money Receipt.
    5. Tax Identification Number 11. Membership Certificate
    6.Import Registration Certificate 12. Rate Fluctuation Undertaking

    (v) Step 5:

    Opening of L/C by the Bank for the Opener:

    Step 6:

    Shipment of Goods and Lodgment of Documents by Exporter:

    Generally the following documents are sent to the Opening Banker with L/C:

    1. Bill of Exchange 6. Packing List
    2. Bill of Lading 7. Advice Details of Shipment
    3. Commercial Invoice 8. Pre-shipment Inspection Certificate
    4. Certification of Origin 9. Vessel Particular
    5. A certificate stating that each packet contains the description of goods over the packet. 10.Shipment Certificate

    Step 7:

    Lodgment of Documents by the Opening Bank from the Negotiating Bank:

    After receiving the documents, the opening banker scrutinizes the documents. If any discrepancy found, it informs the importer. If importer accepts the fault, then opening banker calls importer retiring the documents. At this time many things can happen. These are indicated in the following:

    (a) Discrepancy found and the importer accepts:

    No problem occurs in lodgment.

    (b)Discrepancy found but the importer not agreed to accept:

    In this case, importer protests and sends back all the documents to the exporter and request him to make in the specified manner. Here banker is not bound to pay because the documents send by exporter are not in accordance with the terms of L/C.

    (c) Documents are OK but importer is willing to retire the documents:

    In this case, bank is obligated to pay the price of exported goods. Since importer did not pay for bill of exchange, this payment by bank is one kind of credit to the importer and this credit in banking is known as PAD.

    (d) Everything is OK but importer fails to clear goods from the port and requests bank to clear: 

    In this case bank clears the goods and takes delivery of the same by paying customs duty and sales tax etc. So, this expenditure is debited to the importer’s account and in banking it is called LIM.

    Step 8:

    Retirement:

    The importer receives the intimation and gives necessary instruction to the bank for retirement of the import bills or for the disposal of the shipping documents to clear the imported goods from the customs authority. The importer may instruct the bank to retire the documents by debiting his account with the bank or may ask for LTR (Loan against Trust Receipt).

    4.1.4 Accounting Procedure in case of L/C Opening:

    When the officer thinks fit  the application to open a L/C, giving the following entries creates the following charges:

    Particulars Debit/ Credit Charges in Taka
    Customer’s A/C Debit
    L/C Margin A/C Credit
    Commission A/C on L/C Credit 50%
    VAT Credit 15% on commission
    SWIFT Charge Credit 3000/=
    Datamax Credit 1000/=
    Stamp Credit 150/=
    Postage Credit 300/=
    DHL/Courier Credit 1500/=

    4.1.5 Amendment of L/C:

    After opening of L/C, sometimes alteration to the original terms and conditions become necessary. These amendments involve changes in-

    Such amendments can be affected only if all the concerned parties agree- the beneficiary, the importer, the issuing bank and the advising bank.For any amendment the importer must request the issuing bank in writing duly supported by revised indent/ pro-forma invoice. The issuing bank then advises the required amendment to the advising bank. L/C amendment commission including postage is charged to the client’s A/C.

    4.1.6 Loan against Trust Receipts (LTR):

    4.1.7 Loan Against Imported Merchandise (LIM):

    Advance (Loan) against the security of merchandise imported through the Bank may be allowed either on pledge or hypothecation of goods, retaining margin prescribed on their Landed Cost, depending on their categories and Credit Restriction imposed by the Bangladesh Bank. Bank shall also obtain a letter of undertaking and indemnity from the parties, before getting the goods cleared through LIM Account.

    4.1.8 Payment Procedure of Import Documents:

    This is the most sensitive task of the Import Department. The officials have to be very much careful while making payment. This task constitutes the following:

    (i) Date of Payment:

    Usually payment is made within seven days after the documents have been received. If the payment has become deferred, the negotiating bank may claim interest for making delay.

    (ii) Preparing Sale Memo:

    A Sale Memo is made at B.C rate to the customer. As the T.T & O.D rate is paid to the ID, the difference between these two rates is exchange trading. Finally, an Inter Branch Exchange Trading Credit Advice is sent to ID.

    (iii) Requisition for the Foreign Currency:

    For arranging necessary fund for payment, a requisition is sent to the International Department.

    (iv) Transmission of Message:

    Message is transmitted to the correspondent bank ensuring that payment is being made.

    4.2 Export:

    The goods and services sold by Bangladesh to foreign households, businessmen and governments are called export. The export trade of the country is regulated by the Imports and Exports (Control) Act, 1950. There are a number of formalities, which an exporter has to fulfill before and after shipment of goods. The exports from Bangladesh are subjected to export trade control exercised by the Ministry Of Commerce through Chief Controller of Imports and Exports (CCI&E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI&E and holds valid Export Registration Certificate (ERC). The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP form and other documents connected with exports.

    The formalities and procedures are enumerated as follows: 

    (i) Obtaining export L/C:

    To get export LC form exporter issued by the importer.

    (ii) Submission of export documents:

    Exporter has to submit all necessary documents to the collecting bank after shipping of goods .

    (iii) Checking of export documents:

    After getting the documents banker checks the documents as per L/C terms.

    (iv) Negotiation of export documents:

    If the bank accepts the document and pays the value draft to the exporter and forwards the document to issuing bank that is called a negotiating bank. If the bank does buy the L/C then the bank normally acts as a collecting bank.

    (v) Realization of proceeds:

    This is the period when the issuing bank has realized the payment.

    (vi) Reporting to the Bangladesh bank:

    As per instruction by Bangladesh Bank the bank has to report to respective department of Bangladesh Bank by mentioning latest payment.

    (vii) Issue Proceed Realization Certificate (PRC):

    Bank has to issue Proceed Realization Certificate of export L/C to the supplier / exporter for getting cash assistance.

    4.2.1 Export Operation:

    Bangladesh exports a large quantity of goods and services to foreign households. Readymade textile garments (both knitted and woven), Jute, Jute-made products, frozen shrimps, tea are the main goods that Bangladeshi exporters export to foreign countries. Garments sector is the largest sector that exports the lion share of the country’s export. Bangladesh exports most of its readymade garments products to U.S.A and European Community (EC) countries. Bangladesh exports about 40% of its readymade garments products to U.S.A. Most of the exporters who export through Social Islami Bank Ltd. are readymade garments exporters. They open export L/Cs here to export their goods, which they open against the import L/Cs opened by their foreign importers.

    Export L/C operation is just reverse of the import L/C operation. For exporting goods by the local exporter, bank may act as  an advising bank and collecting bank (negotiable bank) for the exporter.

    (i) As an Advising Bank:

    It receives documents from the foreign importer and hands it over to the exporter. Sometimes it adds confirmation on the L/C on request from the Opening Bank. By adding confirmation, it assumes the responsibility to make payment to the exporter.

    (ii) As Negotiating Bank:

    It negotiates the bills and other shipping documents in favor of the exporter. That is, it collects the proceed of the export-bill from the drawee and credits the exporter’s account for the same. Collection proceed from the export bill is deposited in the bank’s NOSTRO account in the importer’s country. Sometimes the bank purchases the bills at discount and waits till maturity of the bill. When the bill matures, bank presents it to the drawee to encash it.

    In our country, Export and Import operation of bank is very much related with one another because of use of Back-to-Back L/C and maturity of payment for Back-to-Back L/C is set in such that it can be paid out of export proceed.

    4.2.2 Back-To-Back L/C:

    It is simply issued to the clients against an import L/C. Back-to-Back mechanism involves two separate L/Cs. One is master Export L/C and another is Back-to-Back L/C. On the strength of Master Export L/C, bank issues Back to Back L/C. Back-to-Back L/C is commonly known as Buying L/C. On the contrary, Master Export L/C is known as Selling L/C

    (i) Features of Back-to-Back L/C:

    (ii) Documents Required for Opening a Back-to-Back L/C:

    In Social Islami Bank Ltd. Principal Branch, following papers/documents are required for opening a Back-to-Back L/C-

    In addition to the above documents, the followings are also required to export oriented garments industries while requesting for opening a Back-to-Back L/C:

    (iii) Checklist of Export L/C:

    Following defective points are usually found in the Master L/C. Therefore, the bank officials so much carefully check these points. These are:

    (iv) Payment of Back-to-Back L/C:

    In case of Back-to-Back L/C as 60-90-120-180 days of maturity period, deferred payment is made.

    " 134,"

    Foreign Exchange Operations in Bangladesh

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    “Foreign Exchange Operations in Bangladesh”

    Foreign exchange operation

    Foreign exchange operations in banks takes place through four basic operational part of a bank’s day to day activity. They are-

    v Import

    v Export

    v Foreign Remittance

    v International Division &Treasury

    Import Operation

    2.1 In every import export transaction there must be:

    q An Agreed products or services

    q A sales contract

    q Delivery details and Incoterms

    q Shipping and delivery details

    q Terms of payment

    q Required documentation

    q Insurance coverage

    International Trade Cycle

    Law of Contract

    Commonly used payment terms

    Open Account

    Advance Payment

    Documentary Collection

    Documentary Credit

    What is Documentary Credit?

    It is a conditional guarantee by a bank (Issuing Bank) given to be the seller (Beneficiary) at the request, and in accordance with the instructions of the buyer (applicant) to effect payment up to a stated sum of money, within a prescribed time limit and against stipulated documents.

    Parties involved in a Documentary Credit

    The Applicant : Importer who applies for DC

    The Issuing Bank : Importer’s Bank who issues the DC

    The Advising Bank : The Bank in Exporter’s Country authenticating the

    genuineness of the DC (UCP#7)

    The Beneficiary : Exporter in whose favor the DC is issued

    The Reimbursing Bank : The Bank designated by the issuing Bank to effect payment

    to the Negotiating Bank upon their request.

    The Confirming Bank : The Bank which adds its confirmation to the credit

    (UCP#9B, C, D)

    Special Types of Documentary Credit

    q Freely Negotiable vs. Restricted

    q Revocable

    q Irrevocable

    q Confirmed

    q Local

    		 q Foreign

    q Red Clause

    q Revolving

    q Transferable

    q Back to Back

    LC defined

    It is a conditional undertaking given by a bank (Issuing Bank) at the request of a customer (Applicant) or on its own behalf to pay a seller (Beneficiary) against stipulated documents provided all the terms and conditions of the credit are complied with.

    Uses:

    A letter of credit is an essential element for conducting world today. It ensures beneficiary to get price of his consignment consigned to an unknown buyer. So it acts as a bridge between buyer and seller of two different countries, that helps foreign trade to a great extent.

    Parties to L/C

    i. Importer/ buyer/ applicant

    ii. Exporter/ Seller/ beneficiary/ Supplier

    iii. Issuing bank/ Opening bank

    iv. Advising bank/ Notified bank

    v. Confirming bank

    vi. Negotiating bank

    vii. Paying bank/ Reimbursing bank

    To import goods of services, the buyer approaches his/ her bank to open letter of credit in favor of foreign supplier. The opening bank issues the L/C and advise it through its correspondents.

    Importer: The person who requests the opening bank to open L/ C.

    Exporter: The party in whose favor L/ C is established.

    Issuing Bank: The bank which opens/ issues L/ C.

    Advising Bank: The bank through which L/ C is advised.

    Confirming Bank: The bank, which adds its confirmation to the credit. Negotiation bank: The bank, which negotiates the bill.

    TYPES OF LETTER OF CREDIT

    Almost all commercial letters of credit are documentary credits. Therefore, the UCP deals only with documentary credits. A documentary credit may be classified under the following types depending upon the particular provisions it contains:

    Ø Payment, acceptance and negotiating credits

    Ø Revocable and irrevocable credits

    Ø Confirmed and unconfirmed credits

    Ø With Resources and without resources credits

    Ø Fixed and revolving credits

    Ø Transferable credits

    Ø Back-to-back credits

    Ø Red clause and green clause credits

    Ø Stand by credits

    Payment, acceptance and negotiating credits

    ” All credits must clearly indicate whether they are available by sight payment, by deterred payment, by acceptance or by negotiation. ” Thus a letter of credit may be-

    a) Payment credit;

    b) Negotiating credit;

    c) Acceptance credit;

    d) Deferred payment

    Revocable and irrevocable credit:

    A credit may be

    I) Revocable, or

    II) Irrevocable

    The credit should therefore clearly indicate whether it is revocable or irrevocable.

    A revocable credit is one, which can be cancelled or amended by the issuing bank at any time without prior notice to the beneficiary. The cancellation or amendment however, takes effect against the bank, which has negotiated bills under the credit only on receipt of notice of such cancellation, or amendment. The issuing is liable for bills negotiated confirming to the terms and condition of the credit before the notice of revocation is received by the negotiating bank.

    An irrevocable credit constitutes a definite undertaking of the issuing bank or makes payment provide the terms and conditions of the credit are complied with. An irrevocable credit can neither be amended nor cancelled without the agreement of all parties concerned.

    The difference between a revocable credit and an irrevocable credit is quite clear. While a revocable credit can be cancelled or modified without the consent of the exporter, it is not possible in the case of irrevocable credit.

    Confirmed and unconfirmed credit :

    When a letter of credit is advised to the beneficiary through a bank in the beneficiary’s country without adding its confirmation. If the advising bank adds confirmation to the credit, it becomes a confirming bank and the credit a confirmation credit.All confirmed credit is also irrevocable letter of credit. It is so because no bank in the exporter’s country would be willing to undertaking a liability on a revocable credit on which there is no definite undertaking by the issuing bank.

    With resources and without recourse Credit:

    The bill of exchange drawn under a letter of credit may indicate that it is drawn without resources to the drawer. Unless the credit authorizes drawing a ‘without resource’ bill of exchange, it is not proper to present such a bill of exchange.

    A bill of exchange is only one documents drawn under the letter of credit and can’t be discussed in isolation of legal imported the credit. Therefore, to understand the utility of drawing a ‘without resource’ bill of exchange, we should first know the recourse available to the parties involved, viz., the negotiating bank, confirming bank and the issuing bank.

    The exporter’s intention in drawing a without recourse bill of exchange is to ensure that in case of the documents are rejected by the issuing bank or payment is not made by the issuing bank for any reason, he should not be called upon to pay back the amount he received earlier on negotiation of documents.

    Fixed and Revolving credits :

    A fixed letter of credit is one which the limit is reduced permanently to the extent of bills drawn under the credit.Under a revolving letter of credit, the limit under the credit is renewed as and when bills drawn under it are paid, to the extent of such bills.A revolving letter of credit is useful where continuous transactions between the exporter and importer are expected and the amount of each drawing is sought to be limited.For an exporter with a large contract spreading over a period of years, a revolving credit offers the following advantages:

    i) He need not await receipt of letter of credit every time he exports, and

    ii) Since the same credit covers all the transactions the terms and condition do not change.It makes it easy for him to prepare documents as required by the credit.

    Transferable credit:

    A transferable credit is one under which the exporter has the right to make the credit available to third parties. The exporter may be only an intermediary who procures goods from the suppliers and arranges them to be sent to the importer. A credit is transferred in the following ways: the exporter, now called the first beneficiary, will apply to the negotiating bank to transfer and establish in favor of the manufacturer a letter of credit with the same terms and condition as that of the original with the exception to the following:

    a) The amount of the credit may be reduce. The difference would be the profit or commission on the transaction for the first beneficiary.

    b) The validity period and date of shipment may be curtailed.

    c) Because the value of good is reduced, the percentage for which insurance cover must be effected may be in such a way as to provide the amount of cover stipulated in the original credit.

    Red clause and green clause Letter of Credit:

    Also known as ‘packing’ or ‘anticipatory’ credit a red clause letter of credit printed in red, authorizing the negotiating bank to grant advances to the exporter for the purchase of processing, packing and arranging for movement of goods up to the port of shipment. The advance, with interest and other charges, is recoverable from the bills that would be turned under the letter of credit and only the balance would be paid of exporter.

    The amount of letter of credit should be less than the amount of the letter of credit so that it remains fully secured by the obligation of the opening of bank.

    The negotiating bank is not required to supervise the utilization of the advance.

    Back to back L/ C:

    When one L/ C is backed by another L/C then the L/C is called back to back L/C. For procurement of raw materials and accessories banks sometimes provide finance by opening back to back letter of credit. Back to back L/Cs are frequently used for export of readymade garments. Bank to bank L/C does not involve cash outlay at the time of pre-shipped stage. It constitutes a commitment to pay when the goods are shipped as per the terms of the credit. Back to back L/C is opened for a issuance period basis. This bill will be paid after received the export proceeds.

    Back-to-Back LC

    Standby Letter of Credit or Guarantee Credit:

    A standby letter of credit is any letter of credit, or similar arrangement however named or described, which represents an obligation to the beneficiary on the part of the issuer;

    a) To repay money borrowed by or advanced to for the account of the party: or

    b) To make payment on account of any indebtedness undertaken by the account party; or

    c) To make payment on account of any default by the account party in performance on the obligation.

    Under a standby credit, also known as guarantee credit, the issuing bank assures the beneficiary that in the event of non-perforn1ance and non-payment of an obligation by the applicant, the beneficiary may get the payment from the issuing bank. The claim should be a draft accompanied by the request documentary evidence of non-performance as stipulated in the credit.

    Letter of Credit and its terms and conditions:

    In the top of the L/C, issuing bank address along with telephone no, telex no, and fax no is quoted. L/C no with date and amount both in words and figures are also quoted. In the L/C, beneficiary’s name and address, advising bank and applicant’s name and address are clearly quoted. To the advising bank, original and duplicate L/C are forwarded here original for beneficiary and duplicate for advising bank.

    Name of merchandise with quantity, quality, per unit price etc., Performa invoice no or indent no with date along with indenture’s Bangladesh bank pern1ission no are also quoted in merchandise pare.

    IMPORT PROCEDURES

    Formalities & Restrictions :

    The word “Import” is most familiar to the bankers, which means bringing of goods and service to own country from other countries. The word is widely used by the bankers allover the world for the same purpose as stated earlier.

    Way of Import: Import into Bangladesh may be two ways – (1) By way of opening L/C&

    (2) Without opening L/C.

    (I) Import by way of opening L/C requires to fulfill following criteria of private sector importer;

    a) Registered importer having valid IRC

    b) Trade license (valid)

    c) Membership certificate from local chamber of commerce of related association (valid).

    d) Income tax clearance/ declaration in case of new comer.

    e) VAT registration certificate.

    If a private sector importer fulfils above requirements, a banker can process an L/C for import of goods & services from abroad but following papers/documents are to be obtained before opening of L!C in addition it the above mentioned papers/documents:

    1. L/C application.

    2. Indent! Performa invoice/purchase order/contract/agreement.

    3. Charge documents duly & properly executed.

    4. LCAF duly sealed & signed. 5. Insurance cover note

    The importer must be a customer of the L/C issuing bank / branch & the L/C may be opened

    after sanction by the competent authority.

    (2) Import into Bangladesh without opening L/C may be made in the following cases against

    LCAF:

    a) Books, journals, magazines, periodicals against sight draft or usance bills. Any importable item

    by making payment from Bangladesh to the tune of maximum USD. 2500/ -in a year

    b) The items allowed by the credit, Loan, Grant.

    c) International chemical reference by registered allopathic industrial unit with the approval of

    Director, Drug Administration.

    Scrutiny of Documents :

    The letter of credit constitutes one of the most important methods of financing trade. Under a banker’s letter of credit, the issuing bank gives a undertaking on behalf of the buyer that the bank will honor the obligation of payment on presentation of stipulated documents. Thus letter of credit provides security if the beneficiary observes its terms and conditions. The beneficiary of the documentary letter of credit when presents the stipulated documents to the negotiating bank, he expects the bank to honor its obligation under the credit in return. The negotiating bank scrutinizes the document in strict accordance with the L/C terms and negotiates the bill if the documents are in order. After negotiation, the bank claims reimbursement as per L/C terms.The L/C issuing bank / draw bank, after receiving of the above documents, scrutinizes all the documents before lodgment of the same in their books / registers. The following points are considered mainly at the time of scrutiny of documents.

    Common Documents under DC

    Bill of exchange/Draft:

    Ø The draft must be date before expiry of the L/C and within the stipulated period for negotiation.

    Ø It must be dawn or endorsed to the order of the bank.

    Ø It is drawn by the party indicated as the beneficiary of the credit.

    Ø It is drawn on the party indicated as the draw of the credit.

    Ø It is market as drawn under the proper L/C of the bank quoting the L/C number.

    Ø The tenor is in conformity with that stipulated in the L/C.

    Ø The amount is identical with the amount mentioned in terms of the credit.

    Bill of Lading (B/L)

    Ø The full set of B/C is submitted including original copy.

    Ø It is marked “Shipped on Board”

    Ø It is drawn in favor of the bank endorsed to the order off the bank and dated

    after issuance of the L/C

    Ø The B/L is clean

    Ø If the terms of sale is C& F, B/L is to be marked “Freight paid”.

    Ø Short from B/L is not acceptable

    Ø Charter party B/L is not allowed unless specified in the L/C

    Ø B/L is not stale

    Ø Other (if any) as per L/C terms.

    Commercial invoice

    Ø The invoice is signed by the exporter / beneficiary

    Ø The required numbers of copies of the invoice are placed as per L/C terms.

    Ø Description of the goods with measurement / weight are mentioned in full.

    Ø The value and price of the goods to be tallied with L/C terms

    Ø The L/C number, name of the ship with shipping mark, shipments date L.C.A.F/ license numbers of the importer, indent number etc. are to be quoted in the invoice properly.

    Ø The quality and quantity of the goods as mentioned in the invoice must agree with that of L/C terms.

    Ø The name of the importer and the L/C issuing bank is mentioned in the invoice.

    Certificate of origin

    Ø The certificate of origin may be issued by the chamber of commerce & Industry of exporter’s locality or by the supplier as stipulated in the L/C.

    Ø The goods must be originated from the country as per indication given in the L/C.

    Ø All other documents like packing list, per-shipment inspection certificate etc are in accordance with the terms of the credit.

    Ø The importer retires the bill within a reason -able period paying all the charges and bill value. If importer fails to retire the bill from his own source, he may approach for loan against imported merchandise from the bank.

    Lodgment of Documents:

    After shipment of goods the beneficiary sends the documents to the opening bank through the negotiating bank. After receiving the documents from the negotiating bank, the opening bank checks the documents very carefully as per terms & conditions of the back- to- back L/C. if there is no discrepancy or the applicant accepts the discrepancy, if any, then the documents are lodged. International foreign Bills Collection register according to the serial number. After getting the shipping documents in order i.e. clean documents lodgment of documents to be made with in three working days. Steps to be taken in lodgment. Bank and branch name seal to be affixed on the forwarding schedule, B/E seal on all shipping documents and banks crossing seal in bill of exchange and bill of lading to protect fraudulent use of the same. To put B/E serial number on all shipping documents. To make entry in the B/E ledger.

    2.10 Retirement of Documents:

    After the arrival of goods in the port the party comes to retire the documents. Then the following entry is passed.

    Dr. Party’s A!C

    Dr. Marginal Deposit A/C

    Cr. Bill of exchange A/C

    Cr. Interest A!C.

    Interest is calculated on be amount from the date of reimbursement to the date of retirement. If the margin is kept with the bank a minimum 30 days, then interest is paid to the party at the savings rate and following vouchers are passed.

    Dr. Expense control A!C Interest paid on margin L/C cash.

    Cr. Party’s A!C.

    Original documents are handed over to the importer after proper endorsement along with original LCA. The importer clear the goods on showing all these documents. The customs authority gives a bill of entry as a document of entering the importer goods in the country. The importer surrenders this bill of entry to the bank and forwards the bill of entry to Bangladesh bank along with the duplicate of IMP from.

    EXPORT OPERATION

    3.1 An exporter has to obtain a firm contract or an export L/C/Firm contract he has to make the goods ready and necessary arrangement for shipment particularly the following arrangements have to be done:

    Ø Booking of shipping space.

    Ø Packing of the goods with shipping makes as per instruction of Export L/C/contract.

    Ø Booking of space for storage of export cargo at the port of loading.

    Ø Arrangement for transportation of goods to the port.

    Ø Approaching bank (A.D) for issuing EXP.

    Ø Whenever an exporter approaches the branch for issuing and certifying EXP. Branch is to satisfy that he maintains a CD A/c with the branch. He is a manufacturer, producers or supplier of the goods to be exported. Market reputation is satisfactory. Being satisfied following papers and documents are to be obtained:

    Ø Application for the exporter.

    Ø Valid export Registration certificate (ERC).

    Ø Original copy of export L/C/Firm contract.

    3.2 Checking of papers and documents by the branch:

    i. Application:

    Ø Items are permissible for export.

    Ø Arrangement made for realization of Export Proceeds within 4(Four) months.

    Ø Arrangement has been made for receipt of title of he goods like Bill of Loading, Air Way Bill etc.

    ii) Export L/C:

    Ø Irrevocable / Confirmed L/C issued by an Internationally reputed bank under UCPDC inforce and transfer made (if transferable) as per provision of article 48 of ICC- 600.

    Ø Genuineness of Advising or Transferring the L/C is to be verified.

    Ø Time for shipment is sufficient.

    Ø Negotiation authority is provided therein.

    Ø Reimbursement clause is definite.

    Ø B/L clause conforms to the provision of Guidelines for foreign Exchange Transactions.

    Ø All other terms and conditions are favorable.

    iii) Contract:

    Ø Contract is confirmed and duly signed by the seller and the purchaser.

    Ø Buyer consignee is bonafide (Branch has to obtain credentials of the buyer through Foreign Correspondence).

    Ø Full description of the goods to be exported with quantity, quality, price and unite price are given.

    Ø Mode of transport with port of shipment and destination.

    Ø Date of shipment.

    Ø Delivery Term-FOB, CFR, CIF etc. mentioned clearly.

    Ø Payment clause at Sight DC/ DP/ USANCE.

    Ø Validity of the Contract.

    Ø Being satisfied branch is to issue a set of EXP. Duly recorded in Export Register as per specification given in appendix in 5/65 of Guidelines For Foreign Exchange Transaction Volume-1 published by Bangladesh Bank.

    Ø Exporter is to fill up and sign EXP. Under his seal. Branch is to check that all the copies EXP have correctly been filled in as per particulars of export L/C/contract. Signature of the export is to be verified and certify under seal and signature of the branch manager on the space provided.

    Papers and documents are to be handed over to C& F Agent:

    Ø EXP duly signed by Export and certified by the bank.

    Ø Copy of Export L/C Contract.

    Ø Commercial invoice duly issued and signed by the exporter.

    Ø Packing List.

    Ø Insurance cover note in case of Export on CIF basis.

    Ø From VBF-9 (Prescribed by Custom Authority for declaration of Export Cargo).

    Ø Detail instructions regarding shipment:

    Ø Date by which the goods should be put on board.

    Ø Name of the bank in Bangladesh to whose order BL/air way duty Bill should be drawn.

    Ø Number of original and non-negotiable B.L to be obtained.

    Ø A proof of export from the Custom Authority for claiming duty draw back (wherever admissible).

    C & F Agent has to arrange:

    Ø Booking of shipping space.

    Ø Storage of Export Cargo at the port.

    Ø Marking the shipping marks on each packet / container.

    Ø Issue instruction to the carrier regarding the date by which goods are to be shipped on board and shipping documents to be issue with necessary clauses and number of copies to be supplied.

    After shipment Exporter will submit the following documents to the branch:

    Ø All negotiable copies of B/L

    Ø Commercial Invoice duly signed.

    Ø Bill of Exchange.

    Ø Consular invoice (If required).

    Ø Pecking list.

    Ø Certificate of Origin.(If required).

    Ø Pre-shipment inspection certificate (If required).

    Ø GSP certificate (wherever necessary).

    Ø Original copy of export L/C/Contract.

    Ø EXP duly certified by the custom authority.

    Ø Any other documents required as per export L/C Contract.

    Ø Exporter is to submit the export documents under cover of a letter mentioning a number of documents submitted and detail instructions regarding payment and delivery of documents.

    Branch is to verify that-

    The number of the documents mentioned in the forwarding letter are found intact.

    Instruction regarding payment and delivery of documents are in confirming with the terms and conditions of Export L/C contract.

    i) Sight Documents are to be delivered against payment at sight of the draft.

    ii) D.A Documents to be delivered against acceptance of the draft by the drawee

    and documents are to presented on due date for payments.

    iii) D-P-Documents are to be delivered against payment.

    iv) All the documents required as per terms and conditions of L/C contract are

    submitted. Documents submitted are to be scrutinized and the discrepancies are to be noted on the scrutiny sheet.Exporter is to be informed of the discrepancies immediately. Export will rectify the discrepancies which are rectifiable by them.

    Export Financing

    Financing of exports constitutes an important part of a bank’s activities. Exporters require financial services at different stages of their export operation. During each of these phase exporters need different types of financial assistance depending on the nature of the export contract. Export financing can be classified into two categories.

    1) Pre-shipment credit

    2) Post-shipment credit

    Pre-shipment credit

    Pre-shipment credit, as the name suggests, given to finance the activities of an exporter prior to the actual shipment of goods for export. The purpose of such credit is to meet working capital needs starting from the point of purchasing of raw materials to transportation of goods for export to foreign country. Pre-shipment credit takes place the following forms:

    1) Export Cash Credit (Hypothecation)

    2) Export Cash Credit (Pledge)

    3) Export Cash Credit against Trust Receipt

    4) Packing Credit

    5) Back to Back letter of credit

    6) Credit against Red-Clause letter of credit

    Export Cash Credit (Hypothecation)

    Under this arrangement a credit is sanctioned against hypothecation of the raw materials or finished goods intended for export. Such facility is allowed to the first class exporters. As the bank has got no security in this case, except charge documents and lien of export L/C or contract, bank normally insists on the exporter in furnishing collateral security. The letter of credit creates a charge against the merchandise in favor of the bank but neither the ownership nor the possession is passed to it.

    Export Cash Credit (Pledge)

    Such credit facility is allowed against pledge of exportable goods or raw materials. In this case, cash credit facilities are extended against pledge of goods to be stored in the godown under bank’s control by signing letter of pledge and other pledge documents. The exporter surrenders the physical possession of the goods under bank’s effective control as security for payment of bank dues.

    Export Cash Credit against Trust Receipt

    In this case, credit limit is sanctioned against Trust Receipt. The exportable goods remain in the custody of the exporter. He is required to execute a stamped export trust receipt in favor of the bank. This facility is allowed only to the first class party and aollateral security is generally obtained in this case.

    Packing Credit

    In this cash credit, facilities are extended against security of Railway Receipt / Steamer Receipt / Barge Receipt / Truck Receipt evidencing transportation of goods to the port for shipment of the goods in addition to the usual charge documents and lien of export letter of credit. This type of credit is sanctioned for the transitional period from dispatch of the goods till negotiation of the export documents. The drawings under Export cash credit (Hypothecation/Pledge) limit are generally adjusted by drawings in packing credit limit which in turn, liquidated by negotiation of export documents.

    Back to Back Letter of Credit

    Under this arrangement, the bank finances export by opening a letter of credit on behalf of the exporter who has received a letter of credit from the overseas buyer. Since the second letter of credit is opened on the strength of and backed by another letter of credit it is called Back to Back Letter of credit. The need for a back to back letter of credit arise because the beneficiary of the original (export) letter of credit may have to procure the goods from the actual producer who may not supply the goods unless its payment is guaranteed by the bank in the form of letter of credit. The bank’s credit related to back to back letter of credit is realized subsequently from export proceeds.

    Credit against Red-Clause letter of credit

    Under Red clause letter of credit, the opening bank authorizes the advising bank/Negotiating bank to make advance to the beneficiary prior to shipment to enable him to procure and store the exportable goods in anticipation of his effecting the shipment and submitting a bill under the L/C. as the clause containing such authority is printed /typed in red ink the L/C is called Red clause and Green Clause L/C respectively. Though it is not prohibited, it is very rare in Bangladesh.

    Post-shipment credit

    This type of credit facilities extended to the exporters by the banks after shipment of the goods against export documents. Necessity for such credit arises as the exporter can not afford to wait for a long time for without paying manufacturers / suppliers. Banks in our country extend post-shipment credit to the exporters through:

    1) Negotiation of documents under L/C

    2) Purchase of DP and DA bill’s

    3) Advance against Export Bills surrendered for collection

    Negotiation of documents under L/C

    Under this arrangement, after the goods are shipped, the exporter submits the concerned documents to the negotiating bank for negotiation. The documents should be negotiated strictly in accordance with the terms and conditions and within the period mentioned in the letter of credit. If the documents are found complying the terms and conditions of L/C, the bank may purchase/discount the drafts/documents.

    Purchase of DP and DA bill’s

    In such case, the banks purchase/discount the DP (Documents against Payment) and DA (Documents against Acceptance) bills operated under the payment method of documentary collection. While doing so, the banks scrutinize all the export documents separately and minutely. Clear instructions is to be obtained from the drawer of the bill in regard to all important issues related to the negotiation of the bills.

    Advance against Export Bills surrendered for collection

    Banks generally accept export bills for collection of proceeds when they are not drawn under a L/C or when the documents, even though drawn against an L/C contains some discrepancies. Bills drawn under L/C, without any discrepancy in the documents, are generally negotiated by the bank and the exporter gets the money from the bank immediately. However, if the bill is not eligible for negotiation, the exporter may obtain advance from the bank against the security of export bills. In addition to the export bills, banks usually ask for collateral security like a guarantee by a third party and equitable / registered mortgage of property.

    FOREIGN REMITTANCE

    Function of Foreign Remittance Department

    OUTWARD REMITTANCES:

    Outward remittances are those sent aboard in foreign exchange. These also include payment into convertible Taka account or non-resident Taka Account (the so-called vostro Account) of foreign banks maintained with banks in Bangladesh. The bank must exercise utmost care to see that foreign exchange sold to a client is used for the declared purpose.

    Travel Related Services:

    There would be a large number of customers– regular as well as casual– coming to the bank to buy foreign exchange for travel abroad on various purposes.Up to US$ 1000 or equivalent per person may be issued during a calendar year to Bangladesh nationals proceeding by air to destinations in SAARC member countries and Myanmar. Within this annual limit, up to $ 500 or equivalent may be issued per person for overland travels to these countries. For visits to destinations in other countries foreign exchange up to $ 3,000 per person may be issued during a calendar year.

    Medical Treatment Abroad :

    Up to $10,000 or equivalent may be released by the branch on the basis of a recommendation of the Medical Board set up by the Health Directorate, foreign exchange may be released as per the cost estimate given by the foreign medical institution. Applications for release of exchange exceeding $10,000 should be forwarded along with supporting documents to Bangladesh Bank for prior approval.

    Participation in Seminars, Conferences etc:

    Up to $ 250 per diem for countries in the SAARC region and Myanmar and $200 per diem may be released by the branch to private sector officials for attending seminars, conferences and workshops arranged by recognized international bodies.

    Release of Foreign Exchange for Hajj:

    The Government of Bangladesh announces each year the scale at which foreign exchange may be issued to intending pilgrims for performing Hajj. Release of foreign exchange for this purpose should be made as per instructions issued for this purpose by Bangladesh Bank at the beginning of Hajj season

    Remittance of Foreign Exchange for Education Abroad:

    Foreign exchange may be released for studies abroad by Bangladesh nationals in all regular courses (subject to being consistent with the Education Policy of the Bangladesh Govt.) in recognised institutions.

    Transfer of Assets:

    Foreign nationals leaving Bangladesh permanently on expiry of employment contracts may transfer abroad their genuine savings from salaries/benefits clearly stated in the employment contracts approved by the Board of Investment (BOI). They shall also be eligible to transfer abroad retirement benefits such as provident fund, pension, and gratuity as per the employment contracts. The branch may, without prior approval of Bangladesh Bank, effect remittances of those dues including sale proceeds of investment in government securities as per the following instructions.

    Family Remittance Facility:

    Foreign nationals who are resident in Bangladesh and have income in Bangladesh are permitted to make monthly remittances to the country of their domicile out of their current savings up to 50% of their net income to cover their commitments abroad.Bonus or commission receivable by foreign nationals cannot be added for calculating monthly entitlement in anticipation of the grant of bonus or commission This can be included only after the net amount of bonus or commission has been actually paid by the employers. Remittance will be spread over the subsequent twelve months.

    NWARD REMITTANCES:

    Inward remittances are those received from aboard in foreign exchange. Bank should encourage its customers to send more foreign exchange through various accounts. Inward remittance is vary important for Bangladesh, as a large portion of our foreign exchange comes from Wage Earners and other inward related business The branches must exercise utmost care to see that foreign exchange received from a client is credited swiftly so that they cannot be interested to sent money through unauthorized channel.

    Family maintenance:

    Bangladeshi National Working Abroad can send foreign exchange to Bangladesh from the country of their domicile which is exempted from tax. This amount has to be credited by the bank within 03 days from that date of necessary documents by the bank.

    Commission earned from various business:

    Commission arise from business between resident and nonresident can send such amount to Bangladesh, which is may be taxable subject to the government annual gazette declaration.

    Disposal of Foreign Exchange on Return from Abroad :

    On return, unspent amounts brought back (with declaration in FMJ form for amounts more than US$ 5000) may freely be sold to an AD or may be retained in RFCD Account an amount of up to US$ 5000 may be retained in hand.

    Investment by Foreign Nationals in Certificates & Securities:

    All requests for investment by foreign nationals in Bangladesh Government Securities such as Defence Savings Certificate for the purpose of claiming income tax relief against investment allowance should be submitted through the branch to the Bangladesh Bank for prior approval.

    FOREIGN CURRENCY ACCOUNTS:

    Private Foreign Currency Accounts:

    Who Can Open the Accounts?

    Ø Bangladesh nationals residing abroad,

    Ø Foreign nationals residing abroad or Bangladesh,

    Ø Foreign firms operating in Bangladesh or abroad, and

    Ø Foreign missions and their expatriate employees in Bangladesh. Bangladesh Bank may specially allow opening of foreign currency accounts not covered by this

    FC Accounts of Overseas Bangladeshi Nationals:

    *Bangladesh nationals working abroad or proceeding abroad to take up employment may open

    foreign currency accounts.

    *No initial deposit is required to open this account.

    *Account holder may operate the account himself or nominate other persons in Bangladesh for this

    purpose.

    *The account may be opened in pound sterling, US dollar, euro or Japanese yen.

    *The account may be maintained as long as the account holder desires.

    *These accounts should ordinarily be fed by remittances by account holder himself.By funds sent

    by other wage earners,Sale proceeds of currency notes, traveller’s cheques, drafts etc. brought

    into Bangladesh by the account holder while on temporary visit to Bangladesh provided foreign

    exchange in excess of US$ 5000 (or its equivalent) is duly declared to the Customs on Form FMJ

    at the time of their arrival.

    *Funds lying to the credit of FC accounts of Bangladesh nationals can be utilized for import of

    goods and commodities as per Import Policy announced by the Government from time to time.

    FC Accounts of Bangladeshis Working in Foreign organisations:

    Foreign currency accounts may be opened in the names of resident Bangladesh nationals working in foreign/ international organizations operating in Bangladesh provided their salary is paid in foreign currency. Such accounts may be credited only with the foreign currency portion of the salary and debited for all approved current transactions like cost of travel, education for children, medical treatment etc.

    Non-Resident FC Deposit Accounts (NFCD):

    All non-resident Bangladesh nationals and persons of Bangladesh origin including those with dual nationality and ordinarily residing abroad may maintain interest bearing time deposit account named Non-Resident Foreign Currency Deposit (NFCD) Account with the authorised dealers. These accounts may be opened initially with minimum amount of US$ 1000 or pound sterling 500 or equivalent

    Foreign nationals and companies/ firms registered and /or incorporated abroad, banks, other financial institutions including institutional investors and 100% foreign owned (A-Type) industrial units in the Export Processing Zones in Bangladesh are also allowed to maintain NFCD Account. The minimum amount of time deposits in such cases should be US$ 25,000 or its equivalent in pound sterling, euro mark or Japanese yen. Other terms and conditions in respect of these account holders will be similar to those mentioned above for NFCD Accounts of non-resident Bangladesh nationals.

    Resident FC Deposit Account:

    Branches may allow persons ordinarily resident in Bangladesh to open and maintain Resident Foreign Currency Deposit (RFCD) accounts with foreign exchange brought in at the time of their return from travel abroad. Any amount brought into Bangladesh with declaration to the Customs authorities in form FMJ and up to $5000 brought in without any declaration can be credited to such accounts. Proceeds of export of goods or services from Bangladesh or commission arising from business deals in Bangladesh cannot be credited to such accounts.

    Convertible Taka Accounts:

    The branches may open convertible Taka Account in the names of foreign organizations/nationals viz., diplomatic missions, UN organizations, non-profit international bodies,foreign contractors and consultants engaged for specific projects under the Government or semi Government agencies,the expatriate employees of such missions / organizations who are residents in Bangladesh.

    Nonconvertible Taka Account:

    Foreign organizations and their expatriate personnel entitled to open convertible Taka account may maintain non-convertible account with the branch without prior approval of Bangladesh Bank. This account may be debited/credited for the following purpose:

    Private Non-resident Taka Account:

    The Taka accounts maintained with banks in Bangladesh by private individuals, firms and companies resident outside Bangladesh are known as Non-resident Taka accounts. The accounts of foreign nationals residing in Bangladesh and foreign firms and companies located and operating in Bangladesh and accounts of U.N. and its organizations are, however, treated as resident accounts and kept outside the scope of Exchange Control. The accounts of Bangladesh nationals who leave the country except those who hold office in the service of Bangladesh Government are required to be treated as non-resident Taka account so long they remain outside Bangladesh.

    Non-resident Blocked Account:

    A blocked account means an account in which operation is prohibited by an order of Bangladesh Bank. Under the F.E.R. act, 1947 Bangladesh Bank can “Block” an existing Non-resident account or direct any payment due to a Non-Resident to be made only to a N/R blocked Account.Opening and operation of in a N/R blocked Account requires prior approval of Bangladesh Bank.

    INTERNATIONAL DIVISION

    Responsibilities of International Division

    AD Licence and Correspondent Relation:

    International Division at the Head office shall be responsible for providing guidance and necessary logistics to the branches and liase with Bangladesh Bank and other agencies. The Division should identify the branches in various locations based on volume of international business that can profitably operate foreign exchange business and then apply to Bangladesh Bank for Licenses to deal in foreign exchange on prescribed form. Bangladesh Bank normally insists on the prospect for adequate business to justify the authorization. The bank also has to have trained manpower as a prerequisite for issue of AD licence.

    International Division should arrange for establishment of correspondent’s relationship with banks in as many countries as is warranted by customers’ needs. Agency arrangement involves an agreement between bank and a foreign bank/branch for conducting international banking and financial transactions emanating from exports, imports and other foreign exchange business. Generally the following points are covered by agency arrangements:

    v Control Documents: Exchange of authorised signature booklets, Test Key materials etc. between two banks.

    v Area of Operations: The names of the branch/offices of the two banks, which will be authorised to operate under the arrangement.

    v Subject of Operation: The instruments which will be used to execute the transactions viz. D.D./T.T./M.T./L.G./L.C. etc.

    v Currency of Operation: U.S dollar, Pound sterling, Euro, Yen etc. in which transactions are to be conducted.

    v Reimbursement: Mode of reimbursement of drawings on each other through Nostro and Vostro Account and providing of cover against such drawings are set out in the arrangement.

    Monitoring and reporting:

    International Division will work as watchdog over the branches to ensure that they observe the rules and regulations meticulously. For this propose it will maintain a calendar of returns to ensure (a) receipt of reports and returns from the branches and (b) transmission of reports and returns to Bangladesh Bank and other agencies on due dates.

    The branches should also be encouraged to apply innovative ideas to attract new business.

    Forms and Specimens :

    International Division will arrange for printing and supply of various forms to the branches. These should be periodically reviewed to reflect the emerging development in the field of technology, communication and financial products.

    Reference Books:

    International Division will collect and supply the branches with various updated reference materials including ‘Guidelines for Foreign Exchange Transactions’ and Foreign Exchange circulars issued by Bangladesh Bank from time to time, Import Policy, Export Policy, Industrial Policy and laws and regulations concerning joint stock companies, banking, insurance, contracts etc.

    Training and Orientations:

    International Division will arrange suitable orientation and training programmes for the staff in collaboration with BIBM and other organisations at home and abroad as well as in its own training institute. The Division will also hold discussion programmes with the branch staff to interact on business strategies.

    Nostro and Vostro Account:

    Foreign Currency Account maintained with correspondents’ abroad is termed by us as “Nostro Account” meaning “Our Account with you”. The foreign correspondents, however, describe our Account maintained by them as “Vostro Account” meaning ‘Your account with us’.

    Similarly our foreign correspondents may at times want to maintain Non-resident Taka Accounts with us. These are, from their point of view, their Nostro Accounts but from our point of view “Vostro Account”—‘Your account with us’. These types of accounts would, however, be very far and few.

    Foreign Currency Account if any, maintained by us with our correspondents abroad in the name of third party is termed by us as “Loro Account” meaning ‘their Account with you’. These types of accounts will also be rare.

    Limit of Foreign Currency Balances:

    Bangladesh Bank fixes an overall limit of foreign currency balance that each bank can maintain with correspondent’s abroad as working balance. The limit is set in terms of US dollar but banks are free to maintain balances in other convertible foreign currencies in different financial centres, provided the US dollar equivalent is kept within overall limit set by Bangladesh Bank.

    Proforma (Shadow or Mirror) Account in General Ledger

    Our correspondents abroad debit our accounts for payments made by them for our sale transactions and credit with funds paid into these accounts by our correspondents abroad or overseas customers against our purchase transactions. These have the effects of either reducing or increasing the balances in foreign accounts. The Head Office maintains contra proforma account in the General Ledger in the name of each foreign correspondent. For instance, if a “Nostro Account” is maintained in US dollar with Chemical Bank in New York, a contra proforma account under the style Chemical Bank (Our Account) is opened in the General Ledger and other books of accounts. These are proforma accounts. Debit entries in the Nostro Account are reflected in the Proforma Account as credit items, while credit entries in Nostro Account are reflected as debit items in the proforma Account. Such proforma Accounts have separate columns for debits, credits and balance expressed in both foreign currency as well as their Taka equivalent, and the rates of exchange at which the relevant foreign exchange transactions are put through.

    Non-Resident ( N. R. ) Taka Account of Foreign Correspondents:

    ID will have to approve opening of Non- Resident Taka accounts in the name of the bank’s foreign correspondents, subject to report to Bangladesh Bank giving names and address of the foreign banks. Such accounts can, however, be opened only against receipt of inward remittances in freely convertible currencies. Transfer of Taka to the credit of such N. R Taka account constitutes an outward remittance and is equivalent to a sale of foreign currency. Such transfers can be made only against approved outward remittance. Transfer between two N.R. Taka accounts are however, permitted freely.

    All debits/credits and balances in N. R. Taka account of foreign correspondents should be reported to Bangladesh Bank on the appropriate returns.

    Borrowings from Abroad:

    Banks are allowed to obtain short term loans or overdrafts in foreign currency from their correspondents abroad only in the normal course of their foreign exchange business for a period not exceeding 7 days at a stretch but not for any speculative purpose. However, if such loans and O/Ds are to be secured by collaterals, prior approval of the Bangladesh Bank is to be obtained. Interest on such short-term loans and O/Ds can be remitted without prior approval of Bangladesh Bank but subject to submission of report to them in due course.

    j)Long-term loans in Foreign Currency :

    Prior approval of Board of Investment is required for obtaining any long-term loans in foreign currency.

    Open Position:

    Bangladesh Bank sets prudential limits on bank’s open (overbought/oversold) exchange position. The ID should ensure that the prescribed open position limit is not exceeded. If the bank exceeds the prescribed limit and fails to furnish satisfactory explanation for the same, it may be asked to sell the excess amount ready and cover its position by buying forward for deliveries corresponding to the maturities of its own forward obligations. In general, the Bank should aim at maintaining their ready and forward positions month by month reasonably in line, avoiding heavy ready purchases against forward commitments.

    Overbought/oversold position:

    The ID will work out the open exchange position daily and report to Bangladesh Bank the positions (overbought/oversold) as at the close of business on Thursday of each week (see chapter 2, Vol.2 of the Guidelines for Foreign Exchange Transactions). If, for reasons beyond control, the overbought/oversold position during the period under report is in excess of the prescribed limit, a letter explaining the circumstances must accompany the weekly return.

    Square a position:

    When the bank runs short in any currency it may purchase the same from the inter-bank market, overseas correspondent or Bangladesh Bank. Similarly, it can square up the long position by selling the currency in the inter-bank market, or to overseas correspondents or Bangladesh Bank.

    If the bank runs a short/long position in other currencies such as Swiss franc, euro etc., th

    " 135,"

    Foreign Exchange Operations of Southeast Bank Limited

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    “Foreign Exchange Operations of SouthEast Bank Limited”

    Chapter 01

    1. Executive Summary

    SouthEast Bank Limited, a second generation private bank, emerged in 1995 amid liberalization of global economies. Currently, its authorized capital is Tk.10, 000.00 million and its capital and reserve reached 17,095.90 million as of December 31, 2010. Its vision is to stand out as a premier banking institution in Bangladesh and contribute significantly to the national economy.

    The Bank, in the meantime, successfully completed 16th year of banking operations recording significant growth in all the performance indicators. In 2010, the bank earned an after tax profit of Tk. 2,763.13 million. The deposit of the bank grew by 11 percent to Tk 107,0729.59 million and advanced by 19 percent to Tk. 92,452.62 million compared to those of 2009.During the last five years (2006-2010), the bank achieved an average annual growth of 23 percent in deposit, 23 percent in advances,37 percent in export, 30 percent in import and 76 percent in remittance. During the last six years, the export volume increased by three times to Tk 58,158.06 million and foreign remittance increased by eight times to Tk. 28,082.25 million.

    Operational excellence coupled with qualitative improvements continued to be of paramount importance to the bank. At present, the bank has 76 branches and 2 Off-Shore units across the country. Plans have been drawn to raise another 10 branches and at least 10 more SME / Krishi branches in 2011.Our journey towards greater operational success continues with increased energy and enthusiasm.

    As we face the stiff challenges ahead on the way to further improving the profitability of the bank, we rely on our skilled and experienced workforce. Our strengths are our close and cordial partnership with customers, our firmly anchored presence in the country’s strategic places of commercial and business importance and global reach through our correspondent banks for expansion of foreign trade, foreign exchange and remittance business. Our product-basket encompasses Real time online branch banking, Islamic banking, Merchant banking, Dual currency visa credit card, Visa travel card, ATMs, Education loan scheme, Double benefit scheme, Consumer loan, Millionaire deposit scheme, SME banking, Corporate banking, Syndicate loan, Monthly savings scheme, Monthly income scheme, Pension saving scheme, Wage earner pension scheme, SMS banking etc. in addition to our traditional credit and foreign trade related products and services.

    High quality customer service through the integration of the latest and state of the art banking technology and products is our tool to achieve success. Customers are our first priority. We are trying hard to provide a system of one-stop shopping for customers by providing a spectrum of services. Our employees have mastered new technology, enhanced their product knowledge and honed their skill to help customers meet their financial goals. We want to be the best at helping customers become financially better off by providing free advices, innovative leading-edge financial solutions, choices and convenience. Whether our customers are individuals, small businessmen, or commercial clients, we aim to deliver the best customer service by meeting their unique and different needs in a professional, ethical, friendly and knowledgeable manner.

    We are pledge-bound to turn Southeast Bank Limited into a modern banking institution, dynamic in actions, progressive in programs, honest in dealing, just in judgment, futuristic in attitude, fair in approaches and devoted to high quality service to customers. Our charted plans are aimed at boosting modern management, advance technology, good profitability, sound financial strength and fair image of the bank. We are firmly committed to transparent, responsible and accountable corporate governance with the participation of our strong and most capable team of professionals and under the prized policy directives and guidance of the board of directors of the bank.

    Southeast Bank Limited carries out business activities with due respect to its values and norms and with an understanding of the importance a large financial institution has for the society and the environment. It is moving fast to green banking. The bank wants to ensure its shareholders a competitive return in line with the best among peer institutions.

    1.2 Rationality of the study:

    Internship program is the practical aspect of our theoretical learning. It makes a bridge between the gap of classroom learning and practical learning. In this view, Internship plays a pivotal role for each professional degree like BBA. The study will help formulate suitable policies taking into consideration different ideas, suggestions and feelings of the customers and bankers. Further more, it may note that Southeast Bank executives who are really executing the policies undertaken by the top management will have a chance to communicate their interaction and provide necessary feedback.

    1.3 Objectives of the Study:

    1.3.1 Primary objective:

    The primary objective of this report is to be familiar with the working environment of present institutions and also fulfill the requirements of BBA theoretical knowledge gained from the coursework of the BBA program in a specific field.

    1.3.2 Secondary Objective:

    1.4 Scope of the study:

    The Report mainly focuses on the following areas:

    1.5 Limitationsof the Study:

    1.6 Methodology of the study:

    To make the Report more meaningful and presentable, two sources of data and information have been used widely. Both primary and secondary data sources were used to generate the report.

    1.6.1 Primary Data sources:

    1.6.2 Secondary Data sources:

     1.7 Historical Background:

    Southeast Bank Limited is a scheduled Bank under private sector established under the ambit of bank Company Act, 1991 and Incorporated as a Public Limited Company under Companies Act, 1994 on March 12, 1995. The Bank started commercial banking operations effective from May 25, 1995 during this short span of time the Bank had been successful to position itself as a progressive and dynamic financial institution in the country. The Bank had been widely acclaimed by the business community, from small entrepreneur or large traders and industrial conglomerates, including the top rated corporate borrowers for forward-looking business outlook and innovative financing solutions Thus within  very short period of time it has been able to create an image for itself and has earned significant reputation in the country’s banking sector as a Bank with vision. Presently it has sixty three branches in operation.

    The emergence of Southeast Bank Limited at the function of liberation of global economic activities, after “Uruguay Round” has been an important event in the financial sector of Bangladesh. The experience of the prosperous economies of “Asian Vision” has been preciously the essence of the legend of bank’s success. Southeast Bank Limited has been awarded license by the Government of Bangladesh as a Scheduled Bank in the private sector in pursuance of the policy of liberalization of banking and financial services and facilities in Bangladesh.

    Commercial Banks are one of the key contributors to the economy of Bangladesh. They allocate the capital resources to the proper development agencies. People and the government itself are very much dependent on the services provided by these banks in the financial market for the process of economic development to function properly. Commercial banks act as financial intermediaries by performing the function of mobilization the funds from one group and lending the same to another while making a reasonable amount of profit after meeting the cost of funding. Lending is said to be the clients. There are various types of loans and advances through which the bank exercises the function of Lending.

    It is well recognized that there is an urgent need for better-qualified management and better-trained staff in the dynamic global financial market Bangladesh is no excepting of this trend. Banking sector in Bangladesh is facing challenges from different angles though its prospect is bright in the future. Money and Banking is the center around which all-economic science clusters. So this report is carried out to find the problems faced  by Southeast Bank Limited and recommend some measures to overcome these problems for economic development of Bangladesh. 

    To conduct the study disguised queries, trend and growth rate analysis, ratio analysis, graphical presentation such as pie chart, bar, graphs have been used. Raw data collected from various sources required to be processed, edited and carefully developed for the purpose of the study.

    For this study mainly secondary sources of data had been relied on, because secondary data can be an immediate and cost effective means to gaining valuable insight into research issues, provided that the information comes from reliable and timely sources. Its sample was small and no representative. The research has been started with secondary data and preceded to primary data only when the secondary data sources have been exhausted or yield marginal returns. An analytical approach has been followed to conclude the decisions.

    1.8 Southeast Bank’s Future Outlook in 2010:

    1.9 SEBL’s Vision:

    The vision is to be a premier banking institution in Bangladesh and contribute significantly to the national economy.

    1.10 SEBL’s mission:

    1.11 SEBL’s Core Values:

    1.12 SEBL’s Core Strengths:

    1.13 SEBL’s Client Commitments:

    Our customer is focused modem banking institution in Bangladesh. Our business motives center on the emerging needs of the market. Our commitments to the clients are the following:

    1.14 SEBL’s corporate culture:

    Southeast Bank Limited is one of the most disciplined banks with a distinctive corporate culture. The people of the Bank can see and understand events, activities, objects and situation in a distinctive way. They mould their manners and etiquette, characters individually to suit the purpose of the Bank and the needs of the customers who are of paramount importance to them. The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture they belong has not been imposed; it has rather been achieved through their corporate culture.

    1.15 Business Objectives of Southeast Bank Limited:

    1.16 Corporate Slogan:

    A bank with a vision.

    1.17 Performance Analysis and Findings:

    The capital and reserve of the bank as on 31st December,2010 are append below:

    1.17.1 Capital and Reserves:

    (a) Core Capital ( Taka in million ):

    (ii) Paid up capital 6930.84

    (iii) Statutory reserve 3265.60

    (iv) General reserve 337.65

    (v) Retained earnings 2078.87

    Total capital 12612.96

    (Supplementary capital was 17095.90)

    Financial Stability (Taka in million)
    Authorized Capital December, 2010 10,000.00
    Paid – up Capital December, 2010 6930.84
    Total Capital (Tier I + Tier II) December, 2010 17,095.90
    Deposit December, 2010 107,729.58
    Advances December, 2010 92,452.62
    Investments December, 2010 18,327.65
    Operating Profit December, 2010 6,754.94

     Initial public offering of shares of Tk. 150.00 million was completed in 19992

    1.17.2 Resources and Capabilities

    Southeast Bank Limited is well prepared and capable of meeting the demand for a broad range of banking services. It has got adequate resources, both human and physical, to provide the customers with the best possible services.

    1.17.3 Physical and Technological Resources:

    A great deal of investment for developing the physical resource base of the Bank has been made. The Bank has its presence in all the major industrial and commercial hubs of Bangladesh in order to cater to the needs of industry and trade. At present, there are sixty-three conveniently located branches throughout Bangladesh. Most of the branches are in the capital city of Dhaka, each and every division there is one more branch and almost every district  have at least one branch.

    Major features of these branches are:

    Like any other financial intermediaries, Southeast Bank Limited is no exception in performing its core functions via mobilization of fund and utilizing such mobilized fund for profitable purposes.

    1.17.4. Mobilization of fund:

    The main sources of fund for the Bank are:

    (i) Deposit and

    (ii) Borrowing

    1.17.4.1 Deposit:

    Deposit is the mainstay of the Bank’s sources of funds. Following usual practices, it collects deposit through:

    a. Current Deposit

    b. Savings Deposit

    c. Term Deposit

    1.17.4.2 Borrowing:

    Apart from deposit, Southeast Bank Limited receives funds from:

    All of these funding sources are for relatively longer period. Receiving the credit lines from ADB has been a recognization of the Bank’s highly satisfactory performance.

    Five years performance at a glance: (2005-2010) (million in taka)

    Particulars 2009 2008 2007 2006 2010
    Authorized Capital 10,000.00 3,500.00 3,500.00 3,500.00 10,000.00
    Paid up Capital 3,422.64 2,852.20 2,281.76 2,112.74 6930.84
    Reserve Fund / Others 6,504.62 4,804.81 4,186.60 2,828.18 10,165.06
    Deposit 96,669.05 68,714.67 55,474.05 46,056.18 107,729.58
    Advance 77,497.57 60,281.26 48,164.60 41,147.28 32,551.09
    Investment 21,350.23 12,299.61 8,462.86 6,265.55 18,327.65
    Import Business 69,582.92 58,019.77 38,470.34 35,125.12 103,726.70
    Export Business 46,724.47 42,178.60 28,771.36 25,874.61 58,158.06
    Guarantee Business 11,916.74 15,078.99 9,008.32 8,656.80 22,781.19
    Remittance Business 23,800.00 15,221.87 11,040.17 13,479.83 28,082.25
    Total Income 13,702.25 10,250.13 8,670.47 6,766.11 16,071.33
    Total Expenditure 9,087.79 7,237.55 5,754.27 4,703.45 9,316.39
    Operating Profit 4,614.66 3,012.58 2,916.20 2,062.66 6,754.94
    Net Profit after Tax and Provision 1,870.19 887.24 1,222.97 909.88 2,763.13
    Fixed Assets 4,338.35 2,685.56 1,708.11 1,300.39 4463.08
    Total Assets 112,676.98 81,181.53 64,370.69 53,706.12 131,943.48
    Year 2002 2003 2004 2005 2006
    Income 1936.52 2772.52 3043.49 4689.55 6766.11

    Source: Annual Report 2006

    Total Expenditure:

    Figure 2: Total Expenditure

    Amount Million in Taka

    Year 2002 2003 2004 2005 2006
    Expenditure 1.443.98 2,107.36 2,234.83 3,216.11 4.70345

    Source: Annual Report 2006

    Reserve and Funds:

    Figure 3: Reserve fund /other

    Amount Million in Taka

    Year 2002 2003 2004 2005 2006
    Reserve 571 .68 522.98 769.13 1880.47 2828.18

    Source: Annual Report 2006

    Deposit:

    Figure 4: Deposit

    Amount Million in Taka

    Year 2002 2003 2004 2005 2006
    Deposit 1534345 19618.82 27930.84 38258.15 46056.18

    Source: Annual Repot 2006

     Total Capital:

    Figure 5: Total Capital

    Amount Million in Taka

    Year 2002 2003 2004 2005 2006
    Capital 970.96 1300.14 1649.44 2236.B4 4940.92

    Source: Annual Report

    Opening Profit:

    Figure 6: Opening Profit

    Amount Million in Taka

    Year 2002 2003 2004 2005 2006
    Capital 492.56 665.16 808.66 1473.44 2062.66

    1.17.5 SWOT Analysis For SEBL:

    SWOT is a short form that is used to describe the particular strengths, weaknesses, opportunities and threats that are strategic factors for a specific company. For the Southeast Bank Limited I found it as follows:

    Strengths:
    • Efficient management.
    • Leading retail loan providers.
    • Better employee relations.
    • Better location of the branch.
    • Better financial standing.
    • Interesting consumer schemes.
    • Quick delivery of foreign exchange.
    • Online Banking
    • ATM facility
    • Simultaneously Islamic Banking
    		 Opportunities:
    • Market leadership.
    • Growth of the banking sector.
    • Different consumer service schemes of the SEBL.
    • Make the goodwill.
    • Perform services more quickly.
    • Go beyond the national boundaries.
    • SMS banking.
    Weaknesses:
    • Inadequate work force.
    • Conservative loan facility.
    • Profit rate is less than others.
    • Lack of sufficient own ATM booths.
    		 Threats:
    • Political instability.
    • Intense competition.
    • Government rules and regulations.
    • Economical variation.
    • Policy of competitive banks.

    Chapter 02

    2. Terms used in Foreign Exchange Operations

    2.1 Activities of Foreign Exchange:

    There are three kinds of foreign exchange transactions:

    Under the import policy of Bangladesh the Importer has to get the valid Import Registration Certificate (IRC) from the Chief Controller of Import & Export (CCI&E).

    2.2 Letter of credit (L/C):

    Letter of credit means any arrangement whereby a Bank (the issuing Bank) is committed (on behalf of the buyer/applicant) to pay certain amount at the seller’s disposal under some agreed conditions.

    2.3 Types of documentary credit

    Documentary credit may be of three types

    (i) Recoverable credit:

    This type of credit can be cancelled or amended at any time by the issuing Bank without prior notice to the seller. It is not in use.

    (ii) Irrecoverable credit:

    This type of credit can’t be cancelled or amended by the issuing Bank without agreement of parties concerned therefor. All the credits issued in our country are of recoverable nature.

    (iii) Add confirmed credit:

    When a third Bank provides guarantee to the beneficiary to make payment, if issuing Bank fail to make payment, the L/C is called confirmed L/C. In case of a conformed L/C a third Bank adds their confirmation to the beneficiary, to make payment, in addition to that of issuing Bank. Confirmed L/C gives the beneficiary a double assurance of payment.

    2.4 Special documentary letters of credit:

    The following five major steps are involved in the operation of a documentary letter of credit:

    2.5 Import Financing:

    The post import finance extends the import credit in the following forms:

    Under the export policy of Bangladesh, the exporter has to get the valid Export Registration Certificate (ERC) from the Chief Controller of Import & Export (CCI&E). The ERC is required to renew every year. The ERC number is to be incorporated on export form & other paper connected with exports.

    2.6 Receiving the letter of credit:

    After getting contract for sale, exporter should ask the buyer for L/C clearly starting terms & conditions of export & payment.

    2.7 Procuring the materials:

    After knowing that the L/C has opened in his favor, the next step for the exporter is to set about the task of procuring or manufacturing the contracted merchandise. If the exporter has to procure the raw materials from another supplier (local or abroad) he has to open Back-to-Back L/C.

    2.8 Back-to-Back L/C:

    Back-to-Back L/C is one type of L/C, which is opened against lien on a valid export L/C. It is opened for inland & abroad as well. Bank will supply the following papers/documents for opening a Back-to-Back L/C.

    The above papers must be completed, filled & signed by the party therefore. The party will submit the entire filled document along with application in printed form to the designated Bank which is also an agreement between applicant & the Bank.

    2.9 Export Financing:

    An exporter is who exports the goods to another customer whether in domestic country or in abroad. In exporting the stipulated goods he may require financing. So export financing may be required at two stages.

    (i) Pre-shipment Credit:

    Pre-shipment credit is the credit, which is given to finance the export activities of an exporter for the actual shipment of goods. The purpose of each credit is to meet the working capital needs from the procuring of raw materials to the transportation of goods for the export. Before sanctioning that credit, the Bank takes into consideration the credit worthiness, export performance of the exporter’s together worthiness and all other information required for sanctioning the credit in accordance with the existing rules & regulations.

    (ii) Post-shipment Credit:

    There is a time gap between export of the goods and realization of the proceeds. So exporter may require finance in that period to continue his business. So Bank may finance against export documents ensuring the following:

    2.10 Foreign Remittance:

    Foreign remittance means remittance of foreign currencies from one place/person to another place/person. In broad sense, foreign remittance includes all sale and purchase of foreign currencies on account of import, export, travel and other purposes. However, especially foreign remittance means sale & purchase of foreign currencies for the purposes other than export and import. Southeast Bank Limited performs the remittance function with different countries. It maintains the foreign remittance in the following form:

    (a) Foreign Demand Draft (FDD):

    A foreign demand draft is a negotiable instrument issued by a bank drawn on other bank of another country with the instruction to pay a certain amount to the beneficiary on demand. Remittance through demand draft may be inward or outward.

    (i) Inward Remittance:

    Inward remittance refers to the extent where the bank makes payment to the client against foreign demand draft. Bank will make payment to the client by verifying the test number and signature of the authorized officer.

    (ii) Outward Remittance:

    It refers to the extent where the bank issues foreign demand draft. The bank charges TK.300 per demand draft.

    Two forms are used for Outward Remittance of foreign currency such as:

    IMP Form:

    All outward remittance on account of Imports is done by IMP form.

    TM Form:

    For all other outward remittance  TM form is used.

    2.10 Western Union Money Transfer Services:

    Western Union, a global leader in money transfer service, helps to send money to loved ones quickly and reliably with convenience and control through more than 245,000 Western Union Agent locations in over 200 countries and territories. Western Union money transfer service is ideal for transferring money virtually at any time, anywhere, providing a high level of security, flexibility and reach with the fastest, easiest money transfer solutions. With the signing of the Representation Agreement between Western Union Financial Services, Inc., U.S.A. and Southeast Bank Ltd., Bangladeshi Wage Earners living abroad can now send their hard earned money through Western Union and their families and friends can receive the money in minutes by visiting any of the 53 branches and 10 SME locations of Southeast Bank Ltd. all over Bangladesh. The Beneficiary does not have to pay any fee to receive the money transfer.

    With Western Union and Southeast Bank Ltd., money transfer has never been so easy. It is a 3 step process:

    Money transfers can be received from 10:00 A.M. to 4:00 PM on Sunday through Thursday and from 10:00 A.M. to 12:00 PM on Saturday in 17 Authorized Dealer branches.

    From the above discussion we can detail the term foreign exchange operations.

    2.11 Foreign Trade Finance:

    So far the bank has established correspondence relationships with as many as 22 foreign banks in order to facilitate foreign trade. The Bank handled total export business of Taka 46,724.47 million and import business of Taka 69582.92 million in 2009.

    The Bank’s export and import business grew by 8.61 percent and 19.45 percent respectively. Major items of exports were ready made knit & woven garments, sweater, jute products, leather and leather goods, handicrafts etc. Items of import included mainly industrial raw materials, garments accessories, capital machinery, raw cotton, electronic consumer goods, chemicals, tires and tubes, reconditioned vehicles, bicycle spare parts, food items such as rice, wheat, garlic, onion, sugar, chilly and other essential commodities.

    In case of export business finance is perceived as one of the important elements. It is linked to nearly all the stages of conversion cycle- procurement of raw materials, processing of goods, packing storage, transportation to the port, shipment to the buyer, assembling of shipping documents and finally collection of payments. The term Export Finance should therefore mean moneys needed by an exporting farm at each stage of the conversion cycles.

    2.12 Export Financing Sectors of Southeast Bank Limited:

    Export financing can play a vital role in the development process of Bangladesh. With earning on export we can meet our import bills. The export trade is always encouraged because the major portion of foreign exchange earning is derived from export. Because of shortage of adequate capital exporters have to come in contact with commercial banks and financial institutions to get finance from them. Southeast Bank Limited as a state-owned scheduled bank provides certain facilities to the exporters to boost up export earnings.

    The traditional & non-traditional sectors in which Southeast Bank Limited provides export-financing facilities are as follows:

    2.13 Export Financing System of Southeast Bank Limited:

    Bangladesh as a developing country depends mainly on foreign exchange earnings for its development activities. The major portion of foreign exchange earnings is derived from export obviously, to boost export, government provides certain incentives to the exporters namely:

    2.13.1 Pre-Shipment & Pos-Shipment:

    In Southeast Bank Limited export finance is required by the exports at two stages namely

    Pre-shipment & Post-shipment stages:

    (i) Pre-shipment: It is required to purchase of raw materials, to meet cost of production, procurement of exportable goods, packing, transport, payment of insurance premium, inspection fee, freight charges, ware housing etc.

    (ii) Post-shipment: It is required by the exporters after actual shipment of goods in order to bridge the period between shipment of the goods and receipts of sales proceeds from abroad.

    An exporter own resource may not be adequate to meet all such expenses. So he / she have to come in contact with commercial banks and financial institutions to get finance from them. As a state owned scheduled bank Southeast Bank Limited provides credits to exporters at a consideration rate of interest as an export promotion measure as per government directives.

    2.14 Export Form:

    The customer, now issued by the authorized dealers, must declare all export of which the requirement of declaration of exchange control manual of Bangladesh Bank applies on the Export Forms.

    Disposal of Export Forms:

    (i) Original:

    From custom authority to Bangladesh Bank (ECD) after shipment goods.

    (ii) Duplicate:

    From negotiating bank to Bangladesh Bank after negotiation.

    (iii) Triplicate:

    From negotiating bank to Bangladesh Bank after realization of the proceeds of the export bill.

    (iv) Quadruplicate:

    Retained by the negotiating bank as office copy.

    2.15 Export Development Fund:

    The main objective of creating an export development fund at the Bangladesh Bank is to assure a continued availability of foreign exchange to meet the import requirement of non-traditional manufactured items. This facility is available to the non-traditional exporters particularly newer exporters, exporters diversify into higher value export and exporters diversify into new markets. An exporter identified above is eligible on the basis of the conditions stated below: –

    2.16 Scrutiny of Export Document:

    After the shipment of goods the exporters submit export documents to authorized dealer for negotiation of the same. As bankers deal with documents only not with commodity, they are required to be very much careful about the genuineness and correctness of the documents evidencing shipment of the respective commodities. The bankers are to ascertain that the documents are strictly as per the terms of Letter of Credit. Before negotiation of the export bill, the bankers are to scrutinize and examine each & every document with great care. Negligence in the part of the bankers may result in non-repatriation or delay in realization of proceeds as incorrect documents may put the importers abroad into unnecessary troubles. The scrutiny procedures are as follows:

    (i)  Scrutiny of Draft or Draft of Exchange:

    (ii) Scrutiny of invoice:

    The physical description of the goods such as price, quantity, quality, markings etc. in the invoice must correspond with the specifications in the credit.

    (iii) Scrutiny of Shipping Bill:

    (iv) Scrutiny of Insurance:

    Where insurance is to be effected by the beneficiary for GIF consignment, the policy accompanying the documents should be examined to ensure:

    (v) Scrutiny of other documents:

    2.17 Risk of Export Financing:

    In the trade – there are so many risk factors involved. In banking sector  the bank faces risks basically from loans & advances and foreign exchange. In this section I discuss the risk of Export Financing while there are many advantages to exporting it is not without risk. Indeed there are often factors present in international market, which make foreign exchange substantially more risky than domestic ones, including the credit risk of non-payment or non-acceptance of the merchandise by the buyer. For international sales, these risks are far more pronounced than they are domestically. For these reasons Southeast Bank Limited also accompanies with elements of uncertainty some which are as follows:

    (i) Commercial risk:

    (ii) Political risk:

    (iii) Informational risk:

    (iv) Pre-shipment export credit risk:

    All over the world there is no country, which can meet its requirements from its own sources. Some imports raw materials, some finished goods & some food products or other commodities. As it is export & import are invariably conducted through commercial banks. Southeast Bank Limited is engaged to extend the facilities to the importers.

    After getting completed the registration, application for opening L/C is made through a bank where applicant has a current account. An importer is required to fill up import application form & Letter of Credit authorization form (LCAF) & importer has to deposit margin money to the bank from 5% to 40% of the import value, depending on the credibility of the importer. After the Letter of Credit is established, the exporter after executing the export, submits the negotiable documents through its bankers and in terms of exporter’s bank submits the documents to the corresponding bank  in the country. If the documents are found correctly fulfilling all the terms & conditions stipulated in the letter of credit, the corresponding bank of import’s bank will realize that payment will be debited to the importer’s account. In banking terms this is known as PAD and the importer has to pay the PAD amount in 30 days with the bank interest rate. After 30 days when importer is unable to pay the PAD amount, he can take documents but the PAD turns into Loan against Trust Receipts (LTR)

    2.18 Import Financing Sectors of Southeast Bank Limited:

    Southeast Bank Limited is one of the financers of import businesses in our country. In extend of credit grant and other facilities, Southeast Bank Limited gives finances to the following sectors:

    2.19 Import Financing System of Southeast Bank Limited:

    2.20 Import Registration Certificate (IRC):

    In case of import, IRC is the first necessity for the importer. The IRC is not required for import goods by government departments, local authorities, statutory bodies, recognized educational institutes, hospitals. In addition, registration is not required for import goods, which do not involved remittance of foreign exchange like -medicine, reading materials etc. can be imported without IRC by the users within monetary limit.

    2.21 Import Procedure:

    Imports & Exports (control) Act 1950 regulates the import & export trade of the country. There are a number of formalities, which an importer has to fulfill before import goods. The importer follows the following steps:

    2.22 Import Scrutiny:

    The import bills consist of the following documents & the order of their scrutiny should be as below:

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    Foreign Trade Operation of AB Bank Ltd

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    Foreign Trade Operation of AB Bank Ltd

    Chapter-1

    ORGANIZATION OVERVIEW

    OVER VIEW OF THE BANK AND BRANCH

    1.1 Introduction of ABBL

    AB Bank is the First private bank in Bangladesh. Government permitted private banks to enter in to banking because of sustained poor performance by the banks of nationalized sector. AB Bank limited (ABBL) is sailed as the leading private commercial bank in the baking suture from its journey on April 12, 1982 with opening of its first branch at Karwan Bazar in Dhaka. It was the brainchild of group dynamic entrepreneurs of Bangladesh.

    1.2 CORPORATE INFORMATION AT A GLANCE:

    (INFORMATION AS PER LAST ANNUAL REPORT 2009)

    Name of the bank : AB Bank Of Bangladesh Limited

    Status : Public Limited Company

    Nature of Business : Private Commercial Bank

    Date of Incorporation : 31st December, 1981

    Commencement of Business : 27th February 1982

    Inauguration of the Jubilee Road Branch: 26th July, 1994,

    Head Office, BCIC Bhaban, 30-31,

    Dilkusha Commercial Area, Dhaka.

    Registration No : C281461 (1992)/95

    Chairman : Mr. M. Wahidul Haque

    Managing Director : Kaiser A. Chowdhury

    Authorized Capital : TK. 800 Million

    Paid up Capital : TK. 519.76 Million

    Directors : 8

    Number of branches : 81

    Deposit : TK. 27,361.44 Million

    Loan : TK. 21,384.63 Million

    Number of Employees : 1525

    Telephone : (+8802)9560312

    Telefax : (+8802)956-4122-23

    SWIFT Code : ABBLBDDH

    E-mail : info@abbank.com.bd

    Web Site : www.abbank.com.bd

    1.3 Vision & Mission:

    Vision Statement

    “To be the trendsetter for innovative banking with excellence & perfection”

    Mission Statement

    “To be the best performing bank in the country”

    Goal of the Bank

    To exceed customer expectations through innovative financial products & services and establish a strong presence to recognize shareholders expectations and optimize there rewards through dedicated workforce.

    Long term Goal: Keeping ahead of other competitors in productivity and profitability.

    Short Term Goal: To attain budgetary targets fixed in each areas of business.

    1.4 Change of Name:

    AB Bank believes in modernization. The bank took a conscious decision to rejuvenate its past identity – an identity that the bank carried as Arab Bangladesh Bank Limited for twenty five long years. As a result of this decision, the bank chose to rename itself as AB Bank Limited and the Bangladesh Bank put its affirmative stamp on November 14, 2007 vide Bangladesh Bank BPRD circular letter no.-10 dated 22 November 2007. Prior to that shareholders of the bank approved the change of name in the Extra-Ordinary General Meeting held on 4 September 2007.

    1.5 Birth of Logo:

    The coat of arms of the new logo is inspired by traditional “shital Pati” or sleeping mat”. The knit and the pattern of interlace in the new logo that echoes the intricate weave of Shital Pati symbolizes bonding. This bonding reflects the new spirit of AB Bank.

    1.6 Management & Organizational Structure of ABBL

    AB Bank Limited, the first private sector bank under Joint Venture with Dubai Bank Limited, UAE incorporated in Bangladesh incorporated on 31st December 1981, under the Companies Act (Act VII) of 1913 as a limited company having its Head Office in Dhaka. The Bank started functioning from 12th April 1982 with the approval of Bangladesh Bank under the guidelines, rules and regulations given for scheduled commercial banks operating in Bangladesh. It was initially a Joint Venture Commercial Bank between Bangladeshi sponsors and Dubai Bank Limited, Dubai (U.A.E).

    1.7 Composition of the Board of Directors

    Board of directors consists of Chairman, Vice Chairman, Directors and President & Managing Director and Company Secretary.

    Chairman M. Wahidul Haque
    Vice- Chairman Salim Ahmed
    Director Feroz Ahmed
    Director M. A. Awal
    Director Shishir Ranjan Bose FCA
    Director Faheemul Huq
    Director Syed Afzal Hasan Uddin
    Director Mishaal Kabir
    Director Md Salah Uddin
    Director Md Mesbahul Hoque
    Director Md. Anwar Jamil Siddiqui
    Director Dr. M. Imtiaz Hossain
    Director Runa Zakia Shahrood Khan
    President & Managing Director Kaiser A. Chowdhury

    (Source: www.abbank.com)

    1.8 Capital Structure of ABBL

    The authorized share capital of AB Bank Ltd. Was Tk. 282.34 million, divided into 2.82 million ordinary shares of Tk. 100 each. The paid-up capital of the bank was Tk.85 million, out of which, Tk.80 million was provided by the sponsor directors. The government of the Peoples Republic of Bangladesh subscribed Tk. 5 million in the share capital of the Bank and has since nominated one director in the board as per Article 95 of the Memorandum and Article of Association in 1983. During 1984, issuing Public shares of Tk. 15 million raised the paid-up capital. The authorized capital has been raised to Tk.200 crore and paid up capital 74.32 crore as on 31.12.2007.

    In the past paid up capital AB Bank, Dubai Bank Limited had the major share comprising 60% of total share holdings. Dubai Bank Ltd. Was the joint sponsor with the local four entrepreneurs. In 1986, Dubai Bank Ltd. Merged with the Union Bank of Middle East (UBME) and subsequently Union Bank of Middle East (UBME) inherited the shares. They continued as shareholders till early part of 1987 when they decided to off-load their investment in Bangladesh. In terms of Article 23 (a) and 23 (b) of the Articles of association of the company and with necessary approvals of the relevant authorities including the Bangladesh Bank, the shares held by them in the company have been transferred to Group “A” shareholders.

    1.9 Milestones in the Development of the Organization

    AB Bank reached 28 years of its journey, which started with a single Branch operation at Karwan Bazar, Dhaka way back in 1982. AB Bank being the pioneer in private sector banking in Bangladesh will be the first to achieve this milestone. Over the years, AB Bank has contributed in many ways towards development of the private sector banking in the country. AB thrived on customer service and relationship banking, which brought new dimensions to this particular service sector and many more new entrants to banking sector, followed AB.

    Table 2.1: Corporate event of A B Bank Ltd.

    Commencement of Business: February27 1982
    First meeting of the Board of Directors: February 5, 1982
    Opening of the first Branch (Karwan Bazar Branch): April 12, 1982
    Listing with Dhaka stock Exchange (DSE): December 28,1983
    Publication of prospectus for IPO: May 5.1984
    Opening of principal Branch January 16,1986
    Opening of ABIFL-Subsidiary of Hong Kong November 1995
    Listing with the Chittagong Stock Exchange January, 1996
    First Foreign Branch at Mumbai, India April 1996
    Launching of ATM April 12,2002
    Operating of Merchant Banking Wing (MBW) November 2 2002
    Incorporate of AB Bank Foundation November 3 2003
    Launching of VISA Card December 23,2004
    Operating of Islamic Banking Branch December 23,2004
    Online Share Transaction in CDS May 7 ,2006
    Obtained permission as a Security Custodian from Securities and Exchange Commission January 22 ,2007
    Arab Bangladesh Bank Ltd. Changed its name to AB Bank Limited (ABBL) November 14, 2007
    Raise the Authorized Capital Tk.600, 00, 00,000/- divided into 6, 00, 00,000 ordinary shares of Tk.100/- each January 29, 2009

    (Source: www.abbank.com)

    1.10 Customer services

    Like some bank AB Bank Limited (LTD) has also provide different types of services with his potential customers. The services of AB Bank Limited are:

    · Deposit account

    Current Account

    Saving Account

    Short Term Deposit

    Fixed Deposit

    · Foreign Exchange Transaction

    · Customer Credit Scheme

    · E-cash 24 Hour Banking

    · Branch Banking

    · ATM and Credit Card

    · Personal and Car Loan

    · Safe Deposit Locker

    · Utility Bill Payment

    · Opening Student File

    1.11 ORGANOGRAM:

    CHAIRMAN

    VICE CHAIRMAN

    BOARD OF DIRECTOR

    MANAGING DIRECTOR & PRESIDENT

    SEVP SEVP SEVP SEVP

    EVP EVP EVP EVP

    SVP SVP SVP SVP

    VP VP VP VP

    SAVP SAVP SAVP SAVP

    AVP AVP AVP AVP

    SPO SPO SPO SPO

    PO PO PO PO

    SO SO SO SO

    O O O O

    1.12 Introducing the branch

    AB Bank Ltd. Karwan Bazar Branch is one of the largest branches of ABBL is located in BSEC Bhaban, Karwan Bazar C/A. It started its function in the year 1986. Presently there are 56 employees in this branch as of 31st March,2011 which includes One VP, two SAVP, Six AVPs, 4 Senior Principal Officers, 5 Principal Officers, 5 Senior Officers, 18 Officers, three Management Trainee Officer, One assistant and others are messengers, tellers, typist and security guards.

    1.13 Flow Chart of Internship Organogram in AB Bank Ltd of Karwan Bazar Branch

    KARWAN BAZAR BRANCH

    ——————————————————————-

    G.B CREDIT FOREIGN EXCHANGE ACCOUNTS

    ——————————————————–

    IMPORT EXPORT FOREIGN REMITTANCE

    Source: Department Information, ABBl, Karwan Bazar Branch, 2011

    1.14 Flow Chart of AB Bank Ltd. Karwan Bazar Branch:

    1.15 PERFORMANCE OF AB BANK

    1.15.1 Analysis of Capital Structure:

    Table no-1

    Year Authorized Capital(TK in Million) Paid Up Capital(TK in Million)
    2009 6000 3373.96
    2008 3000 2677.75
    2007 2000 743.26
    2006 1500 571.14
    2005 800 878.85

    Figure 01: Authorized & Paid up Capital of AB Bank

    1.15.2 Reserve fund:

    Table no-2

    year Amount(TK in Million)
    2009 3980.3
    2008 2702.95
    2007 2072.53
    2006 1456.47
    2005 826.33

    Figure: Reserve fund

    1.15.3 Deposit mix

    Table no-3

    1.15.4 Deposit position of a bank

    Table no-4

    YEAR Amount of deposit(TK in Million)
    2009 83087.13
    2008 68560.47
    2007 53375.35
    2006 35032.02
    2005 27361.44

    1.15.5 Investment (General)

    Table no-5

    YEAR Amount(TK in Million)
    2009 16369.3
    2008 11395.94
    2007 8884.6
    2006 6301.28
    2005 4060.95

    1.15.6 Investment in share & securities

    Table no-6

    YEAR Amount(TK in Million)
    2009 16369.3
    2008 11395.94
    2007 8884.6
    2006 6301.28
    2005 4060.95

    Chapter-2

    INTRODUCTION OF THE STUDY

    2.1 Introduction

    It is necessary for all BBA (Bachelors of Business Students) to prepare an internship report at the end of this program. On the other hand internship is a course which is related to our course curriculum. As a student of BBA in American International University-Bangladesh (AIUB) my intention is to capture some theoretical concept and to know how implement this theoretical concept in our real life solution. Students are applying this concept in different organizations.

    AB bank limited has started its business with all the features of a corporate Bank and the products of both corporate and retail banking system; to facilitate the daily clientele requirements. ABBL is always try to improve their service in every sectors but in today’s comprehensive business world AB banks need to offer additional concentration to the clients requirement in order to stay in the top.

    In addition of all short of traditional banking activities, AB bank provides on-line banking service and a comprehensive range of financial service national and multinational companies in the country. It also undertakes the share and debentures, works as issue manager, and participates in other operations in MONAY MARKET and CAPITAL MARKAT. As a member of Dhaka stock exchange and Chittagong stock exchange.

    Today is the time of competition. As a business student I am very interested to know the business world. On the other hand foreign trade is one of the parts of business. Foreign trade is divided in three categories like Import, Export and Remittance. Import and export both are related to letter of credit (L/C).

    Letter of Credit is one kind of commitment or assurance or bank guarantee. The commitment is behalf of importer to exporter. If exporter will present his performance as far terms and condition and provide the asked documents, accordingly bank will make payment against the performance. There are different reason importers and exporters are involved in Letter of credit (L/C) like: Lack of trust between importers and exporters contracts.Safe mode of transaction; Lack of confident to provide the payment in due date; Effective payment of shipping goods and services.

    2.2 Rationale of the study

    Foreign exchange transaction plays a vital role in the economic development of a nation. Foreign exchange transaction comprises both international trade & remittance. There are various rules and restrictions in international trade that means import and export transactions. To export or import any items the exporters or importers need financial support. The commercial banks of Bangladesh play an important role by providing them financial support through loan, various incentives and advising letter of credit. This paper empirically discuss with the rules, restrictions and procedures of foreign exchange transactions comprising LC advise, negotiation of documentary bills, repatriation of proceeds and its impact on profits. An easy and simple procedure of such transactions may help the exporters and importers to increase their business in future.

    2.3 Scope of the report

    The scope of the organizational part covers the organizational structure, background, vision, mission, objective, functions and rules, restrictions, procedures of foreign exchange transactions of the organization.

    2.4 Objective of the study

    To prepare the report I have acquainted with day-to-day foreign exchange functions of ABBL, know the progress of foreign exchange and foreign trade of ABBL, to gain in-depth knowledge of export, import and remittance of ABBL highlighting the foreign exchange activities of this bank. The primary & secondary objectives of this report are-

    The main objective is to know the significant relation that exists between import-export and branch performance in this sector. On the other hand the significant relation that exists between import-export and business world.

    To know and focus the whole import-export mechanisms.

    To know and focus the remittances activates.

    To know and focus the rules and regulation of import-export mechanisms.

    Identify some problems and also make some recommendations.

    To observe the working environment in commercial banks.

    To apply theoretical knowledge in the practical field.

    2.5 Methodology of the Report

    Methodology includes-

    · Direct observation

    · Face-to-face discussion with employees of different departments

    · Study of files, circulars and practical work.

    · Annual Report of 2009 etc.

    This study includes both quantitative and qualitative data. However, this report is basically qualitative in nature. In all the cases depending on the requirements data have been collected from different sources.

    · Source of Data

    This report is based on both primary & secondary sources of information that has been collected from the various sources like different publications, library sources, books, articles, etc. For collecting primary data, I ask the respective officer(s). Others are like –

    · Exposure on different desk of the bank;

    · File study.

    · Getting information from face to face dealing with the client

    · Personal interview with branch officials or executives

    The secondary sources are –

    · Annual Report of AB Bank Bangladesh Ltd,

    · Web site of ABBL

    · Periodicals published by the Bangladesh Bank;

    · Different publications regarding banking functions, foreign exchange operation, and export-import policies.

    · Time preference

    The time preference of the study relates to the period covering the years 2005 to 2009. And also shown some analysis from 2008 to 2010 as a per month analysis & evaluation. All these years has been taken for different analysis purposes.

    · Data processing and analysis

    Data processing has been done manually after checking and editing. For analyzing excel is used.

    2.6 Limitation of the study

    AB Bank Ltd. is a large financial institution; therefore it is not possible to find out the true pictures within a short period. To prepare the report I faced some problems & limitations. Those limitations are unavoidable for me. That may causes reduction in the quality of my report. Some of the major problems are pointed below-

    Difficulties to communication and collect data.

    Difficulties to gather data in a specific way.

    In many cases, up to date information is not published.

    Organization confidentiality.

    Time constraints are one of the major problems/limitations to know the information.

    Chapter-3

    Foreign Trade & Foreign Exchange Transactions

    (Theoretical Framework)

    3.1 Foreign Exchange

    Foreign Exchange means foreign currency and it includes any instrument drawn, accepted, made or issued under clause (13), Article 16 of the Bangladesh Bank Order, 1972. All deposits, credits and balances payable in any foreign currency and draft, travelers cheque, letter of credit and bill of exchange expressed or drawn in Bangladeshi currency but payable in any foreign currencies.

    Foreign Exchange Act. 1947 defines foreign exchange as “Foreign currency and includes deposits, credits, and balances payable in foreign currency as well as drafts, travelers cheques, letter of credit, bills of exchange drawn in local currency but , payable in foreign currency”.

    According to Dr. Paul Einzig, “Foreign exchange is the system or process of converting one national currency into another and transferring money from thecountry to another.” Foreign exchange deals with foreign trade and foreign currency.

    3.2 Foreign Trade

    No country is self-sufficient in all the goods. Some countries have special advantage to produce some items. Bangladesh can manufacture readymade garments easily due to lower cost of labor. So Bangladesh is exporting readymade garments to USA where as USA is exporting machinery to Bangladesh due to their favorable transaction to that item. These kinds of cross border transaction or exchange of goods are called foreign trade.

    3.3 Foreign Exchange and Foreign Trade

    ABBL undertakes spot purchase and sales foreign currencies by deploying its own fund.

    Foreign exchange and foreign trades of a country are conducted according to the law of that country. AB Bank Ltd. performs all its banking operations including foreign exchange activities according to that law.AB banks conduct their foreign exchange businesses mainly into two ways:

    a) Bank provides service as an agent for the transa­ction and earns service charge, commission etc.

    b) Bank invests its fund for the purchase of foreign currencies and sale of such currencies on the basis of present transaction and may earn profit thereof.

    3.4 Foreign Exchange Transactions

    Conversion of currencies or exchanges is known as foreign exchange transactions. The conversion may arise for atransaction between a bank and its customers or between a bank and another bank at home or abroad. The transaction involves at least two currencies. For a bank in Bangladesh, the process of conversion frequently involves conversion of Bangladeshi taka into foreign currencies or vice- versa.

    For instance, one of the customers of your bank wishes to send an amount of $1000 to his son in USA. Assuming that this remittance is permissible or that permission from the exchange control authority has been obtained, you will issue a draft in favour of the beneficiary for $1000 drawn on your USA correspondent or a branch of yours, if any, in favour of your customer’s son and ask your customer to pay the equivalent amount in Taka. The transaction involves two things: payment of $ 1000 from your dollar account – your Nostro account maintained with your USA branch or correspondent and recovery of its taka equivalent at the ruling ready (spot) rate of exchange between taka and dollar. In another instance, your customer may ask you to buy a draft for Tk.10000 drawn on a bank in Iran towards the value of jute bags supplied to the Iranian buyer against a letter of credit open by a bank of Iran. If you are satisfied that the documents accompanying the drafts are in order, you will pay the taka amount and ask that bank of Iran to pay you equivalent amount in dollar or Iranian Real.

    In the illustration given above, remittance of $1000 to USA would involve conversion of local currency into a foreign currency and in the later case the transaction would involve conversion of a foreign currency- dollar or Iranian Rial into local currency.

    3.5 Wings of Foreign Exchange

    A Bank’s Foreign exchange department has three definite wings through which foreign exchange transactions are conducted.

    Foreign Exchange

    Import Section ExportSection Remittance Section

    The achievement of AB Bank in the above three areas of foreign exchange business has been quite phenomenal. The Bank has been providing services to import and export trade and for repatriation of hard-earned foreign exchange of Bangladeshis living and working abroad and has, by now, consolidated its position in these areas. The following chapters will discuss about these areas in details.

    Chapter-4

    Wings of Foreign Exchange: Import

    4.1 Introduction

    Import trade of Bangladesh is controlled under the Import & Export control Act (IEC) 1950. Authorized Dealer Banks will import the goods into Bangladesh following import policy, public notice, F, E circular & other instructions from competent authorities from time to time.

    Definition on Import:

    Buying of goods & services form foreign countries for sales is considered as import. The person or organization who import the goods & services form foreign countries is known Importer and from which goods & services are imported is known as Exporter. In case of Import, the importers are asked by their Exporters to open a Letter of Credit (L/C). So that there payment against goods & services is ensured.

    4.2 General Provision for Import

    Regulation of Import – Import of goods under this order shall be regulated as under:

    · Banned list: Banned goods are not allowed to import through the foreign exchange transaction. Such as Live Swine, Eggs of shrimps and prawns etc.

    · Restricted list: Any item, which is restricted by the “Import Policy Order 1997-2002” in Annexure –1(b) shall be importable only on fulfillment of the conditions (b) specified therein against the item.

    · Free Importable Items: The items which are not included either in the Banned list or Restricted list shall be freely importable:

    · In addition to the conditions mentioned inthe Restricted and Banned Lists the conditions restrictions and procedures for import of various items mentioned in the test portion of this Order, shall as usual apply in case of import of those items.

    4.3 General conditions of Import Goods

    1) Import Trade Control Schedule Numbers-For import purpose use of new ITC Numbers with at least six digits corresponding to the classification of goods as given in the Import Trade Control Schedule 1998, based on the Harmonized Commodity Description and Coding System shall be mandatory.

    2) NOC on the basis of ROR (Right of Refusal): No objection Certificate on the basis of right of Refusal form any authority shall not be required for import of any freely importable item by any Public Sector Agency. However, in cases where a public sector agency is required to import banned or restricted items included in the control list prior permission of the Ministry of Commerce shall have to be obtained on the basis of ROR issued by the ministry of Industries or by the Sponsoring Ministry/Division or by both as the case may be.

    3) Restriction regarding source of procurement of goods:

    (a) Goods from Israel or goods originating form that country shall not be importable. Goods shall also not be importable in the flag vessels of that country.

    (b) All kinds of import from and export to Serbia and Montenegro, fragments of former Socialist Republic of Yugoslavia shall be banned.

    4) Pre- Shipment Inspection: Unless otherwise specified pre-shipment inspection of imported goods shall not be obligatory in case of import be the private sector importers.

    5) Shipment of Bangladesh Flag Vessels: Subject to waiver specified below shipment of goods shall normally be made on Bangladesh flag vessels.

    4.4 Types of Importer

    Goods are imported for personal use, commercial or industrial purpose. So there are three kinds of importer such as:

    1. Personal Importer.
    2. Commercial Importer.
    3. Industrial Importer.

    4.5 Authorized Dealers

    Authorized Dealer means a Bank, Authorized by Bangladesh Bank to deal in Foreign Exchange under the Foreign Exchange Regulation (FER) Act 1947. But there are some persons or firms, authorized by Bangladesh Bank to deal in Foreign Exchange with limited scope are called Authorized Money Changers. To get a license for authorization a bank will apply the General Manager, Foreign Exchange Policy Department, Bangladesh Bank, Head Office, Dhaka complying the subsequent conditions:

    i. The Bank must have adequate manpower trained in Foreign Exchange.

    ii. Prospect to attract reasonable volume of Foreign Exchange business in the desired location.

    iii. The bank meticulously complies with the instruction of Bangladesh Bank.

    iv. The bank will commit to deal in Foreign Exchange within the limit & will submit periodical returns as instructed by Bangladesh Bank.

    4.5.1 Functions of Authorized Dealer

    Authorized Dealer can handle all kinds of Foreign Exchange transaction as per Foreign Exchange Regulation (FER) Act 1947 under the instruction of Bangladesh Bank. Following are the main function of an Authorized Dealer:

    i. Exchange of Foreign Currencies.

    ii. To make arrangement with Foreign Correspondent.

    iii. Buying & Selling Foreign currencies.

    iv. Handling of Inward & Outward Remittance

    v. Opening of L/C & Settlement of Payment.

    vi. Investment in Foreign Trade.

    vii. Opening & Maintenance of Accounts with Foreign Banks under intimation to Bangladesh Bank.

    viii. Export Documents handling.

    4.6 Letter of Credit (L/C)

    Letter of Credit (L/C) is a payment guarantee to the seller by the issuing bank on behalf of the importer. In other words, it is a letter of the Issuing Bank to the beneficiary undertaking to effect payment under some agreed conditions. L/C is called documentary Letter of Credit, because the undertaking of the Issuing Bank is subject to presentation of some specified documents. Through the L/C Buyers & Sellers enter into a contract for buying and selling goods/ services and the buyer instructs his bank to issue L/C in favour of the seller. Here bank assumes fiduciary function between the buyer and seller.

    4.6.1 Flowchart of L/C

    Accounting treatment for opening L/C:

    For opening L/C, importer will apply to the issuing bank. In that case, importer is called applicant or opener. After opening it bank will create a contingent liability. In that case, the accounting posting will be the following-

    Customer liability …….. Dr.

    Contingent liability………..Cr.

    Contingent liability…….. Dr.

    Customers liability…………..Cr.

    Payment Against Document(PAD)……….. Dr.

    AB General Account…………………………….. Cr.

    Exchange gain…………………………………….Cr.

    PAD will debit because the bank will pay the money against some documents. AB General Account is a miscellaneous account. It will be credited because by this entry ABBL creates a liability. He has to pay the money to the advising bank. & the gain made by the transaction is shown at Exchange Gain Account. All this entries are made after receiving some documents from the exporters. The above procedure is called Lodging. After giving the above entry, ABBL will inform the clients for collecting the documents from the bank.

    After opening L/C, ABBL (Issuing Bank) must receive the documents for any other proceedings. These documents are-

    I. Bill of Lading

    II. Invoice

    III. Packing List

    IV. Country of Origin

    4.7 Different Parties to a Documentary Credit

    Normally the subsequent parties are related to a documentary credit. Such as

    1) The Issuing Bank: This is the bank who issues Documentary credit on account of it’s client.

    2) The advising Bank: This is a Bank acting as Agent of the Issuing Bank, to advise the L/C to the beneficiary.

    3) The confirming Bank: This Bank gives the beneficiary a double assurance of payment. This is a third Bank undertake to make payment, to the beneficiary, if the Issuing Bank fail to make Payment.

    4) Negotiating Bank: This Bank provides value to the beneficiary against presentation of documents complying credit terms. Usually this is exporter’s Bank who purchases the export documents.

    5) Reimbursing Bank: This is a Bank acting as Agent of the Issuing Bank Authorised to make payment or to honour reimbursing claim of the Negotiating Bank.

    6) The Transferring Bank: If the L/C is transferable then the 1st beneficiary through a bank nominated by the Issuing Bank this bank is called the Transferring Bank.

    7) The Applicant: Importer or buyer is the applicant of a Letter of Credit. Applicant must be the client of the Issuing Bank.

    8) The beneficiary: Exporter or Seller of the goods is the Beneficiary of a Letter of Credit.

    9) Notify Party: The Party / Bank to whom the arrival of shipment has to be notified or to be informed is called notify party.

    4.8 Import Procedure

    To import a person should be an importer. In accordance with Import & Export Control Act, 1950 the office of chief Controller of Import & Export provides the registration (TRC) to the importer. After getting this person has to secure a letter of credit authorization from Bangladesh Bank. Then he becomes a qualified importer; He is the person who requests or instructs the opening bank to open an L/C. He is also called opener or applicant of the Letter of Credit.

    4.8.1 Import Registration Certificate

    Import Registration Certificates are issued by the office of chief controller of imports and exports. Intending importers are to submit applications to CCI & for registration along with required documents are as follows:

    I. Application

    II. Trade License

    III. Nationality Certificate

    IV. Income tax certificate along with TIN

    V. Bank Certificate

    VI. Membership certificate from Trade Association Certificate of incorporation, Article and Memorandum of Association. Partnership Deed for partnership firm.

    4.8.2 Procedure for Registration

    To obtain import registration certificate (IRC) the applicant will submit the following paper to the CCI & E through this nominated Bank.

    a) Questionnaire duly filled in & signed by the applicant

    b) Trade License

    c) Membership certificate from chamber of commerce or any other trade Association

    d) Nationality Certificate

    e) Income tax registration certificate.

    f) Partnership deed/certificate of registration with the register of join stock companies where applicable.

    On being satisfied, the CCI & E issues IRC obtain original copy of treasury challan for payment of registration fee.

    4.9 Preliminary Steps for Opening L/C

    Before opening the L/C Bank will takes the subsequent steps:

    1) Applicant to be Bank’s A/C Holder: Bank will open the L/C on behalf of an entity who has an account with the Bank. Unknown person will not be allowed to open L/C.

    2) Registered importer: Before opening the L/C bank must confirm that the L/C applicant is a registered importer or personal user, and the IRC of the importer has been renewed for the current year.

    3) Permissible item: The item to be imported must be permissible and not banned item. If the item is from conditional list, the condition must fulfill to import the same.

    4) Market Report: Bank will verify the marketability of the item & market price of the goods. Some times the importer may misappropriate the Bank’s money through over invoicing.

    5) Sufficient Security or margin: Price of some items fluctuates frequently. In case of those items Bank will be more careful to take sufficient cash margin or other security.

    6) Business Establishment: Bank should not open an L/C on be half of a floating businessman. The importer must have business establishment, particularly he must have business network for marketing the item to be imported.

    7) Restricted Country: Goods not to be imported from Israil.

    8) Credit report of the beneficiary: It the amount of L/C in one item exceeds TK. 5.00 lac, suppliers credit report is mandatory. Bank will collect credit report of the beneficiary through its correspondent in abroad.

    9) Application of the client to open the L/C: The client will approach to open the L/C in Bank’s prescribed form, duly stamped & signed, along with the following paper & documents: Such as

    I. Indent / Performa invoice.

    II. Insurance cover note with money receipt.

    III. LCAF duly filled in & signed.

    IV. Membership certificate form chamber of commerce / Trade Association.

    V. Tax payment certificate / declaration.

    VI. IMP & TM form signed by the importer

    VII. Charge documents

    VIII. IRC, Pass book, Trade license Membership certificate & VAT, registration certificate in case of new client.

    IX. Export L/C in case of back-to-back L/C.

    10) Permission From Ministry of Commerce: If the goods to be imported under CIF (cost insurance & freight), then permission form ministry of commerce to be obtained.

    11) Creditability of the Client: In consideration of all the above points, if Bank become satisfied regarding the client then L/C may be ope3ned on behalf of the client. Before opening the L/C bank will issue & authenticate a set of LCAF in the name of the importer.

    4.10 Presentation of the Documents

    The seller being satisfied with the terms and the conditions of the credit proceeds to dispatch the required goods to the buyer. Them he has to present the documents evidencing dispatching of goods to the negotiating bank on or before the stipulated expiry date of the credit. After receiving all the documents, the negotiating bank them checks the document against the credit. If the documents are found in order the bank will pay accept or negotiate to Bank. Then bank checks the documents. The usual documents are:

    4.11 Steps Involved in Import procedures:

    Chapter-5

    Wings of Foreign Exchange: Export

    5.1 Introduction

    The export policy 1997-2002 has been formulated by the government to operate within imperative and opportunities of the market economy with a view to maximizing export growth and narrowing down the gap between import payment and export earning. As per existing Export Policy an Exporter can export any goods or services except the items listed as band and restricted in the said policy. Duration of present EPO-5 years effected from 1st July 1998, but valid till announcement of new policy.

    Foreign Exchange Regulation Act, 1947 Clearly states that nobody can export by post and otherwise than by post any goods either directly or indirectly to any place outside Bangladesh, unless a declaration is furnished by the exporter to the collector of customs or to such other person as the Bangladesh Bank (BB) may specify in this behalf that foreign exchange representing the full export value of the goods has been or will be disposed of in a manner and within a period specified by BB. So a clear lawful procedure must be followed in case of export of goods & services.

    5.2 Meaning of export

    – Selling goods to foreign countries against of foreign currency.

    – Export means lawfully carrying get of anything from one country to another country for sale. The import and export trade of the country is regulated by the IEC Act. 1950.

    5.3 Export Policy

    As per export policy order, 1997-2002 now in force an exporter can export any goods or services except the items listed as banned and restricted in the said policy.

    5.3.1 Objectives of Export / Export Policy

    Growth of national wealth, increase of production in export sectors, generation of employment & flow of capital and to achieve the growth of GDP target @7%.

    5.3.2 Exporter Registration

    An exporter must obtain Export Registration Certificate from the office of the Chief Controller of Import & Export (CCI & E). The procedure for obtaining Export Registration Certificate (ERC). Procedures for obtaining export registration certificate (ERC) from the CCI & E, the following documents are required:

    1) Application as per format prescribed by CCI & E.

    2) Bank Solvency Certificate.

    3) Membership Certificate from a Chamber of Commerce.

    4) Nationality certificate.

    5) Partnership deed (Registered / Un-Registered) for partnership business concern.

    6) Memorandum & Articles of Association & its incorporation certificate for public limited company.

    7) Income Tax payment certificate (TIN)

    8) Recent passport size photographs of the applicant.

    9) Treasury chalan showing payment of fees for ERC.

    5.3.3 Securing the order:

    After getting ERC Certificate the exporter may proceed to secure the export order. He can do this by contacting the buyers directly or through agent. In this purpose the exporter may get help from:

    5.4 Classification of Export

    i. Export under L/C: Exporters are allowed to export the commodity under irrevocable L/C, under this type of export, exporter will ship the goods as per terms of the credit and will get payment as per arrangement of the credit.

    ii. A firm Contract/Consignment Basis Export:Exports are allowed against firm contract. As per contract, exporter will ship the goods and the buyer will make payment after selling the consignment.

    iii. Export against Advance Payment:Sometimes exporter receives payment in advance. In that case AD should obtain a declaration from the exporter on the “Advance Receipt Voucher certifying the purpose of the remittance. Then the exporter will export the goods against the advance payment. Export section ABBL, New market Branch deals with two types of L/C that are as follows-

    5.5 Back-to-back letter of credit

    Back-to-back L/C is a secondary L/C (New Import L/C) opened by the seller’s bank based on the original L/C (Master L/C) to purchase the raw materials and accessories for manufacturing of the export product (s) required by the seller.

    Under the ‘Back to Back’ concept, the seller as the Beneficiary of the master L/C offer it as a ‘security’ to the advising Bank for the issuance of the second L/C. The beneficiary of the Back-to-Back L/C may be located inside or outside the original beneficiary’s country. In case of a Bark-to-Back L/C, the bank takes no cash security (margin). Bank liens the Master L/C and the drawn bill is an Usance/ Time bill.

    5.6 Export letter of credit

    The other type of L/C facility offered by the bank is Export L/C. Bangladesh exports a large quantity of goods and services to foreign households. Readymade textile garments (both knitted and wove), jute, jute-made products, frozen shrimps, tea are the main goods that Bangladeshi exporters exports to foreign countries. Garments Sector Is the largest sector that exports the lion share of the country’s export. Bangladesh exports most of its ready-made garments products to USA and European Community (EC) countries. Bangladesh exports about 40% of its readymade garments products to USA.

    5.6.1 Formalities Required for Export L/C

    The export trade of the country is regulated by the Imports & Exports (Control) Act, 1950. There are a number of formalities that an exporter has to fulfill before and after shipment of goods. These formalities or procedures are enumerated as follows –

    A. EXPORT REGISTRATION CERTIFICATE (ERC):The exports from Bangladesh are subject to export trade control exercised by the Ministry of Commerce through Chief Controller of Imports & Exports (CCI&E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI&E and holds valid ERC. The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP (Export) Forms and other documents connected with exports.

    B. THE EXP FORM:Foreign Exchange Regulation (FER) Act- 1947 prohibit export of any goods directly or indirectly to any place outside Bangladesh unless the exporter furnish a declaration to the effect that the export value of goods has been or will be repatriated into the country within a period time specified by the Bangladesh Bank. So, repatriation of export proceed is mandatory for all exported goods or services. Accordingly, before shipment of goods an exporter must declare on Export Form (Exp) prescribed by Bangladesh Bank and issued by the Authorized Dealer (Exporters Bank). The EXP Forms are numbered serially and issued in quadruplicate. For delay in repatriation of export proceeds or non-realization of export proceeds, the exporters render themselves for action under Foreign Exchange Regulation Act 1947. Authorized Dealers (AD) and their officials who certify the export forms also render themselves of such action by the Central bank. An EXP Form usually contains the following particulars –

    i. Name and address of the Authorized Dealer;

    ii. Particulars of the commodity to be exported with particulars and code no;

    iii. Country of destination;

    iv. Port of destination;

    v. Quantity;

    vi. L/C value in foreign currency;

    vii. Terms of sale;

    viii. Name and address of Importer/ Consignee;

    ix. Bill of Lading/Railway Receipt/Airway Bill/Truck Receipt/Post Parcel Receipt no. and date;

    x. Port of Shipment/Post Office of Dispatch;

    xi Land custom post

    xii. Shipment Date;

    xiii. Name of the Exporter with address;

    xiv. Registration number and date;

    xv. Sector (public or private) under which the exporter fails.

    C. SECURING THE ORDER:Upon registration, the exporter may proceed to secure the export order. Contracting the buyers directly through correspondence can do this.

    D. SIGNING of THE CONTRACT:While making a contract, the following points are to be mentioned: a) Description of the goods;

    b) Quantity of the commodity;

    c) Price of the commodity;

    d) Shipment; e) Insurance and marks;

    f

    " 137,"

    FOURTH GENERATION OF MOBILE COMMUNICATION (4G) 2

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    Fourth Generation of Mobile Communication (4G)

    1.1 Introduction

    We are experiencing exponential growth rates in mobile communication systems, increasing mobility awareness in society, and deregulation of former monopolized markets while traditional communication paradigms with fixed networks, mobility raises a new set of questions, techniques and solutions. For many countries, mobile communication is the only solution due to the lack of an appropriate fixed communication infrastructure. The trends mentioned above create an ever- increasing demand for well-ended communication engineers who understand the developments and possibilities of mobile communication. What we see today is only the beginning. There are many new and exciting systems currently being developed in research labs. The future will see more and more mobile devices, the merging of classical voice and data transmission technologies, and the extension of today’s internet applications (e.g., the World Wide Web) onto mobile and wireless devices. New applications and new mobile networks will bring ubiquitous multimedia computing to the mass market; radios, personal digital assistants, laptops and mobile phones will converge and many different functions will be available on one device.

    This REPORT is an introduction to the field of fourth generation of mobile communications and focuses on digital data transfer. The paper is intended for use by students of EE or communication classes, engineers working with fixed networks who want to see the future trends in networking, as well as managers who need a comprehensible overview in mobile communication. The reader requires a basic understanding of communication and a rough knowledge of the Internet or networking in general.

    This work addresses people who want to know how 4G mobile phone systems work, what technology will be next in satellite communication, and how mobility will influence applications, security, or networks.

    The job follows a tall and thin’ approach. it covers a whole course in 4G mobile communications, from signals, access protocols, up to application requirements and security. Topics in the higher layers of communication, like the wireless applications are also mentioned here briefly.

    1.2 Standards of mobile communication

    The main standards and the main markets in which they are used are summarized in the following table.

    Year Standard Mobile telephone system Technology Primary Markets
    1981 NMT-450 Nordic Mobile Telephone Analogus Europs Middle East
    1983 AMPS Advance Mobile Phone System Analogue North and South America
    1985 TACS Total Access Communication System Analogue Europe and Chana
    1986 NMT 900 Nordic Mobile Telephone Analogue Europe, Middle East
    1991 GSM Global System for Mobile Communication Digital World-wide
    1991 TDMA D-AMPS Tune Division Multiple Access Digital North and South America
    1992 CDMA Code Division Multiple Digital N. America, Korsa
    1993 GSM 1800 Global System for Mobile Communication Digital Europe
    1994 PDC Personal Digital Cellular Digital Japan
    1995 PCS 1900 Personal Communication Services Digital North America
    2000 CDMA, GPRS Coded Division Multiple Access Digital USA
    2002 4G, WCDMA WCDMA/UMTS CDMA 4G Digital Japan USA

    Table: Brief History of Mobile Standards.

    1.3 Scope of 4G

    4G is designed to deliver:

    • A wide range of market-focused applications.
    • Long-term market-driven creativity, an innovative value chain and real user benefits, driving genuine market demand.
    • Advanced, lightweight, easy-to-use terminals with intuitive interfaces Instant, real-time multimedia communications.
    • Global mobility and roaming.
    • A wide range of vendors and operators, offering choice, competition and affordability.
    • High-speed e-mail and Internet access.

    1.4 What’s new in 4G

    • All network elements are digital.
    • Entirely packet-switched networks.
    • Higher bandwidths to provide multimedia services at lower cost (up to 100Mbps)
    • Tight network security.

    1.5 Comparison of 3G and 4G

    3G 4G
    Back compatible to 2G. Extend 3G capacity by one order of magnitude:
    Circuit and packet switched networks. Entirely packet switched networks.
    Combination of existing & evolved equipment. All network elements are digital.
    Data rate (up to 2Mbps). Higher bandwidth (up to 100 Mbps).

    1.6 Rolling out of 4G

    NTT DoCoMo already launched the worlds’ first commercialized fourth-generation “FOMA” mobile communication service on October l, 2003. FOMA is the name used in Japan for NTT DoCoMo’s 4G services.

    The question of 4G deployments is not a technical issue, but a regulatory and economic one- Subscriber demand is the key factor: user expectations for mobile services are being raised, and for any successful 4G license bidder time to market will be critical. The way 4G is rolled out in a particular market-will depend entirely on the business plans of the mobile operators, and the license requirements imposed by the regulatory authorities.

    Today’s mobile network operators can gain the vital business and market experience of providing high-speed mobile data services by introducing packet switching networks such as GPRS (General Packer Radio Service). By the time the new WCDMA, EDGE and cdma2000 wideband radio interfaces are standardized and commercially available, the market will already be attuned to the possibilities of 4G. Japan was the first market to announce specific plans to introduce wideband radio networks based on WCDMA technology. As a result, it is expected that 4G will go into service first in Japan. Currently, WCDMA networks are scheduled to be in operation there in 2001. The 4G licensing process has completed in many countries in Europe, and the first wideband radio networks are expected to enter commercial operation in 2005. Before then, GPRS will be introduced into GSM networks, to increase user bandwidth. The first GPRS systems was introduced early in 2000 in France but due to handset shortest and technical problems of the advance overall network architecture, it was not a success.

    2.1 Introduction

    The concept of mobile telephony was originated in the 1920’s, but it was only in 1947 that the cellular network structure was devised. Up to then, no solution enabled a mobile station to roam far from the antenna system. The concept of cellular communication was born in the Bell laboratories of the USA in the late 1960’s. In the mid 1970’s, AT&T’s Bell labs demonstrated, what came to be known as Cellular Mobile Telephone (CMPT). Cellular technology provides communication to and from the user located anywhere on the glob or within a territory, through a portable lightweight handheld mobile telephone. It is a two way communication process. An area is divided into a number of cells, each with a Radio Base Station (RBS), having a transmitting and receiving tower. In cellular mobile telephone system, the subscriber carries small sized transceiver (transmitter cum receiver) with an assigned radio frequency channel through which the Public Service Telephone Network (PSTN) subscriber can call the mobile, the mobile can call the PSTN subscriber and the mobiles themselves can talk to one another. Based on the concept of efficient spectrum utilization, the cellular mobile radio system design can be analyzed and related to the others. `1 major elements are the concept of frequency reuse channels, the co channel interference reduction factor, handoff mechanism, cell splitting etc. The common problems are path loss, shadowing, multi-path fading, time dispersion, time alignment etc. There are several solutions to solve these problems. To solve these problems several techniques such as channel coding, interleaving, adaptive equalization, frequency hopping etc are used.

    2.2 Cellular fundamentals

    A cell may be defined an area of radio coverage from one Base Transceiver Station (BTS) antenna system. It is the smallest building block in a mobile network and is the reason why mobile networks are often referred to as cellular networks. The power level of a transmitter within a single cell must be limited in order to reduce the interference with the transmitters of neighboring cells. The interference will not produce any damage to the system if a distance of about 2.5 to 3 times the diameter of a cell is reserved between transmitters.

    In order to work properly, a cellular system must verify the following two main conditions.

    · Neighboring cells cannot share the same channels. In order to reduce the interference, the frequencies must he reused only within a certain pattern.

    · It is two-way communication process. An area is decided into a number of cells, each with a radio base station (RBS), having a transmitting and a receiving tower. Each RDS has a set of channels assigned. The mobile in a given cell send its signals to RBS.A number of RBSs are connected to and controlled by ‘a base station controller (BSC). All the BSCs in the service Qreace connected to the mobile switching center (MSC) which handles major technical like switching, assigning radio channels to every mobile, locating the cell a mobile is in as soon as it is switched on, as it moves From cell, measuring the calls, recording the charges etc The MSC is the switches that interconnect the PSTN (public switched telephone network) and the mobile system.

    2.3 A basic cellular system

    A basic cellular system consists of three parts: a mobile unit, a cell site, and a Mobile Telephone Switching Office (MTSO).

    · Mobile unit: A mobile telephone unit contains a control unit, a transceiver and antenna system.

    · Cell site: The cell site provides interface between the MTSO and the mobile units, it has a control unit, radio cabinets, antennas, a power plant, and data terminals.

    · MTSO: The switching off-ice, the central coordinating element for all cell sites, contains the cellular processor and cellular switch. It interfaces with Telephone Company Lone offices, controls call processing, and handles billing activities. The radio and high-speed data links connect the three substations. Each mobile unit can only use one channel at a time for its communication link. The MTSO is the heart of cellular mobile system. Their processor provides central coordination and cellular administration.

    2.4 Cluster

    The cells are grouped into clusters. The number of cells in a cluster must be determined so that the cluster can be repeated continuously within the covering area of an operator. The typical clusters contain 4,7,12 or 21 cells. A balance must be found in order to avoid the interference that could occur between neighboring clusters.

    2.5 Cell type

    Cells can be of different types based on the antenna direction, size and nature of the area they cover, etc. Some of the cell types are described below:

    A. Depending on the antenna direction:

    · Omni cells are the cells served by antenna, which transmits, equally in all horizontal direction.

    · Sector cell – a cell with uni-directional BTS antenna system.

    Three sectored cells from one tower system can also form a circular coverage area. Sectors will be 120 degree apart from each other. In Grameen Phone we use three sectored cells to obtain more or less a circular coverage area.

    B. Depending on the size of the cell:

    • Macro cell
    • Micro cell
    • Pico cell

    C. Depending on the area

    · Urban cell

    · Suburban cell

    · Rural cells ‘

    D. Depending on the cell relationship

    • Overlaid cell
    • Under laid cell
    • Umbrella cell

    E. Depending on thee usage

    v Indoor cells

    v Outdoor cell

    v Road cell to give coverage to a particular road, etc.

    2.6 Performance criteria

    The cellular system provides some important performances which give the subscribers better services. There are four categories for specifying performance criteria.

    2.6.1 Voice quality

    Voice quality is very hard to judge without subjective tests from users opinions. In this technical area engineers cannot decide how to build a system without knowing the voice quality that will satisfy the users. For any given commercial communications, the voice will be based upon the following criterion: a set value X at which Y percent of customers rate the system voice quality as good or excellent, the top to circuits merits of the five listed bellow:

    · CMS- excellent (speech perfectly understandable)

    · CM4- good (speech easily understandable, some noise)

    · CM3- fair (speech understandable with a slight effort, occasional repetition)

    · CM2- fair (speech understandable only with considerable effort, frequent repetition needed )

    · CM 1- unusable (speech not understandable)

    2.6.2 Service quality

    · Coverage: The system should serve an area as large as possible. It is usually not practical to cover 100 percent of the area for two reasons:

    a. The transmitted power would have to be very high to illuminate weak spots with sufficient reception, a significant added cost factor.

    b. The higher the transmitted power, the harder it becomes to control interference.

    · Required grade of service: For a normal start-up system the grade of service is specified for a blocking probability of 0.02 for initiating calls at the busy hour. This is an average value.

    · Number of dropped calls: During Q calls in an hour, if a call is dropped and Q-1 calls are completed, then the call drop rate is l/q, this drop rate must be kept low.

    2.6.3 Low terminal and service cost

    In cellular system the mobile terminal (hand set) and the rate per minute of the call is low than other system.

    2.6.4 Support of international roaming

    In cellular system one can get the service of call even during moving from one site to another by the process of hand over As the tits roams through the area, it continuous t scan the control channels to ensure that It is tuned to the strongest possible channel If the MS finds one, which is stronger, then the MS retunes to this new control channels If the new control channel belongs to a new Local Area (LA), the MS will also inform the network of its new location.

    2.7 Operation of cellular System

    For the call set up in the cellular mobile communication system among the subscribers throughout the cellular network the following operations are to be performed.

    2.7.1 Mobile unit initialization

    When a receiver of a mobile unit is activated, its scans 21 set up channels, which are designed among the 333 channels. It then selects the strongest and locks on for a certain time. This means selecting nearest cell site. This function is done in idle stage and is used independent. After 60 see, this self-location procedure is repeated.

    2.7.2 Mobile Originating call

    The user places the called number into an originated register, checks to see that the number is correct and pushes the “send” button. A request for service is sent on a selected set-up channel obtained from a self-location scheme. The cell receives it, and in directional cell sites, selects the best directive antenna for the voice channel to us.

    At the same time the cell site sends a request to the mobile telephone switching office. (MTSO) via a high-speed data link, The MTSO selects an appropriate voice channel for the call; it also connects the wire-line party through the telephone company zone off-ice.

    2.7.3 Network originated call

    A land-wire party dials a mobile unit number. The telephone company zone office recognizes that the number is mobile & forwards the call to the MTSO sends a paging message to certain cell site based on the mobile unit number and the search algorithm. Each cell site transmits the page on its own set-up channel. The mobile unit recognizes its own identification on strong set-up channel, lucks on to the cell site.

    2.7.4 Call termination

    When the mobile user turns off the transmitter, a particular signal (signaling tone) transmit to the cell site, and both sides free the voice channel.

    2.8 Handoff procedure

    During the call, two parties are on a voice channel. When the mobile unit moves out of the coverage area of a particular cell site, the reception becomes weak. The present cell site requests a handoff. The system switches the call to a new frequency channel in a new cell site without either interrupting the call or altering the user. The call continues as long as the user is talking. The user does not notice the handoff occurrences.

    2.9 Hand Over

    Hand over is defined as the passing, I taking over a live call between two neighboring cells or frequencies. When a user reaches the edge of a cell, the signal strength (between the serving base station and himself) gets weaker. If his call is not taken over by another cell, his call might be dropped (discontinued). The signal strength criterion is the basic behind a hand over. However, there are many other special reasons why a call could be handed over (bad quality, congestion, etc).

    As the cell sizes are getting smaller, the probability of a subscriber to move to a nearby cell while talking is increasing also. Thus the challenge of this cellular concept is to transfer a “live” call to a nearby cell when the user is on the move. The characteristic of such a hand over is the delay time – i.e., how faster the call can be handed over. Now a clays the systems are so intelligent and faster that the user is totally unaware of when they are actually handing over to other cells.

    Fig : car crossing a cell

    As we are reducing the cell size, the shorter would be “sate distance” and the more would be the number of such hand over and more resources (measurements, calculation, decision making) would be needed from the network element to handle these great number of hand over.

    Following figure shows a road, this passes through many cells. A car taking this road will be served by all these cells one after another thus generating a number of handover in one single call.

    2.10 Coverage range of a cell

    Coverage is defined as the area of the geographical region where a good communication is possible via the mobile station.

    By coverage is usually meant that an area is covered if in 90% of that area the signal received by the mobile station is larger than some value. This value is defined by the radio planner on the basis of the area and the equipment specifications. According to the strength of the signals, the coverage may be classified into three types:

    2.10.1 Outdoor coverage

    This is designed for open area. This may be useful for the rural area coverage. High gain antenna with wide opening angle is possible in this kind of coverage.

    2.10.2 In-car coverage

    This is designed for the coverage inside vehicle. Due to the penetration loss of the glass window of the vehicle, the planners need stronger signal to reach the radio coverage inside the vehicle. For road coverage this kind of coverage is important.

    2.10.3 Indoor coverage

    This is the most challenging coverage to provide. This is the coverage that the city dwellers would demand. Due to the penetration loss of the thick walls of the building (concrete, glasses, etc.), it is needed to provide stronger signal. However, this can not be guaranteed!! This is because different houses are built in different ways, with different materials. Also that there may be a corner where it is very difficult for the radio signal to reach. As a thumb rule if one can read newspaper in any corner of the house in broad daylight, then it may be possible to reach coverage to that corner Because of the stronger signal requirement for indoor coverage, it is always expensive to provide this kind of coverage.

    2.11 Cell splitting

    The motivation behind implementing a cellular mobile system is to improve the Utilization of spectrum efficiency. The frequency reuse scheme in one concept and cell splitting is another concept. When traffic density starts to build-up & the frequency channels in each cell cannot provide enough mobile calls, the original cell can be split into smaller cells. Usually the new radius is one-half the original radius, i.e. New cell radius=.Old cell radius/2

    Hence, new eel l area= Old area/ 4

    So, new traffic load/unit area 4x traffic load /Unit area. There are two kinds of cell-splitting technique:

    2.11.1 Permanent splitting:

    The installation of every new split cell has to be planned ahead of time, the number of channels, the transmitted power, the assigned frequencies the choosing of the Cell-Site selection and the traffic load consideration should all considered.

    2.11.2 Dynamic splitting:

    This schemes is based on utilizing the allocated spectrum efficiency in real time. The algorithm for dynamically splitting cell sites is a tedious job since we cannot afford to have one single cell unused during cell splitting at heavy traffic hours. The splitting procedure is shown below:

    Fig-Cell Splitting

    2.12 Efficient phone operation with minimum power consumption

    · Hold the phone, as would any other telephone. While speaking directly into the mouthpiece, angle the antenna in a direction up and over the shoulder. If the antenna is extendable, it should be extended during a call.

    · Do not hold the antenna when the phone is in use. 1-biding the antenna affects call quality, may cause the phone to operate at a higher power level then needed and shown talk and standby times.

    2.13 Driving

    Check the laws and regulations on the use of telephones in the areas where one drive. When one uses phone while driving then

    • It is needed give full attention to driving.
    • Use off handshake operation, if available.
    • Pull off the road and a park before making or answering a call if driving conditions so require.

    2.14 Receiving a call

    When you receive a call, the phone rings the indicator light on the top of phone blinks rapidly.

    2.15 Answering a call

    · Press YES to answer the call.

    · When the call is finished, press no.

    2.16 Rejecting a call

    · Press No when the phone rings If the caller’s network supports it, the cagier will hear a busy tone.

    2.17 Putting a call on hold

    · Press YES to put a call on hold.

    · To put the call off hold, press YES again.

    2.18 A typical set of specification for mobile unit

    i. General:

    Battery voltage ……………………………. 9.0 to 16.0 Vdc

    Received current………………………….. 1.1A (Max)

    Transmitted current………………………. 3OA (Max)

    ii. Receiver:

    Frequency range………………………….. 935-960 MHz

    Channel spacing…………………………. 30 kHz

    Sensitivity………………………………… I micro volt for 12 dB sired.

    iii. Selectivity:

    Adjacent channel…………………….. Better than 50 dB

    All other channel……………………. better than 65 dB

    Audio response……………………. 30 Hz to 3 kHz+dB

    Harmonic distortion…………….. <5%

    Inter modulation…………………. 65 dB

    iv. Transmitter:

    Frequency range…………………. 890-915 MHz

    Channel spacing…………………. 30 kHz

    Carrier stability………………….. + 2.5 ppm

    Load impedance………………… 50 ohm

    Output power…………………… 3 watt (nominal Max. Level)

    Power steps……………………. seven, 1 dB steps

    100% deviation……………… + kHz peak

    FM hum & noise…………… <-40 dB

    Distortion……………………. < 5%

    Tx attach/inhibit time………… < 2 ns

    Carrier power inhibit………… 60 dBm

    2.19 Capacity and frequency re-use:

    Figure: Neighboring cells can not have the same frequency

    The number of frequencies in a cell determines the cell’s capacity. Each company with a license to operate a mobile network is allocated a limited number of frequencies These frequencies are distributed throughout the cells in their network. Depending on the traffic load and the availability of frequencies, a cell may have one or more frequencies allocated to it.

    To cover an entire country, fur example, frequencies must be re used many times at different geographical locations in order to provide a network with sufficient capacity. The same frequencies can not be used in neighboring cells as they would interfere with each other so special patterns oh frequency usage are determined during the planning of network.

    3.1 Introduction

    The mobile communication has come to the present state following a step by step generation. The first generation of mobile communication was started in Chicago, USA. It was analog one-called AMPS. It could transmit voice at a very slow rate. The second generation mobile was digital. It is able to transmit slow rate data & faster voice compared to first generation. The Third Generation Mobile Communication is the most modern mobile communication, which is already launched in Japan & USA. It provides several special features. In a word its functionality is like magic. As part of the landmark project to deliver the first KPI-compliant UNITS network in Africa to Vodacom, South Africa’s leading cellular network, Siemens Communications has partnered with their counterpart in 4G Technology and wireless network performance engineering solutions provider Actix. This chapter describes the step-by-step evaluation of mobile communication.

    3.2 Generations of wireless.

    -First generation wireless systems used Analog technologies to provide circuit switched access for mobile voice telephony

    • AMPS (Advanced Mobile Phone System)
    • MTS, IMTS, NMT, TACS, ETACS, JTACS, others.

    – Second-generation wireless systems use the earliest digital technologies provide mainly circuit- switched access for mobile voice telephony

    · GSM (Global System for Mobile Communications) TDMA

    · IS- 54. IS- 136 TDMA

    · IS- 95 CDMA.

    – Third generation wireless systems use improved digital technologies to provide packet- switched access for advanced voice and data applications

    • wider- bandwidth, higher- capacity, more features and applications
    • CDMA2000 IxRTT, IxEV DO, DV, 3xRTT – migration path from IS- 95
    • GPRS & UNITS – migration path from GSM and IS – 136 TDMA
    • EDGE – migration path from TDMA.

    – Fourth Generation technologies are erupting into the marketplace, a revolution that could topple (or be absorbed by) the established players.

    3.3 Wireless data

    – Each wireless technology offers limited data capability today.

    One or more circuit- switched traffic channels arc dedicated to fast data instead of voice

    • Dial- up modem emulation is provided at the wireless switch
    • Packet data access maybe provided by a muter at the switch, but the RF link is circuit- switched
    • Data rates are slow; compression may be provided.

    – Even 3G CDPD and Mobitex Data- Only technologies are slow!

    – 4G technologies are much better!

    • Much faster RF traffic channels
    • True packet- switched channel management.

    Table 1. Short History of Mobile Telephone Technology

    Technology 1G 2G 2.5G 3G 4G
    Design Began 1970 1980 1985 1990 2000
    Implementation 1984 1991 1999 2002 2010?
    Service Analog voice, synchronous data to 9.6 kbps Digital voice Higher capacity, packetized data Higher capacity, broadband data up to 2 Mbps Higher capacity,completely Ip-oriented, multimedia, data to hundreds of megabits
    Standards AMPS, TACS,NUT, etc. TDMA, CDMA,GSM, PDC GPRS, EDGE,1xRTT WCDMA,COMA2000 Single standard
    Data Bandwidth 1.9 kbps 14.4 kbps 384 kbps 2 Mbps 200 Mbps
    Multiplexing FDMA TDMA, CDMA TDMA, CDMA CDMA CDMA?
    Core Network PSTN PSTN PSTN,packet network Packet network internet

    3.4 Interesting features in 4G

    · Support interactive multimedia services: teleconferencing, wireless Internet, etc.

    · Wider bandwidths, higher bit rates.

    · Global mobility and service portability.

    · Low cost.

    · Scalability of mobile networks.

    3.5 Wireless development and the recent history of 4G

    The above figure shows the ages of science & Technology according to the name of scientists of different ages.

    – The ITU defined objectives for next-generation mobile systems in a 1998 request for proposals.

    – Sponsoring organizations submitted details of proposed radio transmission.

    3.6.1 The radio perspective

    Original commercial CDMA systems in the 800 MHz. Band complied with IS- 95A, and 1900 MHz. Systems complied with the Joint Standard 008. Both had the following common features:

    Signal structure:

    • 12288 MCPS spreading, signal 125 MHz Wide.
    • BTS Sectors have short PN offsets, channels are Walsh codes.
    • Mobiles have long PN offsets and transmit one channel only

    Traffic Channel Capabilities:

    · Rate Set 1: 9600- bps traffic channels for 8 kb/s vocoders.

    · Rate Set 2: 14400- bps traffic channels for 13 kb/ s vocoders

    and other 14400- max data applications.

    3.6.2 IS- 95B: CDMA 3G enhancements

    IS- 95B is still considered Third Generation, but offers some needed enhancements to the original IS- 95A and J- Std008.

    Improved Access Methods

    • Mobiles originally could use only one sector during an access attempt Multipath fading causes roughly 2% failed accesses!
    • IS- 95B allows mobiles to use alternate sectors as “backup” during access in case the original sector fades.

    Improved Handoff Methods

    • Original CDMA provided only fixed- threshold handoff triggers

    – Inflexible, can skip needed handoffs but waste unneeded ones

    • IS- 95B uses slope and intercept- based thresholds to tailor handoff action to what is really needed for call survival.

    Faster Data Services

    ·Original CDMA allowed data only at the rate of a single traffic channel

    · Is- 95B/ IS- 707 allows aggregation of traffic channels for faster data, but not at the rates provided by 3G cdma2000.

    3.7 The 4G path from GSM: GPRS, WCDMA, UMTS

    3.7.1 GSM history

    – The GSM network architecture was defined in work of the ETSI during the late I 980s

    • Switching and network architecture based on ISDN concepts
    • Roaming and location management derived from early intelligent Networks concepts.

    – GSM has enjoyed large business success due to its non-proprietary open architecture and competitive vendors

    • Approximately 60% of global wireless subscribers use GSM.

    3.7.2 Air interface

    There are three frequency bands defined for GSM: 900, 1800, and 1900. Within the GSM 900 band, there are 174 frequencies with 200kHz spacing. Separate bands are used for uplink (mobile to base) and downlink (base to mobile).

    Within each frequency, there arc 8 timeslots supporting up to 8 users. The modulation scheme is gaussian minimum shift keying, GMSK (a variant of binary phase shift keying) with a bit rate of 271 kbit/s.

    The speech signal is processed in 20ms intervals, called speech frames. Each speech frame is compressed and coded using 244 bits. These 244 bits are then encoded with a channel code, interleaved, segmented, and transmitted in 8 TDMA time slots. Similar transmission formats are used for data services.

    3.7.3 GSM radio network aspects Frequency planning and re-use. Frequency planning is necessary to avoid the same frequency being used in nearby cells, which would cause unwanted interference. The number of cells that use different frequencies is called the reuse factor. Tighter reuse (lower reuse factor) means that more frequencies can be used in each cell, for a given number of total frequencies, but also means a larger interference between the cells.

    Handover. When a user moves during a speech call, it may be necessary to perform a handover to another base station to keep the call. To support this, the mobile station periodically measures the quality of all neighbor cells and reports to the network. The decision when to perform the handover is made in the base station controller.

    Power control. Depending on attenuation and interference, different transmit power levels may be needed to obtain adequate signal quality. Power control is used to set the smallest possible power that meets the quality target. This reduces interference towards other users and increases the battery life time.

    Frequency hopping. A frequency may be bad in a certain location due to multipath fading, or it may be bad due to interference from other cells. Frequency hopping may be used to avoid staying at a bad frequency, instead a number of frequencies are circulated using a pseudo-random hopping sequence. .

    3.7.4 GPRS

    GPRS, General Packet Radio Services, is anextension to GSM that allows more efficient packet data transfer compared to traditional GSM data services. The principle is that a user can be constantly connected to the network without occupying any radio resources (frequency, time slots) until a data packet has to be transferred. When a packet is to be transferred, a temporary channel is assigned to the user; after completed transfer, the channel is quickly released again. GPRS allows many users to share the same timeslot, and also allows a single user to use more than one time slot. It uses an error detection and retransmission scheme to ensure that data packets are correctly delivered to the receiver.

    3.7.5 EDGE

    EDGE, Enhanced Data rates for GSM Evolution, is another extension to GSM that allows higher bit rates than GSM does. This is accomplished by using higher order modulation, 8-ary phase-shift keying instead of GSM’s binary phase-shift keying.

    3.7.6 WCDMA and UMTS

    WCDMA, Wideband Code-Division Multiple Access, is a new radio interface standard that supports a set of Universal Mobile Telecommunication Services, UMTS.

    The requirements of UMTS are:

    · Coverage and capacity for speech services should be better than GSM, under the same conditions

    · The system should be able to efficiently and flexibly handle a mix of real time, variable bit rate, and

    Packet services.

    · A data rate of 384 kbit/s should be possible to provide with full coverage (everywhere).

    · It should be possible to provide a data rate of 2 MbiVs in selected areas, e.g. indoors.

    CDMA Principle

    The basic principle of CDMA is that all or many users utilize the same frequency band simultaneously. The benefit of this is that each user has access to the entire system bandwidth all the time, potentially allowing higher data rates than a FDMA/TDMA system where each user has access to only a smaller bandwidth. However, the shared frequency means that the receiver of a particular signal has to cope with strong interference from other users. The CDMA principle used in WCDMA is called direct­sequence code-division multiple access. In the transmitter, the data sequence is spread by multiplying with a spreading sequence of a higher rate, after which it is modulated and transmitted. Spreading means that each data symbol (represented as +/-1) is repeated a number of times, equal to the spreading factor, and each repeated symbol is multiplied with a new symbol from the spreading sequence. The spreading sequence is a pseudo­random sequence that makes the transmitted signal look like noise. The receiver demodulates the signal and multiplies it with the same spreading sequence as was used in the transmitter. The original data sequence is then restored by taking the average over the repeated symbols.

    3.7.7 WCDMA air interface

    The CDMA principle is the corner stone for the flexibility of the WCDMA air interface. A higher data rate requires a low spreading factor, which means that the averaging in the receiver occurs over fewer symbols, resulting in less noise reduction.

    Therefore, a higher data rate requires a higher transmit power, and will cause stronger interference to other users. Conversely, a lower data rate can use a lower transmit power, causing less interference to other users. The transmit power does not only depend on the data rate, but also on the radio conditions. A user in a good location near the base station requires a lower power than a user far away. Furthermore, it is important that users in good locations keep their powers at a minimum, since they may otherwise cause too strong interference for other users. This is called the near-far effect. This is accomplished through closed-loop power control, whereby the receiver constantly monitors the quality of the received signal, and sends power control commands back to the transmitter, instructing it to either increase or reduce the power.

    FIG. WCDMA air interface example

    Some key parameters of the WCDMA air interface are:

    • Chip rate (rate of the spreading sequences) 3.84 MHz
    • Bandwidth 5 MHz
    • Modulation QPSK (quaternary phase-shift keying)
    • Spreading factor 4, 8, 16, 32, 64, 128, or 256
    • Power control rate 1500 Hz

    3.7.8 Frequency re-use 1

    Because of the CDMA principle, all base stations in a WCDMA system occupy the same frequency, i.e. the frequency reuse factor is 1. This means that the entire spectrum owned by an operator can be used in each cell.

    3.7.9 Soft handover

    Because of the varying radio conditions, the signal attenuation between the user and the base stations may change very quickly. If the user is connected to only one base station, it may be impossible to move the connection fast enough to always use the base station with the lowest attenuation (the “best” base station).

    FIG. Soft handover

    In a system with reuse factor 1, it may be disastrous for the system if a user is not connected to the best base station. The reason is that the transmit power in the mobile will by set such that the received signal is strong enough in the connected base station. If another connection is “better”, the transmit power of the mobile may cause too much interference in that base station, degrading the quality for other users. Soft handover means that the user is connected to more than one base station. The goal is to ensure that the best base station is always connected, even when the conditions are quickly varying. In soft handover, the transmit power of the mobile is controlled by the “best” base station, i.e. the base station to which the attenuation is lowest. Thereby, the power can be kept down and excessive interference can be avoided.

    3.8 FDMA/TDMA vs. CDMA Here are some technology comparisons between FDMA/TDMA and CDMA.

    3.8.1 Fading resistance

    Because CDMA systems use a higher bandwidth compared to systems that use FTMA, the systems are less vulnerable to frequency-selective fading. On the other hand, the near­tar effect means that fast power control is needed in CDMA systems to ensure that interference is not too large.

    3.8.2 Flexibility

    A FDMA/TDMA system is limited by its choice of channel bandwidth and time slot structure, which typically can not be changed after standardization. In a CDMA system, on the other hand, the resource sharing is accomplished by control the amount of power transmitted for each user, which can be changed in real-time.

    3.8.3 Frequency planning

    Systems based on FDMA require frequency planning, which is difficult and time consuming. This is not necessary with CDMA systems.

    3.8.4 Radiation

    Mobile stations based on TDMA transmit in short pulses, causing strong power peaks and potentially interfering with other devices. CDMA-based mobile stations, on the other hand-transmit continuously, only changing the power in steps according to varying radio conditions and desired bit rates.

    3.8.5 Complexity

    The high bandwidth and chip rates of CDMA makes the transmitters and receivers more complex to design and manufactured compared to FDMA-based devices.

    4.1 Introduction

    New mobile connections now exceed new fixed connections and, it is expected, will continue so to do. A successful vision for 4th generation systems will be set in a mobile/wire free environment with fixed as a subset. An Operator who wishes to launch 4G mobile, have to have a perfect plan for the total system. In this chapter there are some discussion about that Planning.

    4.2 The mobile challenge

    The first mobile challenge that of providing mass market voice communication, is largely satisfied by the existing digital cellular systems. The next challenge is to do the same for the Information Society services including graphics, video and mufti media.

    4.3 The 4th generation marketplace

    The 4th Generation Marketplace in the UK and Europe will be characterized in several ways; Personalization of services with the use of Universal Personal Pocket Terminals that are adaptive to support customer and network specific needs; Customers using wire free products and services with high performance and capabilities (including graphics, video and multi-media) that change how they work and live, with new consumer and business products which incorporate embedded radios to support services such as maintenance, customer care and fraud/theft prevention; a Market rapidly growing in penetration to 40% by 2005 (and continuing to grow), from which the majority of the population will derive benefit, involving significantly increased usage promoted by low costs and an extensive range of services, a highly competitive marketplace at al levels, and the concept of universal availability; and Service which will include advanced wire free services for business and consumers integrated with the information superhighway and its future developments including the European Information Infrastructure; with Vast Growth in value added opportunities based on capabilities within and external to networks and terminals, and new and innovative services stimulated by broadband networks.

    New industrial growth from the Collisions and Convergences across industry will be enabled by 4th generation mobile systems with the future role of service providers, and possible restrictions on ownership, key issues for the industry requiring further study.

    4.4 UMTS platform

    The concept of the GSM platform has become a proven success and UMTS should be implemented so as to benefit from this experience. The merits of building on GSM are evident. Several mobile satellite operators have decided to base their infrastructure on GSM, providing dual operation with common security, authentication and billing mechanisms. Also, the European railway community UIC is to use a slightly modified version oh the GSM air interface for railway applications. Roaming with DECT using the GSM core platform is now in development, and a form of UPT based on the GSM SIM is being considered to provide roaming between fixed networks.

    QSM has become a platform for a wide range of services with different terminal standards while using the SIM and MAP (and often the A interface) to provide roaming and billing with security. The GSM MoU Association has recently opened its membership to public operators of telecommunications systems based on the GSM platform irrespective of the terminal interface adopted, conditional on providing roaming services.

    UMTS should adopt a similar approach with the specification of a number of standardized interfaces with specific interfaces to allow the cost effective multi- sourcing of infrastructure. As with GSM, the SIM (or USIM), MAP (or its replacement) and Billing Interfaces will be very important. The UMTS interfaces will perform many similar functions to those of GSM but will differ where necessary to support the more complex service and feature structure of UMTS.

    4.5 Critical success factors

    Success in a modern telecommunications venture is dependent on an available market and on an investment environment in which a sensible minimal risk business opportunity can be foreseen by financiers. The remainders of the success factors are targeted against meeting these two over-riding criteria. The more stable and more predictable the sector is seen to be, the more funding that will be available at attractive terms. This means that roll out occurs more rapidly, pay- hack is achieved in a shorter timescales, and the tariffs can be set to attract mass market participation from the outset, with the benefits that mobility and access to the information superhighway, fundamental to the success of the UK and Europe, can be achieved as quickly as possible.

    The success factors are grouped into market, regulatory environment, industrial sector, standards and technology.

    4.5.1 Market

    The Group considers that an initial total market opportunity of 8 million users is required to support the necessary investment by manufacturers of UMTS terminals, growing to at least 60 million within 10 years. Growth thereafter is subject to market development.

    At the end of 1996, Japan had 18.2 million cellular customers and 4.9 million users of the Personal Handyphone System (PF1S); these markets are predicted to rise to 34 million for cellular and 38 million for PHS by the year 2010; a cordless market of 20 million at the year 2000 is expected to remain static until the year 2010. In financial terms, Japan consider this to be a market growing from a current £10,000 million (equivalent to 40,000 employees) to £32,000 million in 2000, and £93,000 million by 2010, by then supporting 520,000 employees.

    Already in Scandinavia the penetration of cellular mobile is approaching 30%, in the UK it is almost 12% and within Europe and developed countries it is anticipated to rise to greater than 50% of the population. (Within the Stockholm district in Sweden the peak period penetration is estimated at up to 60%). The scale of the industry has grown vastly and within the UK there are over 100,000 employees are engaged on cellular domestic end export activities.

    GSM MoU Association has given estimates that 150 million GSM terminals will be in use world-wide by the end of the century. GSM global usage will further grow to at least 200 million terminals by 2005, constituting a truly mass market. UMTS will go on to provide two major enhancements. Firstly the addition of broadband multimedia services and secondly the ability to connect via cellular mobile networks, global satellite networks, private cordless networks, and through wireless access to fixed public networks, whichever is the best for the user’s situation at any time.

    4.5.2 Regulatory and licensing

    Policy announcements setting out a calendar for the adoption of UMTS standards by the UK and Europe, for the release of a designated frequency allocation, and the conditions for licensing are recommended to encourage potential operators and manufacturers to commit resources to the third generation standards-making process and subsequent investment in third generation mobile technology.

    It is important that the conditions for licensing the telecommunications business in Europe are not seen to be transient. An unstable historical environment is likely to deter both operators and manufacturers from making the massive investment necessary to implement third generation mobile.

    The Group considers that it is essential to have a regulatory regime which will ensure that operators can reasonably expect that the licensing conditions offered will remain in place long enough to ensure that the massive investment in new technology is recovered, and that the market opportunities, identified during conception and licensing, will not be distorted by changes in regulatory policy. This may require a policy statement from the respective member states within Europe to ensure that this is achieved.

    4.5.3 Industrial sector

    Commercial successes will not he achieved without an announced commitment by strong manufacturers to support the standard and the technology – ideally a minimum of 3 infrastructure manufacturers and 10 volume terminal manufacturers. This will provide operators with both competitive choice for their network and an identifiable source of product so that the network can be exploited.

    4.5.4 Standards

    A stable standard is required, with open interfaces for all external interconnection and key internal network functional blocks. Such a standard will limit development brisk and maximize returns to manufacturers from development expenditure. It will create a competitive environment where users can change between operators and allow both choice and purchase confidence.

    4.5.5 Technology

    Technological solutions must be found which will ensure new services e.g. multi media and broadband services can be provided and migrated to and from fixed networks.

    Technological solutions are required for Network, Architectures and Terminals which, when applied to high volume market, will produce very low cost terminals and low tariffs.

    Technological solutions should allow migration from the existing second generation mobile systems where appropriate.

    Technological solutions must take account of the strong convergence between the Information Technology and telecommunications sectors, in both the network infrastructure and terminal equipment fields.

    Technological solutions must offer flexibility of service provision e.g. the capability to mix voice and data in various proportions, support variable rate data, etc.

    4.6 Network issues

    4.6.1 Service requirements

    UNITS is required to support a wide range of services, generally incorporating those familiar within second generation cellular, fixed, cordless, satellite and PMR networks. The UMTS standard will also support a range of more advanced services such as multi­media. However, it is planned that in most cases, UMTS will provide support for these services, rather than itself define the actual services. Multi-media services will require the availability of higher bandwidths at variable rates, on demand (i.e. packet-based services

    FOURTH GENERATION OF MOBILE COMMUNICATION (4G)

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    1.1 Introduction
    We are experiencing exponential growth rates in mobile communication systems, increasing mobility awareness in society, and deregulation of former monopolized markets while traditional communication paradigms with fixed networks, mobility raises a new set of questions, techniques and solutions. For many countries, mobile communication is the only solution due to the lack of an appropriate fixed communication infrastructure. The trends mentioned above create an ever- increasing demand for well-ended communication engineers who understand the developments and possibilities of mobile communication. What we see today is only the beginning. There are many new and exciting systems currently being developed in research labs. The future will see more and more mobile devices, the merging of classical voice and data transmission technologies, and the extension of today’s internet applications (e.g., the World Wide Web) onto mobile and wireless devices. New applications and new mobile networks will bring ubiquitous multimedia computing to the mass market; radios, personal digital assistants, laptops and mobile phones will converge and many different functions will be available on one device.

    This thesis is an introduction to the field of fourth generation of mobile communications and focuses on digital data transfer. The paper is intended for use by students of EE or communication classes, engineers working with fixed networks who want to see the future trends in networking, as well as managers who need a comprehensible overview in mobile communication. The reader requires a basic understanding of communication and a rough knowledge of the Internet or networking in general.

    This work addresses people who want to know how 4G mobile phone systems work, what technology will be next in satellite communication, and how mobility will influence applications, security, or networks.

    The job follows a tall and thin’ approach. It covers a whole course in 4G mobile communications, from signals, access protocols, up to application requirements and security. Topics in the higher layers of communication, like the wireless applications are also mentioned here briefly.
    Chapter two introduces the field of cellular fundamentals, a basic cellular system which include a mobile unit, a cell site, connections etc. this section gives a over view of the performance criteria of a cellular system such as voice quality and service quality. Here operation of a cellular system has been described which tells about mobile call origination, network originating call, call termination, handoff procedure. In this chapter the cell splitting has been described which will increase channel capacity of Cellular system.

    Chapter three presents the step-by-step generation of wireless communications. It includes wireless data formats, voice and-data rate upgrading in step-by-step generation. It gives over view of 4G features, the history of the age of science and technology, the file transfer telecommunication age and the age of wireless telephony.

    Chapter four describes the 4G planning and requirements. Planning is a very much important factor for mobile communication. The overall success of the trial system deepens on the well and good planning. While planning the system several factors have to be considered such as the mobile challenge, the market place. The best platform for 4G is the UMTS which is included in this section. The most critical success factors of 4G are the market, regulatory and licensing, industrial sectors, different standards, technology effort, the network issues which includes requirements, creations, provisions of services, the human factors which is influenced by charging, evolution, radio access, service adoption, the quality of service aspects.

    Chapter five explains GPRS in details. The GPRS network is explained here. The important features of GPRS services such as short massage service are included. This section shows the GSM migration to GPRS, GSM BTS Changes Required to Support GPRS, Channel Coding Implemented at the BTS, the GPRS Location management State Model, and Mobile Action based on GPRS Location State, GPRS.

    Enhancements: EDGE. Here the GPRS switching, The EDGE Air Interface Key User Features of GPRS. Here The GPRS switching, spectrum efficiency are included. At the end of this chapter the GPRS applications such as chat, textual and visual information, still images, moving images, web browsing, document sharing, collaborative working, audio, corporate email, Internet email, file transfer etc.

    Chapter six describes the distinguishing features between CDMA & WCDMA. Benefits of WCDMA is described here & the system details & The technical Features of WCDMA is also provided in this Chapter. UMTS architecture & technical features of UMTS like core network. There are also features about the UTRAN & Radio Network Controller (RNC). UMTS radio access & modulation techniques are mentioned in this chapter. There are also details about WCDMA Access & Timeslot . UMTS Special features like multi-rate & Rate Matching are provided here. We also mentioned here details about the UMTS Handovers. Consequently this chapter describes the leading technology of fourth Generation of Mobile Communication.

    Chapter Seven includes the multimedia communication points out a Communication with multiple ways of presenting the information, as a combination of text, data, graphics, animation, images, sound, speech and still or moving video. Interesting characteristics added to multimedia communication.

    This chapter has presented the feasibility of transmitting compressed video information over the WCDMA link. In the approach presented, two direct spread supplemental channels were considered to transport highly compressed video signals with two layer partitioning. This strategy was implemented by allocating a different power to each supplemental channel in accordance with the parameters specified in the link budget. The supplemental channel with the higher allocated power was used to carry the partitioned video bit stream. This channel carried more error-sensitive data information. It was shown that such a strategy can be effectively applied to the cdma2000 system for video conferencing applications.

    multi-rate & Rate Matching are provided here. We also mentioned here details about the UMTS Handovers. Consequently this chapter describes the leading technology of fourth Generation of Mobile Communication.

    Chapter Seven includes the multimedia communication points out a Communication with multiple ways of presenting the information, as a combination of text, data, graphics, animation, images, sound, speech and still or moving video. Interesting characteristics added to multimedia communication.

    This chapter has presented the feasibility of transmitting compressed video information over the WCDMA reverse link. In the approach presented, two direct spread supplemental channels were considered to transport highly compressed video signals with two layer partitioning. This strategy was implemented by allocating a different power to each supplemental channel in accordance with the parameters specified in the link budget. The supplemental channel with the higher allocated power was used to carry the partitioned video bit stream. This channel carved more error-sensitive data information. It was shown that such a strategy can be effectively applied to the cdma2000 system for video conferencing applications.

    Chapter eight focuses on Mobile IP, IP Based transport to data networks, dynamic IP Address, User keeps same IP & address across networks and along with these mobile IP Sessions, Tunneling & Mobile IP Authentication. Here are also Active IP Session & its advantages & disadvantages.

    Chapter nine 4G opens the door to anything you can imagine. You will be able to do a multitude of things while going through your daily schedule, whether at work or at leisure. The scenarios below demonstrate just a few applications for 4G and only hint at what will be on offer in the future. Versatile applications of fourth generation mobile is described here briefly.
    Chapter ten discusses about the present condition of mobile communication in Bangladesh.
    Chapter eleven presents the description of the implementation of FM transmitter.

    1.3 Standards of mobile communication
    The main standards and the main markets in which they are used are summarized in the following table.

    Year Standard Mobile telephone system Technology Primary Markets
    1981 NMT-450 Nordic Mobile Telephone Analogus Europs Middle East
    1983 AMPS Advance Mobile Phone System Analogue North and South America
    1985 TACS Total Access Communication System Analogue Europe and Chana
    1986 NMT 900 Nordic Mobile Telephone Analogue Europe, Middle East
    1991 GSM Global System for Mobile Communication Digital World-wide
    1991 TDMA D-AMPS Tune Division Multiple Access Digital North and South America
    1992 CDMA Code Division Multiple Digital N. America, Korsa
    1993 GSM 1800 Global System for Mobile Communication Digital Europe
    1994 PDC Personal Digital Cellular Digital Japan
    1995 PCS 1900 Personal Communication Services Digital North America
    2000 CDMA, GPRS Coded Division Multiple Access Digital USA
    2002 4G, WCDMA WCDMA/UMTS CDMA 4G Digital Japan USA
    Table: Brief History of Mobile Standards.

    1.3 Scope of 4G
    4G is designed to deliver:
    A wide range of market-focused applications.
    Long-term market-driven creativity, an innovative value chain and real user benefits, driving genuine market demand.Advanced, lightweight, easy-to-use terminals with intuitive interfaces Instant, real-time multimedia communications.
    Global mobility and roaming. A wide range of vendors and operators, offering choice, competition and affordability. High-speed e-mail and Internet access.

    1.4 What’s new in 4G
    All network elements are digital.
    Entirely packet-switched networks.
    Higher bandwidths to provide multimedia services at lower cost (up to 100Mbps)
    Tight network security.
    1.5 Comparison of 3G and 4G

    3G 4G
    Back compatible to 2G. Extend 3G capacity by one order of magnitude:
    Circuit and packet switched networks. Entirely packet switched networks.
    Combination of existing & evolved equipment. All network elements are digital.
    Data rate (up to 2Mbps). Higher bandwidth (up to 100 Mbps).
    1.6 Rolling out of 4G

    NTT DoCoMo already launched the worlds’ first commercialized fourth-generation “FOMA” mobile communication service on October l, 2003. FOMA is the name used in Japan for NTT DoCoMo’s 4G services.
    The question of 4G deployments is not a technical issue, but a regulatory and economic one- Subscriber demand is the key factor: user expectations for mobile services are being raised, and for any successful 4G license bidder time to market will be critical. The way 4G is rolled out in a particular market-will depend entirely on the business plans of the mobile operators, and the license requirements imposed by the regulatory authorities.

    Today’s mobile network operators can gain the vital business and market experience of providing high-speed mobile data services by introducing packet switching networks such as GPRS (General Packer Radio Service). By the time the new WCDMA, EDGE and cdma2000 wideband radio interfaces are standardized and commercially available, the market will already be attuned to the possibilities of 4G. Japan was the first market to announce specific plans to introduce wideband radio networks based on WCDMA technology. As a result, it is expected that 4G will go into service first in Japan. Currently, WCDMA networks are scheduled to be in operation there in 2001. The 4G licensing process has completed in many countries in Europe, and the first wideband radio networks are expected to enter commercial operation in 2005. Before then, GPRS will be introduced into GSM networks, to increase user bandwidth. The first GPRS systems was introduced early in 2000 in France but due to handset shortest and technical problems of the advance overall network architecture, it was not a success.

    2.1 Introduction
    The concept of mobile telephony was originated in the 1920’s, but it was only in 1947 that the cellular network structure was devised. Up to then, no solution enabled a mobile station to roam far from the antenna system. The concept of cellular communication was born in the Bell laboratories of the USA in the late 1960’s. In the mid 1970’s, AT&T’s Bell labs demonstrated, what came to be known as Cellular Mobile Telephone (CMPT). Cellular technology provides communication to and from the user located anywhere on the glob or within a territory, through a portable lightweight handheld mobile telephone. It is a two way communication process. An area is divided into a number of cells, each with a Radio Base Station (RBS), having a transmitting and receiving tower. In cellular mobile telephone system, the subscriber carries small sized transceiver (transmitter cum receiver) with an assigned radio frequency channel through which the Public Service Telephone Network (PSTN) subscriber can call the mobile, the mobile can call the PSTN subscriber and the mobiles themselves can talk to one another. Based on the concept of efficient spectrum utilization, the cellular mobile radio system design can be analyzed and related to the others. `1 major elements are the concept of frequency reuse channels, the co channel interference reduction factor, handoff mechanism, cell splitting etc. The common problems are path loss, shadowing, multi-path fading, time dispersion, time alignment etc. There are several solutions to solve these problems. To solve these problems several techniques such as channel coding, interleaving, adaptive equalization, frequency hopping etc are used.

    2.2 Cellular fundamentals
    A cell may be defined an area of radio coverage from one Base Transceiver Station (BTS) antenna system. It is the smallest building block in a mobile network and is the reason why mobile networks are often referred to as cellular networks. The power level of a transmitter within a single cell must be limited in order to reduce the interference with the transmitters of neighboring cells. The interference will not produce any damage to the system if a distance of about 2.5 to 3 times the diameter of a cell is reserved between transmitters.
    In order to work properly, a cellular system must verify the following two main conditions.
    Neighboring cells cannot share the same channels. In order to reduce the interference, the frequencies must he reused only within a certain pattern.It is two-way communication process. An area is decided into a number of cells, each with a radio base station (RBS), having a transmitting and a receiving tower. Each RDS has a set of channels assigned. The mobile in a given cell send its signals to RBS.A number of RBSs are connected to and controlled by ‘a base station controller (BSC). All the BSCs in the service Qreace connected to the mobile switching center (MSC) which handles major technical  like switching, assigning radio channels to every mobile, locating the cell a mobile is in as soon as it is switched on, as it moves From cell, measuring the calls, recording the charges etc The MSC is the switches that interconnect the PSTN (public switched telephone network) and the mobile system.

    2.3 A basic cellular system
    A basic cellular system consists of three parts: a mobile unit, a cell site, and a Mobile Telephone Switching Office (MTSO).

    Mobile unit: A mobile telephone unit contains a control unit, a transceiver and antenna system.

    Cell site: The cell site provides interface between the MTSO and the mobile units, it has a control unit, radio cabinets, antennas, a power plant, and data terminals.

    MTSO: The switching off-ice, the central coordinating element for all cell sites, contains the cellular processor and cellular switch. It interfaces with telephone company Lone offices, controls call processing, and handles billing activities. The radio and high-speed data links connect the three substations. Each mobile unit can only use one channel at a time for its communication link. The MTSO is the heart of cellular mobile system. Their processor provides central coordination and cellular administration.

    2.4 Cluster
    The cells are grouped into clusters. The number of cells in a cluster must be determined so that the cluster can be repeated continuously within the covering area of an operator. The typical clusters contain 4,7,12 or 21 cells. A balance must be found in order to avoid the interference that could occur between neighboring clusters.

    2.5 Cell type
    Cells can be of different types based on the antenna direction, size and nature of the area they cover, etc. Some of the cell types are described below:
    A. Depending on the antenna direction:
    Omni cells are the cells served by antenna, which transmits, equally in all horizontal direction.
    Sector cell – a cell with uni-directional BTS antenna system.
    Three sectored cells from one tower system can also form a circular coverage area. Sectors will be 120 degree apart from each other. In Grameen Phone we use three sectored cells to obtain more or less a circular coverage area.

    B. Depending on the size of the cell:
    Macro cell
    Micro cell
    Pico cell
    C. Depending on the area
    Urban cell
    Suburban cell
    Rural cells ‘

    D. Depending on the cell relationship
    Overlaid cell
    Under laid cell
    Umbrella cell
    E.  Depending on thee usage
    Indoor cells
    Outdoor cell
    Road cell to give coverage to a particular road, etc.

    2.6 Performance criteria
    The cellular system provides some important performances which give the subscribers better services. There are four categories for specifying performance criteria.

    2.6.1 Voice quality
    Voice quality is very hard to judge without subjective tests from users opinions. In this technical area engineers cannot decide how to build a system without knowing the voice quality that will satisfy the users. For any given commercial communications, the voice will be based upon the following criterion: a set value X at which Y percent of customers rate the system voice quality as good or excellent, the top to circuits merits of the five listed bellow:
    CMS- excellent (speech perfectly understandable)
    CM4- good (speech easily understandable, some noise)
    CM3- fair (speech understandable with a slight effort, occasional repetition)
    CM2- fair (speech understandable only with considerable effort, frequent repetition needed )
    CM 1- unusable (speech not understandable)

    2.6.2 Service quality
    Coverage: The system should serve an area as large as possible. It is usually not practical to cover 100 percent of the area for two reasons:
    a. The transmitted power would have to be very high to illuminate weak spots with sufficient reception, a significant added cost factor.
    b. The higher the transmitted power, the harder it becomes to control interference.
    Required grade of service: For a normal start-up system the grade of service is specified for a blocking probability of 0.02 for initiating calls at the busy hour. This is an average value.
    Number of dropped calls: During Q calls in an hour, if a call is dropped and Q-1 calls are completed, then the call drop rate is l/q, this drop rate must be kept low.

    2.6.3 Low terminal and service cost
    In cellular system the mobile terminal (hand set) and the rate per minute of the call is low than other system.

    2.6.4 Support of international roaming
    In cellular system one can get the service of call even during moving from one site to another by the process of hand over As the tits roams through the area, it continuous t scan the control channels to ensure that It is tuned to the strongest possible channel If the MS finds one, which is stronger, then the MS retunes to this new control channels If the new control channel belongs to a new Local Area (LA), the MS will also inform the network of its new location.

    2.7 Operation of cellular System
    For the call set up in the cellular mobile communication system among the subscribers throughout the cellular network the following operations are to be performed.

    2.7.1 Mobile unit initialization
    When a receiver of a mobile unit is activated, its scans 21 set up channels, which are designed among the 333 channels. It then selects the strongest and locks on for a certain time. This means selecting nearest cell site. This function is done in idle stage and is used independent. After 60 see, this self-location procedure is repeated.

    2.7.2 Mobile Originating call
    The user places the called number into an originated register, checks to see that the number is correct and pushes the “send” button. A request for service is sent on a selected set-up channel obtained from a self-location scheme. The cell receives it, and in directional cell sites, selects the best directive antenna for the voice channel to us.

    At the same time the cell site sends a request to the mobile telephone switching office. (MTSO) via a high-speed data link, The MTSO selects an appropriate voice channel for the call; it also connects the wire-line party through the telephone company zone off-ice.

    2.7.3 Network originated call
    A land-wire party dials a mobile unit number. The telephone company zone office recognizes that the number is mobile & forwards the call to the MTSO sends a paging message to certain cell site based on the mobile unit number and the search algorithm. Each cell site transmits the page on its own set-up channel. The mobile unit recognizes its own identification on strong set-up channel, lucks on to the cell site.

    2.7.4 Call termination
    When the mobile user turns off the transmitter, a particular signal (signaling tone) transmit to the cell site, and both sides free the voice channel.

    2.8 Handoff procedure
    During the call, two parties are on a voice channel. When the mobile unit moves out of the coverage area of a particular cell site, the reception becomes weak. The present cell site requests a handoff. The system switches the call to a new frequency channel in a new cell site without either interrupting the call or altering the user. The call continues as long as the user is talking. The user does not notice the handoff occurrences.

    2.9 Hand Over
    Hand over is defined as the passing, I taking over a live call between two neighboring cells or frequencies. When a user reaches the edge of a cell, the signal strength (between the serving base station and himself) gets weaker. If his call is not taken over by another cell, his call might be dropped (discontinued). The signal strength criterion is the basic behind a hand over. However, there are many other special reasons why a call could be handed over (bad quality, congestion, etc).

    As the cell sizes are getting smaller, the probability of a subscriber to move to a nearby cell while talking is increasing also. Thus the challenge of this cellular concept is to transfer a “live” call to a nearby cell when the user is on the move. The characteristic of such a hand over is the delay time – i.e., how faster the call can be handed over. Now a clays the systems are so intelligent and faster that the user is totally unaware of when they are actually handing over to other cells.

    As we are reducing the cell size, the shorter would be “sate distance” and the more would be the number of such hand over and more resources (measurements, calculation, decision making) would be needed from the network element to handle these great number of hand over.

    Following figure shows a road, which passes through many cells. A car taking this road will be served by all these cells one after another thus generating a number of handover in one single call.

    2.10 Coverage range of a cell
    Coverage is defined as the area of the geographical region where a good communication is possible via the mobile station.By coverage is usually meant that an area is covered if in 90% of that area the signal received by the mobile station is larger than some value. This value is defined by the radio planner on the basis of the area and the equipment specifications. According to the strength of the signals, the coverage may be classified into three types:

    2.10.1 Outdoor coverage
    This is designed for open area. This may be useful for the rural area coverage. High gain antenna with wide opening angle is possible in this kind of coverage.

    2.10.2 In-car coverage

    This is designed for the coverage inside vehicle. Due to the penetration loss of the glass window of the vehicle, the planners need stronger signal to reach the radio coverage inside the vehicle. For road coverage this kind of coverage is important.

    2.10.3 Indoor coverage

    This is the most challenging coverage to provide. This is the coverage that the city dwellers would demand. Due to the penetration loss of the thick walls of the building (concrete, glasses, etc.), it is needed to provide stronger signal. However, this cannot be guaranteed!! This is because different houses are built in different ways, with different materials. Also that there may be a corner where it is very difficult for the radio signal to reach. As a thumb rule if one can read newspaper in any corner of the house in broad daylight, then it may be possible to reach coverage to that corner Because of the stronger signal requirement for indoor coverage, it is always expensive to provide this kind of coverage.
    2.11 Cell splitting

    The motivation behind implementing a cellular mobile system is to improve the Utilization of spectrum efficiency. The frequency reuse scheme in one concept and cell splitting is another concept. When traffic density starts to build-up & the frequency channels in each cell cannot provide enough mobile calls, the original cell can be split into smaller cells. Usually the new radius is one-half the original radius, i.e. New cell radius=.Old cell radius/2
    Hence, new eel l area= Old area/ 4
    So, new traffic load/unit area 4x traffic load /Unit area. There are two kinds of cell-splitting technique:

    2.11.1 Permanent splitting:
    The installation of every new split cell has to be planned ahead of time, the number of channels, the transmitted power, the assigned frequencies the choosing of the Cell-Site selection and the traffic load consideration should all considered.

    2.11.2 Dynamic splitting:
    This schemes is based on utilizing the allocated spectrum efficiency in real time. The algorithm for dynamically splitting cell sites is a tedious job since we cannot afford to have one single cell unused during cell splitting at heavy traffic hours. The splitting procedure is shown below:

    Fig-Cell Splitting

    2.12 Efficient phone operation with minimum power consumption
    Hold the phone, as would any other telephone. While speaking directly into the mouthpiece, angle the antenna in a direction up and over the shoulder. If the antenna is extendable, it should be extended during a call.
    Do not hold the antenna when the phone is in use. 1-biding the antenna affects call quality, may cause the phone to operate at a higher power level then needed and shown talk and standby times.

    2.13 Driving
    Check the laws and regulations on the use of telephones in the areas where one drive. When one uses phone while driving then
    It is needed give full attention to driving.
    Use off handshake operation, if available.
    Pull off the road and a park before making or answering a call if driving conditions so require.

    2.14 Receiving a call
    When you receive a call, the phone rings the indicator light on the top of phone blinks rapidly.

    2.15 Answering a call
    Press YES to answer the call.
    When the call is finished, press no.

    2.16 Rejecting a call
    Press No when the phone rings If the caller’s network supports it, the cagier will hear a busy tone.

    2.17 Putting a call on hold
    Press YES to put a call on hold.
    To put the call off hold, press YES again.

    2.18 A typical set of specification for mobile unit
    i.          General:
    Battery voltage …………………………….              9.0 to 16.0 Vdc
    Received current …………………………..             1.1A (Max)
    Transmitted current……………………….              3OA (Max)
    ii.         Receiver:
    Frequency range…………………………..              935-960 MHz
    Channel spacing………………………….               30 kHz
    Sensitivity…………………………………      I micro volt for 12 dB sired.
    iii.        Selectivity:
    Adjacent channel……………………..                   Better than 50 dB
    All other channel…………………….                    better than 65 dB
    Audio response…………………….                                   30 Hz to 3 kHz+dB
    Harmonic distortion……………..                                    <5%
    Inter modulation………………….                                    65 dB
    iv.        Transmitter:
    Frequency range………………….                        890-915 MHz
    Channel spacing………………….                        30 kHz
    Carrier stability…………………..             + 2.5 ppm
    Load impedance…………………             50 ohm
    Output power……………………               3 watt (nominal Max. Level)
    Power steps…………………….                 seven, 1 dB steps
    100% deviation………………                 + kHz peak
    FM hum & noise……………                   <-40 dB
    Distortion…………………….                    < 5%
    Tx attach/inhibit time…………               < 2 ns
    Carrier power inhibit…………                60 dBm
    2.19 Capacity and frequency re-use:

    Figure : Neighboring cells can not have the same frequency
    The number of frequencies in a cell determines the cell’s capacity. Each company with a license to operate a mobile network is allocated a limited number of frequencies These frequencies are distributed throughout the cells in their network. Depending on the traffic load and the availability of frequencies, a cell may have one or more frequencies allocated to it.
    To cover an entire country, fur example, frequencies must be re used many times at different geographical locations in order to provide a network with sufficient capacity. The same frequencies can not be used in neighboring cells as they would interfere with each other so special patterns oh frequency usage are determined during the planning of network.

    3.1  Introduction 
    The mobile communication has come to the present state following a step by step generation. The first generation of mobile communication was started in Chicago, USA. It was analog one-called AMPS. It could transmit voice at a very slow rate. The second generation mobile was digital. It is able to transmit slow rate data & faster voice compared to first generation. The Third Generation Mobile Communication is the most modern mobile communication, which is already launched in Japan & USA. It provides several special features. In a word its functionality is like magic. As part of the landmark project to deliver the first KPI-compliant UNITS network in Africa to Vodacom, South Africa’s leading cellular network, Siemens Communications has partnered with their counterpart in 4G Technology and wireless network performance engineering solutions provider Actix. This chapter describes the step-by-step evaluation of mobile communication.

    3.2 Generations of wireless.
    -First generation wireless systems used Analog technologies to provide circuit switched access for mobile voice telephony
    AMPS (Advanced Mobile Phone System)
    MTS, IMTS, NMT, TACS, ETACS, JTACS, others.
    – Second-generation wireless systems use the earliest digital technologies provide mainly circuit- switched access for mobile voice telephony
    GSM (Global System for Mobile Communications) TDMA
    IS- 54. IS- 136 TDMA
    IS- 95 CDMA.
    – Third generation wireless systems use improved digital technologies to provide packet- switched access for advanced voice and data applications
    wider- bandwidth, higher- capacity, more features and applications
    CDMA2000 IxRTT, IxEV DO, DV, 3xRTT – migration path from IS- 95
    GPRS & UNITS – migration path from GSM and IS – 136 TDMA
    EDGE – migration path from TDMA.
    – Fourth Generation technologies are erupting into the marketplace, a revolution that could topple (or be absorbed by) the established players.

    3.3 Wireless data 
    – Each wireless technology offers limited data capability today.
    One or more circuit- switched traffic channels arc dedicated to fast data instead of voice
    Dial- up modem emulation is provided at the wireless switch
    Packet data access maybe provided by a muter at the switch, but the RF link is circuit- switched
    Data rates are slow; compression may be provided.
    – Even 3G CDPD and Mobitex Data- Only technologies are slow!
    – 4G technologies are much better!
    Much faster RF traffic channels
    True packet- switched channel management.

    Technology 1G 2G 2.5G 3G 4G
    Design Began 1970 1980 1985 1990 2000
    Implementation  1984 1991 1999 2002 2010?
    Service Analog voice, synchronous data to 9.6 kbps Digital voice Higher capacity, packetized data Higher capacity, broadband data up to 2 Mbps Higher capacity,
    completely Ip-oriented, multimedia, data to hundreds of megabits
    Standards AMPS, TACS,
    NUT, etc.    		 TDMA, CDMA,
    GSM, PDC    		 GPRS, EDGE,
    1xRTT    		 WCDMA,
    COMA2000    		 Single standard
    Data Bandwidth 1.9 kbps 14.4 kbps 384 kbps 2 Mbps 200 Mbps
    Multiplexing FDMA TDMA, CDMA TDMA, CDMA CDMA CDMA?
    Core Network PSTN PSTN PSTN,
    packet network    		 Packet network internet
    Table 1. Short History of Mobile Telephone Technology

    3.4 Interesting features in 4G
    Support interactive multimedia services: teleconferencing, wireless Internet, etc.
    Wider bandwidths, higher bit rates.
    Global mobility and service portability.
    Low cost.
    Scalability of mobile networks.

    3.5 Wireless development and the recent history of 4G
    The above figure shows the ages of science & Technology according to the name of scientists of different ages.
    –           The ITU defined objectives for next-generation mobile systems in a 1998 request for proposals.
    –           Sponsoring organizations submitted details of proposed radio transmission.

    3.6.1 The radio perspective
    Original commercial CDMA systems in the 800 MHz. Band complied with IS- 95A, and 1900 MHz. Systems complied with the Joint Standard 008. Both had the following common features:
    Signal structure:
    12288 MCPS spreading, signal 125 MHz Wide.
    BTS Sectors have short PN offsets, channels are Walsh codes.
    Mobiles have long PN offsets and transmit one channel only
    Traffic Channel Capabilities:
    Rate Set 1: 9600- bps traffic channels for 8 kb/s vocoders.
    Rate Set 2: 14400- bps traffic channels for 13 kb/ s vocoders and other 14400- max data applications.

    3.6.2 IS- 95B: CDMA 3G enhancements
    IS- 95B is still considered Third Generation, but offers some needed enhancements to the original IS- 95A and J- Std008.
    Improved Access Methods
    Mobiles originally could use only one sector during an access attempt Multipath fading causes roughly 2% failed accesses!
    IS- 95B allows mobiles to use alternate sectors as “backup” during access in case the original sector fades.
    Improved Handoff Methods
    Original CDMA provided only fixed- threshold handoff triggers
    – Inflexible, can skip needed handoffs but waste unneeded ones
    IS- 95B uses slope and intercept- based thresholds to tailor handoff action to what is really needed for call survival.
    Faster Data Services
    Original CDMA allowed data only at the rate of a single traffic channel
    Is- 95B/ IS- 707 allows aggregation of traffic channels for faster data, but not at the rates provided by 3G cdma2000.

    3.7 The 4G path from GSM:GPRS, WCDMA, UMTSN

    3.7.1 GSM history
    – The GSM network architecture was defined in work of the ETSI during the late I 980s
    Switching and network architecture based on ISDN concepts
    Roaming and location management derived from early intelligent Networks concepts.
    – GSM has enjoyed large business success due to its non-proprietary open architecture and competitive vendors
    Approximately 60% of global wireless subscribers use GSM.
    3.7.2 Air interface
    There are three frequency bands defined for GSM: 900, 1800, and 1900. Within the GSM 900 band, there are 174 frequencies with 200kHz spacing. Separate bands are used for uplink (mobile to base) and downlink (base to mobile).
    Within each frequency, there arc 8 timeslots supporting up to 8 users. The modulation scheme is gaussian minimum shift keying, GMSK (a variant of binary phase shift keying) with a bit rate of 271 kbit/s.
    The speech signal is processed in 20ms intervals, called speech frames. Each speech frame is compressed and coded using 244 bits. These 244 bits are then encoded with a channel code, interleaved, segmented, and transmitted in 8 TDMA time slots. Similar transmission formats are used for data services.

    3.7.3 GSM radio network aspectsFrequency planning and re-use. Frequency planning is necessary to avoid the same frequency being used in nearby cells, which would cause unwanted interference. The number of cells that use different frequencies is called the reuse factor. Tighter reuse (lower reuse factor) means that more frequencies can be used in each cell, for a given number of total frequencies, but also means a larger interference between the cells.

    Handover. When a user moves during a speech call, it may be necessary to perform a handover to another base station to keep the call. To support this, the mobile station periodically measures the quality of all neighbor cells and reports to the network. The decision when to perform the handover is made in the base station controller.

    Power control. Depending on attenuation and interference, different transmit power levels may be needed to obtain adequate signal quality. Power control is used to set the smallest possible power that meets the quality target. This reduces interference towards other users and increases the battery life time.

    Frequency hopping. A frequency may be bad in a certain location due to multipath fading, or it may be bad due to interference from other cells. Frequency hopping may be used to avoid staying at a bad frequency, instead a number of frequencies are circulated using a pseudo-random hopping sequence.            .

    3.7.4 GPRS
    GPRS, General Packet Radio Services, is an extension to GSM that allows more efficient packet data transfer compared to traditional GSM data services. The principle is that a user can be constantly connected to the network without occupying any radio resources (frequency, time slots) until a data packet has to be transferred. When a packet is to be transferred, a temporary channel is assigned to the user; after completed transfer, the channel is quickly released again. GPRS allows many users to share the same timeslot, and also allows a single user to use more than one time slot. It uses an error detection and retransmission scheme to ensure that data packets are correctly delivered to the receiver.

    3.7.5 EDGE
    EDGE, Enhanced Data rates for GSM Evolution, is another extension to GSM that allows higher bit rates than GSM does. This is accomplished by using higher order modulation, 8-ary phase-shift keying instead of GSM’s binary phase-shift keying.

    3.7.6 WCDMA and UMTS
    WCDMA, Wideband Code-Division Multiple Access, is a new radio interface standard that supports a set of Universal Mobile Telecommunication Services, UMTS. The requirements of UMTS are:
    Coverage and capacity for speech services should be better than GSM, under the same conditions
    The system should be able to efficiently and flexibly handle a mix of real time, variable bit rate, and Packet services.
    A data rate of 384 kbit/s should be possible to provide with full coverage (everywhere).
    It should be possible to provide a data rate of 2 MbiVs in selected areas, e.g. indoors.

    CDMA Principle
    The basic principle of CDMA is that all or many users utilize the same frequency band simultaneously. The benefit of this is that each user has access to the entire system bandwidth all the time, potentially allowing higher data rates than a FDMA/TDMA system where each user has access to only a smaller bandwidth. However, the shared frequency means that the receiver of a particular signal has to cope with strong interference from other users. The CDMA principle used in WCDMA is called direct­sequence code-division multiple access. In the transmitter, the data sequence is spread by multiplying with a spreading sequence of a higher rate, after which it is modulated and transmitted. Spreading means that each data symbol (represented as +/-1) is repeated a number of times, equal to the spreading factor, and each repeated symbol is multiplied with a new symbol from the spreading sequence. The spreading sequence is a pseudo­random sequence that makes the transmitted signal look like noise. The receiver demodulates the signal and multiplies it with the same spreading sequence as was used in the transmitter. The original data sequence is then restored by taking the average over the repeated symbols. Because of this averaging, any unwanted noise or interference in the received signal will be suppressed, while the desired signal will remain in strength. The noise is typically not cancelled out completely, so error-correction techniques are necessary to achieve reliable bit transfer.

    3.7.7 WCDMA air interface

    The CDMA principle is the corner stone for the flexibility of the WCDMA air interface. A higher data rate requires a low spreading factor, which means that the averaging in the receiver occurs over fewer symbols, resulting in less noise reduction.

    Therefore, a higher data rate requires a higher transmit power, and will cause stronger interference to other users. Conversely, a lower data rate can use a lower transmit power, causing less interference to other users. The transmit power does not only depend on the data rate, but also on the radio conditions. A user in a good location near the base station requires a lower power than a user far away. Furthermore, it is important that users in good locations keep their powers at a minimum, since they may otherwise cause too strong interference for other users. This is called the near-far effect. This is accomplished through closed-loop power control, whereby the receiver constantly monitors the quality of the received signal, and sends power control commands back to the transmitter, instructing it to either increase or reduce the power.

    FIG. WCDMA air interface example

    Some key parameters of the WCDMA air interface are:
    Chip rate (rate of the spreading sequences) 3.84 MHz
    Bandwidth 5 MHz
    Modulation QPSK (quaternary phase-shift keying)
    Spreading factor 4, 8, 16, 32, 64, 128, or 256
    Power control rate 1500 Hz

    3.7.8 Frequency re-uses 1 
    Because of the CDMA principle, all base stations in a WCDMA system occupy the same frequency, i.e. the frequency reuse factor is 1. This means that the entire spectrum owned by an operator can be used in each cell.

    3.7.9 Soft handover
    Because of the varying radio conditions, the signal attenuation between the user and the base stations may change very quickly. If the user is connected to only one base station, it may be impossible to move the connection fast enough to always use the base station with the lowest attenuation (the “best” base station).

    FIG. Soft handover

    In a system with reuse factor 1, it may be disastrous for the system if a user is not connected to the best base station. The reason is that the transmit power in the mobile will by set such that the received signal is strong enough in the connected base station. If another connection is “better”, the transmit power of the mobile may cause too much interference in that base station, degrading the quality for other users. Soft handover means that the user is connected to more than one base station. The goal is to ensure that the best base station is always connected, even when the conditions are quickly varying. In soft handover, the transmit power of the mobile is controlled by the “best” base station, i.e. the base station to which the attenuation is lowest. Thereby, the power can be kept down and excessive interference can be avoided.

    3.8 FDMA/TDMA vs. CDMA Here are some technology comparisons between FDMA/TDMA and CDMA.

    3.8.1 Fading resistance

    Because CDMA systems use a higher bandwidth compared to systems that use FTMA, the systems are less vulnerable to frequency-selective fading. On the other hand, the near­tar effect means that fast power control is needed in CDMA systems to ensure that interference is not too large.

    3.8.2 Flexibility

    A FDMA/TDMA system is limited by its choice of channel bandwidth and time slot structure, which typically can not be changed after standardization. In a CDMA system, on the other hand, the resource sharing is accomplished by control the amount of power transmitted for each user, which can be changed in real-time.

    3.8.3 Frequency planning
    Systems based on FDMA require frequency planning, which is difficult and time consuming. This is not necessary with CDMA systems.

    3.8.4 Radiation
    Mobile stations based on TDMA transmit in short pulses, causing strong power peaks and potentially interfering with other devices. CDMA-based mobile stations, on the other hand-transmit continuously, only changing the power in steps according to varying radio conditions and desired bit rates.

    3.8.5 Complexity
    The high bandwidth and chip rates of CDMA makes the transmitters and receivers more complex to design and manufactured compared to FDMA-based devices.

    4.1 Introduction
    New mobile connections now exceed new fixed connections and, it is expected, will continue so to do. A successful vision for 4th generation systems will be set in a mobile/wire free environment with fixed as a subset. An Operator who wishes to launch 4G mobile, have to have a perfect plan for the total system. In this chapter there are some discussion about that Planning.

    4.2 The mobile challenge
    The first mobile challenge, that of providing mass market voice communication, is largely satisfied by the existing digital cellular systems. The next challenge is to do the same for the Information Society services including graphics, video and mufti media.

    4.3 The 4th generation marketplace
    The 4th Generation Marketplace in the UK and Europe will be characterized in several ways; Personalization of services with the use of Universal Personal Pocket Terminals that are adaptive to support customer and network specific needs; Customers using wire free products and services with high performance and capabilities (including graphics, video and multi-media) that change how they work and live, with new consumer and business products which incorporate embedded radios to support services such as maintenance, customer care and fraud/theft prevention; a Market rapidly growing in penetration to 40% by 2005 (and continuing to grow), from which the majority of the population will derive benefit, involving significantly increased usage promoted by low costs and an extensive range of services, a highly competitive marketplace at al levels, and the concept of universal availability; and Service which will include advanced wire free services for business and consumers integrated with the information superhighway and its future developments including the European Information Infrastructure; with Vast Growth in value added opportunities based on capabilities within and external to networks and terminals, and new and innovative services stimulated by broadband networks.

    New industrial growth from the Collisions and Convergences across industry will be enabled by 4th generation mobile systems with the future role of service providers, and possible restrictions on ownership, key issues for the industry requiring further study.

    4.4 UMTS platform
    The concept of the GSM platform has become a proven success and UMTS should be implemented so as to benefit from this experience. The merits of building on GSM are evident. Several mobile satellite operators have decided to base their infrastructure on GSM, providing dual operation with common security, authentication and billing mechanisms. Also, the European railway community UIC is to use a slightly modified version oh the GSM air interface for railway applications. Roaming with DECT using the GSM core platform is now in development, and a form of UPT based on the GSM SIM is being considered to provide roaming between fixed networks.
    QSM has become a platform for a wide range of services with different terminal standards while using the SIM and MAP (and often the A interface) to provide roaming and billing with security. The GSM MoU Association has recently opened its membership to public operators of telecommunications systems based on the GSM platform irrespective of the terminal interface adopted, conditional on providing roaming services.

    UMTS should adopt a similar approach with the specification of a number of standardized interfaces with specific interfaces to allow the cost effective multi- sourcing of infrastructure. As with GSM, the SIM (or USIM), MAP (or its replacement) and Billing Interfaces will be very important. The UMTS interfaces will perform many similar functions to those of GSM but will differ where necessary to support the more complex service and feature structure of UMTS.

    4.5 Critical success factors
    Success in a modern telecommunications venture is dependent on an available market and on an investment environment in which a sensible minimal risk business opportunity can be foreseen by financiers. The remainder of the success factors are targeted against meeting these two over-riding criteria. The more stable and more predictable the sector is seen to be, the more funding that will be available at attractive terms. This means that roll out occurs more rapidly, pay- hack is achieved in a shorter timescales, and the tariffs can be set to attract mass market participation from the outset, with the benefits that mobility and access to the information superhighway, fundamental to the success of the UK and Europe, can be achieved as quickly as possible.

    The success factors are grouped into market, regulatory environment, industrial sector, standards and technology.

    4.5.1 Market
    The Group considers that an initial total market opportunity of 8 million users is required to support the necessary investment by manufacturers of UMTS terminals, growing to at least 60 million within 10 years. Growth thereafter is subject to market development.

    At the end of 1996, Japan had 18.2 million cellular customers and 4.9 million users of the Personal Handyphone System (PF1S); these markets are predicted to rise to 34 million for cellular and 38 million for PHS by the year 2010; a cordless market of 20 million at the year 2000 is expected to remain static until the year 2010. In financial terms, Japan consider this to be a market growing from a current £10,000 million (equivalent to 40,000 employees) to £32,000 million in 2000, and £93,000 million by 2010, by then supporting 520,000 employees.

    Already in Scandinavia the penetration of cellular mobile is approaching 30%, in the UK it is almost 12% and within Europe and developed countries it is anticipated to rise to greater than 50% of the population. (Within the Stockholm district in Sweden the peak period penetration is estimated at up to 60%). The scale of the industry has grown vastly and within the UK there are over 100,000 employees are engaged on cellular domestic end export activities.

    GSM MoU Association has given estimates that 150 million GSM terminals will be in use world-wide by the end of the century. GSM global usage will further grow to at least 200 million terminals by 2005, constituting a truly mass market. UMTS will go on to provide two major enhancements. Firstly the addition of broadband multimedia services and secondly the ability to connect via cellular mobile networks, global satellite networks, private cordless networks, and through wireless access to fixed public networks, whichever is the best for the user’s situation at any time.

    4.5.2 Regulatory and licensing
    Policy announcements setting out a calendar for the adoption of UMTS standards by the UK and Europe, for the release of a designated frequency allocation, and the conditions for licensing are recommended to encourage potential operators and manufacturers to commit resources to the third generation standards-making process and subsequent investment in third generation mobile technology.

    It is important that the conditions for licensing the telecommunications business in Europe are not seen to be transient. An unstable historical environment is likely to deter both operators and manufacturers from making the massive investment necessary to implement third generation mobile.

    The Group considers that it is essential to have a regulatory regime which will ensure that operators can reasonably expect that the licensing conditions offered will remain in place long enough to ensure that the massive investment in new technology is recovered, and that the market opportunities, identified during conception and licensing, will not be distorted by changes in regulatory policy. This may require a policy statement from the respective member states within Europe to ensure that this is achieved.

    4.5.3 Industrial sector
    Commercial success wills not he achieved without an announced commitment by strong manufacturers to support the standard and the technology – ideally a minimum of 3 infrastructure manufacturers and 10 volume terminal manufacturers. This will provide operators with both competitive choice for their network and an identifiable source of product so that the network can be exploited.

    4.5.4 Standards
    A stable standard is required, with open interfaces for all external interconnection and key internal network functional blocks. Such a standard will limit development brisk and maximize returns to manufacturers from development expenditure. It will create a competitive environment where users can change between operators and allow both choice and purchase confidence.

    4.5.5 Technology
    Technological solutions must be found which will ensure new services e.g. multi media and broadband services can be provided and migrated to and from fixed networks.
    Technological solutions are required for Network, Architectures and Terminals which, when applied to high volume market, will produce very low cost terminals and low tariffs.
    Technological solutions should allow migration from the existing second generation mobile systems where appropriate.
    Technological solutions must take account of the strong convergence between the Information Technology and telecommunications sectors, in both the network infrastructure and terminal equipment fields.

    Technological solutions must offer flexibility of service provision e.g. the capability to mix voice and data in various proportions, support variable rate data, etc.

    4.6 Network issues

    4.6.1 Service requirements
    UNITS is required to support a wide range of services, generally incorporating those familiar within second generation cellular, fixed, cordless, satellite and PMR networks. The UMTS standard will also support a range of more advanced services such as multi­media. However, it is planned that in most cases, UMTS will provide support for these services, rather than itself define the actual services. Multi-media services will require the availability of higher bandwidths at variable rates, on demand (i.e. packet-based services).

    4.6.2 Creation of services
    Since UMTS is planned to be part of the ITU world standard FPLMTS, it is unlikely that all regions and market areas will be able to agree on a single uniform set of standards, and will in any case have to inter-work with differing (existing) fixed and mobile standards. Also, experience of GSM has shown that it is vital to be able to introduce new services without excessive delay or disruption.

    Service creation is therefore seen as fundamental to the success of UMTS. It is planned that the network, together with the user’s personal profile, should define the services required and that these should, as far as possible, be maintained even when roaming to other networks. This concept has been named the “Virtual Home Environment” (VHE), since the intention is for the user to “fee” that he is on his home network, even when roaming. It is also likely that the terminal will negotiate functionality with the visited network, possibly even downloading software so that it will provide “home-like” service in a potentially alien environment.

    Service Portability will provide service in different networks (i.e. roaming) and environments (e.g. cellular, cordless etc.) by means of common numbering, roaming, multi-mode terminals and UMTS Subscriber Identity Module (USIM) portability between terminals.

    4.6.3 Provision of services
    It is premature to assume that the model of service provision in UMTS will be the same as for GSM. The standard is therefore being prepared to support a wide range of options for service provision. It is assumed that roaming will always be technically feasible, including seamless handover between dissimilar networks, but the extent to which it is supported commercially will be up to inter-operator agreements. It is possible that this might be provided dynamically for “new” network pairs and would include authentication and agreement on methods of financial settlement.

    4.6.4. Human factors
    GSM has defined a limited set of standard Man Machine Interface requirements, generally in line with existing European (CEPT) practice. However, it is not clear that this would be acceptable in a world environment. Many aspects of Human Factors can be left to the terminal designer, but it is also desirable for some aspects to be “married” to the user, whose requirements could be stored either with his profile in the network or in his UIM.

    a) Charging
    Traditionally, charging aspects have not been defined by technical standards committees. However, on UNITS it is likely that a mechanism will need to be standardized for secure transport of charging information when roaming.

    b) Evolution
    By the time of introduction of UMTS, the value of the installed base of GSM around the world will be many billions of ECU. By then, the functionality of GSM will have been extended towards that of UMTS, so a smooth migration path will be essential. However, successful standards need to develop and experience in GSM has shown that it is vital to be able to evolve the standard, even within a generation. Evolution would include (for example) services, frequency bands and technologies.

    c) Radio Access
    This section sets out the requirements for the Third Generation Radio Access, which the Group recommend that UK Government and industry endorse. A concluding recommendation is made for participation in the selection process for the new system.
    d) Service Adaptation
    A goal for third generation mobile systems is to provide universal coverage and to enable terminals to be capable of seamless roaming between networks, which may be of differing types. Realistically, a uniform level of service is impractical, particularly for multimedia services requiring high bandwidths. For customer premises networks and very small area cellular systems, the goal is to be able to offer communications up to 155 Mbit/s by means of 60 GHz wireless. For cellular and micro-cellular applications, the current goal for UMTS is to provide burst rates of up to 2 Mb/s. However with the finite “spectrum available in the 2 GHz region for UMTS, it is clearly impractical to offer continuous connections at such high bit rates for conventional macro-cellular and wide area systems. For the mobile satellite element, it is impossible.

    e) Quality of Service Aspects
    Quality of service, with respect to the radio interface, traditionally comprises two main attributes, low error rate and low delay. The speech coder has also been considered as part of the Radio Access system and therefore excellent speech quality has also been a key metric. However, as the operation of cellular networks has become more sophisticated, other quality factors have also come into play, such as dynamic consistency of quality (e.g. in a fading environment), transmission breaks (e.g. due to handover), as well as factors which affect other diverse customer perceived quality issues, such as measures which can improve the battery life of the terminal.

    When used as a voice terminal, good speech quality is extremely important and must match improving standards in fixed networks. In order to allow much greater scope for mobile network operators to improve the perceived quality of their networks, this aspect will be one of the main applications for the adaptive, software downloadable capability of UMTS terminals.

    4.7 Bandwidth requirements
    Radio bandwidth, or spectrum, is required in order to support the speech, data and video services which will be provided. Modem radio engineering has progressed beyond considering just the simple allocation of radio frequency bandwidth to a service. A much more complex analysis is now used which considers the optimum use of the whole of the allocated spectrum in two dimensional space (and in the future, possibly in three dimensional space).

    Spectrum is a precious resource. A pre-requisite for any modem radio communication system is that it should use spectrum resources effectively. However in the past, systems ‘ have tended to optimize spectrum efficiency for their primary communications service (e.g. voice) and while they may have then successfully added other services (such as data), the spectrum utilization of these other services is often compromised.

    The challenge for Third Generation Systems is to achieve better spectrum usage than any second generation system for voice communication and also to maintain optimum spectrum usage for all services at all times, despite their differing demands for data rates, symmetry, channel quality and delay.

    4.8 Data rates needed
    Fourth Generation concepts impose the requirement to provide broadband services, interworking with broadband ISDN. This has been clarified to mean wireless access to the information highway for multimedia applications. Multimedia can address a huge range of data rates, from simple low rate paging messages, thr6ugh voice to high rates associated with video or file transfer. Therefore the Radio Access system should be capable of providing bandwidth on demand. The support of up to155 Mb/s for pico­cellular systems, 2 Mb/s for micro-cellular and 144 kb/s for wide area cellular is considered desirable, at present. Some applications, such as software download, will require a highly asymmetrical data capability, requiring high rates in one direction, but ‘much lower rates on the return path. Furthermore, some of these services require continuous transmission (such as desktop video conferencing), some are bursty by nature, others require low delay and others require absolute integrity. The variable nature of the radio channel has already been mentioned; therefore the maximum throughput will be equally dynamic, requiring adaptive bandwidth from the Radio Access system.

    4.9 Modulation and multiple access selection
    The Modulation method and the Multiple Access Technology are the main elements which determine the characteristics of a particular radio technology standard. Third Generation Wireless Multimedia terminals will have to exist in a world of multiple standards. It is hoped that there will be a single Third Generation air interface standard in order to ease the requirement for world-wide roaming, but with different regional interests and different rates of progress, this might not be possible. Standards, themselves are expected to evolve. Current generation terminals are manufactured to one fixed standard (or set of standards) which cannot be changed once they leave the factory. Forward thinking, encapsulated by the GSM MoU. 3GIG and by the European Commission’s ACTS research programs, is that adaptive technology and over-the-air software download will make multimode / multiband, multimedia terminals feasible which can interwork with different standards, old and new. At the same time, low cost is essential in order to assure a mass market.

    Other aspects which will determine the selection of the modulation standard include the ability to meet the requirements described above for the data rates and adaptive bandwidth-on-demand, delay constraints, spectrum efficiency for all types of service including asymmetric and packet mode, and quality, achieved all within the constraints of the radio propagation environments. Requirements for backward compatibility and low cost will also affect the choice of standard.

    4.10 Coverage/Cell sizes
    UMTS should support diverse cell sizes, as with existing wide area coverage (usually in less populated areas) to urban micro cells and down to in-building Pico cells. A major differentiator for Fourth Generation is that it should allow for independent sub-networks to be provided. This is particularly important in the case of pico-cellular Customer Premises Networks (CPNs). The requirements have a significant impact on higher level protocols, particularly the need for distributed, “bottom-up” mobility management, but

    for the Radio Access system, a highly desirable feature is for the radio network to be self planning and self optimizing. This considerably eases the deployment of small and independent networks, by calling on techniques such as dynamic channel allocation.

    Good Coverage Efficiency is one parameter on which to base the selection of the Radio Access technology, it is a measure of how many base sites are required to cover a given area at or above, a given level of service quality.

    4.11 Multiple environments
    A good Radio Access system, particularly an adaptive one, should be capable of supporting operation with good spectrum efficiency, coverage efficiency and service quality in all the physical environments in which wireless and mobile communication will take place. Third Generation systems should be more flexible than Second Generation systems which are something of a compromise. It is a multi-dimensional situation, involving physical environments such as in-building, outdoor congested (urban), and outdoor rural. There are different mobility environments such as stationary, pedestrian, vehicular mobility, and high speed applications. Finally there are different user density environments, including three dimensional situations. The Radio Access system needs to optimally adapt to all propagation environments and all traffic environments which result, including mixed environments, where, for example, fast moving vehicles may be moving on a roadway which is physically close to a pedestrian precinct.

    4.12 Power levels
    Within the requirement to provide good coverage efficiency, the Radio Access system should operate at minimum RF power. This is desirable because of the need to ensure that the infrastructure has minimum power consumption and the terminals have maximum battery life. Power saving techniques such as adaptive power control and discontinuous transmission should be encouraged.

    4.13 Cost implications
    It is important to achieve low terminal cost as well as low capital and running costs for infrastructure, where it impacts call charges for the subscriber. With regard to these important selection criteria for the UNITS Radio Access system, costs are determined by factors such as the coverage efficiency which affects the number of sites required, the antenna system complexity, power consumption and DSP complexity. Unexpected aspects can also be a factor, for example the need for additional leased transmission lines in the case of systems which utilize soft handover or simulcast.

    4.14 Inter and intra system handover

    In the case of 4th Generation, there are likely to be even more networks than there are today, together with the possibility of a vast number of wireless Customer Premises Networks (CPNs). However a goal is to achieve truly personal communications, implying a one number (or name?) service with the aim also to achieve seamless roaming across dissimilar networks. Roaming across dissimilar networks could mean that a subscriber terminal can roam from a 60 GHz CPN into a pico-cellular/micro-cellular UMTS network then into a wide area macro-cellular network (which may actually be a second generation network) and then to a satellite mobile network. Ubiquitous roaming impacts the Radio Access system by requiring that it supports handover between different networks, as well subscriber location techniques (location updating) in order that incoming calls can be correctly routed to the subscriber. The new network architecture design will require considerable innovation, in order to devise means of realizing distributed mobility management across networks, so that calls are routed with the optimum efficiency and minimum delay and so that independent sub-networks can “own” their subscribers. The self routing capability of ATM is being seriously studied as a possible new method. It is likely, therefore that there will be considerable advantages in structuring parts of the radio interface as wireless ATM.

    In fourth generation systems, cellular and paging/messaging systems have traditionally had their own mobile networks. Cordless systems have been connected to fixed networks and recent work on interworking profiles (e.g. DECT/GSM) also enables interconnection of cordless systems to mobile networks.

    4.15 Switching and transport network
    The transition or migration from existing systems is a key issue which has already been noted. Issues of convergence, evolution and growth are important and commercially viable solutions must be found.

    There is a need to ensure that a cost-effective balance between narrow-band and wide­band systems is maintained – it is necessary to develop the correct architecture. An evolution migration approach should be taken. The migration route from systems other than GSM/DCS should also be addressed.
    Use should be made of evolving network standards (ATM, IP, B-ISDN etc.), where the necessary functionality is provided.

    The important role of the ITU in developing suitable common global IN standards offering full support for mobility is recognized.

    4.16 Spectrum issues
    Radio spectrum is the key resource which will enable effective implementation of third generation mobile services. The relation between services and radio frequency needs is based on the requirements for bearer capabilities, coverage, types and numbers of operators and, most significantly, on the estimated number of users and amount and type of usage. Whereas the number of users can be estimated from demographic data, the capacity requirement for services beyond speech can not be precisely assessed. It is assumed that the huge advancement in information technology and availability of mobile access with information rich and user friendly systems (e.g. mobile multimedia) will not only require the whole of the currently identified spectrum for FPLMTS, but also trigger the need for further spectrum.

    Work within the Group, based on the ETS1 Technical Report “Overall requirements on the radio interfaces of the Universal Mobile Telecommunications System (VMTS)” (Draft ETR (04-0)) Version 2.), June 1995), has indicated a likely total demand for all public mobile radio services of some 550 MHz of spectrum early in the next century. While this total should not be considered to be a definitive requirement, comparison with GSM, DECT, DCS 1800, current UMTS reservation and tabled requests for further UMTS spectrum show it to be consistent. The general recommendations from the Group are:

    4.17 For terrestrial applications
    Facilitate access to the spectrum as proposed in the Draft ERC Decision on UMTS with initial availability by 2002 Limit the current DECT band (1880 – 1900 MHz) to 20 Mflz Give urgent consideration to the need to free up additional spectrum as recommended by UMTS Task Force by the year 2008 Consider carefully the impact of Government proposals on spectrum pricing and auctions on the timely and effective introduction of UMTS services in the UK Award licenses with flexibility to use all spectrum bands most effectively for coverage, capacity and service Consider the assignment of other spectrum for third generation cordless, fixed wireless access and asymmetric applications such as multimedia for use as integral UMTS components or in conjunction with UMTS (this may exploit unpaired bands).

    4.18 For satellite applications
    Facilitate access to the spectrum for the satellite component of FPLMTS within the bands 1980 -2010 MHz and 2170 – 2200 MHz by the year 2000 Consider identifying an additional 2 x 30 MHz of spectrum below 3 GHz for use by 2005. It should be noted that existing operators may wish to use appropriate 2nd and 3rd generation technology in the existing bands, as an integrated part of their overall service. New standards, new spectrum and the potential contribution of existing operators should not be considered in isolation. Existing infrastructure and in particular the current spectrum will be key components in providing personal communication services of the future. For marketing reasons it is recommended that regulatory bodies and standards makers take due account of niulti-band/mode operation when considering the development and introduction of UMTS.

    4.18.1 Mobile satellite
    The Group supports the allocation of 2 x 30 MHz proposed for UMTS satellite component services but comments that this, too, may well need to be increased to meet fully the service requirements of UMTS. Some satellite component spectrum considerations are:

    One of the 30 MHz allocations is for mobile transmit and the other for mobile receive – this could have implications for the terrestrial component which will be operating in adjacent bands provision needs to be made for more than one UMTS satellite operator within these bands the inherently global coverage of non geostationary systems, whether regional or not, with its implications for other regions the need to be able to share with other services overall frequency efficiency requires careful attention ‘to the need to provide guard bands, both within the satellite component and between it and the terrestrial component.

    The satellite and terrestrial components are viewed as being jointly complementary, each covering areas which would be uneconomic for the other to reach. The spectrum identified by WRC-95 within the FPLMTS bands for Mobile Satellite Services, should thus be used exclusively by these systems as sharing with terrestrial systems will be neither practical nor efficient. Some sharing may still be feasible e.g. low power in building services in cities with satellite services in remote areas; however, more studies are needed for this special case.

    Spectrum requirement calculations for the satellite component are complex and depend on a number of assumptions. In particular they will be affected by the type of traffic to be carried, the user distribution, the orbits used, and the spacecraft capabilities. To carry the equivalent of the UMTS terrestrial 144 kbit/s capability to users of the satellite component, initial calculations indicate that for one operator each direction of transmission would require at least 20 MHz in the 2 -3 GHz region. A significant increase in MSS spectrum availability would be required to encompass this.

    4.19 Fixed wireless access and PBX
    The ETSI SMG recommendations have not explicitly addressed wireless local loop applications where a (fixed) network operator may seek to provide UMTS services, nor clarified its spectrum recommendations for use with a wireless PBX.
    The Group recommends study of the use of Segment 5, which is designated for mobile satellite in Region 2, for indoor cordless systems / PBXs. The group also note that in contrast to the ETSI SMG Task Force study, it may be relevant to consider these unpaired segments (segments 2 and 5) not for TDD use but to provide non-symmetrical capacity in conjunction with the paired bands. Multimedia communication is likely to be highly asymmetrical, with higher capacity needed mostly for the downlink to the mobile.

    External issues:
    The deployment of PCS in the United States and the subsequent agreement by Canada and South America to utilize similar bands for their own implementations of PCS, coupled with Japan’s desire to deploy new ‘FPLMTS’ systems by the year 2000 may call into some question the practical degree to which true global roaming using a single terrestrial standard may be achieved.

    4.20 Relationship with standards bodies
    A variety of standards groups are involved in third generation standardization work within the I T[I and ETSI. The key groups are ETSI SMG on UNITS and ITU-R Task Group 8/1 on FPLMTS.ETSI and the ITU are equally important because ETSI has strong links with the EU and the evolving European regulatory position, whilst ITU is the only truly global telecommunications standards body; global considerations are important for third generation work, with universal roaming being an objective.

    The FAMOUS trilateral meetings of Europe, USA and Japan are only loosely coupled to the more formal standardization work within ITU and ETSI.

    4.21 Environmental and safety issues
    An objective of third generation system should be to provide mass market mobile access to information society services using (for a given technology) the lowest feasible radiated power, although power alone would not be used as a technology selection factor. This will both minimize the general impact on the environment and will help to reduce any public concerns related to the widespread use of radio technologies.

    4.22 Security
    Fourth generation mobile system must offer an adequate level of security. This involves security requirements being introduced for the benefit of providers, customers, and regulators.

    4.23 Provider issues

    a) Authentication:
    It is necessary to identify which parties need to be authenticated (e.g.. between service providers and users, network operators and service providers, network operators and network operators, etc.)
    It is likely that some form of global trusted third party hierarchy will be required to support authentication between providers.
    Procedures must be flexible enough to support a wide range of authentication mechanisms (e.g. symmetric key, public key, second generation, as well as future enhancements).

    b) Fraud:
    Appropriate levels of standardization must be established, e.g. whether all network operators will have to communicate with all service providers, and send specific types of data.

    c)Roaming
    There will be large numbers of service providers and network operators, some possibly small and very local. A mechanism must be developed to enable appropriate roaming agreements to be set up amongst these. In particular, mechanisms may be required to support the on-line establishment of secure roaming agreements. It will be necessary to establish an agreed level of security for roamers. In particular, to whose policies they adhere, i.e. home service provider, visited network operator, or both.

    d) Customer Issues:
    It will be necessary to identify which interfaces and data types (e.g. traffic, signaling, control, charging, etc.) should be protected. In particular, it will be necessary to agree whether confidentiality be provided over interfaces other than the radio interface.
    It is likely that ‘on-line’ or `hot’ charging will be a commercial requirement. Suitable mechanism for secure charging e.g. addressing confidentiality, integrity, and non­repudiation must be established to support this. This, together with normal billing, must cater for handover between dissimilar networks.

    5.1 Introduction
    GPRS (General Packet Radio Service)) utilizes packet switching technology where, information is transmitted in short bursts of data over an IP-based network. GPRS provides a quick session set up and fast data transmission speeds. GPRS can use multiple time slots for data transfer as opposed to a normal single time slot. GPRS Technology is used in Third Generation of Mobile Communication, This Chapter describes about the GPRS & its relation with 4G.


    5.2 Network architecture

    The GSM network architecture was modified to add packet services, through the addition of the new network elements GGSN and SGSN
    GGSN gateway GPRS Support Node
    – Responsible for routing data packets entering and leaving the radio network also as a router for packets within the network
    SGSN Serving GPRS Support Node
    – Responsible for packet delivery to mobiles in its area
    – a type of packet switch with capability to interrogate the GSM databases HLR and VLR for location and service profiles of mobiles.

    Data is “tunneled” from the GGSN to the SGSN using GTP, GPRS Tunneling Protocol, encapsulating packets de- encapsulating on delivery.

    5.3 GPRS backbone networks

    Two kinds of GPRS backbones:
    Intra-PLMN among GSNs of same PLMN (private, IP-based)
    Inter-PLMN among GSNs of different PLMNs (roaming agreements)

    Gateways between the PLMNs and the external inter-PLMN backbone are called Border Gateways.
    Border Gateways perform security functions to prevent unauthorized access and attacks
    The Gn and Gp interfaces are also defined between two SGSNs .This allows exchange of user profiles as mobiles move around The Gf interface allows a SGSN to query the IMIE of a registering mobile.

    The Gi interface connects the PLMN to external public or private PDNs
    Interfaces to IPv4, IPv6, and X.25 networks are supported.
    The Gr interface allows an SGSN to communicate with an MR.

    5.4 GPRS services

    GPRS bearer services provide end-to-end packet-switched data transfer. There are two kinds:
    PTP Connectionless Network Service (PTP-CLNS) for IP
    PTP Connection-oriented network Service (PTP-CONS) for X25

    5.4.1 SMS: Short message services
    Supplemental Call Services
    CFU Call Forwarding Unconditional, CFNRc Call Forwarding Subscriber Not Reachable, CUG Closed User group
    Non-Standard Services may be offered at GPRS service providers
    Database access, messaging, c-transactions, monitoring and telemetry.

    5.5 The stages of the GPRS specifications
    The GPRS specification is built in three stages.
    Stage I describes the basic service capabilities
    Stage 2 describes the specific system and network radio interface description.

    Stage 3 provides details of the link control layer entities, specifications of the mobile stations, and details of the internal network element interfaces and their protocols.

    5.6 GSM BTS changes required to support GPRS
    – Since GPRS uses new coding schemes, a Channel Code Unit (CCU) is required
    The CCU can normally be implemented within BTS software.
    – Timeslot allocation for GPRS is handled by a new Packet Controller Unit (PCU) which also implements frame relay connection with the GPRS network.
    The PCU function can be physically implemented in the B”1’S, BSC, or at the SGSN, but is conceptually part of the BSS.

    5.7 Channel coding implemented at the BTS
    Channel coding is used to protect the transmitted GPRS data packets against errors.
    The channel coding in GPRS is very similar to that of GSM
    An outer block coding, an inner block coding, and an interleaving scheme are used.
    Four different coding schemes are defined in the table above.

    5.8 The GPRS location management state model

    A mobile can be in any of three states depending on its current traffic level
    Location update frequency is dependent on the MS state.
    –           In IDLE state, the mobile is not reachable.
    – Performing a GPRS attach, the mobile enters the READY state.
    – With a (IPRS detach the mobile may disconnect from the network and fall back into the IDLE state
    All PDP contexts will be deleted.
    – The STANDBY state is reached when a MS does not send any packets for along period.
    The READY timer expires

    5.9 Mobile action based on GPRS location state
    In IDLE state, no location updating is performed
    The current location of the mobile is unknown to the network.
    –           An MS in RFADY state informs its SGSN of every movement to a new cell.
    –           A GSM Location Area is divided into several Routing Areas (RAs)
    An RA can consist of one or several cells.
    – A MS in STANDBY state will inform its SGSN only when it moves into a new RA
    Cell changes are not disclosed.
    ___To find out the current cell of a MS in STANDBY, the mobile is paged
    ___throughout the current RA
    ___For MS in READY state, no paging is necessary.
    ___Whenever a mobile moves to new RA, it sends air routing area update request to its assigned SGSN.
    Message contain the routing area identity (RAI) of its old RA
    The BSS adds the cell identifier of the new cell, from which the SGSN can derive the new RAI.

    5.10 GPRS enhancements: EDGE
    5.10.1 The vision of EDGE

    ____Dead or not, Edge deserves a quick look in parting
    ____An Evolutionary path to 4G services for GSM and TDMA operators.
    ____Builds on General Packet Radio Service (GPRS) air interface and networks.
    ____Phase I (ReleaseTM99 & 2002 deployment) supports best effort packet data at speeds up to about 384 kbps – three times faster than GPRS.
    ____Phase 2 (ReleaseTM2000 & 2003 deployment) will add Voice over IP capability.

    5.10.2 The EDGE air interface
    ____Extends GPRS packet data with adaptive modulation/coding.
    ____2x spectral efficiency of GPRS for best effort data.
    ____8-PSK/GMSK at 271 ksps in 200 KHz RF channels supports 8.2 to 59.2 kbps per time slot.
    ____Supports peak rates over 384 kbps.
    ____Requires linear amplifiers with < 3 dB peak to average power ratio using linearized GMSK pulses.
    ____Initial deployment with less than 2x 1 MHz using 1/3 reuse with EDGE Compact as a complementary data service.

    5.10.3 Steps in the EDGE evolution
    ____Best effort IP packet data on EDGE
    ____Voice over IP on EDGE circuit bearers
    ____Voice over IP with statistical radio resource multiplexing
    ____Network based intelligent resource assignment
    ____Smart antennas & adaptive antennas
    ____Downlink speeds at several Mbps based on wideband OFDM and/or multiple virtual channels.

    5.11 Key user features of GPRS

    The General Packet Radio Service (GPRS) is a new non-voice value added service that allows information to be sent and received across a mobile telephone network. It supplements today’s Circuit Switched Data and Short Message Service. GPRS is NOT related to GPS (the Global Positioning System), a similar acronym that is often used in mobile contexts. GPRS has several unique features which can be summarized as:

    5.11.1 Speed
    Theoretical maximum speeds of up to 171.2 kilobits per second (kbps) are achievable with GPRS using all eight timeslots at the same time. This is about three times as fast as the data transmission speeds possible over today’s fixed telecommunications networks and ten times as fast as current Circuit Switched Data services on GSM networks. By allowing information to be transmitted more quickly, immediately and efficiently across the mobile network, GPRS may well be a relatively less costly mobile data service compared to SMS and Circuit Switched Data.

    5.11.2 Immediacy
    GPRS facilitates instant connections whereby information can be sent or received immediately as the need arises, subject to radio coverage. No dial-up modem connection is necessary. This is why GPRS users are sometimes referred to be as being “always connected”. Immediacy is one of the advantages of GPRS (and SMS) when compared to Circuit Switched Data. High immediacy is a very important feature for time critical applications such as remote credit card authorization where it would be unacceptable to keep the customer waiting for even thirty extra seconds.

    5.12 New applications, better applications
    GPRS facilitates several new applications that have not previously been available over GSM networks due to the limitations in speed of Circuit Switched Data (9. 6 kbps) and message length of the Short Message Service (160 characters) GPRS will fully enable the Internet applications you are used to on your desktop from web browsing to chat over the mobile network Other new applications for GPRS, profiled later, include file transfer and home automation- the ability to remotely access and control in-house appliances and machines.

    5.12.1 Service access
    To use GPRS, users specifically need:
    a mobile phone or terminal that supports GPRS (existing GSM phones do NOT support GPRS)a subscription to a mobile telephone network that supports GPRS operators, others will require a specific opt-in knowledge of how to send and/ or receive GPRS information using their specific model of mobile phone, including software and hardware configuration (this creates a customer service requirement) a destination to send or receive information through GPRS. Whereas with SMS this was often another mobile phone, in the case of GPRS, it is likely to be an Internet address, since GPRS is designed to make the Internet fully available to mobile users for the first time. From day one, GPRS users can access any web page or other Internet applications- providing an immediate critical mass of uses.

    5.12.2 Packet switching
    GPRS involves overlaying a packet based air interface on the existing circuit switched GSM network. This gives the user an option to use a packet-based data service. To supplement a circuit switched network architecture with packet switching is quite a major upgrade. However, as we shall see later, the GPRS standard is delivered in a very elegant manner- with network operators needing only to add a couple of new infrastructure nodes and making a software upgrade to some existing network elements.

    With GPRS, the information is split into separate but related “packets” before being transmitted and reassembled at the receiving end. Packet switching is similar to a jigsaw puzzle- the image that the puzzle represents is divided into pieces at the manufacturing factory and put into a plastic bag. During transportation of the now boxed jigsaw from the factory to the end user, the pieces get jumbled up. When the recipient empties the bag with all the pieces, they are reassembled to form the original image. All the pieces are all related and fit together, but the way they are transported and assembled varies. The Internet itself is another example of a packet network, the most famous of many such network types.

    5.13 Spectrum efficiency
    Packet switching means that GPRS radio resources are used only when users are actually sending or receiving data. Rather than dedicating a radio channel to a mobile data user for a fixed period of time, the available radio resource can be concurrently shared between several users. This efficient use of scarce radio resources means that large numbers of GPRS users can potentially share the same bandwidth and be served from a single cell. The actual number of users supported depends on the application being used and how much data is being transferred. Because of the spectrum efficiency of GPRS, there is less need to build in idle capacity that is only used in peak hours. GPRS therefore lets network operators maximize the use of their network. resources in a dynamic and flexible way, along with user access to resources and revenues.

    GPRS should improve the peak time capacity of a GSM network since it simultaneously allocates scarce radio resources more efficiently by supporting virtual connectivity immigrates traffic that was previously sent using Circuit Switched Data to GPRS instead, and reduces SMS Center and signaling channel loading by migrating some traffic that previously was sent using SMS to GPRS instead using the GPRS/ SMS interconnect that is supported by the GPRS standards.

    5.14 Internet aware
    For the first time, GPRS fully enables Mobile Internet functionality by allowing inter working between the existing Internet and the new GPRS network. Any service that is used over the fixed Internet today- File Transfer Protocol (FTP), web browsing, chat, email, telnet- will be as available over the mobile network because of GPRS. In fact, many network operators are considering the opportunity to use GPRS to help become wireless Internet Service Providers in their own right.

    The World Wide Web is becoming the primary communications interface- people access the Internet for entertainment and information collection, the intranet for accessing company information and connecting with colleagues and the extranet for accessing customers and suppliers. These are all derivatives of the World Wide Web aimed at connecting different communities of interest. There is a trend away from storing information locally in specific software packages on PCs to remotely on the Internet. When you want to check your schedule or contacts, instead of using something like “Act!”, you go onto the Internet site such as a portal. Hence, web browsing is a very important application for GPRS.

    5.15 Applications for GPRS

    A wide range of corporate and consumer applications are enabled by non voice mobile services such as SMS and GPRS. This section will introduce those that are particularly suited to GPRS.

    5.15.1 Chat
    Chat can be distinguished from general information services because the source of the information is a person with chat whereas it tends to be from an Internet site for information services. The “information intensity”- the amount of information transferred per message tends to be lower with chat, where people are more likely to state opinions than factual data. In the same way as Internet chat groups have proven a very popular application of the Internet, groups of likeminded people- so called communities of interest- have begun to use non-voice mobile services as a means to chat and communicate and discuss.

    Because of its synergy with the Internet, GPRS would allow mobile users to participate fully in existing Internet chat groups rather than needing to set up their own groups that are dedicated to mobile users. Since the number of participants is an important factor determining the value of participation in the newsgroup, the use of GPRS here would be advantageous. GPRS will not however support point to multipoint services in its first phase, hindering the distribution of a single message to a group of people. As such, given the installed base of SMS capable devices, we would expect SMS to remain the primary bearer for chat applications in the foreseeable future, although experimentation with using GPRS is likely to commence sooner rather than later.

    5.15.2 Textual and visual information
    A wide range of content can be delivered to mobile phone users ranging from share prices, sports scores, weather, fight information, news headlines, prayer reminders, lottery results, jokes, horoscopes, traffic, location sensitive services and so on. This information need not necessary be textual-it may be maps or graphs or other types of visual information.

    The length of a short message of 160 characters suffices for delivering information when it is quantitative- such as a share price or a sports score or temperature. When the information is of a qualitative nature however, such as a horoscope or news story, 160 characters is too short other than to tantalize or annoy the information recipient since they receive the headline or forecast but little else of substance. As such, GPRS will likely be used for qualitative information services when end users have GPRS capable devices, but SMS will continue to be used for delivering most quantitative information services. Interestingly, chat applications are a form of qualitative information that may remain delivered using SMS, in order to limit people to brevity and reduce the incidence of spurious and irrelevant posts to the mailing list that are a common occurrence on Internet chat groups.

    5.15.3 Still images
    Still images such as photographs, pictures, postcards, greeting cards and presentations, static web pages can be sent and received over the mobile network as they -are across fixed telephone networks. It will be possible with GPRS to post images from a digital camera connected to a GPRS radio device directly to an Internet site, allowing near real-time desktop publishing.

    5.15.4 Moving images
    Over time, the nature and form of mobile communication is getting less textual and more visual. The wireless industry is moving from text messages to icons and picture messages to photographs and blueprints to video messages and movie previews being downloaded and on to full blown movie watching via data streaming on a mobile device.

    Sending moving images in a mobile environment has several vertical market applications including monitoring parking lots or building sites for intruders or thieves, and sending images of patients from an ambulance to a hospital. Videoconferencing applications, in which teams of distributed sales people can have a regular sales meeting without having to go to a particular physical location, is another application for moving images.

    5.15.5 Web browsing
    Using Circuit Switched Data for web browsing has never been an enduring application for mobile users. Because of the slow speed of Circuit Switched Data, it takes a long time for data to arrive from the Internet server to the browser. Alternatively, users switch off the images and just access the text on the web, and end up with difficult to read text layouts on screens that are difficult to read from. As such, mobile Internet browsing is better suited to GPRS.

    5.15.6 Document sharing collaborative working
    Mobile data facilitates document sharing and remote collaborative working. This lets different people in different places work on the same document at the same time. Multimedia applications combining voice, text, pictures and images can even be envisaged. These kinds of applications could be useful in any problem solving exercise such as fire fighting, combat to plan the route of attack, medical treatment 3. copy setting, architecture, journalism and so on. Even comments on resort to book a holiday at could benefit from document sharing to save everyone having to visit the travel agent to make a decision. Anywhere somebody can benefit from having and being able to comment on a visual depiction of a situation or matter, such collaborative working can be useful. By providing sufficient bandwidth, GPRS facilitates multimedia applications such as document sharing.

    5.15.7 Audio
    Despite many improvements in the quality of voice calls on mobile networks such as Enhanced Full Rate (EFR), they are still not broadcast quality. There are scenarios where journalists or undercover police officers with portable professional broadcast quality microphones and amplifiers capture interviews with people or radio reports dictated by themselves and need to send this information back to their radio or police station. Leaving a mobile phone on, or dictating to a mobile phone, would simply not give sufficient voice quality to allow that transmission to be broadcast or analyzed for the purposes of background noise analysis or voice printing, where the speech autograph is taken and matched against those in police storage. Since even short voice clips occupy large file sizes, GPRS or other high speed mobile data services are needed.

    5.15.8 Corporate email
    With up to half of employees typically away from their desks at any one time, it is important for them to keep in touch with the office by extending the use of corporate email systems beyond an employee’s office PC. Corporate email systems run on Local Area computer Networks (LAN) and include Microsoft Mail, Outlook, Outlook Express, Microsoft Exchange, Lotus Notes and Lotus cc:Mail.

    Since GPRS capable devices will be more widespread in corporations than amongst the general mobile phone user community, there are likely to be more corporate email applications using GPRS than Internet email ones whose target market is more general

    5.15.9 Internet email
    Internet email services come in the form of a gateway service where the messages are not stored, or mailbox services in which messages are stored In the case of gateway services, the wireless email platform simply translates the message from SMTP, the Internet email protocol, into SMS and sends to the SMS Center In the case of mailbox email services the emails are actually stored and the user gets a notification on their mobile phone and can then retrieve the full email by dialing in to collect it, forward it and so on receiving a new email, most Internet email users do not currently get notified fact on their mobile phone. When they are out of the office, they have to dial in speculatively and periodically to check their mailbox contents. However, by linking Internet email with an alert mechanism such as SMS or GPRS, users can be notified when a new email is received.

    5.15.10 File transfer
    As this generic term suggests, file transfer applications encompass any form of downloading sizeable data across the mobile network. This data could be a presentation document for a traveling salesperson, an appliance manual for a service engineer or a software application such as Adobe Acrobat Reader to read documents. The source of this information could be one of the Internet communication methods such as FTP (File Transfer Protocol), tenet, http or Java- or from a proprietary database or legacy platform. Irrespective of source and type of file being transferred, this kind of application tends to be bandwidth intensive. It therefore requires a high speed mobile data service such as GPRS, EDGE or 3GSM to run satisfactorily across a mobile network.

    5.16 Conclusion
    GPRS will provide a massive boost to mobile data usage and usefulness. That much seems assured from its flexible feature set, its latency and efficiency and speed. The only question is how soon it takes off in earnest and how to ensure that the technical and commercial features do not hinder its widespread use.

    6.1 Introduction
    4G Systems are intended to provide a global mobility with wide range of services including tclcphony, paging, messaging, Internet and broadband data. International Telecommunication Union (ITU) started the process of defining the standard for third generation systems, referred to as International Mobile Telecommunications 2000 (IMT­2000). In Europe European Telecommunications Standards Institute (ETSI) was responsible of UMTS standardization process. In 2004 Fourth Generation Partnership Project (4GPP) was formed to continue the technical specification work. 4GPP has five main UMTS standardization areas: Radio Access Network, Core Network, Terminals, Services and System Aspects Just a few years ago it was unthinkable nonsense that the GSM community would be joyfully planning to a new- generation wireless service based on Wideband CDMA.Yet in 2005, this is precisely the case!

    Still, there are major differences between the “flavor” of CDMA in the US and the new W- CDMA, which will supplement (and some say replace) GSM around the world. The chip rates differ significantly. W- CDMA does not normally use precise timing and PN offsets.

    Nevertheless, this is a wireless milestone to be savored because of the cooperation within the wireless community that has made it possible, and the tremendous potential that this : new technology offers for the benefit of humankind.

    6.2 UMTS architecture
    A UMTS network consist of three interacting domains; Core Network (CN), UMTS Terrestrial Radio Access Network (UTRAN) and User Equipment (UE). The main function of the core network is to provide switching, routing and transit for user traffic Core network also contains the databases and network management functions.

    The basic Core Network architecture for AMTS is based on GSM network with GPRS. All equipment has to be modified for UMTS operation and services. It is necessary for a network to know the approximate location in order to be able to page user equipment. Here is the list of system areas from largest to smallest.

    (IMTS systems (including satellite)
    Public Land Mobile Network (PLMN)
    MSCNLR or SGSN
    Location Area
    Routing Area (PS domain)
    UTRAN Registration Area (PS domain)
    Cell
    Sub cell.

    6.3 The core network
    The Core Network is divided in circuit switched and packet switched domains. Circuit switched elements are Mobile services Switching Centre (MSC), Visitor location register (VLR), and Gateway MSC and packet switched elements are Serving GPRS Support :Node ( SGSN) and Gateway GPRS Support Node (GGSN). Some network elements, like EIR HLR and AIJC, are shared by both domains.
    The Asynchronous Transfer Mode (ATM) is defined for UMTS core transmission. ATM Adaptation Layer type 2 (AAL2) handles circuit switched connection and packet connection protocol AAL5 is designed for data delivery.
    be architecture of the Core Network may change when new services° and features are introduced, Number Portability Database (NPDB) will be used to enable user to change the network while keeping their old phone number. Gateway Location Register (GLR) may he used to optimize the subscriber handling between network boundaries. MSC, VLR and SGSN- can merge to become a UMTS MSC. The UMTS core network consist of GSN (GPRS Service Node) system design, MSC and registers dimensioning, OMC dimensioning, Core network interface dimensioning.

    6.4 The UTRAN
    The UTRAN provides the air interface access method for User Equipment. Base Station is referred as Node-B and control equipment for Node-B’s is called Radio Network Controller (RNC).

    6.5 Base station (Node -B)

    Node B amount is derived form air interface capacity and coverage calculations, but Node Bs also have to be configured. Hardware configuration is vendor specific, but here is a general list of things that need to be considered when configuring Node-Bs:

    • Call mix of expected traffic
    • Type of Node Bs (outdoor vs. indoor)
    • Amount of low capacity Node Bs
    • Required redundancies (e.g. 2N, N+l)
    • Required diversities LI Number of carriers per sector
    • Number of sectors per Node B
    • Number of users
    • Voice and data traffic to be carried
    • Node B software features
    • Required Node B optional features
    • Requirements for special antenna systems
    • Requirements for power and transmission systems
    • 6.5.1 The functions of Node-B
    • Air interface Transmission / Reception
    • Modulation / Demodulation
    • CDMA Physical Channel coding
    • Micro Diversity
    • Error Handing
    • Closed loop power control.
    6.6 Radio network controller (RNC)
    The RNC is designed after the air interface dimensioning and network interfaces planning. After those are prepared, the bandwidth of each RNC link is known. RNC dimensioning is to calculate the number RNCs and configuration of RNCs needed to support the radio access network requirements. Any network side equipment will have the trade-offs in configuration selection. Network can be designed for maximizing the ease of future expansion or for minimizing the total cost. Usually RNC locations are fixed based on network operators main site locations and transmission costs will determine the most cost effective RNC configurations. RNC Hardware configuration is also vendor specific, but here is a general list of things that need to be considered when dimensioning RNCs:
    • RNC capacity and configuration options
    • Total CS traffic (Erlangs)
    • Total PS traffic (Mops)
    • Total traffic and signaling load
    • Total number of Node Bs
    • Total number of cells
    • Total number of carriers
    • Used channel configurations
    • RNC software features
    • Required RNC optional features
    • Type of transmission interfaces
    • Expansion
    • 6.6.1 The functions of RNC
    • Radio Resource Control
    • Admission Control
    • Channel Allocation
    • Power Control Settings
    • Handover Control
    • Macro Diversity
    • Ciphering
    • Segmentation / Reassembly
    • Broadcast Signaling
    • Open Loop Power Control
    6.7 Wide band CDMA technology was selected to for UTRAN air interface UMTS WCDMA is a Direct Sequence CDMA system where user data is multiplied with quasi-random bits derived from WCDMA Spreading codes In UMTS, in addition to channelization, Codes are used for synchronization and scrambling. WCDMA has two basic modes of operation: Frequency Division Duplex (FDD) and Time Division Duplex (TDD). UTRAN interfaces are shown on UMTS Network page.

    6.8 W- CDMA spreading
    -WCDMA uses long spreading codes
    One set of codes are used for cell separation on downlink
    One set of codes are used for user separation on uplink
    – Downlink
    Gold Codes of length 218 are used
    Truncated to same ength as the 10 ms frames
    Total number of scrambling codes is 512
    Divided into 64 code groups with 8 codes in each group, to aglow fast cell search (recently revised)
    – Uplink
    Short codes can be used to ease implementation of advanced multi- user receiver techniques
    -VL- Kasami Codes of length 256 chips
    Otherwise long codes are used.
    – Gold sequences of length 2 41 chips, truncated to 10 ms
    6.8.1 W- CDMA channelization
    – Orthogonal OVSF codes are used for channelization
    – OVSF codes are used from a tree structure
    This ensures that only orthogonal codes are used.


    6.9 Downlink spreading and modulation:
    Fig: Downlik Spreeding and Modulation

    – Data modulation is QPSK

    – Each pair of two bits are serial- parallel converted and mapped to the I and Q “branches
    land Q are then spread to chip rate with an OVSF unique for the specific channel Complex spreading is performed with one of 5 12 primary scrambling codes; at least the primary CCPCH is scrambled this way
    – Other downlink physical channels can be transmitted scrambled with the primary scrambling code or with a secondary scrambling code from the set of 511 associated with the particular l- of= 512 primary scrambling code.


    6.10 Uplink spreading and modulation

    Fig: Downlink Spreeding and Modulation

    -Dual- channel QPSIC is used
    -DPCCH channel mapped to Q, first DPDCH mapped to
    Subsequently- mapped DPDCHs can be mapped to I or Q
    – I and Q are then spread to chip rate with two different OVSF codes
    – In ordinary BTS, a 38.4K- long Gold Code is used for complex scrambling

    In BTS with advanced receiver, a 256 code from the S( 2) family is used instead

    6.11 W-CDMA random access 
    – W- CDMA random access is based on slotted- Aloha technique with fast acquisition indication
    – The Mobile can start the transmission at any of many well- defined time offsets
    All relative to the frame boundary of every second frame of the received BCH of the current cell
    These time offsets are called “access slots’
    There are 15 access slots per two frames spaced 5120 chips apart
    The BCH tells what access slots are available on the current cell
    –Before transmitting a random access request, the mobile
    Achieves chip, slot, and frame synchronization on target BTS
    Gets downlink scrambling code from SCH
    Gets random access code( s) used in the sector from the BCCH
    Estimates downlink path loss to calculate open loop transmit power
    – There are also special provisions for including packet data in a burst if desired
    — At the transmitter, the information source provides symbols
    The symbols are applied to a spreading code.

    6.12 The channels of UMTS
    – In UMTS, information and traffic flow through three types of channels:
    – Logical Channels – analogous to airline companies
    Logical channels are functional, conceptual groupings of information and! Or
    traffic.
    At this level, it is easy to understand the purposes and objectives of the ‘cliannels, the types of activities being carried out on each channel, and the call processing steps involved
    – Transport Channels – analogous to scheduled flights
    Transport channels arc the intermediate, individual flows of information which carry subcomponents of the logical channels and which are represented by bits on the physical channels
    – Physical Channels – analogous to individual aircraft
    These are the real over- the- air channels made up of bits
    At this level, the channels are just patterns of bits – multiframes,
    frames, timeslots, and the various fields of bits which are defined to occupy them.

    6.13 UMTS time slots
    UMTS has several different time slot configuration depending on the used channel. Here is an example of DPCH (Dedicated Physical Channel) downlink and uplink time slot allocation.

    TCP stands for Transmit Power Control, Feedback Information (FBI) is used for closed loop transmission diversity. Transport Format Combination Indicator (TFCI) contains the information relating to data rates. Pilot bits are always the same and are used for channel synchronization.

    6.14 UMTS Special Topics

    6.14.1 Multirate
    – Multiple services of the same connection are multiplexed on one DPDCH
    After service multiplexing and channel coding, the multi service data stream is mapped to one DPDCH
    If the total rate exceeds the upper limit for single code transmission, several DPDCHs are allocated
    – A second alternative for service multiplexing is to map parallel services to different DPDCHs in a multi code fashion with separate channel coding and interleaving
    This allows independent control of the power and quality of each service.
    For BER 10 -3 services, convolutional coding of 1/3 is used
    For high bit rates, a code rate of 1/2 can be used
    For higher quality service classes, parallel concatenated convolutional code is used
    – Retransmission can be used to guarantee service quality.

    6.14.2 Rate matching
    After channel coding and service multiplexing, the total bit rate can appear quite arbitrary!
    The rate matching adapts this rate to7 the limited set of possible bit rates of a DPDCH
    – Repetition or puncturing is used to match the coded bit stream to the channel gross rate
    – For Uplink, rate matching to the closest uplink [)PDC’t-t rate is always based on unequal repetition or code puncturing
    Puncturing is chosen for bit rates less than 20% above
    In all other cases, unequal repetition is performed
    – For Downlink, rate matching to the closest DPDCH rate, using unequal repetition or code puncturing, is only made for the highest rate of a variable rate connection.

    6.15 UMTS handovers 
    6.15.1 Soft handover
    – Before entering soft handover, the mobile
    Measures the observed timing differences of the downlink SCHs from the two base stations
    Reports the timing differences back to the serving base station
    – The tuning of the new downlink soft handover connection is adjusted with a resolution of one symbol
    This enables the rake receiver in the mobile to collect the macro diversity energy from the two base stations
    Timing adjustments of dedicated downlink channels is carried out with a resolution of one symbol without losing orthogonality of the downlink codes.

    6.15.2 Interfrequency handovers

    lnterfrequency handovers arise during utilization of hierarchical cell structures (macro, micro, indoor cells) Several carriers and intertrequency handovers may also be used for taking care of high capacity needs in hot spots Interfrequency handovers are also needed to second- generation systems such as GSM or IS- 95. An efficient method is needed for making measurements on other frequencies while still having the connection running on the current frequency- Two methods are available to-do interfrequency measurements in WCDMA Dual Receiver and Slotted Mode Dual receiver is considered feasible especially if the mobile uses antenna diversity
    – One receiver branch can be switched to the other frequency Slotted Mode is necessary if the receiver has no diversity
    The information transmitted during a 10 ms frame is compressed by puncturing or changing the FEC rate and the mobile is free to make a quick measurement on the other frequency.

    For UMTS the following types of handover are specified:
    Handover 3G -3G (i.e. between UNITS and other 3G systems)
    FDD soft/softer handover
    FDD inter-frequency hard handover
    FDD/TDD handover (change of cell)
    TDD/FDD handover (change of cell)
    TDD/TDD handover
    Handover 4G – 3G (e.g. handover to GSM)
    Handover 3G – 4G (e.g. handover from GSM)

    The most obvious cause for performing a handover is that due to its movement a user can be served in another cell more efficiently (like less power emission, less interference). It may however also be performed for other reasons such as system load control.

    7.1 Introduction
    Multimedia communication points out a Communication with multiple ways of the information, as a combination of text, data, graphics, animation , images , sound, speech and still or moving video. Interesting characteristics added to multimedia communication.

    Blue tooth technology will allow the replacement of the many proprietary cables that connect one device to another with one universal short-range radio link. Blue tooth, “A Global Specification for Wireless Connectivity”, will replace the cable used today to connect printers, desktops, fax machines, cellular phones, laptops, keyboards, joysticks and virtually any other digital device. Blue tooth radios will operate in the unlicensed.

    7.2 Multimedia in 4G mobile
    The emerging third generation of mobile communication users in a communication true paradigm shift. While mobile communication is presently voice centric, offering the benefits of person-to-person speech communication anywhere and at anytime, personal telephony is rapidly being transformed into a mass market of personal mobile multimedia services and terminals. Fourth-generation mobile communication will do much more than bring voice communication capabilities to our pockets. It will also make information ser­vices instantly available, including the Internet, intranets, and entertainment services for instance; a fourth-generation terminal might function as a video camera from which end­users can send electronic postcards and video clips. End-users will also be able to use their terminals as a tool for mobile electronic commerce (e-commerce). in essence, the end-user will have a retail outlet in his or her pocket, with the ability to reserve tickets, make banking transactions, pay parking fees, buy items from a vending machine, and so on. Third-generation mobile communication will also introduce a more powerful, flexible and efficient way of doing business. Mobile multimedia services and mobile or wireless office solutions will simplify the implementation of virtual enterprises. Similarly, appliance-to-appliance and appliance-to-people communication applications will grow in importance, vastly improving security and efficiency.

    7.3 Mobile terminal networks
    New multimedia applications will drive the market for third-generation services. The terminals used in the mobile multimedia era will nearly always be turned on, serving as the gateway to the Internet or to corporate intranets via packet-swached connectivity i networks. This will eliminate delays associated with setup, and add convenience to the use of data and multimedia services. Ericsson and other members of the industry are creating new, open platforms and standards which facilitate multimedia applications that can be accessed by and run on wireless terminals.
    The wireless application protocol easily adapts information from the Internet for access via mobile terminals.
    Ericsson is a founding member of Symbian, a joint venture that recognizes the need to standardize an operating system (EPOC) that supports mobile devices and usage:
    The -Symbian partners are working to create a toolbox that will enable third-party software developers to create innovative services for third-generation mt)bil -. devices.
    Bluetooth is a new, low-cost, short-distance radio technology that was designed to eliminate cables between portable and peripheral terminal; and devices. 14 Bluetooth can, for example, connect mobile terminals, digital cameras, scanners, printers, and PCs.

    7.4 Video transmission for fourth generation mobile communication systems 

    A video splitting strategy was considered for the other 4G systems know as WCDMA. It was shown that an unequal error protection scheme with a simple repetition code could be applied to protect the most error sensitive video data. Since the structure of the cdma2000 system is substantially different from its competitor (WCDMA), we have proposed a different approach that suits the cdma2000 physical layer is based on a Direct Spread (DS) multi code channel structure where power for each channel is allocated separately but under certain restrictions. Therefore, unlike the unequal error protection approach, for cdma2000 we have considered a different dual priority strategy which is based on exploiting the flexibility of the relative power allocation in its link budget. Here we have mainly concentrated on the reverse link due to its more sophisticated power budget specifications.

    7.6- Conclusion

    During the next decade, the information society will evolve into a globally networked Economy – a development that is being shaped by the convergence of computing, communication and broadcasting technologies. Accordingly, the third generation of mobile communication will enable end users to enjoy the benefits of data and image or video communications while on the move – true mobile multimedia.

    8.1 Mobile IP

    Subscriber’s IP routing service is provided by a public IP network Mobile station is assigned a static IP address belonging to its Home Agent Mobile can maintain the static IF address even for handoff between radio networks connected to separate PDSNs Mobile IP capabilities will be especially important for mobiles on system boundaries.
    Without Mobile IP roaming capability, data service for border-area mobiles will be erratic.
    8.2 Mobile IP implications
    Handoffs possible between PDSNs
    Mobile can roam in the public IP network
    Mobile termination is possible while Mobile is in dormant or active mode.

    8.3 Mobile IP and secure tunneling mail -analogy
    Mobile IP is a packet-forwarding arrangement that allows the mobile user to send and receive packets just as if they were physically present at their home agent location.

    8.4 Mobile LP overview
    Mobile IP provides mobility to IP users  allows a host to be reachable at the same address even as it moves across different networks; offers seamless roaming works with multiple access technologies, such as Ethernet, wireless LAN, PPP links, cellular, etc. completely transparent to applications  Three Fundamental Entities in Mobile IP Mobile Node Home Agent – with mobile home location Foreign Agent – serves as a default router for mobile node
    Standards
    FC2002-2006+TIAIS-835
    RFC 2344 – Reverse Tunneling
    RFC 2794 – Mobile NAI Extension
    Foreign Agent Challenge/ Response.

    8.5 Mobile IP: Three levels of mobility

    8.6 Mobile IP architecture
    8.7. Mobile IP session,
    8.7.1 Mobile IP session, step-by-step (1)

    1.         The mobile station accesses die radio network for a data session. This includes getting the necessay-Y fundamental and supplemental traffic channel. Procedures for this need is defined in Is- 2000 and IS- 707.
    2.         The E3SC communicates over the RP interface as defined in IOS version 4.0, with the PDSN to initiate a data session. The underlying lower layers will support the PPP connection.
    3.         The PDSN initiates a PPP connection to the mobile station. Messages and procedures for this in based on the Point- to- Point Protocol RFC 1661.
    4.         IPCP based on RFC 1332 is used to configure the PPP link for IP communication. PPP can support other network layer protocols in addition to IP.
    5.         PPP is established between the Mobile Station and the PDSN. The PDSN sends FA advertisements to the mobile station. (Or the mobile station may send an Agent Solicitation message following the PPP initialization.) The PDSN/ FA informs the mobile station of its capabilities and care- of- addresses that are available for use. In these advertisement messages, the PDSN will indicate its ability to support reverse tunneling, that is used to download information from the HA to the FA.
    6.         Mobile station sends a MIP registration request (MIP RRQ) to the PDSN. This request has to be forwarded to the user’s HA so that the HA is made aware of the user’s location. In these registration requests, the mobile station can also specify reverse tunneling.
    7.         The PDSN extracts authentication information from the request and forwards to the local AAA server using Radius Protocol. The PDSN may also request for user profile for the user’s Home Agent address.
    8.7.2 Mobile IP session, step-by-step (2)
    8.         The local AAA server verifies that the NAI and password and returns an acknowledgement to the PDSN.
    9.         The Foreign Agent (FA) function in the PDSN sends the MW registration request message to the Home Agent
    10.       The home agent sends a response back to the PDSN (FA). Message formats and procedures are based on RFC2002 – 1P -Mobility Support. The reply will include indication on whether the HA can support forward and revere tunneling.
    11.       The PDSN sends the registration reply to the mobile station. Accounting is initiated to
    AAA server based on RFC 2139 standards.
    12.       Data flow between mobile station and PDSN. Interim accounting data may be collected and forwarded to the AAA server.
    13.       Mobile station terminates data/PPP connection by sending MIP de registration request using procedures in RFC2002 PPP connection is torn down. Accounting is suspended
    14.       During the session PDSN collects statistics relevant to the session and forwards to the ‘AAA server in a Usage Data Record (UDR) format.
    8.8 Home agent & foreign agent
    The Home Agent
    Located within the MN’s Home Network
    Termination point for Mobile IP tunnels
    Receive and route packets to/ from the FA
    Assign dynamic addresses for mobiles
    provides Mobile IP functionality by maintaining IP sessions as users move among cells.
    Most operators will equip their own Home Agents allowing users to access the outside network, such as the Internet while roaming Large users & Corporations may equip their own home agent in their network linked to a wireless provider Using Mobile IP, their users will appear to be on their home corporate network while using the wireless system Foreign Agent
    Located within PDSN
    Maintains awareness of visiting MN’s
    Acts as a relay between the MN and its Home Agent (HA).
    RADIUS Clients.

    9.1 Introduction

    Like many completely novel technologies, 4G will probably start its life primarily as a medium of entertainment and social interaction. But its potential is much more profound than this and as the market settles down, 4G will find more and more serious uses both for domestic management and as a powerful business tool. Eventually, we predict it will become a mainstream channel of communication, e commerce and information access. Some common applications of 4G are discussed bellow.

    9.2 Text

    Plain text. Any character encoding (char set) that contains a subset of the logical characters in Unicode shall be used (e.g. US-ASCII, ISO-8859-1, UTF-8, Shift JIS, etc.). Unrecognized subtypes of “text” shall be treated as subtype “plain” as long as the MIME implementation knows how to handle the char set. Any other unrecognized subtype and unrecognized char set shall be treated as “application/octet – stream”.

    9.3 Speech 
    The AMR codec shall be supported for narrow-band speech. The AMR wideband speech codec shall be supported when wideband speech working at 16 kHz sampling frequency is supported.

    Codec Mode Source Codec Bit-rate
    AMR 12.20 12,20 kbits (GSM FER)
    AMR 10.20 10,20 kbits
    AMR 7.95 7,95 kbits
    AMR 7.40 7,40 kbits (16-641)
    AMR 6.70 6,70 kbits (PDC-EFR)
    AMR 5.90 5,90 Kkbits
    AMR 5.15 5,15 kbits
    AMR 4.75 4,75 kbits
    AMR 8/D 1,80 kbits (see note 1)
    Fig: Source codec bit-rates for the AMR codec

    9.4 Audio

    MPEG-4 AAC Low Complexity object type should be supported. The maximum sampling rate to be supported by the decoder is 48 kf-fz. The channel configurations to be supported are mono (1/0) and stereo (2/0). In addition, the MPEG-4 AAC Long Term Prediction object type may be supported.

    9.5 Still image
    ISO/IEC JPEG together with JFIF shall be supported. The Support for ISO/TEC JPEG only apply to the following two modes:
    mandatory baseline DCT, non-differential, Huffman coding.
    optional: progressive DCT, non-differential, Huffman coding.

    9.6 Bitmap graphics 
    The following bitmap graphics formats should be supported:
    GIF87a
    GIF89a
    PNG

    9.7 Video 
    For terminals supporting media type video, ITU-T Recommendation H.263 profile 0 -level 10 shall be supported. This is the mandatory video codec for the MMS. In addition, MMS should support:
    H.263 Profile 3 Level 10
    MPEG-4 Visual Simple Profile Level 0

    These two video codes are optional to implement.

    9.8 Vector graphics:

    For terminals supporting media type “2D vector graphics” the “Tiny” profile of the Scalable Vector Graphics (SVG-Tiny) format shall be supported, and the “Basic” profile of the Scalable Vector Graphics (SVG-Basic) format may be supported.

    9.9 Billing

    Be needed to support for example: With traditional circuit-switched traffic, the user has exclusive use of a circuit from A to B, so the charge is based simply on the length of the circuit and the duration of the call. With 4G, this model no longer applies. Packet­switching and the always- on concept mean that charging for connection time and distance are not appropriate, as they do not reflect the way that network resources are being used. On the other hand, charging customers according to the number of packets sent or received may mean little to the personal consumer market and would only occasionally reflect the value of the services that were being accessed. The new charging model is therefore likely to be based on a combination of data volumes, and a mix of charges for services and content, including mark-ups. on goods and services purchased over the network from third parties. A bill from a 4G service provider will look more like a credit card statement than an old-fashioned telephone bill. This not, only involves a much more sophisticated billing technology than was required in the past but also requires it to be integrated with every aspect of the 4G service. For example billing needs to support the settlement process – the means by which the operator will keep track of what he owes to a multitude of partner organizations and effects the appropriate payment to them. Settlement calculations will need to be based not only on straight percentages but on a bewildering mix of content pricing structures, one-off fees, royalty charges and quality-related penalties. International roaming services, a potentially highly lucrative source of new revenue streams, will also require meticulous management of a variety of different license fee agreements individually negotiated with other network operators. The underlying design of billing systems will also change to reflect the demands of 3G technology and the Internet enabled customer. The billing system will be the central repository of customer, service, rating and accounting data and will need to interact with many other system functions. Much of this interaction will need to take place in real time, providing an up to the minute picture of the customer’s account status. Real time processing will be needed to support for example on-line enquiry by customer or CSR fraud and bad debt management, particularly as we move into higher value transactions being enacted against the account credit checking at the Point of Sale, which in many instances will be the mobile terminal itself Finally, the system must be convergent, by which we mean that the customer bill will reflect all of the services delivered. In a multimedia world, if the consumer perceives one service provider delivering voice, data and value-added services to a single handset, he or she will find it bizarre to see charges dispersed between many bills.

    9.10 Revenue mix
    Here are the likely main sources of revenue which the operator will need to manage pro­actively for maximum profitability:

    Hosting fees – from individual application and content owners and aggregators. To enter the 4G market, these businesses will depend absolutely on finding a suitably resourced host.
    Advertising revenue — – advertisers and sponsor will pay for space on the portal, presentation time during calls and for -so-called ‘interstitial flashes’ (subliminal presentation of brand between clicks.) gull range of services from narrowband voice to wideband, real-time multimedia services. Voice traffic is expected to re- main an important application and source of revenue. Support for high-speed packet data, including the browsing of information and the World Wide Web (WWW); information delivery (news, weather, traffic, finance) via push techniques the information might even be location-dependent; and remote and wireless access to the Internet/’intranets.
    Unified messaging services, such as multimedia e-mail. Real-time audio/video applications, such as videophone, interactive video conferencing, audio and music, and specialized multimedia business applications, inc telernedicine and remote security surveillance.

    Mobile e-commerce applications:
    mobile banking, and mobile shopping.
    Mobile office applications:
    a. seamless multimedia for users who are on the move and at the office;
    b. Specialized aril private mobile-radio (SMRJPMR) services and intranet access.
    c. New portable and pocket-sized wireless terminals will support these new multimedia.

    9.11 File format, for dynamic media

    The file format used in the present document for timed multimedia (such as video. associated audio and timed text) is structurally based on the MP4 file format. However, since non-ISO codes are used here, it is called the 3GPP file format and has its own file extension and MIME type to distinguish these files from MPEG-4 files. When the present document refers to the MP4 file format, it is referring to its structure (ISO file format), riot to its conformance definition.
    To ensure interoperability for the transport of video ‘ and associated speech/audio and timed text in an MM, the MP4 file format shall be supported. The usage of the MP4 file format format shall follow the technical specifications and the implementation guidelines specified in TS 26.234.

    9.12 Media synchronization and presentation format
    The mandatory format for media synchronization and scene description of multimedia messaging is SMII.
    Additionally, 4GPP MMS should provide the following format.
    XHTMI Mobile Profile
    The 3 GPP MMS uses a subset of XHTMI 1.1 as a format for scene description.

    10.1 Mobile communication in Bangladesh
    In Bangladesh Mobile Telephone System comes for public service in 1992. In 1 989 a local operator BTL (Bangladesh Telecom Limited) was given license for operating, paging radio franking reverie communications and cellular radio telephone in the private sector. This company though introduced Paging & Radio franking, could not successfully operate reverie communication & cellular radio telephony was transferred to another company named HBTL (Hutchison Bangladesh Telecom Limited).
    The first ever-cellular radio telephone service in Bangladesh was introduced in 1993. By this new company, which of course changed its name to PBTL (Pacific Bangladesh Telecom Limited ). In 1996 later on three more private companies named Grameen Phone), TMIB, Sheba Telecom were given licenses for operating cellular telecom services- in late .1996. The present position of these four mobile operators are given below:
    A. Grameen Phone
    Service provided at 26 March 1997.
    System used: GSM-900
    Frequency Band: From 910 to 915 MHz + 895 to 897.4 MHz= Total 7 A MHz.
    Total Coverage: 62 Districts.
    Total Subscribers: 25,00,000
    B. AKTEL
    Service provided at 15 November 1997.
    System used: GSM-900
    Frequency Band : From 905 to 910M1 lz = Total 5 MHz.
    Total Coverage : Divisions : 61 Districts.
    Total Subscribers: 15,00,000
    C. Pacific Bangladesh Telecom Ltd .(Citycell)
    Service provided at 26 March, 1997.
    System used: AMPS & CDMA One (IS-95 A)
    Frequency Band: From 900 to 905MHz = Total 5MHz.
    Total Coverage: Divisions- Dhaka, Chittagong, Syihet, Rajshah, Khulna, Barisal
    Total Subscribers: 8,00,000.
    D. Sheba Telecom (Bangla Link)
    Service provided at 21 May, 1998.
    System used: GSM-900
    Frequency Band : From 890 to 895MHz = Total 5 MHz.
    Total Coverage: 12 Districts.
    Total Subscribers: 1,40,000.
    In our country the Pacific Bangladesh Telecom Limited (City Cell) can launch Fourth Generation Mobile. Because they are already using CDMA One, which is one of the access methods of 4G. The other operators such as the Sheba Tele-com Ltd & Grameen Phone Ltd. have to add GPRS with their G.S.M technology, which will be equivalent to EJMTS. As a modern & convenient technology 4G is now a necessity in our country. But as 4G is an expensive technology, it will take time to start 4G services in Bangladesh.

    10.2 Conclusion
    The Fourth generation of mobile communication is the latest communication system of mobile communication. The previous generations of mobile such as 1 G, 2G, 3G provides slow rate voice and data communication. But the Fourth generation mobile provides high speed voice and data communication. The 4G mobile improve the voice quality provide several special future such as Internet, e-mail, multimedia with better efficiency. The technology is updating everyday. 4G Mobile is under research & scientists hopes to launch-~within 2010. By using Very Large Scale integration (VL,SI) microprocessor technology, many function of the mobile station can be built in one cheapest, resulting in lighter weight, more compact & more energy efficient terminals can be invented.

    The 4G mobile have been launched in Japan in November, 2004. One of the biggest mobile operator normally NTT DoCoMo launched this mobile. They named the mobile “FOMA” NTT Do Co Mo, Initially launched “FOMA” in three big cities in Japan, they are Tokey, Osaka & Nagoya Do Co Mo however expects a rapid roll=gut of the W-CDMA network infrastructure and so, the foreseeable future is concentrating on single mode W­CDMA terminals rather than multimode terminals which might include 3G or other technologies. NTT DoCoMo assures that the probabilities if international roaming will be available. DoCoMo wants to ensure that its 4G terminal technology will be supplier to preceding generations of the terminal technology, hence the emphasis on small assize & weight as well as advanced technology. In fact several terminal variants are being contemplated. Broad categories world include very small hand held voice or other terminals linked by “Blue tooth” connectively to laptop computers.

    Some long terms prediction suggests that Japan with a population of 120 million people­could support about 360 million 4G services, especially in non voice applications such as in car, telemetry& some expert predicts.

    At last we would like to say that are really pleased to study this important & interesting thing. We pay our heartiest gratitude & thanks to our supervisor Md. Shaifur Rahman & all other honorable teachers of the department of electrical & electronic engineering, KUET, Khulna for the completion of this paper.

    11.1 Introduction
    The FM transmitter is an electronic device which is commonly used for a vast kind of applications in different sectors of telecommunication engineering. From its name it is apparent that this device contributes for transmitting different types of waves. Here the frequency of audio frequency wave is modulated by the carrier wave and is transmitted to the receiver through a suitable channel.
    The frequency band of FM is from 88MHz to 108 MI {z. This frequency band lies on VHF band. Our FM Transmitter consists of mainly VHF amplifier, VHF oscillator and a microphone preamplifier. In other hand, VHF amplifier act as an FM modulator & carrier oscillator. For continuous oscillation the output of collector tank circuit should properly phased to the input. At the same time this signal must be amplified 20 to 60 times in designing VHF transistor amplifier circuit. One matter must be considered # band width product of transistor lies within its limit. As an example if we amplify a 100 MHz 20 times then we need a transistor having. fl=(100*20) = 2000 MHz= 2 GHz.
    In our circuit we used BFR 91′ which t is 5.5 GHz and P = 0.25 watt Ln free air.
    But we put a heat sink on it to operate it two to four times higher then its normal watt, rating. Because power transistor from two to five watts with high frequency is not available in local market.
    11.2 How a FM transmitter works

    Audio input, RF output and everything in between. Shown below (Figure 1.) is a basic block diagram of a typical stereo FM transmitter. The audio input is delivered from stereo HI-Fl equipment (e.g. CD player) into the L (Left) and R (Right) audio input terminals. The left and right audio channels are then passed on to the “Stereo Encoder / Multiplexer”            ‘

    The Stereo Encoder then “encodes” (combines) the 2 audio channels into a single audio channel, this process is known as “Multiplexing”. The multiplexing process is very

    The Stereo Encoder then “encodes” (combines) the 2 audio channels into a single audio channel, this process is known as “Multiplexing”. The multiplexing process is very difficult to understand and involves deep mathematical calculations which will be omitted here for simplicity. The audio signal is now encoded and will be “decoded” by the receiver tuned to the radio station. After this audio signal is encoded (multiplexed), it is fed to the “Oscillator / Frequency Generator”. The Oscillator is the single most important part of an FM transmitter or any transmitting device for that matter. This is the, part of the transmitter that generates the frequency (f), hence the name “frequency generator”. The term oscillator is the name given to an object that generates a frequency by repetition. In the field of electronics, the oscillator generates an electronic signal with a voltage that varies with respect to time (t). This voltage will vary from one value to another, and then back to the initial value. The concept of oscillation (voltage varying with respect to time) is shown in Figure 2. This is a “sinusoidal” waveform which begins at point A, then increases voltage to Vmax, returns the same voltage as it had at point A, then decreases voltage to Vmin before finally returning to its initial voltage, the same voltage as at point A. This is a very simple “single cycle sinusoidal waveforrn” and is a typical sample of a waveform generated by an FM oscillator. These oscillators have a set frequency, and their output frequency (known as the center frequency) will be that frequency on which the transmitter will broadcast. For the mathematical people, f = 1/t, therefore t = 1/f.

    It’s worth now stating that “RP is an abbreviation for the term “Radio Frequency” and that “FM” is an abbreviation for the term “Frequency Modulation”. Frequency Modulation actually means that the frequency of operation of the oscillator will be affected /, controlled by the signal modulating it. In the case of an FM Transmitter, the signal modulating it is the audio signal from CD player etc.., which remember has been processedd by the “Stereo Encoder / Multiplexer”. The oscillator frequency will change slightly depending on the voltage of the audio signal modulating it and the oscillator design. The minor change in this frequency is known as “deviation”, and the frequency of the oscillator: should deviate equally both above and below the center frequency of the oscillator. The oscillator generates the output frequency which determines where on the FM Band transmission will be located. The output of the oscillator contains all of the essentials for an FM broadcast. It is modulated by the audio signal and transmitting on a user defined frequency. When tuned to with an FM receiver music will be heard, but there is only one problem with the output from the oscillator. The output power of an oscillator is usually very low, perhaps 50 mWatts (milli Watts). This level of power would only be capable of transmission over a range of 100 – 300 meters depending on environmental conditions. This output power is useless for long range broadcasts, we can increase the range by increasing the output power. How do we increase the output power? Amplify it! The RF Amplifier is the final part of an FM transmitter. ft will be fed by the oscillator and will have the single property of increasing the power of the oscillating signal generated by the oscillator. We will not get into circuit design of an amplifier in this document as it is very technical, but we will show the fundamental input and output properties of the amplifier. Before proceeding note that in the following we will limit our discussion to Voltage amplification. There are different types of amplifiers i.e. voltage amplifiers and current amplifiers, we will only speak of voltage amplification here as it is easier to understand when limited to block diagrams as opposed to circuit diagrams. Although for 100% accuracy we would speak of “power amplifiers” here however the same principle applies, what you put in is amplified. By limiting to voltage amplifiers we can use straight forward gain factors and have no need to use dB (decibel) gain factors. Shown in Figure 3, is an RF amplifier module with a sinusoidal input signal with value Vin. Without getting technical,. this signal undergoes an amplification process which produces a signal at the output with a value of Vin multiplied by the gain factor.

    Normally the gain factor is denoted by the letter “A”, and as shown below the gain (A) for this amplifier has a value of 10. Therefore is we were to apply a signal of I Volt to the input of this amplifier, then the output should be I X 10 =- 10 Volts, if we applied 5 volts then Output = 5 X 10 = 50 Volts and so on. It must be said now that an amplifier has no effect on the frequency. The frequency of the output signal must be exactly the same as the frequency of the input signal. Some amplifiers will have inverted output signals.

    11.4     Block diagram of FM transmitter

    Colpite Oscillator


    FIG: Block diagram of FM transmitter

    11.6 Circuit diagram

    L1= Uh, 6 to 8 turns of 22 ga. hookup wire close wound around a 1/4 inch diameter non-conductive core such as a pencil.
    FIG. Circuit diagram of FM transmitter
    11.7 Waveform of frequency modulated voltage

    10.8 Antenna and antenna matching unit
    Our transmitter is designed to transmit signal from 88 MHz to 108 MHZ. in FM band maximum power will be transmitted if transmitting antenna is designed to specific frequency. We want transmit our carrier in 88 MHz. So antenna should be designed 88 MHz.

    We know wave length y          =   = 3.4 m

    Antenna is transmitted to transmitter output via. An antenna matching unit is a variable capacitor (15-50 pf) Maximum power is will be transmitted to antenna when transmitter output impedance match to antenna input impedance.
    References
    Mobile Cellular Tele communication By. Willium C.Y. Lec.
    Cellular Concept By. V.H. Mcdonald
    IEEE Spectrum (Year. 2 Vol. 39 Num. 6 June 2002)
    System Survey Training Document By. Ericsson
    Radio Engineering BY G.K. Mithal.
    Web Sites
    wwe.howcdmaworks.com
    www.4Gintroduction.com
    www.gsmworld.com
    www.welly.com
    www.grameenphone.conm
    www.ericsson.com
    www.3Gpp.com
    www.banglalink.com
    www.3gapp.com
    www.gsm.com
    www.3gcouk.com
    www.ieee.com
    www.totalemap.com
    www.w2forumcom
    www.edb4tel.com
    ITU                  International Telecommunications Union
    Kbps                Kilobits per ‘second
    MAN               Metropolitan Area Network
    MSC                Mobile Service Switching Centre
    MVNO Mobile Virtual Network Operators
    NMT                Nordic Mobile Telephone
    NTIA               National Telecommunications and Information
    OFDM Orthogonal frequency-division multiplexing
    OHG                Operators Harmonization Group
    PAN                 Personal Area Network
    PCF                  Packet Control function
    PCS                  Personal Communications Services
    PDC                 Personal Digital Cellular
    PDSN               Packet data Service Node
    PIM                  Personal Information Management
    PSD                 Packet Switched Data
    PSTN               Public Switched Telephone Network
    QPSK               Quadrature Phase Shift Keying
    PN                   Radio Network
    PNC                 Radio Network Controller
    S-UMTS           Satellite UNITS
    UTRA  Terrestrial Radio Access standard
    SDMA Space Division Multiple Access
    SIM                  Subscriber Identity Module
    SGSN               Serving GPRS Support Node
    SMS                 Short Message Service
    TDM                Time Division Multiplexing
    TCP                 Transmission Control Protocol
    TDD                Time Division Duplex
    TDMA Time Division Multiple access
    UMTS  Universal Mobile Telephony System
    UTRA  Terrestrial Radio Access
    VOD                Video On Demand
    VOIP               Voice over Internet Protocol
    WCDMA         Wideband Code Division Multiple Access
    WTDMA          Wideband-Time Division Multiple Access
    WAN               Wide Area Network
    WMAN            Wireless Metropolitan Area Network
    WAP                Wireless Application Protocol
    WWL               Wireless Markup Language
    GLOSSARY
    AAA                Authorization, Authentication and accounting
    AAL2              Adaptation Layer Type 2
    AMPS  Advanced Mobile Phone System
    ARPC  Average revenue per user
    ATM                Asynchronous Transfer Mode
    BPS                  Bits per second
    BTS                 Base Transceiver Station
    CDMA Code Division Multiple Access
    CDPD  Cellular digital packet data
    CPN                 Customer Premises Network
    CRM                Customer Relationship Management
    CSD                 Circuit Switched Data
    CTIA               Cellular Telecommunications Industry Association.
    DPCH  Dedicated Physical Channel
    DSFDD            Direct Spread Frequency Division Duplex
    DVD                Digital Video Broadcasting
    EGPRS             Enhanced General packet Radio services
    EDGE  Enhanced Data rates for GSM Evolution
    ETSI                European Telecommunications Standard Institute
    FDD                 Frequency-division multiplexing
    FOMA Freedom of Mobile Multimedia Access
    FWA                Fixed Wireless Access
    GGSG  Gateway GPRS Support Node
    GMPCS            Global Mobile Personal Communications via Satellite
    GMSK Gaussian Minimum Shift Keying
    GPRS               General Packet Radio System
    GPS                 Global system for Mobile Communications
    HA                   Home Agent
    HLR                 Home location Register
    HSCSD            High Speed Circuit Switched Data
    IETF                International Mobile Telecommunication 2000
    IP                     Internet Protocol
    IPy6                 Internet Protocol, Version 6

    " 138,"

    Fourth Generation of Mobile Communication (4G)

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    Fourth Generation of Mobile Communication (4G)

    1.1 Introduction

    We are experiencing exponential growth rates in mobile communication systems, increasing mobility awareness in society, and deregulation of former monopolized markets while traditional communication paradigms with fixed networks, mobility raises a new set of questions, techniques and solutions. For many countries, mobile communication is the only solution due to the lack of an appropriate fixed communication infrastructure. The trends mentioned above create an ever- increasing demand for well-ended communication engineers who understand the developments and possibilities of mobile communication. What we see today is only the beginning. There are many new and exciting systems currently being developed in research labs. The future will see more and more mobile devices, the merging of classical voice and data transmission technologies, and the extension of today’s internet applications (e.g., the World Wide Web) onto mobile and wireless devices. New applications and new mobile networks will bring ubiquitous multimedia computing to the mass market; radios, personal digital assistants, laptops and mobile phones will converge and many different functions will be available on one device.

    This REPORT is an introduction to the field of fourth generation of mobile communications and focuses on digital data transfer. The paper is intended for use by students of EE or communication classes, engineers working with fixed networks who want to see the future trends in networking, as well as managers who need a comprehensible overview in mobile communication. The reader requires a basic understanding of communication and a rough knowledge of the Internet or networking in general.

    This work addresses people who want to know how 4G mobile phone systems work, what technology will be next in satellite communication, and how mobility will influence applications, security, or networks.

    The job follows a tall and thin’ approach. it covers a whole course in 4G mobile communications, from signals, access protocols, up to application requirements and security. Topics in the higher layers of communication, like the wireless applications are also mentioned here briefly.

    1.2 Standards of mobile communication

    The main standards and the main markets in which they are used are summarized in the following table.

    Year Standard Mobile telephone system Technology Primary Markets
    1981 NMT-450 Nordic Mobile Telephone Analogus Europs Middle East
    1983 AMPS Advance Mobile Phone System Analogue North and South America
    1985 TACS Total Access Communication System Analogue Europe and Chana
    1986 NMT 900 Nordic Mobile Telephone Analogue Europe, Middle East
    1991 GSM Global System for Mobile Communication Digital World-wide
    1991 TDMA D-AMPS Tune Division Multiple Access Digital North and South America
    1992 CDMA Code Division Multiple Digital N. America, Korsa
    1993 GSM 1800 Global System for Mobile Communication Digital Europe
    1994 PDC Personal Digital Cellular Digital Japan
    1995 PCS 1900 Personal Communication Services Digital North America
    2000 CDMA, GPRS Coded Division Multiple Access Digital USA
    2002 4G, WCDMA WCDMA/UMTS CDMA 4G Digital Japan USA

    Table: Brief History of Mobile Standards.

    1.3 Scope of 4G

    4G is designed to deliver:

    1.4 What’s new in 4G

    1.5 Comparison of 3G and 4G

    3G 4G
    Back compatible to 2G. Extend 3G capacity by one order of magnitude:
    Circuit and packet switched networks. Entirely packet switched networks.
    Combination of existing & evolved equipment. All network elements are digital.
    Data rate (up to 2Mbps). Higher bandwidth (up to 100 Mbps).

    1.6 Rolling out of 4G

    NTT DoCoMo already launched the worlds’ first commercialized fourth-generation “FOMA” mobile communication service on October l, 2003. FOMA is the name used in Japan for NTT DoCoMo’s 4G services.

    The question of 4G deployments is not a technical issue, but a regulatory and economic one- Subscriber demand is the key factor: user expectations for mobile services are being raised, and for any successful 4G license bidder time to market will be critical. The way 4G is rolled out in a particular market-will depend entirely on the business plans of the mobile operators, and the license requirements imposed by the regulatory authorities.

    Today’s mobile network operators can gain the vital business and market experience of providing high-speed mobile data services by introducing packet switching networks such as GPRS (General Packer Radio Service). By the time the new WCDMA, EDGE and cdma2000 wideband radio interfaces are standardized and commercially available, the market will already be attuned to the possibilities of 4G. Japan was the first market to announce specific plans to introduce wideband radio networks based on WCDMA technology. As a result, it is expected that 4G will go into service first in Japan. Currently, WCDMA networks are scheduled to be in operation there in 2001. The 4G licensing process has completed in many countries in Europe, and the first wideband radio networks are expected to enter commercial operation in 2005. Before then, GPRS will be introduced into GSM networks, to increase user bandwidth. The first GPRS systems was introduced early in 2000 in France but due to handset shortest and technical problems of the advance overall network architecture, it was not a success.

    2.1 Introduction

    The concept of mobile telephony was originated in the 1920’s, but it was only in 1947 that the cellular network structure was devised. Up to then, no solution enabled a mobile station to roam far from the antenna system. The concept of cellular communication was born in the Bell laboratories of the USA in the late 1960’s. In the mid 1970’s, AT&T’s Bell labs demonstrated, what came to be known as Cellular Mobile Telephone (CMPT). Cellular technology provides communication to and from the user located anywhere on the glob or within a territory, through a portable lightweight handheld mobile telephone. It is a two way communication process. An area is divided into a number of cells, each with a Radio Base Station (RBS), having a transmitting and receiving tower. In cellular mobile telephone system, the subscriber carries small sized transceiver (transmitter cum receiver) with an assigned radio frequency channel through which the Public Service Telephone Network (PSTN) subscriber can call the mobile, the mobile can call the PSTN subscriber and the mobiles themselves can talk to one another. Based on the concept of efficient spectrum utilization, the cellular mobile radio system design can be analyzed and related to the others. `1 major elements are the concept of frequency reuse channels, the co channel interference reduction factor, handoff mechanism, cell splitting etc. The common problems are path loss, shadowing, multi-path fading, time dispersion, time alignment etc. There are several solutions to solve these problems. To solve these problems several techniques such as channel coding, interleaving, adaptive equalization, frequency hopping etc are used.

    2.2 Cellular fundamentals

    A cell may be defined an area of radio coverage from one Base Transceiver Station (BTS) antenna system. It is the smallest building block in a mobile network and is the reason why mobile networks are often referred to as cellular networks. The power level of a transmitter within a single cell must be limited in order to reduce the interference with the transmitters of neighboring cells. The interference will not produce any damage to the system if a distance of about 2.5 to 3 times the diameter of a cell is reserved between transmitters.

    In order to work properly, a cellular system must verify the following two main conditions.

    · Neighboring cells cannot share the same channels. In order to reduce the interference, the frequencies must he reused only within a certain pattern.

    · It is two-way communication process. An area is decided into a number of cells, each with a radio base station (RBS), having a transmitting and a receiving tower. Each RDS has a set of channels assigned. The mobile in a given cell send its signals to RBS.A number of RBSs are connected to and controlled by ‘a base station controller (BSC). All the BSCs in the service Qreace connected to the mobile switching center (MSC) which handles major technical like switching, assigning radio channels to every mobile, locating the cell a mobile is in as soon as it is switched on, as it moves From cell, measuring the calls, recording the charges etc The MSC is the switches that interconnect the PSTN (public switched telephone network) and the mobile system.

    2.3 A basic cellular system

    A basic cellular system consists of three parts: a mobile unit, a cell site, and a Mobile Telephone Switching Office (MTSO).

    · Mobile unit: A mobile telephone unit contains a control unit, a transceiver and antenna system.

    · Cell site: The cell site provides interface between the MTSO and the mobile units, it has a control unit, radio cabinets, antennas, a power plant, and data terminals.

    · MTSO: The switching off-ice, the central coordinating element for all cell sites, contains the cellular processor and cellular switch. It interfaces with Telephone Company Lone offices, controls call processing, and handles billing activities. The radio and high-speed data links connect the three substations. Each mobile unit can only use one channel at a time for its communication link. The MTSO is the heart of cellular mobile system. Their processor provides central coordination and cellular administration.

    2.4 Cluster

    The cells are grouped into clusters. The number of cells in a cluster must be determined so that the cluster can be repeated continuously within the covering area of an operator. The typical clusters contain 4,7,12 or 21 cells. A balance must be found in order to avoid the interference that could occur between neighboring clusters.

    2.5 Cell type

    Cells can be of different types based on the antenna direction, size and nature of the area they cover, etc. Some of the cell types are described below:

    A. Depending on the antenna direction:

    · Omni cells are the cells served by antenna, which transmits, equally in all horizontal direction.

    · Sector cell – a cell with uni-directional BTS antenna system.

    Three sectored cells from one tower system can also form a circular coverage area. Sectors will be 120 degree apart from each other. In Grameen Phone we use three sectored cells to obtain more or less a circular coverage area.

    B. Depending on the size of the cell:

    C. Depending on the area

    · Urban cell

    · Suburban cell

    · Rural cells ‘

    D. Depending on the cell relationship

    E. Depending on thee usage

    v Indoor cells

    v Outdoor cell

    v Road cell to give coverage to a particular road, etc.

    2.6 Performance criteria

    The cellular system provides some important performances which give the subscribers better services. There are four categories for specifying performance criteria.

    2.6.1 Voice quality

    Voice quality is very hard to judge without subjective tests from users opinions. In this technical area engineers cannot decide how to build a system without knowing the voice quality that will satisfy the users. For any given commercial communications, the voice will be based upon the following criterion: a set value X at which Y percent of customers rate the system voice quality as good or excellent, the top to circuits merits of the five listed bellow:

    · CMS- excellent (speech perfectly understandable)

    · CM4- good (speech easily understandable, some noise)

    · CM3- fair (speech understandable with a slight effort, occasional repetition)

    · CM2- fair (speech understandable only with considerable effort, frequent repetition needed )

    · CM 1- unusable (speech not understandable)

    2.6.2 Service quality

    · Coverage: The system should serve an area as large as possible. It is usually not practical to cover 100 percent of the area for two reasons:

    a. The transmitted power would have to be very high to illuminate weak spots with sufficient reception, a significant added cost factor.

    b. The higher the transmitted power, the harder it becomes to control interference.

    · Required grade of service: For a normal start-up system the grade of service is specified for a blocking probability of 0.02 for initiating calls at the busy hour. This is an average value.

    · Number of dropped calls: During Q calls in an hour, if a call is dropped and Q-1 calls are completed, then the call drop rate is l/q, this drop rate must be kept low.

    2.6.3 Low terminal and service cost

    In cellular system the mobile terminal (hand set) and the rate per minute of the call is low than other system.

    2.6.4 Support of international roaming

    In cellular system one can get the service of call even during moving from one site to another by the process of hand over As the tits roams through the area, it continuous t scan the control channels to ensure that It is tuned to the strongest possible channel If the MS finds one, which is stronger, then the MS retunes to this new control channels If the new control channel belongs to a new Local Area (LA), the MS will also inform the network of its new location.

    2.7 Operation of cellular System

    For the call set up in the cellular mobile communication system among the subscribers throughout the cellular network the following operations are to be performed.

    2.7.1 Mobile unit initialization

    When a receiver of a mobile unit is activated, its scans 21 set up channels, which are designed among the 333 channels. It then selects the strongest and locks on for a certain time. This means selecting nearest cell site. This function is done in idle stage and is used independent. After 60 see, this self-location procedure is repeated.

    2.7.2 Mobile Originating call

    The user places the called number into an originated register, checks to see that the number is correct and pushes the “send” button. A request for service is sent on a selected set-up channel obtained from a self-location scheme. The cell receives it, and in directional cell sites, selects the best directive antenna for the voice channel to us.

    At the same time the cell site sends a request to the mobile telephone switching office. (MTSO) via a high-speed data link, The MTSO selects an appropriate voice channel for the call; it also connects the wire-line party through the telephone company zone off-ice.

    2.7.3 Network originated call

    A land-wire party dials a mobile unit number. The telephone company zone office recognizes that the number is mobile & forwards the call to the MTSO sends a paging message to certain cell site based on the mobile unit number and the search algorithm. Each cell site transmits the page on its own set-up channel. The mobile unit recognizes its own identification on strong set-up channel, lucks on to the cell site.

    2.7.4 Call termination

    When the mobile user turns off the transmitter, a particular signal (signaling tone) transmit to the cell site, and both sides free the voice channel.

    2.8 Handoff procedure

    During the call, two parties are on a voice channel. When the mobile unit moves out of the coverage area of a particular cell site, the reception becomes weak. The present cell site requests a handoff. The system switches the call to a new frequency channel in a new cell site without either interrupting the call or altering the user. The call continues as long as the user is talking. The user does not notice the handoff occurrences.

    2.9 Hand Over

    Hand over is defined as the passing, I taking over a live call between two neighboring cells or frequencies. When a user reaches the edge of a cell, the signal strength (between the serving base station and himself) gets weaker. If his call is not taken over by another cell, his call might be dropped (discontinued). The signal strength criterion is the basic behind a hand over. However, there are many other special reasons why a call could be handed over (bad quality, congestion, etc).

    As the cell sizes are getting smaller, the probability of a subscriber to move to a nearby cell while talking is increasing also. Thus the challenge of this cellular concept is to transfer a “live” call to a nearby cell when the user is on the move. The characteristic of such a hand over is the delay time – i.e., how faster the call can be handed over. Now a clays the systems are so intelligent and faster that the user is totally unaware of when they are actually handing over to other cells.

    Fig : car crossing a cell

    As we are reducing the cell size, the shorter would be “sate distance” and the more would be the number of such hand over and more resources (measurements, calculation, decision making) would be needed from the network element to handle these great number of hand over.

    Following figure shows a road, this passes through many cells. A car taking this road will be served by all these cells one after another thus generating a number of handover in one single call.

    2.10 Coverage range of a cell

    Coverage is defined as the area of the geographical region where a good communication is possible via the mobile station.

    By coverage is usually meant that an area is covered if in 90% of that area the signal received by the mobile station is larger than some value. This value is defined by the radio planner on the basis of the area and the equipment specifications. According to the strength of the signals, the coverage may be classified into three types:

    2.10.1 Outdoor coverage

    This is designed for open area. This may be useful for the rural area coverage. High gain antenna with wide opening angle is possible in this kind of coverage.

    2.10.2 In-car coverage

    This is designed for the coverage inside vehicle. Due to the penetration loss of the glass window of the vehicle, the planners need stronger signal to reach the radio coverage inside the vehicle. For road coverage this kind of coverage is important.

    2.10.3 Indoor coverage

    This is the most challenging coverage to provide. This is the coverage that the city dwellers would demand. Due to the penetration loss of the thick walls of the building (concrete, glasses, etc.), it is needed to provide stronger signal. However, this can not be guaranteed!! This is because different houses are built in different ways, with different materials. Also that there may be a corner where it is very difficult for the radio signal to reach. As a thumb rule if one can read newspaper in any corner of the house in broad daylight, then it may be possible to reach coverage to that corner Because of the stronger signal requirement for indoor coverage, it is always expensive to provide this kind of coverage.

    2.11 Cell splitting

    The motivation behind implementing a cellular mobile system is to improve the Utilization of spectrum efficiency. The frequency reuse scheme in one concept and cell splitting is another concept. When traffic density starts to build-up & the frequency channels in each cell cannot provide enough mobile calls, the original cell can be split into smaller cells. Usually the new radius is one-half the original radius, i.e. New cell radius=.Old cell radius/2

    Hence, new eel l area= Old area/ 4

    So, new traffic load/unit area 4x traffic load /Unit area. There are two kinds of cell-splitting technique:

    2.11.1 Permanent splitting:

    The installation of every new split cell has to be planned ahead of time, the number of channels, the transmitted power, the assigned frequencies the choosing of the Cell-Site selection and the traffic load consideration should all considered.

    2.11.2 Dynamic splitting:

    This schemes is based on utilizing the allocated spectrum efficiency in real time. The algorithm for dynamically splitting cell sites is a tedious job since we cannot afford to have one single cell unused during cell splitting at heavy traffic hours. The splitting procedure is shown below:

    Fig-Cell Splitting

    2.12 Efficient phone operation with minimum power consumption

    · Hold the phone, as would any other telephone. While speaking directly into the mouthpiece, angle the antenna in a direction up and over the shoulder. If the antenna is extendable, it should be extended during a call.

    · Do not hold the antenna when the phone is in use. 1-biding the antenna affects call quality, may cause the phone to operate at a higher power level then needed and shown talk and standby times.

    2.13 Driving

    Check the laws and regulations on the use of telephones in the areas where one drive. When one uses phone while driving then

    2.14 Receiving a call

    When you receive a call, the phone rings the indicator light on the top of phone blinks rapidly.

    2.15 Answering a call

    · Press YES to answer the call.

    · When the call is finished, press no.

    2.16 Rejecting a call

    · Press No when the phone rings If the caller’s network supports it, the cagier will hear a busy tone.

    2.17 Putting a call on hold

    · Press YES to put a call on hold.

    · To put the call off hold, press YES again.

    2.18 A typical set of specification for mobile unit

    i. General:

    Battery voltage ……………………………. 9.0 to 16.0 Vdc

    Received current………………………….. 1.1A (Max)

    Transmitted current………………………. 3OA (Max)

    ii. Receiver:

    Frequency range………………………….. 935-960 MHz

    Channel spacing…………………………. 30 kHz

    Sensitivity………………………………… I micro volt for 12 dB sired.

    iii. Selectivity:

    Adjacent channel…………………….. Better than 50 dB

    All other channel……………………. better than 65 dB

    Audio response……………………. 30 Hz to 3 kHz+dB

    Harmonic distortion…………….. <5%

    Inter modulation…………………. 65 dB

    iv. Transmitter:

    Frequency range…………………. 890-915 MHz

    Channel spacing…………………. 30 kHz

    Carrier stability………………….. + 2.5 ppm

    Load impedance………………… 50 ohm

    Output power…………………… 3 watt (nominal Max. Level)

    Power steps……………………. seven, 1 dB steps

    100% deviation……………… + kHz peak

    FM hum & noise…………… <-40 dB

    Distortion……………………. < 5%

    Tx attach/inhibit time………… < 2 ns

    Carrier power inhibit………… 60 dBm

    2.19 Capacity and frequency re-use:

    Figure: Neighboring cells can not have the same frequency

    The number of frequencies in a cell determines the cell’s capacity. Each company with a license to operate a mobile network is allocated a limited number of frequencies These frequencies are distributed throughout the cells in their network. Depending on the traffic load and the availability of frequencies, a cell may have one or more frequencies allocated to it.

    To cover an entire country, fur example, frequencies must be re used many times at different geographical locations in order to provide a network with sufficient capacity. The same frequencies can not be used in neighboring cells as they would interfere with each other so special patterns oh frequency usage are determined during the planning of network.

    3.1 Introduction

    The mobile communication has come to the present state following a step by step generation. The first generation of mobile communication was started in Chicago, USA. It was analog one-called AMPS. It could transmit voice at a very slow rate. The second generation mobile was digital. It is able to transmit slow rate data & faster voice compared to first generation. The Third Generation Mobile Communication is the most modern mobile communication, which is already launched in Japan & USA. It provides several special features. In a word its functionality is like magic. As part of the landmark project to deliver the first KPI-compliant UNITS network in Africa to Vodacom, South Africa’s leading cellular network, Siemens Communications has partnered with their counterpart in 4G Technology and wireless network performance engineering solutions provider Actix. This chapter describes the step-by-step evaluation of mobile communication.

    3.2 Generations of wireless.

    -First generation wireless systems used Analog technologies to provide circuit switched access for mobile voice telephony

    – Second-generation wireless systems use the earliest digital technologies provide mainly circuit- switched access for mobile voice telephony

    · GSM (Global System for Mobile Communications) TDMA

    · IS- 54. IS- 136 TDMA

    · IS- 95 CDMA.

    – Third generation wireless systems use improved digital technologies to provide packet- switched access for advanced voice and data applications

    – Fourth Generation technologies are erupting into the marketplace, a revolution that could topple (or be absorbed by) the established players.

    3.3 Wireless data

    – Each wireless technology offers limited data capability today.

    One or more circuit- switched traffic channels arc dedicated to fast data instead of voice

    – Even 3G CDPD and Mobitex Data- Only technologies are slow!

    – 4G technologies are much better!

    Table 1. Short History of Mobile Telephone Technology

    Technology 1G 2G 2.5G 3G 4G
    Design Began 1970 1980 1985 1990 2000
    Implementation 1984 1991 1999 2002 2010?
    Service Analog voice, synchronous data to 9.6 kbps Digital voice Higher capacity, packetized data Higher capacity, broadband data up to 2 Mbps Higher capacity,

    completely Ip-oriented, multimedia, data to hundreds of megabits
    Standards AMPS, TACS,

    NUT, etc.

    		 TDMA, CDMA,

    GSM, PDC

    		 GPRS, EDGE,

    1xRTT

    		 WCDMA,

    COMA2000

    		 Single standard
    Data Bandwidth 1.9 kbps 14.4 kbps 384 kbps 2 Mbps 200 Mbps
    Multiplexing FDMA TDMA, CDMA TDMA, CDMA CDMA CDMA?
    Core Network PSTN PSTN PSTN,

    packet network

    		 Packet network internet

    3.4 Interesting features in 4G

    · Support interactive multimedia services: teleconferencing, wireless Internet, etc.

    · Wider bandwidths, higher bit rates.

    · Global mobility and service portability.

    · Low cost.

    · Scalability of mobile networks.

    3.5 Wireless development and the recent history of 4G

    The above figure shows the ages of science & Technology according to the name of scientists of different ages.

    – The ITU defined objectives for next-generation mobile systems in a 1998 request for proposals.

    – Sponsoring organizations submitted details of proposed radio transmission.

    3.6.1 The radio perspective

    Original commercial CDMA systems in the 800 MHz. Band complied with IS- 95A, and 1900 MHz. Systems complied with the Joint Standard 008. Both had the following common features:

    Signal structure:

    Traffic Channel Capabilities:

    · Rate Set 1: 9600- bps traffic channels for 8 kb/s vocoders.

    · Rate Set 2: 14400- bps traffic channels for 13 kb/ s vocoders

    and other 14400- max data applications.

    3.6.2 IS- 95B: CDMA 3G enhancements

    IS- 95B is still considered Third Generation, but offers some needed enhancements to the original IS- 95A and J- Std008.

    Improved Access Methods

    Improved Handoff Methods

    – Inflexible, can skip needed handoffs but waste unneeded ones

    Faster Data Services

    ·Original CDMA allowed data only at the rate of a single traffic channel

    · Is- 95B/ IS- 707 allows aggregation of traffic channels for faster data, but not at the rates provided by 3G cdma2000.

    3.7 The 4G path from GSM: GPRS, WCDMA, UMTS

    3.7.1 GSM history

    – The GSM network architecture was defined in work of the ETSI during the late I 980s

    – GSM has enjoyed large business success due to its non-proprietary open architecture and competitive vendors

    3.7.2 Air interface

    There are three frequency bands defined for GSM: 900, 1800, and 1900. Within the GSM 900 band, there are 174 frequencies with 200kHz spacing. Separate bands are used for uplink (mobile to base) and downlink (base to mobile).

    Within each frequency, there arc 8 timeslots supporting up to 8 users. The modulation scheme is gaussian minimum shift keying, GMSK (a variant of binary phase shift keying) with a bit rate of 271 kbit/s.

    The speech signal is processed in 20ms intervals, called speech frames. Each speech frame is compressed and coded using 244 bits. These 244 bits are then encoded with a channel code, interleaved, segmented, and transmitted in 8 TDMA time slots. Similar transmission formats are used for data services.

    3.7.3 GSM radio network aspects Frequency planning and re-use. Frequency planning is necessary to avoid the same frequency being used in nearby cells, which would cause unwanted interference. The number of cells that use different frequencies is called the reuse factor. Tighter reuse (lower reuse factor) means that more frequencies can be used in each cell, for a given number of total frequencies, but also means a larger interference between the cells.

    Handover. When a user moves during a speech call, it may be necessary to perform a handover to another base station to keep the call. To support this, the mobile station periodically measures the quality of all neighbor cells and reports to the network. The decision when to perform the handover is made in the base station controller.

    Power control. Depending on attenuation and interference, different transmit power levels may be needed to obtain adequate signal quality. Power control is used to set the smallest possible power that meets the quality target. This reduces interference towards other users and increases the battery life time.

    Frequency hopping. A frequency may be bad in a certain location due to multipath fading, or it may be bad due to interference from other cells. Frequency hopping may be used to avoid staying at a bad frequency, instead a number of frequencies are circulated using a pseudo-random hopping sequence. .

    3.7.4 GPRS

    GPRS, General Packet Radio Services, is anextension to GSM that allows more efficient packet data transfer compared to traditional GSM data services. The principle is that a user can be constantly connected to the network without occupying any radio resources (frequency, time slots) until a data packet has to be transferred. When a packet is to be transferred, a temporary channel is assigned to the user; after completed transfer, the channel is quickly released again. GPRS allows many users to share the same timeslot, and also allows a single user to use more than one time slot. It uses an error detection and retransmission scheme to ensure that data packets are correctly delivered to the receiver.

    3.7.5 EDGE

    EDGE, Enhanced Data rates for GSM Evolution, is another extension to GSM that allows higher bit rates than GSM does. This is accomplished by using higher order modulation, 8-ary phase-shift keying instead of GSM’s binary phase-shift keying.

    3.7.6 WCDMA and UMTS

    WCDMA, Wideband Code-Division Multiple Access, is a new radio interface standard that supports a set of Universal Mobile Telecommunication Services, UMTS.

    The requirements of UMTS are:

    · Coverage and capacity for speech services should be better than GSM, under the same conditions

    · The system should be able to efficiently and flexibly handle a mix of real time, variable bit rate, and

    Packet services.

    · A data rate of 384 kbit/s should be possible to provide with full coverage (everywhere).

    · It should be possible to provide a data rate of 2 MbiVs in selected areas, e.g. indoors.

    CDMA Principle

    The basic principle of CDMA is that all or many users utilize the same frequency band simultaneously. The benefit of this is that each user has access to the entire system bandwidth all the time, potentially allowing higher data rates than a FDMA/TDMA system where each user has access to only a smaller bandwidth. However, the shared frequency means that the receiver of a particular signal has to cope with strong interference from other users. The CDMA principle used in WCDMA is called direct­sequence code-division multiple access. In the transmitter, the data sequence is spread by multiplying with a spreading sequence of a higher rate, after which it is modulated and transmitted. Spreading means that each data symbol (represented as +/-1) is repeated a number of times, equal to the spreading factor, and each repeated symbol is multiplied with a new symbol from the spreading sequence. The spreading sequence is a pseudo­random sequence that makes the transmitted signal look like noise. The receiver demodulates the signal and multiplies it with the same spreading sequence as was used in the transmitter. The original data sequence is then restored by taking the average over the repeated symbols.

    3.7.7 WCDMA air interface

    The CDMA principle is the corner stone for the flexibility of the WCDMA air interface. A higher data rate requires a low spreading factor, which means that the averaging in the receiver occurs over fewer symbols, resulting in less noise reduction.

    Therefore, a higher data rate requires a higher transmit power, and will cause stronger interference to other users. Conversely, a lower data rate can use a lower transmit power, causing less interference to other users. The transmit power does not only depend on the data rate, but also on the radio conditions. A user in a good location near the base station requires a lower power than a user far away. Furthermore, it is important that users in good locations keep their powers at a minimum, since they may otherwise cause too strong interference for other users. This is called the near-far effect. This is accomplished through closed-loop power control, whereby the receiver constantly monitors the quality of the received signal, and sends power control commands back to the transmitter, instructing it to either increase or reduce the power.

    FIG. WCDMA air interface example

    Some key parameters of the WCDMA air interface are:

    3.7.8 Frequency re-use 1

    Because of the CDMA principle, all base stations in a WCDMA system occupy the same frequency, i.e. the frequency reuse factor is 1. This means that the entire spectrum owned by an operator can be used in each cell.

    3.7.9 Soft handover

    Because of the varying radio conditions, the signal attenuation between the user and the base stations may change very quickly. If the user is connected to only one base station, it may be impossible to move the connection fast enough to always use the base station with the lowest attenuation (the “best” base station).

    FIG. Soft handover

    In a system with reuse factor 1, it may be disastrous for the system if a user is not connected to the best base station. The reason is that the transmit power in the mobile will by set such that the received signal is strong enough in the connected base station. If another connection is “better”, the transmit power of the mobile may cause too much interference in that base station, degrading the quality for other users. Soft handover means that the user is connected to more than one base station. The goal is to ensure that the best base station is always connected, even when the conditions are quickly varying. In soft handover, the transmit power of the mobile is controlled by the “best” base station, i.e. the base station to which the attenuation is lowest. Thereby, the power can be kept down and excessive interference can be avoided.

    3.8 FDMA/TDMA vs. CDMA Here are some technology comparisons between FDMA/TDMA and CDMA.

    3.8.1 Fading resistance

    Because CDMA systems use a higher bandwidth compared to systems that use FTMA, the systems are less vulnerable to frequency-selective fading. On the other hand, the near­tar effect means that fast power control is needed in CDMA systems to ensure that interference is not too large.

    3.8.2 Flexibility

    A FDMA/TDMA system is limited by its choice of channel bandwidth and time slot structure, which typically can not be changed after standardization. In a CDMA system, on the other hand, the resource sharing is accomplished by control the amount of power transmitted for each user, which can be changed in real-time.

    3.8.3 Frequency planning

    Systems based on FDMA require frequency planning, which is difficult and time consuming. This is not necessary with CDMA systems.

    3.8.4 Radiation

    Mobile stations based on TDMA transmit in short pulses, causing strong power peaks and potentially interfering with other devices. CDMA-based mobile stations, on the other hand-transmit continuously, only changing the power in steps according to varying radio conditions and desired bit rates.

    3.8.5 Complexity

    The high bandwidth and chip rates of CDMA makes the transmitters and receivers more complex to design and manufactured compared to FDMA-based devices.

    4.1 Introduction

    New mobile connections now exceed new fixed connections and, it is expected, will continue so to do. A successful vision for 4th generation systems will be set in a mobile/wire free environment with fixed as a subset. An Operator who wishes to launch 4G mobile, have to have a perfect plan for the total system. In this chapter there are some discussion about that Planning.

    4.2 The mobile challenge

    The first mobile challenge that of providing mass market voice communication, is largely satisfied by the existing digital cellular systems. The next challenge is to do the same for the Information Society services including graphics, video and mufti media.

    4.3 The 4th generation marketplace

    The 4th Generation Marketplace in the UK and Europe will be characterized in several ways; Personalization of services with the use of Universal Personal Pocket Terminals that are adaptive to support customer and network specific needs; Customers using wire free products and services with high performance and capabilities (including graphics, video and multi-media) that change how they work and live, with new consumer and business products which incorporate embedded radios to support services such as maintenance, customer care and fraud/theft prevention; a Market rapidly growing in penetration to 40% by 2005 (and continuing to grow), from which the majority of the population will derive benefit, involving significantly increased usage promoted by low costs and an extensive range of services, a highly competitive marketplace at al levels, and the concept of universal availability; and Service which will include advanced wire free services for business and consumers integrated with the information superhighway and its future developments including the European Information Infrastructure; with Vast Growth in value added opportunities based on capabilities within and external to networks and terminals, and new and innovative services stimulated by broadband networks.

    New industrial growth from the Collisions and Convergences across industry will be enabled by 4th generation mobile systems with the future role of service providers, and possible restrictions on ownership, key issues for the industry requiring further study.

    4.4 UMTS platform

    The concept of the GSM platform has become a proven success and UMTS should be implemented so as to benefit from this experience. The merits of building on GSM are evident. Several mobile satellite operators have decided to base their infrastructure on GSM, providing dual operation with common security, authentication and billing mechanisms. Also, the European railway community UIC is to use a slightly modified version oh the GSM air interface for railway applications. Roaming with DECT using the GSM core platform is now in development, and a form of UPT based on the GSM SIM is being considered to provide roaming between fixed networks.

    QSM has become a platform for a wide range of services with different terminal standards while using the SIM and MAP (and often the A interface) to provide roaming and billing with security. The GSM MoU Association has recently opened its membership to public operators of telecommunications systems based on the GSM platform irrespective of the terminal interface adopted, conditional on providing roaming services.

    UMTS should adopt a similar approach with the specification of a number of standardized interfaces with specific interfaces to allow the cost effective multi- sourcing of infrastructure. As with GSM, the SIM (or USIM), MAP (or its replacement) and Billing Interfaces will be very important. The UMTS interfaces will perform many similar functions to those of GSM but will differ where necessary to support the more complex service and feature structure of UMTS.

    4.5 Critical success factors

    Success in a modern telecommunications venture is dependent on an available market and on an investment environment in which a sensible minimal risk business opportunity can be foreseen by financiers. The remainders of the success factors are targeted against meeting these two over-riding criteria. The more stable and more predictable the sector is seen to be, the more funding that will be available at attractive terms. This means that roll out occurs more rapidly, pay- hack is achieved in a shorter timescales, and the tariffs can be set to attract mass market participation from the outset, with the benefits that mobility and access to the information superhighway, fundamental to the success of the UK and Europe, can be achieved as quickly as possible.

    The success factors are grouped into market, regulatory environment, industrial sector, standards and technology.

    4.5.1 Market

    The Group considers that an initial total market opportunity of 8 million users is required to support the necessary investment by manufacturers of UMTS terminals, growing to at least 60 million within 10 years. Growth thereafter is subject to market development.

    At the end of 1996, Japan had 18.2 million cellular customers and 4.9 million users of the Personal Handyphone System (PF1S); these markets are predicted to rise to 34 million for cellular and 38 million for PHS by the year 2010; a cordless market of 20 million at the year 2000 is expected to remain static until the year 2010. In financial terms, Japan consider this to be a market growing from a current £10,000 million (equivalent to 40,000 employees) to £32,000 million in 2000, and £93,000 million by 2010, by then supporting 520,000 employees.

    Already in Scandinavia the penetration of cellular mobile is approaching 30%, in the UK it is almost 12% and within Europe and developed countries it is anticipated to rise to greater than 50% of the population. (Within the Stockholm district in Sweden the peak period penetration is estimated at up to 60%). The scale of the industry has grown vastly and within the UK there are over 100,000 employees are engaged on cellular domestic end export activities.

    GSM MoU Association has given estimates that 150 million GSM terminals will be in use world-wide by the end of the century. GSM global usage will further grow to at least 200 million terminals by 2005, constituting a truly mass market. UMTS will go on to provide two major enhancements. Firstly the addition of broadband multimedia services and secondly the ability to connect via cellular mobile networks, global satellite networks, private cordless networks, and through wireless access to fixed public networks, whichever is the best for the user’s situation at any time.

    4.5.2 Regulatory and licensing

    Policy announcements setting out a calendar for the adoption of UMTS standards by the UK and Europe, for the release of a designated frequency allocation, and the conditions for licensing are recommended to encourage potential operators and manufacturers to commit resources to the third generation standards-making process and subsequent investment in third generation mobile technology.

    It is important that the conditions for licensing the telecommunications business in Europe are not seen to be transient. An unstable historical environment is likely to deter both operators and manufacturers from making the massive investment necessary to implement third generation mobile.

    The Group considers that it is essential to have a regulatory regime which will ensure that operators can reasonably expect that the licensing conditions offered will remain in place long enough to ensure that the massive investment in new technology is recovered, and that the market opportunities, identified during conception and licensing, will not be distorted by changes in regulatory policy. This may require a policy statement from the respective member states within Europe to ensure that this is achieved.

    4.5.3 Industrial sector

    Commercial successes will not he achieved without an announced commitment by strong manufacturers to support the standard and the technology – ideally a minimum of 3 infrastructure manufacturers and 10 volume terminal manufacturers. This will provide operators with both competitive choice for their network and an identifiable source of product so that the network can be exploited.

    4.5.4 Standards

    A stable standard is required, with open interfaces for all external interconnection and key internal network functional blocks. Such a standard will limit development brisk and maximize returns to manufacturers from development expenditure. It will create a competitive environment where users can change between operators and allow both choice and purchase confidence.

    4.5.5 Technology

    Technological solutions must be found which will ensure new services e.g. multi media and broadband services can be provided and migrated to and from fixed networks.

    Technological solutions are required for Network, Architectures and Terminals which, when applied to high volume market, will produce very low cost terminals and low tariffs.

    Technological solutions should allow migration from the existing second generation mobile systems where appropriate.

    Technological solutions must take account of the strong convergence between the Information Technology and telecommunications sectors, in both the network infrastructure and terminal equipment fields.

    Technological solutions must offer flexibility of service provision e.g. the capability to mix voice and data in various proportions, support variable rate data, etc.

    4.6 Network issues

    4.6.1 Service requirements

    UNITS is required to support a wide range of services, generally incorporating those familiar within second generation cellular, fixed, cordless, satellite and PMR networks. The UMTS standard will also support a range of more advanced services such as multi­media. However, it is planned that in most cases, UMTS will provide support for these services, rather than itself define the actual services. Multi-media services will require the availability of higher bandwidths at variable rates, on demand (i.e. packet-based services

    " 139,"

    FUNCTIONS OF THE RECEIVER

    ","

    The function of the receiver is to accept low level power from the detector and convert it into a
    high voltage output. There are many ways to accomplish this. The figure on the left shows a
    detector current producing a voltage drop across a load resistance. The voltage drop is directed
    into amplifier. An output voltage representative of the transmitted signal is the result. Other
    electronics maybe added to the circuitry to maintain adequate response. A gain control may be
    used in the front end to vary the impedance of the receiver.

    It is reasonably priced. The APD is more expensive than the PIN diode since it provides greater
    receiver sensitivity. The APD also requires an auxiliary power supply.

    So far, fiber optics has only played a small role in practical Local Area Networks. Many papers
    have been published in scholarly journals describing experimental fiber optic LANs. A few
    companies even offer commercial ones, but the few that have been installed are only a small
    fraction of LANs in use. Local Area Networks themselves are not as widespread one might
    think. This material has been used in few practical LANs but has been tested in many laboratory
    LANs.

    This will be changing. Most present terminals and personal computer require only modest
    transmission rates, which often can be sent over telephone lines. Current LANs operate at speeds
    about 10Mbits/s, at which there is little benefit from using them (except in some special cases).
    Future devices will require faster data transmission to allow better quality graphics, faster access
    to databases and more efficient sharing of information. The need for faster transmission will
    accelerate the development of LANs and their use of them. To get a good understanding of fiber
    optics in networks, we will have to see how fiber optics can improve the capability of present
    and the next generation LANs being developed around fiber optics. Interest in higher speed
    transmission could motivate uses of fiber optics in networks.

    " 140,"

    GAY MARRIAGE AND GOVERNMENT

    ","

    Gay marriage is the marriage that involves two people of the same sexes either a man and a man or a woman and a woman. It can also be seen as the term that is used by the government, the social groups and the religion to have the recognition of the marriage between two people of the same sex. There is a social movement so that the people can obtain their rights and responsibilities in the countries like the US. The legal issues that are involved in this type of marriage have been made hard by the federal system of government in the traditional, the federal government had no attempt to have meaning of marriage and therefore there was the notion that any marriage that was known by the state was also made known by the federal government even though there was a problem for the recognition of these marriages by the other states. This means that the state was liable for enforcement of the rights that the people require so that the people can have their partner through the law. With the act of defense of marriage then the people found it easy on how to go about the problems that were to be encountered and this could only work and it made the definition that marriage could be a union of one man and one woman. Therefore there is no agency that has the recognition for this same sex that people have forced for the legalization of the type of sex. (Justin, 1990)

    In the US federal government general accounting office there are many rights and protections that are given to the citizens in marriage by the federal government and most of the covered areas are the social security benefits, the veterans benefits and the health insurance and many other areas that are needful for the people to have their rights and legalization concerning most of their affected areas. The state is responsible for the aspects of marriages and the act of the defense of marriage does not have the right definition that will be necessary and important for the people to see what they demand. There is a law that has defined the same sex marriage that is the Massachusetts and it has its effects on the state law and the federal government hats no link and therefore it does not have any recognition of the same sex. There are some states that have the recognition of the same sex marriage and have the recognition of the similar relationships that are made available in other states.

    Most of the marriages that are of the same sexes are prevented and this has to work through ensuring that they make the attempt of preventing the other states from having the recognition of such unions through making changes to the US constitution so that it can define the union as a man and a woman. This type of sex had many problems that were based on its legalization and the only state that had agreed on giving marriage license to this type of marriage is the Massachusetts where by it is done for a particular benefit. Even though this group is limited there is the need for the people to have their rights due to the fact that they need the society and the nation to have the recognition that they have agreed to have a marriage. Therefore there is need for the government to have recognition of this type of marriage with other citizens opposing and others supporting it. (Hein, 1995)

    Supporting points for gay marriage

    Those that agree claim that if people have relationship then it is not the work of the government to know about their relationship and therefore they should have their own rights and therefore they is need to have the definition of the nature and the extend in which these couples have their relationships. The gay rights advocates also have the view that the rights of these people need to be addressed and therefore the government should have interests and recognition of the committed people in their relationship and therefore the need to have their rights respected by all. This is because with stable relationship then there is the reduction in the need of the society to have support to these people. The people are responsible for ensuring that each spouse has got the safety that is required and therefore an argument by the advocates of the same sex that there is no difference in the ability of the same sex and the opposite sex in making their commitments in whatever they are supposed to do. (Hein,1995)

    This means that these two behave and act just the same manner with the case for the opposite sex and therefore this type of marriage should apply to both. There is an argument that on the belief of the government to be involved in marriage arises from the problems that arise from the sexual acts between men and women and these people have the belief that the children do well when raised by their biological parents and with such children the conflicts is low as compared to the opposite sex marriage. There is an argument that on the belief of the government to be involved in marriage arises from the problems that arise from the sexual acts between men and women and these people have the belief that the children do well when raised by their biological parents and with such children the conflicts is low as compared to the opposite sex marriage.

    There is the claim from other Christians that there biblical passages of the homosexuals is taken from the historical and cultural contexts and therefore they are not applicable to this homosexual relationship today this means that they are supporting for this type of marriage to be respected and given their rights just like other types of marriage. With the homosexuals then it is intolerant towards the women and the people of other colors this is because the problems that affects marriages will be reduced and people will have happy lives that will be of benefit to them. (Daniel, 1997)

    The legalization of this type of marriage will be better of in the families and the communities this is because it will promote the society acceptance of the homosexuality and this will mean that the families will live well without problems and therefore the problems that can be faced in the society is no longer experienced and people will have happy lives. Some have the argument that if the law does not prohibit those women who are past their menopause of getting married then they should not therefore place the claim of procreation to this same sex marriage. This is because a woman past the menopause of not able to give birth and is given the rights to get married therefore it became hard for that law to be enforced to prevent people from having this type of marriage.

    There are some countries that agree on the idea of legalizing the same sex marriage and they do this with their own reason meaning that the people are given the opportunity to have their rights and responsibilities been respected just the same as the others and therefore it has led to the legalization of that particular marriage in that country. The countries like the US where by this type of marriage is supported by groups like the American psychological association. This type of marriage does not affect any one and therefore when it is legalized then people will not be hurt but live their lives just as normal. To deny these people the marriage is like denying them their rights and everyone requires living and enjoying a happy life just like the others and therefore the support for it to be legalized is well for the freedom of the people.

    Arguments against gay marriage

    The homosexuality leads to the weakening of the definition of marriage this is because with the legalization of this type of marriage then it will lead to marriages that have no base but just done for the tax benefits. Those against this type of marriage argue that the society is encouraging the legal marriage where by they prefer the monogamy type of marriage as they have the argument that such couples will be highly committed in their work and do everything that is legalized in their marriage like child bearing and therefore with this argument then they claim that the same sex marriage does not have children and therefore they see it not wise for such couples to have their legal rights.( Ben,1990)

    The gay marriage weakens the traditional values in that the definition for the family will not be well understood as it will have a different meaning and therefore this will lead to more problems facing the families due to the fact that the traditional values are no longer respected. The opponents also see that in seeking this type of marriage then they do it for their social benefits and therefore this recognition will lead to the exclusion of other people and therefore this type of sex is seen to have the conservative movement within the politics. They have then argument that the same sex will not have the fulfillment of the procreation roles where by the argument is centered on the sexual acts. The states that have legalization of this type of marriage will lead to the redefinition of the family they affect the traditional family unions and have an increment to the number of homosexuals in that nation.

    This is something that is very much prohibited by the Christians. There are churches like the Roman Catholic that opposes this type of marriage and claims that if the government has to legalize this type of marriage then it will have another meaning that is different from the meaning of marriage, which is a union between a man and a woman. The legalization of this type of marriage will lead to the people getting the chance of misusing the rights and even end up marrying the blow up dolls. This marriage will lead to people staying less years due to the fact that they will adopt the unhealthy lifestyles and this will mean that the years the are expected for the people to live will be less. The homosexuality is also seen to be against the biblical teaching and therefore for a nation to legalize this type of marriage will mean that they go against what the bible teaches. (David, 1998)

    In the social arguments sees this marriage not a legal concern of the state but it should be occurring in the political institution that the state is liable for the recognition of this type of marriage just like they have the recognition of other natural institutions. The argument is that the advocates for same sex have changes in the importance of the marriage from its natural function of its reproduction and just assume it is a way of given people freedom to have sex. They see that any customary relationship have the consideration to be marriage and therefore this will lead to more problems in the legislation of the nation on how to go about the social value and the responsibility of taking care of their children.

    With the legalization that was passed in the year 2003 then most of the American citizens went in for that particular marriage and the group that was concerned with the American national gay rights had given a statement that was asking the couples to have contact with them before they were joined and this was done because there was high challenges that faced this type of marriage and therefore there was need for the group to ensure that this same sex movement was coordinated in the country. There has been an impact with the legalization of the same sex marriage that has raised due to the foreign laws where by a country like Canada has the complain that their is a high proximity of the people to US and therefore they just have to respect the unions that are made and this will lead to the law been legally addressed in these two nations unlike other countries. (Ben, 1990)

    Those that oppose are groups like the Alabama policy institute which has got reasons that best fit them due to their opposing idea of this same sex. The main reason for marriage is to have children and therefore the claim is that this type of marriage has one partner been infertile and therefore these people sees marriage as a long term mating strategy with the social and economic benefits that will have impact to the family growth and stability. The people have the argument that all the marriages should be viewed as legal civil unions where by they only receive the benefits of marriage and do not need expenditures from the government and the monetary would benefits given on basis of the number of children the family has. The gay marriage in the society has no meaning this is due to the fact that the people claim to have the same rights but in the bible the man was given right to be the head of the family and with the legalization of this marriage then they give the woman the same rights like the man which is wrong. During the creation of the world in the book of genesis man was created and then from his bones the woman was taken and therefore there is no way they can have equal rights. Also the bible gives commission to the woman that she should be under the man and bear children and the man to till the land, provide for the family therefore there is nothing like equality in the bible. (Axel, 1995)

    Rebuttals

    To have the legalization of this type of marriage is wrong this is because it will encourage homosexual practices that are against the bible. Also it will mean that both the women and men have the same rights and therefore it is not true in the bible as the woman was created just to assist the man and not to have same rights in the book of genesis for example the bible says that God created man and women gave the power over all the creation and to multiply but there is no where one can be allowed to have the same sex marriage. The legalization of this type of marriage will lead to high divorces that will hurt the definition of marriage meaning that if the marriage is meant for procreation then the infertile couples should not be allowed to marry this will mean that the people will be refused their freedom to live their lives that will be pleasing to them. With the argument on the traditions been weakened then it will mean that the people will be in slavery and will not have to do anything that they feel is pleasing and therefore this will lead to more slavery in the modern world which will not be possible.

    Allowance of this type of marriage in many countries will mean that it will not be possible to prevent most of the unwanted practices and this will lead to more problems been faced in the world and this will lead to doing way of the things that are important like the traditions tat govern people and theretofore the lives of people will change completely. People will now prefer to be homosexuals than to be heterosexual and therefore there will be no cure for the practices that occur in the world today. With the legalization of this marriage then the purpose of God of creating a woman will be meaningless and therefore it should not be legalized. The bible says that in genesis God created the woman to be the helper for the man but not to have the same rights and therefore it is not right to have the legalization of this type of marriage.

    Conclusion

    This gay marriage has the need to be given its rights just the same as other types of marriages the reason is that these people have reasons for deciding to have the marriage and therefore the government should have the recognition of their relationship. There are many people who are different views concerning this type of marriage and therefore the government should have to weight both sides so that the law does not cause conflicts to the people. The thing is that the people should be given their rights and responsibilities to do what ever they think is right and the government should not intervene.

    Reference:

    Axel, G. (1995): the gay marriages in nations. Rutgers- New York

    Ben, K. (1990): same sex marriages. The issues and cases for the need of legalization of gay marriages. Pathfinder series.

    David, B. (1998): the analysis of the claims on the same sex marriage. Brigham young university law review.

    Daniel, M. (1997): the need for same sex marriage legalization. The legal and social aspects.

    Hein, D. (1995): lesbian and gay issuers. The social responsibilities and the special interest. The American association of law.

    Justin, P. (1990): the need for legalization of same sex marriages. Journal of public laws, pp, 89.

    Mike, L. (1999): the gay marriages legalization. The journal of public law, pp, 78

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    General Banking Activities Exim Bank Limited

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    “General Banking Activities of Exim Bank Limited”

    Executive Summery

    The first chapter of this report is compiled with the information about the origin of the report. In this chapter the booklover will find Introduction of the Report, Background of the Report, Objective of the Report, Scope of the Report, Research Methodology and Limitations.

    The second chapter is compiled with the information about Islamic Bank; its definition, objectives, distinguished features, objectives according to the modern age, difference between conventional banking & Islamic Banking and problems of Islamic banking.

    In the third chapter the booklover will find the literature review of this report.

    Chapter number four consists information of EXIM Bank Ltd. Origin of the bank, organizational objectives, operating & financial review, credit ratings, prime operational area etc. are discussed in this chapter.

    The fifth chapter is compiled with the information about different Products and Services of EXIM Bank Ltd. Sectors of EXIM Bank Ltd., products and services  etc. are discussed in this chapter.

    The next chapter is all about General Banking. Starts with deposit mobilization, different types of accounts, documents required for opening an account, provisional profit rate on different accounts, statement of affairs, issuance of a cheque, remittance of funds, DD, TT, PO etc are elaborately discussed and end with the discussion about Clearing.

    The seventh chapter is about Investment of the Bank. In this chapter we will find the different modes of Islamic financing used by EXIM Bank such as Murabaha Import Bills (MIB), Murabaha Trust Receipt (MTR), Izara Bill Baia (IBB) etc. In this chapter we will also find the documentation process of investment of EXIM Bank Ltd.

    The eighth chapter is all about Foreign Exchange. Foreign exchange operation of EXIM Bank Ltd., import financing, types of L/C and many more things are discussed in this chapter.

    The ninth chapter is about the Customer Satisfaction of EXIM Bank Ltd. according to a survey made on 50 customers of the bank regarding their satisfaction.

    Based on the study at the end of the report there are some recommendations given for the betterment of the Bank:

    Short Names Elaborated Names
    EXIM Export Import Bank of Bangladesh Limited
    NPBs New Private Banks
    NCBs Nationalized Commercial Banks
    CBL Commercial Banks Limited
    BBA Bachelor of  Business Administration
    BOE Bill of Exchange
    BB Bangladesh Bank
    WB World Bank
    CB Central Bank
    GB General Banking
    IT Information Technology
    L/C Letter of Credit
    B/L Bill of Leading
    TT Telegraph Transfer
    A/C Account
    MTD Mudaraba Term Deposit
    MSD Mudaraba Saving Deposit
    DD Demand Draft
    PO Pay Order
    ERC Export Registration Certificate
    CCH Cash Credit Hypo
    LDBP Local Documentary Bills Purchased
    LDBC Local Documentary Bills for Collection
    MTR Murabaha Trust Receipt
    CCP Cash Credit Pledge
    CRISL Credit Rating Information and Services Limited
    IFC Investment Finance Corporation

     

    Chapter 01

    1. Introduction

    Commercial banks are the most important financial intermediaries. EXIM Bank Ltd. (Export Import Bank of Bangladesh Limited) is one of the best and most important bank for the banking system of Bangladesh. Like other banks & financial intermediaries, they perform a critical function of facilitating the flow of funds from surplus units to deficit units. Commercial banks are basically focused on commercial lending. From the end of 19th century they are providing diversified services.

    Like other Commercial banks EXIM Bank Ltd. also have different sections such as section focusing on lending, a section helping in foreign trade, a section collecting deposits etc. This study more or less relates with all the sections but gives much emphasis on the section “Loan & Advance”.

    1.1 Background of the Report:

    The internship program which is an essential part of the BBA program to complete the degree and exercise a significant importance as it enables a student to become familiar with the practical business activities. The student works closely with the people of an organization and learn about the functions of that organization. This program enables a student to develop his analytical skill and scholastic attitude.

    1.2 Objectives of the Report:

    (a) General:

    · To observe the Islamic Banking Operation of Export Import Bank of Bangladesh Limited.

    (b) Specific:

    · To learn the implementation of Islamic Mode of Finance in the General Banking System.

    · To know about EXIM Bank Ltd. as a whole.

    · To observe the major outline of Banking Business.

    · To observe investment arrangement.

    · To forecast about the necessary documents in Loan & Advance transaction of EXIM Bank Ltd.

    · To know about the foreign exchange mechanism practicing at EXIM Bank Ltd.

    · To observe foreign correspondents of EXIM Bank Ltd.

    · To observe general banking activities.

    · To be familiarized with the different components & instruments used in foreign exchange, general banking & investment department.

    · To recommend solutions for solving the problems faced by the bank.

    · Find out comparative position of the company.

    · Find out the customer satisfaction of EXIM Bank Ltd.

    1.3 Scope of the Report:

    An infrastructure of the organization has been detailed, accompanied by a global perspective and look into the future. The scope of this report is limited to the overall description of the company, its services and its position in the market and its marketing strategy.The scope of the study is limited to organizational setup, function and performances of the Satmasjid Road Branch of Export Import Bank of Bangladesh Limited.

    1.4 Research Methodology:

    The report is prepared on the basis of information collected from both secondary source and primary data collection survey. The secondary information was collected from EXIM Bank Ltd. archive, annual report and materials from various newspapers.In this study, have adopted the under mentioned methods to conduct the activity.

    1.4.1 Determining the source of information:

    In the next step, have determined the source of information that would be required for the study. Used both primary and secondary data to conduct the study.

    (a) Primary data:

    Report has collected primary data by interviewing employees and clients of Export Import Bank of Bangladesh Limited. Primary data were derived through discussion with the employees of the organization. Clarification of issues was made from different concerned officials of the Branch. I have collected primary data in the following way:

    · Face to face interview with both employees and clients.

    · Questionnaire.

    · Observing the operational activities of the Branch.

    (b) Secondary data:

    Different types of secondary data are used in this study. Sources of secondary data are as follows:

    · Internal source.

    · Annual Report of the Bank.

    · Preceding research Report.

    · Information regarding foreign exchange, general banking and investment.

    (c) External source:

    1.5 Limitations:

    Beside all the efforts faced the following limitations:

     Chapter 02

     

     

    2.Overview of Banking

     

     

    The banking sector of Bangladesh played an important role towards economic growth of the country. In recent years Central Bank took strict measures to check unauthorized overseas transaction through enacting Anti Money Laundering Act, amending “Artho Rin Adalot Ain” and strengthening supervision by Central Bank to bring transparency in the banking sector. These timely steps have made the banking operations more transparent, acceptable and modern. As a result the image of banking sector has been elevated.

    Bangladesh Bank also identified five core risks areas for management of the banks and provided necessary guidelines for implementation. Those are Foreign Exchange Risk Management, Asset Liability Management, Prevention of Money Laundering, Credit Risk Management and Internal Control and Compliance. This initiative will bring in overall discipline in this sector and enhance operational profit.

    .Whoever being an individual firm, company or corporation generally deals in the business of money and credit is called bank. In our country, any institution which accepts for the purpose of lending or investment deposits of money from public, repayable on demand or otherwise, with transferable by checks draft order or otherwise can be termed as a bank.

    The purpose of banking is to ensure transfer of money from surplus unit to deficit units. Banks of all countries work as the repository of money. The owners look for safety and amount of interest for their deposits with Banks. Entrepreneurs try to obtain money from the banks as working capital and for long-term investment. These entrepreneurs welcome effective and forward-looking advice for investment. Banking sector thus owe a great to the deposit holders on the hand and the entrepreneurs on the other. They are expected to play the role of friend, philosopher, and guide for the deposit holders and the entrepreneurs.

    Since liberation, Bangladesh passed through fragile phases of development in the banking sector. The nationalization of banks in the post liberation period was intended to safe the institutions and the interest of the depositors. Those handling the banking sector have borne the burden of putting banks on reliable footings. Despite all that was done, some elements of irregularities appeared. With the assertion of the role of the Central bank, The Bangladesh bank started adopting measures for putting banking institutions on right track. Yet the performance of public sector management of banks left some negative effects in the money market in particular and the economy in general. The agility among the borrowers manipulates the banking sector as a whole. In effect, a default culture appeared on the scene.

    The opening of PRIVATE and FOREIGN participants to the banking sector was intended to obtain desirable results from banking. The authorization of private banks was designed to create competition among the banks and competition in the form of efficiency with and the productivity in enterprises funded by banks. Unfortunately, for the people, at large banking sector is yet to obtain the credit for efficiency, credibility, and growth.

    2.1 The Banking Arena in Bangladesh

    The Banking Sector of Bangladesh comprises of four categories of scheduled banks. These are-

    · Nationalized Commercial Banks (NCBs).

    · Government Owned Development Finance Institutions (DFIs).

    · Private Commercial Banks (PCBs).

    · Foreign Commercial Banks (FCBs).

    Private Commercial Banks are again divided into three categories- First Generation, Second Generation and Third Generation.

    (i) Nationalized Commercial Banks (NCBs):

    In general terms; NCBs are large, operationally inefficient and technically insolvent. They are used as vehicles of government directed lending. These banks enjoy an enormous and stable customer deposit base, which provides a cheap source of funding. In addition, most large government related business is routed through these banks.

    (ii) Private Banks-1996:

    Six new licenses were granted. These are the better-managed banks with strong capital base and good asset quality and under a much-improved regulatory regime. All the banks clustered in this group have successfully raised capital from secondary market and all the shares are now traded in the stock exchange at premium.

    (iii) Private Banks-1998:

    Set up to service the sectors not being addressed by the larger NCBs. Not subject to state directed lending but have generally suffered from related lending to directors and their extended families.

    (iv) New Private Sector Banks:

    Ten new banks have been granted licenses over the year 1999. While some bankers complained that the country is over-banked, the more commonly held view, including that of the World Bank, is that there is adequate scope for these banks to survive given currently untapped gaps in the market, fat in existing interest margins (currently circa 5%), and efficiency/ service level disparities. It is estimated that up to 70% of the Bangladeshi economy remains un-banked. While this appears to imply that the newer banks may move downstream in terms of asset quality but in reality the last two sets of new banks are successfully competing with NCBs and Foreign banks on the top end market segment.

    Generally asset quality is poor with the level of non-performing loans at worryingly high levels. Across the whole banking sector, classified loans, as reported by Bangladesh Bank (BB) in December 2002, the Central Bank, were 34.93%. As a percentage of their own total loan portfolio, non-performing loans accounted for 38.55% of the NCBs loan book, and 22.01% of private banks (both categories). In October 2002, the provisioning requirements changed for past due loans from 180 to 90 days, now requiring a 20% provision. Generally, provisioning levels are weak, impairing capital. It is however necessary to understand why the banks carry such high levels of non-performing loans. Firstly, the legal position of banks’ recourse is weakened once a loan is written-off; and secondly, BB imposes a six-year moratorium on write-offs. As the legal system is slow and time consuming, this results in NPBs remaining on the books for longer than would otherwise be the case in other countries. There is also a significant proportion of NPBs, which is due to non-payment by Government or Government owned agencies.

    Lower credit growth in 2002, compared to deposits, has meant that the banks now have excess liquidity. With investment rates in call, money market and government bonds remaining static at their lowest levels, some banks are now cutting back on their long-term deposit rates and are refusing to accept large deposits.

    Long-term interest rates have traditionally been lower than short-term rates. This inverted yield curve is a fall out from the source of long term lending. Long term lending was traditionally extended by the NCB’s, usually for non-commercial loans, thus setting a low benchmark for longer-term funds.

    However care should be exercised when taking comfort from BB’s assertion that it will not allow any bank to fail. While this pledge has held true to date, in effect it means that BB will allow a technically insolvent bank to continue in operation with BB guidance and “Technical” support but BB will not provide a capital injection or write-off government related bad loans.

    2.2 Origin of the Bank:

    EXIM Bank Limited was established under the rules and regulations of Bangladesh Bank and the ‘Bank companies act. 1991’ in 1999 under the leadership of Late Mr. Shahjahan Kabir, founder chairman who had a long dream of floating a commercial bank which would contribute to the socio-economic development of our country. He had a long experience as a good banker. A group of highly qualified and successful entrepreneurs joined their hands with the founder chairman to materialize his dream. In deed, all of them proved themselves in their respective business as most successful star with their endeavor, intelligence, hard working and talent entrepreneurship. Among them, Mr. Nazrul Islam Mazumder became the honorable chairman after the demise of the honorable founder chairman.

    This bank starts functioning from 3rd August, 1999 with Mr. Alamgir Kabir, FCA as the advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them have long experience in the financial sector of our country. By their pragmatic decision and management directives in the operational activities, this bank has earned a secured and distinctive position in the banking industry in terms of performance, growth, and excellent management. The authorized capital and paid up capital of the bank are Tk. 1000.00 million and Tk 313.87 million respectively.

    Export Import Bank of Bangladesh Limited started its operation as one of the third generation bank but within a short span of time it has become one of the leading and most successful bank not only among the third generation banks but also it superseded many other banks and financial institutions belonging to second and even first generation banks from the point of view of its excellent business performance, extraordinary corporate culture and strong team work under the dynamic leadership of its Management. The Board of Directors has always been very much conscious as to the policy making and framing of strategy of the bank which is being implemented by the Management through its strong workforce comprising skilled human resources having great zeal and excellent team spirit. Transparency, accountability and integrity accompanied by honesty and utmost sincerity are the key factors behind its success. Both the Board and the Management are transparent like crystal clear. EXIM Bank believes that there is no short cut way to achieve the success and as such only hard work can bring the success.

    The bank has migrated all of its conventional banking operation into Shariah based Islami banking since July, 2004 following the decision taken unanimously in the Extra Ordinary General Meeting held on December 28, 2003. Obtaining confirmation from the honorable High Court Division of Bangladesh Supreme Court, the Bank had been converted into a full-fledged Islami Bank based on Shariah from traditional interest based banking and at the grace of Almighty Allah the Bank started functioning as an Islami Bank with effect from July 01, 2004 with the approval of Bangladesh Bank. Before conversion the Bank put option to all of its valued customers through news media in addition to personal contact with them to accept the decision taken by the Bank. It’s a great pleasure that everybody gladly accepted the conversion with appreciation. It is something new in the history of Islami Banking. Because, in so far my knowledge goes, there may be establishment of some Islami Banks since inception at the time of their incorporation. Someone may also experience to see some traditional Banks having a few branches based on Shariah. But total conversion of a conventional Bank into a full-fledged Islami Bank is, perhaps, for the first time is introduced by Export Import Bank of Bangladesh Limited in the World.

    Corporate Information’s at a Glance (As per December 31, 2006):

    Name of the bank : Export Import Bank of Bangladesh Limited

    Status : Private Limited Company

    Date of Incorporation : 2nd June, 1999.

    Inauguration of the first branch : 3rd August, 1999.

    Head Office : 5 Rajuk Avenue, Printers Buildings (5th, 6th, 10th & 13th floor, Dhaka.).

    Chairman : Mr. Md. Nazrul Islam Mazumder.

    Managing Director : Mr. Kazi Mashiur Rahman (Joined on June 04, 2007)

    Authorized Capital : TK. 35000 million.

    Paid up Capital : TK. 1713.75 million.

    Directors : 10

    Number of Branches : 33

    Deposits : TK. 35032.02 million

    Loan : TK. 32641.27 Million

    Number of Employees : 1020.

    2.3 Organizational Objectives:

    (i) Vision:

    The gist of the Vision of EXIM Bank is “Together Towards Tomorrow”.

    Export Import Bank of Bangladesh Limited believes in togetherness with its customers, in its march on the road to growth and progress with services. To achieve the desired goal, there will be pursuit of excellence at all stages with a climate of continuous improvement, because, in EXIM Bank, we believe, the line of excellence is never ending. Bank’s strategic plans and networking will strengthen its competitive edge over others in rapidly changing competitive environments. Its personalized quality services to the customers with the trend of constant improvement will be cornerstone to achieve our operational success.

    (ii) Mission:

    The Bank has chalked out the following corporate objectives in order to ensure smooth achievement of its goals:

    · To be the most caring and customer friendly and service oriented Bank.

    · To create a technology based most efficient banking environment for its customers.

    · To ensure ethics and transparency in all levels.

    · To ensure sustainable growth and establish full value of the honorable shareholders.

    · Above all, to add effective contribution to the national economy.

    . Eventually the Bank emphasizes on:

    · Providing high quality financial services in export and import trade.

    · Providing efficient customer service.

    · Maintaining corporate and business ethics.

    · Being trusted repository of customers’ money and their financial adviser.

    · Making its products superior and rewarding to the customers.

    · Display team spirit and professionalism.

    · Sound Capital Base.

    · Enhancement of shareholders wealth.

    · Fulfilling its social commitments by expanding its charitable and humanitarian activities.

    2.4 Operating and Financial Review:

    As a commercial Bank, EXIM Bank does all traditional Banking business including the wide range of savings and credit scheme products, retail banking and ancillary services with the support of modern technology and professional Excellency. But the main focus is, for obvious reason, on export and import trade handling and the development of entrepreneurship and patronization of private sectors.

    (i) EXIM Bank at a Glance:

    Figure in crore
    Sl. No. Particulars 2003 2004 2005 2006
    01. Authorized Capital 100.00 100.00 100.00 350.00
    02. Paid-up Capital 31.39 62.78 87.90 171.38
    03. Reserve Fund 22.82 35.73 57.00 81.09
    04. Deposits 1524.30 1907.82 2831.90 3503.20
    05. Investment(General) 1228.91 1933.20 2604.60 3264.13
    06. Investment(Shares & Bonds) 237.70 154.30 163.30 223.33
    07. Foreign Exchange Business 3461.96 4931.24 7294.00 9617.51
    a) Import Business 1926.00 2678.10 4143.20 4949.67
    b) Export Business 1512.46 2241.84 3128.50 4623.46
    c) Remittance 23.50 11.31 22.30 34.38
    08. Operating Profit 56.27 83.58 117.58 137.87
    09. Loan as a % of total Deposit 80.62% 101.97% 91.97% 93.18%
    10. No. of Foreign Correspondent 185 200 222 246
    11. Number of Employees 627 768 934 1020
    12. Number of Branches 19 28 28 30
    13. Return on Assets 3.15% 3.44% 1.65% 1.73%

    (ii) Financial Overview of the Bank:

    The performance of the Bank, during the period under review, is more significant simultaneously in development and achievements of continuous growth rate in all the areas of banking operations. The Bank has successfully been marching ahead with its prime business objective by earning a pre-tax profit of Tk.1,199.49 million registering an annual growth of 12.81% than that of the previous year. It has successfully mobilized Tk.35,32.02 million deposit from depositors and has arranged disbursement of Tk.32,641.27 million as investment to 16,604 accounts as on 31st December 2006 through its 30 Branches. The total income and expenditure of the Bank were Tk.4,967.57 million and Tk.3,588.89 million respectively during the period under review. The return on assets (ROA) after tax was 1.73% well above the industry average. The achievements were possible because of the service excellence of management team with support from a very resourceful and skilled workforce rendering efficient and specialized services.

    (iii) Capital and Reserve Fund:

    The Bank started its voyage with an authorized Capital of Tk 1000 million with its initial Paid up Capital was Tk. 225 million subscribed by the sponsor in the year 1999. The Capital and Reserve of the Bank as on 31st December 2006 stood at Tk. 3,111.68 million including Paid up Capital of Tk. 1,731.75 million. In the year 2006, the Bank has issued Rights shares to strengthen its Capital base. In this course the Bank has gather an amount of Tk. 571.25 million. The Bank also maid Provision on unclassified Investments which is amounted to take 351.47 million.

    (iv) Deposit:

    Deposit is one of the principal sources of fund for investment of commercial banks and investment of deposit is the main stream of revenue in the banking business. The total deposit of the bank stood at Tk. 35,032.02 million as on December 2006 against Tk. 28,319.21 million of the previous year which is an increase of 23.70%. This growth rate may be termed as a remarkable achievement for the Bank. The present strategy is to increase the deposit base through maintaining competitive rates of Profit and having low cost of funds.

    The following Pie Chart contains the numerical presentation of the Deposit Mix of EXIM Bank-

    (v) Investment:

    Total amount of Investment of the Bank stood at Tk. 34,641.27 million as on December 31, 2006 as against Tk. 26,046.34 million as on December 31, 2005 showing an increase of Tk. 6,594.93 million with growth rate of 25.32%. Investments are the core asset of a Bank. The Bank gives emphasis to acquire quality assets and does appropriate lending risk analysis and follows all the terms and conditions of CRM (Credit Risk Management) while approving commercial and trade investments to clients.

    The following chart contains the numerical representation of last five years Investment of the Bank-

    (vi) Investments (Share & Bonds):

    The size of the investment portfolio in 2006 is Tk. 2,233.25 million while it was Tk. 1,633.03 million in 2005. The portfolio comprises Islamic Investment Bond, Shares and Prize Bonds.

    The following chart contains information of last five years investment portfolio-

    (vii) Import Business:

    During the year, the Bank opened 25,817 import letters of credit and the import volume stood at Tk. 49,596.73 million with a growth of 19.71% in comparison with previous year.

    From the following chart we can see the information of last five years Import Business of the Bank-

    (viii)Export Business:

    The growth of the Export business has significantly been increased by 47.78%. It stood at Tk. 46,234.59 million as of December 31, 2006 against Tk. 31,285.37 million of the previous year.

    In the following chart we can see the information of last five years regarding Export Business of EXIM Bank-

    (ix) Foreign Remittance:

    Foreign Remittance of the Bank stood at Tk. 343.78 million as of December 31, 2006 as against Tk. 222.97 million in 2005. Besides, the Bank has taken initiatives to make Remittance Arrangements with some leading Exchange Houses at abroad.

    (x) Credit Ratings:

    In the times, CRISL and IFC are in the process of rating the bank in different aspects. According to the Notification of Reporting of May 07, 2007, CRISL rated Long Term credit as A (Adequate Safety) and Short Term as St-3 (Good Grade).

    While IFC expressed its satisfaction regarding the Bank’s operations as well as its position in connection with management of core risk factors and maintenance of good governance along with flawless operations.

    Credit Ratings at a glance:

    Particulars Ratings Significance
    Long-Term Credit A- Adequate Safety
    Short-Term Credit ST-3 Good Grade

    (xi) Prime Operational Area:

    As a commercial Bank, EXIM Bank provides all traditional banking services including a wide range of savings and investment scheme products, Foreign Exchange and ancillary services with the support of modern technology and professional management but the main stress of the Bank is, as the name implies, put on Export and Import trade handling and financing & the Bank has become the pioneer in promoting Readymade Garment Industries and one of the largest financiers in this sector. The Bank provides financial support including market information and advice and today the garment sector constitutes the lion portion of the total export of the Company.

    2.5 Head Office and Branch Offices of EXIM Bank

    The Bank operates its activities through its Head office located in Dhaka and 33 more Branches located in many places of Dhaka & Bangladesh.

    2.6-A Organizational Structure of Export Import Bank of Bangladesh Limited

    2.6-B Organizational Structure of Principal Branch

    2.6-C Organizational Structure of Satmasjid Road Branch

    Chapter 03

    3. Introduction

    General Banking or cash department is one of the major areas of Formal sector. Through this section bank receives and disburses money, to develop banker customer relationship by opening different types of account and providing prompt services to the customers. It is called a nerve centre of the bank. The officers/staffs engaged in the department not merely deal with cash but they also take important role rendering the better customer services. So cash officers should be well experienced and well behaved towards the valued customers by offering prompt services in receipt and payment of cash with always presenting smiling face. Since bank make profit by investing peoples money so its need to collect money from customer by various way and need to make sure best service for attracting customer.

    The whole activity of General Banking/cash department of EXIM Bank is classified in four areas:

    3.1 Deposit Mobilization:

    Mobilization of resources is one of core components in banking business, particularly for back up support of the growing demand of investment. By deposit mobilization, we mean bringing of potential deposit or idle savings of the surplus unit of the society to invest them as a supply of fund to the deficit unit. In a wider sense, it may also mean bringing potential savings of the people to the banking channel. Deposit is the money kept by the customers, which are repayable on demand and withdrawable by cheques, drafts, order or using other acceptable instrument from bank. Bank gives profit to depositor for keeping money in the bank and also claim servicing charge from the client. By collecting this deposit from depositor bank invests this deposit and earns profit from the borrower of the fund. As more and more deposits are mobilized by a bank its entire activity enlarges and the bank starts making higher returns.

    At a glance, the process of Deposit Mobilization is as follows-

    3.2 Different Types of Account of EXIM Bank:

    Export Import Bank of Bangladesh has different types of account. They are-

    · Al-Wadiah Current Deposit Account.

    · Mudaraba Deposit Account (RFCD, NFCD).

    · Mudaraba Savings Monthly Scheme-Money Grower.

    · Mudaraba Income Scheme-Steady Money.

    · Mudaraba Super Savings- Double in 6 years.

    · Mudaraba Multiplus Savings-More than Triple in 10 Years.

    · Mudaraba Education Savings-For Higher Education.

    · Mudaraba Hajj Prokalpa.

    · Mudaraba CREDIT CARDS.

    · Foreign Currency Deposit A/C.

    3.3 Papers/Documents Required for Opening an Account:

    (a) For Individual/Joint Account:

    · Introduction of the Account.

    · Two photographs of the Signatory/Signatories duly attested by the introducer.

    · Identity (copy of Passport/Chairman Certificate/TIN/Voter ID/T&T/Employee Certificate, Student ID/KYC, TP provided by the Bank).

    · Joint Declaration Form (For Joint A/C only).

    (b) For Partnership Account:

    · Introduction of the Account.

    · Two photographs of the Signatory/Signatories duly attested by the introducer.

    · Partnership deed duly signed by the all Partners to open & operate the account (Sign
    should be similar as stated in Partnership deed).

    · Partnership deed certified copy by Notary Public(Deed should be written in Bond of Tk 500/= but if the capital exceed Tk. 25,000/=, bond of Tk. 1000/= is required).

    · Registration (if any).

    · Rubber Stamp.

    · Updated Trade License.

    · ID, KYC, TP.

    (c) For Proprietorship Account:

    · Introduction of the Account.

    · Two photographs of the Signatory/Signatories duly attested by the introducer.

    · Updated Trade License.

    · Rubber Stamp.

    · TIN Certificate (if any).

    · ID, KYC, TP.

    (d) For Limited Company:

    · Introduction of the Account.

    · Two photographs of the Signatory/Signatories duly attested by the introducer.

    · Valid Copy of Trade License.

    · Board Resolution of opening A/C duly certified by the Chairman/Managing Director.

    · Certificate of Incorporation.

    · Certificate of Commencement (In case of Public Limited Company).

    · Certificate of (Joint Stock) true copy of the Memorandum and Article of Association of the
    Companies (In case of Directorship Change) duly attested by Chairman or Managing Director.

    · List of Directors along with designation & specimen signature.

    · Latest certified copy of From-XII (to be certified by register of Joint Stock Companies

    · (In case of Directorship Change).

    · Rubber Stamp (Seal with designation of each person).

    · Certificate of registration (in case of Insurance Company) obtained from Department
    of Insurance from the Peoples Republic of Bangladesh).

    (e) For Club/Societies:

    Introduction of the Account.

    Two photographs of the Signatory/Signatories duly attested by the introducer.

    Board resolution of Opening A/C duly certified by President/Secretary.

    List of Existing Managing Committee.

    Registration (if any).

    Rubber Stamp.

    By Laws/Cons.

    Permission Letter of Bureau of N.G.O (In case of N.G.O A/C).

    (f) For Trust and Provident Funds in Local Currency:

    · Two copies of Passport size photographs of the account holder who will operate the account
    duly attested by the introducer and authenticated by Authorized Officer.

    · Certified copy of the Trust Deed/duly certified by the Chairman/President/Secretary.

    · Certified copy of Resolution of Trustee Board for opening & operation of the account
    and authorizing specific persons to operate upon the same.

    (g) Government Account:

    · Resolution for opening Account.

    3.4 Provisional Profit Rate on Different Types of Deposit of EXIM Bank:

    Types of Deposit Provisional Profit Rate
    1. Al-Wadia Current Deposit 0%
    2. Mudaraba Deposit Account 6.00%
    3. Mudaraba Short-Term Deposit (MSTD) 5.00%
    4. Mudaraba Term Deposit (MTDR)-
    One (01) Month’s MTDR 8.50%
    Three (03) Months’ MTDR 11.25%
    Six (06) Months’ MTDR 11.25%
    One (01)-Three (03) Years MTDR 11.50%
    5. Mudaraba Scheme Deposit-
    Mudaraba Monthly Deposit Scheme (MMDS)
    A. 05 Years Term 9.75%
    B. 08 Years Term 10.00%
    C. 10 Years Term 10.20%
    D. 12 Years Term 10.30%
    6. Mudaraba Monthly Income Scheme (MIS) {03 Years Term} 12.00%
    7. Mudaraba Super Savings Scheme (MSSS) {06 Years Term} 12.25%
    8. Mudaraba Multiplus Savings Scheme (Triple Amount in 10 Years) 12.25%
    9. Mudaraba Hajj Scheme for different terms 10.50%
    10. Mudaraba Education Scheme for different terms 10.50%

    3.5 Statement of Affairs of Satmasjid Road Branch of EXIM Bank:

    Statement of Affairs as on 31/10/2007

    Total Deposit: 1,567,711,125.29

    Total Advance: 352,193,796.76

    Demand Deposit: 300,001,392.28

    Time Deposit: 413,070,193.24

    Profit/Loss: 22,072,454.57.

    Application Total Accounts
    Al-WADIA CURRENT ACCOUNT 141
    MUDARABA SAVINGS DEPOSIT 911
    MUDARABA SAVINGS DEPOSIT (STAF) 28
    MUDARABA SHORT TERM DEPOSIT (7 D) 58
    BAI MUAZZAL DEPOSIT (CCH) 145
    MUDARABA TERM DEPOSIT (3 MON) 1,118
    MUDARABA TERM DEPOSIT (6 MON) 154
    MUDARABA TERM DEPOSIT (12 MON) 346
    MUDARABA TERM DEPOSIT (24 MON) 1
    MUDARABA TERM DEPOSIT (36 MON) 33
    MUDARABA TERM DEPOSIT (1 MON) 25
    MONTHLY SAVINGS SCHEMES 5 YEARS 304
    MONTHLY SAVINGS SCHEMES 8 YEARS 57
    MONTHLY SAVINGS SCHEMES 10 YEARS 151
    MONTHLY SAVINGS SCHEMES 12 YEARS 232
    SUPER SAVINGS SCHEMES 176
    MULTIPLUS SAVINGS SCHEMES 14
    MONTHLY PFT SAVINGS SCHEME 200
    MONTHLY SAVINGS SCHEMES 5 YEARS 9
    MONTHLY SAVINGS SCHEMES 8 YEARS 2
    MONTHLY SAVINGS SCHEMES 10 YEARS 5
    MONTHLY SAVINGS SCHEMES 12 YEARS 45
    IZARA BILL BAIA (STAFF HB) 2
    IZARA BILL BAIA (EIS) 5
    HIRE PURCHASE EX. CAR SCH 2
    TR (MIB/MURA/MPI) 4
    IZARA BILL BAIA (HP) 16
    MURABAHA IMPORT BILLS (PAD) 1
    BAI-MUAJJAL (CCH) 3
    L.D.B.P (LOCAL) 15
    BAI-MUAJJAL (FIN.OBL) 77
    TOTAL 4280

    3.6 Issuance of Check:

    When a Client finished the process of account opening then according to banking rules and regulation the client have to maintain and pay some down payment then bank will provide a check requisition sleep.

    In the sleep the account holder fill up his name, address, account number and specific signature then finally bank provide check book to the customer.

    If it is not possible for the account holder to regularly maintain all types of transactions and check book withdrawals then he/she can authorize a person on his behalf to operate the account.

    To give some one the authority mentioned then the client have to give authorized signature at the check requisition sleep.

    3.7 Remittance of Funds:

    EXIM Bank has 33 branches throughout the entire country and therefore, they serve as best medium for remittance of funds from one place to another. This service is available to both customers as well as non-customers of the Bank. The following are some of the important modes of transferring funds from one to another through a bank.

    3.7.1 Functions of remittance section:

    · Handling of all incoming and outgoing foreign and local remittance is the major function for this department.

    · Handling of incoming and outgoing T.T.

    · Outstation Cheque Collection.

    · Outstation Cheque Purchase.

    · Demand Draft Handling.

    · Other assorted work.

    . The Remittance of funds are:

    An Inland Remittance:

    Any person can remit funds to another through Inland remittance by using the following means of remitting funds with charges-

    · Pay Order (PO).

    · Demand Draft (DD).

    · Telegraphic Transfer (T.T).

    · Mail Transfers.

    (a) Pay Order:

    A pay order is a written statement issued by a branch of the Bank to pay a certain sum of money to a specific person or a bank. It may also be said as banker’s cheque as it is issued by a bank and payable by itself.

    Issuance:

    1. The application form must be filled up properly.

    2. Commission to be calculated as the Bank’s rules as per amount.

    3. Total amount due must be paid by the customer at the cash receive counter, after receiving
    the cashier will issue a voucher to the PO issue department.

    4. The pay order is prepared and entered in the PO issue register. The PO number is then written on the application form and the amount is prtectographed on the face of the PO.

    5. The vouchers along with the instrument and register are then sent to the department- in – charge for checking and signature.

    6.Then all the documents are sent to the branch in-charge for second signature.

    7. After all signatures are complete, the pay order draft is given to the customer and his/her signature must be taken on the counter foil.

    8. After that the following vouchers have to be passed:

    DR.IDT (issued by cashier)

    CR. Pay order Payable A/C and

    CR. Commission on Remittance.

    Issue to remember:

    1. A PO is transferable. As it is a banker’s cheque payable to order, the beneficiary may transfer it, by giving proper discharge on its back. It is a quasi-negotiable instrument.

    2.Before making payment the signature of issuing officers should be verified and the date of payment should marked in the register.

    3. If the purchaser requests for cancellation of the PO after its issue, then a written request must be obtained and after verifying his/her signature on the letter, the PO may be cancelled and it must be marked on the PO issued register as such.

    4. A PO becomes stale after six months of its issue, it may revalidate if tendered by the
    purchaser.

    (b) Demand Draft (DD):

    This is an instrument through which customers money is remitted to another person/firm/organization in outstation (outside the clearing house area) from a branch of one Bank to an outstation branch of the same Bank or to a branch of another Bank( with prior arrangement between that Bank with the issuing branch).

    This is an order instrument in which the issuing branch gives instruction to the payee/drawer branch to pay certain amount of money to the order of certain person/firm/organization. The payee/drawer branch upon receiving the message, decodes the tested message and being fully satisfied, pay the amount by crediting the payees account (if account is maintained with the payee branch). Telegraphic transfer may also be issued favoring the beneficiary who maintains account with other banks. In such case the payee branch issues pay order favoring the payee and handover the P.O the concerned Bank branch for effecting payment to the payee.

    Export Import Bank of Bangladesh Limited Demand Draft

    … EXIM/DD No.

    Date:…………

    On Demand

    Pay to the order of…………………………………………………………………

    The sum of Taka………………………………….for value received for Export Import Bank of Bangladesh Limited.

    Drawn on

    Export Import Bank of Bangladesh Limited

    ……………Branch Authorized Signature Authorized Signature

    · A draft is always an order and never a bearer instrument.

    · It is a negotiable instrument like a cheque that can be endorsed, collected and delivered to the endorsee.

    · DD may be issued to any person and it can be issued in favor of a firm, company or local authority on written request duly signed by the purchaser.

    Issuance:

    1. Filling of DD application form (This form is treated as an application as well as a Voucher).

    2. Commission to calculated as per BB rate and written on the space provided on the form. (@15%, min Tk.15/-)

    3. Total amount due must be paid by the customer at the cash receive counter, after receiving the cashier will issue a voucher for the DD issue department.

    4. The Draft is prepared and entered in the draft issue register. The draft number is then written on the application form and the amount is protecting graphed on the face of the draft.

    5. The vouchers along with the instrument and register are then sent to the department-in-charge for checking and signature.

    6. Then the entire documents are sent to the branch in-charge for second signature.

    7. After all signatures are completed, the draft is given to the customer and his/her signature must be taken on the counter foil.

    8. Preparing advice: an IBCA (For demand draft only) must be prepared, starting the details of the issued draft and must be sent to Drawee Branch; on the same day.

    9. Voucher to be passed:

    DR. IDT (issued by cahier)

    CR. SBL General A/C

    CR. Commission on Remittance

    Encashment:

    1. When a draft is presented for payment, the following things must be checked scrupulously:

    a) DD is issued by SIBL

    b) DD is drawn on your branch

    c) Amount in word and figure

     

    " 142,"

    General Banking System of Dutch Bangla Bank Ltd

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    “General Banking System of Dutch Bangla Bank Ltd.”

    Chapter 01

    1. Introduction

    1.2 Objectives of the Study:

    The broad objective of the research is to know about banking services provided for International Business through Dutch-Bangla Bank Limited, Dhanmondi branch.

    Objectives regarding this study are as follows:

    1.3 Scope:

    The scope of this report is very limited to the Dutch Bangla Bank Ltd., Dhanmondi Branch only. To the investigation, observance and practices the activities of DBB, Dhanmondi Branch during my internship period and to go through some documents and reports.

    1.4 Methodology:

    The information used to prepare this report has been collected from practical desk work, face to face conversation with officers, direct observation, face to face conservation with clients and annual report of DBBL, various publications on Bank also from website, sent by Head Office and Bangladesh Bank.

    1.5 Limitations of the Report:

    There were some problems while I have undergone the internship program. A wholehearted effort was applied to conduct the internship program and to bring a reliable and fruitful result. In spite of having the wholehearted effort, there exits some limitations, which acted as barrier. The limitations were:

    Chapter 02

    2. Banking Sector in Bangladesh

    2.1 Historical Background of Banking:

    Banks and other financial institutions play a vital role in fostering the economic and social condition of a country. They help to develop a conducive climate for capital formation through three stages such as savings, financing and investment and the role of banks is instrumental in all these stages. Banks in Bangladesh now constitute the core of the country’s organized financial system. They mobilize the savings of people and channel the resources towards different sector of the economy.

    The objectives of this paper are to trace the following:

    In order to fulfill the objectives, basically historical method of research has been applied. The available book. research works, articles, publications of Bangladesh Bank were reviewed. The required items of information were developed, searched, noted from sources without bias and organized into an appropriate order.

    2.2 Banking in Ancient and British Period:

    Banking in India is traceable in ancient Vedic era. Ancient bankers performed the functions such as accepting deposit, granting loan against security, acting as bailee to customers or as treasurers and bankers to the state and managing the currency of the country also they used loan deeds. During Buddhist period, Brahmins and Kshatriyas entered the banking business. The concept of Hundis or indigenous bills of exchange came in use (Ahmad 1992.25).

    During Mughal rule, indigenous banks granted loans for both domestic and foreign trade, assisted the state, issued metallic coin, and acted as moneychanger, revenue influence and power. They financed trade, performed treasury functions and were trusted custodians of deposits (Ahmad 1992:27). However, the Jagath Seth did not provide banking services.

    The tradition and culture of the Bengalis reflect their conscious of money and assets. They have been exposed to the principles of cash transaction, savings, investment, credit, interest, and several kinds of mortgages since Indian classical civilization. By the third century BC, Mauryan urban economy extended up to Mahasthan (Bogra), where its silver coins have been found (Maloney and Ahmed, 1988:1).

    In seventeenth century, the English traders and the East India Company utilized indigenous bankers for borowings and collection of land revenue. But the business and power of indigenous bankers declined due to the emergence of the English Agency Houses (in Calcutta and Bombay) which began banking business in addition to their commercial business. Other causes of decline of the indigenous bankers can be attributed to the break up of the Mughal Empire and establishment of uniform currency throughout the country in 1835. Also changes in trade routes and trade relations with other countries due to development of railways, steamships, post and telegraph etc. badly affected the indigenous bankers. Indigenous bankers lost their business in urban areas and the European bankers captured the urban banking. Then, indigenous bankers existed in rural areas by concentrating on banking services to agricultural and internal trade. The Agency Houses were bankers of the East India Company and the European merchants in India. The Agency Houses financed the crops trade, issued paper money and paved the way for the establishment of joint stock banks (Ahmad 1992:28).

    Commercial banks in Bangladesh’s territory have been functioning for the last two centuries. “The Bank of Hindustan” was the first modern bank formed in 1770 by an English Agency House in Calcutta but was wound up in 1832 (Guru Datta 1987:5 in Abrol, (1987); Ahmad 1992:30). The Bengal Bank and the General Bank of India were established in about 1785 chartered by the East India Company (Ahmad 1932:30). In the first quarter of the nineteenth century, the state aided bank facilitated government borrowing and helped the trading class. In the year 1806 the first presidency bank, the Bank of Bengal, was established, followed by the Bank of Bombay (1840) and the Bank of Madras (1843). The East India Company and European private shareholders mostly owned these banks. The presidency banks had the monopoly of government banking and the issue of notes. In 1876, the Presidency Banks Act was passed and government had withdrawn its capital. The government’s balances were kept in three reserve treasuries. The policy of the Presidency Banks Act was to safeguard the interest of the government and also it imposed restriction on all three banks to carry out the business of banking only (Ahmad 1992:30). In that period, the English agencies established mostly the joint stock banks. After 1813, several joint stock banks were established by the British settlers in India  but most of them could not stay long as they failed to confine to banking business only (Ahmad 1992:31). Between 1861 and 1865 there was a mushroom growth of banking companies. Under the Indian management, the Oudh Commercial Bank was first formed in 1880 followed by the Punjab National Bank and the Alliance Bank of Simla [Srinivasaraghavan, 1955:567). The three presidency banks and Indian joint stock banks were established by the acts of Indian legislature. In 1860, the principal of limited liability was first applied to the banks (Ahmad 1992:30).

    The failure of Indian banks (upto 1935) was mostly because they indulged in other activities. Such as large sums of money were locked up in speculative businesses, the banks had provided long-term finance to businesses without efficient investigation into their surroungings, for getting the chance of earning large profits and also short term deposits were invested for this purpose. Many of the directors and managers of these banks were incapable and dishonest. Loans to directors and concerns in which they were interested were unrestricted (Ahmad 1992:32).

    The political stimulus of the “Swadeshi Movement” in the early twentieth century inspired the opening of important joint stock banks. (such as Bank of India, the Cenara Bank of Baroda) Srinivasaraghavan, 1985:568; Ahmad 1992:31). In order to face the competition of foreign banks, the three presidency banks were amalgamated and the Imperial Bank of India was formed in 1920 (Ahmed 1992:31).The Imperial Bank of India Act was passed in 1920. Before the establishment of RBI, commercial banks were regulated by different acts. The establishment of RBI was the first organized initiative to bring banking and monetary system of the sub-continent in a disciplined way.

    After 1942, circumstantial forces changed the traditional pattern of banking policy in India. The subcontinent experienced a tremendous inflow of money due to expenditure in war and post-war reconstruction (Ismail in Uzair 1967:42]. The British rulers pursued a policy package that had two characteristics:

    (i) The exploitative relation between the United Kingdom and India and

    (ii) The dominance of the British over the Indians.

    The maintenance of imperial systems received the highest priority. The philosophy and socio-economic intent of the British rules concentrated mostly on administration for laws and regulations for protecting the imperial interest. The government monopoly was retained in the sphere of post, telegraph and telecommunication. The banking and insurance etc. were encouraged for private enterprises (Ahmad 1987:68). The foreign exchange banks, which were fifteen in number, were not under the control of the Indian government.

    2.3 Banking during Pakistan Period:

    In Bengal, the rural informal credit was part of the social, economic and trade culture. Traditional Mahajans were goldsmiths, and Hindu businessmen, especially “Baniyas” who acted as moneylender since long. But, many had left for other areas of India and their place in money lending was taken by Muslim landowners (Maloney and Ahmed, 1988:49).

    The areas that fall within the boundaries of Pakistan had been fairly well provided with commercial banking facilities during the pre-1947 period. In March 1947, the number of Indian scheduled bank offices in undivided India was 3,496, of which 631 were in Pakistan. Of the total number of bank offices, 487 (77%) were in the West Pakistan and 144 (33%) were in the East Pakistan. Small and mostly non-scheduled banks mainly provided banking facilities in the then East Pakistan.

    After the announcement of independence of Pakistan in August 1947, the banking services in Pakistan were seriously hampered and the number of banks declined to 38 with 195 bank offices. Many funds and accounts were transferred to India. Most of the bank offices, which belonged to India, had closed their business. This resulted in a sharp curtailment of banking business in Pakistan, which had only two banks owned by Pakistani nationals. In East Pakistan, number of bank offices remained unchanged but banking functions reduced sharply due to the fact that non-Muslims had withdrawn all their deposits and went to India. In June 1948, of the 195 bank offices that remained in Pakistan, 81 were in the West Pakistan and 114 were in East Pakistan (Srinivasaraghavan, 1955:569). At that time, Pakistan’s banking system consisted primarily of non-Indian foreign banks. The Australia Bank had been functioning in Pakistan prior to June 1947. Nineteen non-Indian foreign bank offices and a number of Indian banks were in limited operation. Prior to June 1947, only one Muslim-managed schedule bank, Bank of Bahawalpur Limited, was functioning in the Pakistani territory. The Habib Bank Limited, established in 1941, had transferred its head office to Karachi after partition (Andrus and Mohammed, 1966:105). The number of Pakistani banks on the 30th June, 1948 was 4 with 23 branches (Banking Statistics of Pakistan, 1960-61, 1964-65).

    2.4 Banking in Bangladesh:

    Since early British rule, the history of banking in Bangladesh territory shows that the traditional trade-networks developed before the banks invaded rural areas. And the banking services have slowly flourished in Bangladesh territory. Even today, in many places, moneylenders provide credit services. Small shopkeepers and businessmen use informal credit at high interest rate (Maloney and Ahmed, 1988: 54). Traditional Mahajans’ money lending business gradually declined due to expansion of banks and the micro credit programs of NGOs, cooperative banks and government agencies.

    2.4.1 Public Sector Banks:

    During the liberation war in 1971, the economic, political, and social system including the banking system were severally damaged at that time, all high and medium financial institutions except two small banks had their head office in the West Pakistan. The non-Bengali owners and managers of the financial establishments that operated in East Pakistan had abandoned them. After independence in 1971, the now government had to take over management and ownership of all such institutions. The Baths Nationalization Order 1972 was issued to nationalize banks and financial institutions (except those incorporated abroad) in order to control chaos in the field of ownership party, bureaucracy, the intelligentsia and pressure group. By several orders six nationalized commercial banks (NCBs), one industrial bank (BSB), one agricultural bank (BKB), and one industrial development financial institution (BSRS) were created. The banks and financial institutions, which originated during the Pakistan period and were merged, renamed and continued their functioning after independence of Bangladesh have teen presented in Table-3. The banks were consolidated and nationalized. The nationalized banks and foreign banks constituted the total banking system of Bangladesh. Investment Corporation of Bangladesh was established in 1976. Grameen Bank, a specialized bank for the poor but not under control of the Central Bank, was established in 1983. In the year 1983, the government allowed private sectors to participate in the  business.

    The Pubali Bank and the Uttara Bank were denationalized in January 1985 due to non-profitability. This action reduced the number of NCBs to four. The nationalized banks continue to receive refinancing and other subsidies in order to fill credit demand and government desires. Rupali Bank was converted into a public limited company on 14th December, 1986. Rajshahi Krishi Unnayan Bank was established in 1987 through a bifurcation of the offices of Bangladesh Krishi Bank of Rajshahi division. Bank of Small Industries and Commerce Bangladesh Ltd. was established in 1993. This was made with the intention of reversing the urban monopoly of banking and the flow of capital from rural to urban areas. Such restructuring of public sector banks was in order to attain economic growth and policies were formulated for scheduled banks to play their role in industry, agriculture, export, self-employment etc. As a result there has been an advancement in the public sector banks in terms of increase in the number of branches, deposit mobilization,and advances to the society (Table-4). There are nine public sector banks, of which four are nationalized commercial banks and five are specialized banks.

    2.4.2 Private Commercial Banks:

    Taking advantage of the liberalization policy of the government regarding participaiton of private sectors in the banking business, a number of private sector banks was established in and after 1983. With the emergence of private banks in Bangladesh, a competitive situation in the sector has been created. There are twenty seven private banks in Bangladesh. They are: The City Bank (1983), International Finance Investment and Commerce Bank (1983), Arab Bangladesh Bank (1986), Al-Baraka Bank Bangladesh (1995), South East Bank (1995) Dhaka Bank (1996), Dutch Bangla Bank (1996), Al-Arafa Islami Bank (1996), Social Investment Bank (1996), Mercantile Bank, Standard Bank, One Bank, EXIM Bank, Bangladesh Commerce Bank, Mutual Trust Bank, Premier Bank, The First Security Bank, Bank Asia and The Trust Bank. The emergence of private banks has added a new dimension to the banking system in Bangladesh. The private commercial banks show a steady growth in terms of number of branches, deposits, and advances (Table-5).

    2.4.3 Foreign Banks:

    The State Bank of India opened one branch during July-September in 1975. In 1975, the four foreign banks operating in Bangladesh were:

    Now, there are thirteen foreign banks – American Express Bank, ANZ Grindlays Bank, Standard Chartered Bank, State Bank of India, Habib Bank, Citibank N.A., Credit Agricole Indousez, National Bank of Pakistan, Muslim Commercial Bank, The Bank of Nova Scotia, Hanil Bank, Hongkong and Shanghai Banking Corporation, Faysal Islamic Bank of Bahrain E.C. The foreign banks show a steady growth in terms of number of branches, deposits, and advances.

    2.4.4 Cooperative Banks:

    Cooperative banks are indigenous banks in model and function. They are organized in three tiers and their form of functioning is unit banking. The then British government promulgated cooperative rules in 1904 and 1912 to shape the organization. In 1947 the then East Pakistan had twenty-six thousand cooperatives, which collapsed after partition. The traditional cooperatives in Bangal were mostly organized by savings and credit societies. In 1948, Union Multipurpose Cooperative Societies (UMPCSs) were formed with government patronage but were mostly dissolved due to malfunctioning. The cooperative financing and (Maloney Ahmed, 1988: 115-6) The Land Mortgage Banks have been operating in India since 1929. They supplied long-term and medium term loans to their members on the mortgage of land for agricultural purpose. They also performed banking functions of deposit mobilization, supply of credit and provision of remittance facilities.

    2.5 Factors Affecting Change in Banking System:

    After independence, Bangladesh Bank had taken measures such as credit expansion, branch expansion, deposit mobilization, advances to priority sectors through the banks. (Chowdhury, 1973:1). Immediately after independence, to recover and reconstruct the war affected economy, Bangladesh signed several trade agreements with different countries, donor agencies, and international banks for inflow of capital in the form of aid, grant, loan, etc. The Government and the Bangladesh Bank implemented several loan schemes for economic development and the government continuously adopted deficit budget and followed foreign aid financed development strategy. All these contributed to the growth of banks in Bangladesh (Sobhan and Islam, 1988, 182; Hossain, 1988: 211; Hashemi, 1988: 213; Bhattacharya, 1988:233: Ahmad, 1988:309). The main factors which shaped the nature of development of the banking system in Bangladesh are:

    Some Important Modern Bank Some Important Ancient Bank

    Sonali Bank

    Janata Bank

    Agrani Bank

    Rupali Bank

    AB Bank Ltd

    Uttara Bank Limited

    IFIC Bank Limited

    National Bank Limited

    The City Bank Limited

    United Commercial Bank Limited

    NCC Bank Limited

    Prime Bank Limited

    SouthEast Bank Limited

    Al-Arafah Islami Bank Limited

    Social Islami Bank Limited

    Standard Bank Limited

    One Bank Limited

    Exim Bank Limited

    Mercantile Bank Limited

    Mutual Trust Bank Limited

    First Security Bank Limited

    The Premier Bank Limited

    Bank Asia Limited

    Trust Bank Limited

    Shahjalal Islami Bank Limited

    Citigroup

    HSBC

    Standard Chartered Bank

    Commercial Bank of Ceylon

    Dutch Bangla Bank Limited

    Dhaka Bank Limited

    Islami Bank Bangladesh Ltd

    Pubali Bank Limited

    Jamuna Bank Limited

    ICB Islami Bank

    Bank Alfalah

    		 Shansi Bank

    Bank of Venice

    Bank of Saint George

    Bank of Barcelona

    Riksbank of Sweden

    Bank of England

    Bank of Prussia

    The Hindustan Bank

    Bengal Bank

    Central Bank of India

    Bank of France

    Bank of Calcutta

    Bank of Bombay

    Bank of Madras

    Rak Bank

    Bank of Japan

    Federal Reserve System

    Imperial Bank of India

    Reserve Bank of India

    Habib Bank Ltd.

    State Bank of Pakistan

    The National Bank of Pakistan

    Eastern Mercantile Bank

    Bangladesh bank

    Chapter 03

    3. Organizational Overview

    3.1 Introduction:

    Dutch-Bangla Bank is a second generation commercial private Bank. During the period of its operation, this bank created a milestone of success in banking sector. This bank holds an experienced team of banking professionals. They achieved this success because of their experienced banking professional team, proper management & so on.

    Dutch-Bangla Bank Limited is a Bangladesh–Netherlands joint venture scheduled commercial bank established in Bangladesh with the primary objective to carry on all kinds of banking business in and outside of Bangladesh.

    Starting with one Branch in 1996, DBBL has expanded to one sixty four (164) branches including nine Branches outside of the capital. To provide client services all over Bangladesh it has established a wide correspondent banking relationship with a number of local banks. To facilitate international trade transactions, it has arranged correspondent relationship with large number of international banks which are active across the globe.

    In addition to its banking activities, Dutch-Bangla Bank Limited takes part in different national activities promoting sports, culture, social awareness, etc. Participation in these activities as sponsors is part of its business development policy.

    3.2 Philosophical Standing of DBBL:

    The objectives of Dutch-Bangla Bank Limited remain to offer modern & innovative products & services to its clients in Bangladesh. The partnership with FMO is optimistically seen to offer scopes and opportunities to draw on modern tools & techniques of Banking from western world which could be blended with the currently prevalent local customs & practice. The Bank is committed to being a sophisticated, prominent and professional institution, providing a one window service to its customers. During the first five years, Dutch-Bangla Bank’s strategy was focused on continuing in provident of internal procedures and operating structures, to have a greater control on the quality of our business and to provide better management direction. After five years of working on the Banks structure, its culture and controls, the management is confident that the Bank can move forward on a rapid growth path. The DBBL’s corporate philosophy is to build its non-funded fees and commission income stream, thus reducing its reliance on interest income alone.

    3.3 Core Objective of DBBL:

    Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and satisfaction and to become their first choice in banking. Taking cue from its pool esteemed clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and epitomizes its slogan “Your Trusted Partner”.

    3.4 Focus of DBBL:

    DBBL’s focus is to provide one counter service to our clients covering:

    (i) Traveler Cheques

    (ii) Foreign & Inland Remittances

    3. 5 Mission of DBBL:

    Each business unit needs to define its specific mission within the broader company mission. Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a commitment to social responsibility. “Profits alone” do not hold a central focus in the Bank’s operation; because “Man does not live by bread and butter alone”. Mission statements are at their best when they are guided by a vision.

    3. 6 Tactics of DBBL:

    3.7 Aim of DBBL:

    3.8 Organizational (General) Hierarchy of DBBL:

    Flow chart-3.8 Organizational (General) Hierarchy

    3.9 Services and Products:

    3.9.1 Products and Services offered by DBBL:

    3.10 Banking Products:

    3.10.1 Various Deposits:

    3.10.2 Loan & Advances: 

    We can find DBBL ATMs beside our home, in our office premise, nearby market, university, college & school premises, airport, railway stations etc., throughout the country.

    3.10.3 ATM Services:

    Using any of the DBBL ATM pools any where in the country, you can perform the following:

    Table 3.10.3: ATMs of DBBL

    Products Name Customer Charge
    ATM NEXUS Debit card All a/c Holders Yes
    ATM Maestro Debit card All a/c Holders Yes
    ATM Maestro Debit card All a/c Holders Yes
    ATM DBBL Credit (OD) card Limited Yes
    Internet Banking All a/c Holders Yes
    SMS Banking All a/c Holders Yes

     

     

     

     

     

    3.10.4 Account Service:

    DBBL provides all the accounts services as prescribed by the guidelines of Central Bank (Bangladesh Bank). We offer competitive interest rate and provide premium quality services for the accounts. Account services are:

    3.10.5 DBBL Internet Banking:

    DBBL Internet banking enables customer to access his/her personal or business accounts anytime anywhere from home, office or when traveling. Internet Banking gives customer the freedom to choose his/her own banking hours. It can save time, money and effort. It’s fast, easy, secure and best of all.

    Using any of the DBBL ATM booths any where in the country, its customers can perform the following:

    Chapter 04

    4. General Banking Activities

    4.1 Introduction:

    General Banking department is the “Heart” of all banking activities. General Banking department performs the core functions of Bank, operates the day-to-day transactions. General banking is the starting point of all banking operations. General banking is the front-side banking service department. It provides those customers who come frequently and those customers who come one time for enjoying banking ancillary services. In some general banking activities, there is no relation between banker and customers who will take only one service from bank. Since bank is confined to provide the services everyday, general banking is also known as ‘retail banking’

    4.2 Functions of GB Department:

    General Banking department generally deals with the following section:

     

    4.2.1 Front Desk:

    Front desk of DBBL, Dhanmondi Branch is one of the important parts of general banking department. The works and procedures of conducting those are given bellow:

    (a) Types of Account:

    The relationship between banker and customer begins with the opening of an account by the customer. Opening an account binds the customer into contractual relationship. Infact all kinds of fraud & forgery start by opening an account. So, the bank should take extreme caution in selection customers.

    Under this section, DBBL Bank Assistant Officer opens different types of account on the request of clients. Such as:

    (i) Current Account:

    A current deposit account may be operated in several times during a working day. There is no restriction on the number and the amount of withdrawals from a current account and banker does not allow any interest on this account DBBL Banks normally prefer current account due to its cost free nature.

    (ii) Savings account:

    A saving account is meant for the person of the lower and the middle classes who wishes to save a part of their income to meet their future needs and intend to earn an income from their savings .This is an interest bearing account and a reasonable rate of interest is offered, which is higher than that of short term deposit account but lower than that of fixed deposit account.

    (iii) Other type account:

    We can get an idea by observing this chart.

    (b) Bank activity:

    After selecting the type of account, customer needs to fill up a form which is known as account opening form. After filling up the account opening form by customer, the assistant officer does the following job:

    4.2.2 Procedure of Opening Account:

     The procedure of opening account is given below:

    Step1 Receiving filled up application and signed by account holder in bank’s prescribed form mentioning what type of account is desired to be opened.
    Step2 # The form is filled up by the applicant himself / herself.

    # Two copies of passport size photographs from individual are taken. In case of firms, photographs of all partners are taken.(attested by the introducer).

    #Applicants must submit citizenship certificates: Photocopy of valid passport or ward commissioner certificate

    # Application must sign in A/c opening form and KYC (Know Your Customer) form.

    # Introducer’s signature and accounts number – verified by legal officer.

    # Nominee name, signature and photograph one copy.
    Step3  Authorized Officer accepts the application
    Step 4 Minimum balance is deposited – only cash is accepted
    Step 5 Account is opened and a pay-in-slip book is given.

    After fulfilling the above formalities, DBBL Bank provides the customer pay-in-slip book through which they deposit their initial deposit.

    (a) Cheque book issuing:

    There are tw0 different procedures of issuing cheque book for savings account holders and current account holders. For savings account holders officer needs to send online request for cheque book. It takes three working days to prepare their cheque books. After two working days the clients have to collect their cheque books from front desk..

    (b) Account related activities:

    In general banking bankers maintain some other activities such as:

    (c) Account Balance inquiry:

    Customers can inquiry about their account balance or any transaction within the banking hour.

    (d) Transfer of an A/C:

    Account holder may transfer his account from one branch to another branch. For this he/she must apply to the manager of the branch where he is maintaining account. Then manager sends a request letter to the manager of the branch where the account holder wants to transfer his account. With his request he sends original copy of account opening application and specimen Signature Card and photocopy of application for transferring the account with the balance remained account. But now-a-days customers do not need to transfer their accounts from one branch to another branch. They can make transaction from any DBBL branch with truly on-line facility.

    (e) Deposits:

    Bank is a financial intermediary, which mobilizes fund from surplus unit and allocates it to deficit unit. Surplus unit means the people who have surplus money and willingness to save. Deficit unit means the people who need money for industry, trade, business or for personal use but don’t have sufficient money of their own for such purposes. Bank mobilizes the fund by accepting deposits from depositors and allocates the fund by providing loan to borrower. Therefore, accepting deposits is one of the two classic functions of commercial banks.

    Deposit Services of DBBL:

    (i) Current Deposit Account:

    Current deposit accounts are unproductive in nature as per bank’s loanable fund is concerned. Sufficient fund has to be kept in liquid form, as current deposits are demand liability. Businessmen and companies are the main customers of this product. Thus huge portion of this fund become non-performing. For this reason banks do not pay any interest to CD account holders. There is no restriction on the number and the amount of withdrawals from a current account. Service charge and incidental charges are recovered from the depositors since the bank makes payments and collects the bills, drafts, cheques for any number of times daily. The Banks through current accounts grant the loans and advances in practice of DBBL, a minimum balance of TK.5000 has to be maintained.

    (ii) Savings Deposit Account:

    As per Bangladesh Bank’s instruction 90% of savings deposit accounts are treated as time liability and 10% of it as demand liability. Interest is paid on this account. DBBL offers a reasonable rate of interest (5.00%) for SB A/C on day basis. Generally, banks require a 7-day prior notice if the total amount of one or more withdrawals on any date exceeds 25% of the balance of the account unless it is given. But in DBBL there is no restriction about drawing money from savings account. Any time holders may withdraw money of any amount without prior notice. Generally householders, individuals and other small-scale savers are the clients of this account. Minimum Balance of Tk.500 is to be maintained. But initial deposit is Tk 2000.Very limited service charge (Tk.100 per year) as it is an interest bearing account. Govt. charge only 10%  interest on income of the customer.

    (iii) Short Term Deposit Account (STD):

    Customers deposit money for a shorter period of time. STD account can be treated as semi-term deposit. STD should be kept for at least thirty days to get interest. The interest offered for STD is less than that of savings deposit. In practice, DBBL offers 5.00% rate of interest (half yearly compounding) for STD account. It may increase depending on the fund. Volume of STD A/C is generally high. In DBBL, various big companies, organizations, government departments keep money in STD accounts. Frequent withdrawal is discouraged and requires prior notice.

    (iv) Local Remittance:

    In banking language money transmitted domestically are known as local remittance. For local remittance purpose DBBL purchases and sells some instruments for its customers. The instruments are Pay Order (PO), Demand Draft (DD), Telegraphic Transfer (TT) and Mail Transfer (MT).

    (a) Pay Order (PO):

    Pay order is an instrument, which is used to remit money within a city through banking channel. The instruments are generally safe as most of them are crossed.

    From the above accounting treatments it is clear that the money, which is received by the bank from selling the instrument, is kept under bills payable account. It is current liability on the part of bank, which implies that, money received in this purpose has to be paid to the payees collecting bank on placement of the instrument. But in the local banking arena DBBL offers 57.50 tk for issuing of Payment Order for everybody.

    Types of PO:

    Account payee only : Only can en-cash it by depositing it in his account.

    Blank Crossed: Any one can en-cash it by depositing in their account.

    Cash payment: P.O. can be paid in cash if buyer gives a letter of identification regarding payee.

    Settlement of a PO:

    When P.O is submitted by collecting bank through clearinghouse, the issuing bank gives payment. Thus bank’s liability is settled by debiting bills payable. But before giving payment it should be examined whether endorsement was given by the collecting bank or not. If not then the instrument is dishonored marking “Endorsement required”.

    Cancellation of a PO:

    If buyer wants to cancel the P.O. he has to give a letter of instruction in this regard. He will also have to return the instrument.

    Collection of PO:

    A customer of DBBL who is the payee of a P.O will deposit it for collection. The instrument is given to the clearing that will place it to the issuing bank in the clearinghouse. Before placement, DBBL as a collecting bank gives necessary endorsement.

    Special Caution must be taken for the following customers:

    In the name of Individual The client has to fill up an account opening form. Terms and conditions are printed on the back of the form. The form contains the declaration clause, special instructions etc.
    In Joint Name In this type, the formality is same as individual account, but in the special instruction clause, either ‘survivor’ or ‘former’ clause is marked.
    Proprietorship In addition, the customer has to submit the valid Trade License and Tax Paying Identification Number (TIN) along with the application.
    Partnership Firm . A copy of notarized partnership deed certified by all the partners or Registered partnership deed.

    . Resolution of the partners regarding account opening.

    . Photographs attested of those who will operate.

    . Trade license.

    . Mandate as to operation of the account.
    Public Limited Company . Certificate of Incorporation.

    . Copy of Memorandum and Articles of Association duly certified by the Register of Joint Stock Companies.

    . Certificate of Commencement.

    . Form XII and schedule X – duly certified by the Register of Joint Stock Companies.

    .Copy of Resolution of the Board of Directors.
    Private Limited Company . Certificate of Commencement is not necessary.

    . Certificate of Incorporation.

    . Copy of Memorandum and Articles of Association.

    . Resolution of the Board of Directors.

    4.3 Bill Collection and Clearing Section:

    Customers do pay and receive bill from their counter party as a result of transaction. DBBL collects the bills on behalf of their customers. Collection mechanisms in DBBL are clearing, Outward Bills for Collection (OBC), Inward Bills for Collection (IBC).

    4.3.1 Clearing:

    When the bill is within the range of the clearinghouse it is sent for collection through clearing section. As far as safety is concerned customers get crossed cheque for the transaction. Crossed check can’t be encashed from the counter; rather it has to be collected through banking channel in clearing. If a client of DBBL received a check of another bank that is located within the clearing range and deposits the instrument in his account at DBBL, then DBBL will collect the money through clearing house. After receiving the check, DBBL will credit client account. However, the amount is credited in the customer a/c but he will not get the money until the check is honored.

    4.3.2 Procedures for Collection:

    4.3.3 Functions in the Clearing House:

    4.3.4 Accounts and ATM Section:

    (i) ATM Card:

    An account holder gets a NEXUS Debit card at free of cost after opening account. It takes usually three weeks to prepare the card and sends him by mail.

    (ii) PIN mailer of ATM Card delivery:

    After opening account an inactive ATM card is sent to customer within two or three weeks. Then account holder come to the branch with card and fill up the form for requesting activation of ATM card. A secret PIN number is delivered to the account holder. Concern officer verifies the signature and photo of account holder. ATM Card will be activated within one week and user can use it.

    (iii) Term Deposits:

    The fixed deposit account is repayable after the expiry of a predetermined period fixed by the customer himself. The period varies from three months to three years. The customer may open his /her account for different time periods, which may be for three months, six months, one year, two years and three years.

    (a) General Characteristics:

    (b) Fixed Deposit:

    Fixed deposit is one, which is repayable after the expiry of a predetermined period fixed by him. The period varies form 3 months to 1 year. These deposits are not repayable on demand but they are withdrawal subject to a period of notice. Hence, it is popularly known as ‘Time Deposit’ or ‘Time Liabilities”. Normally the money on a fixed deposit is not repayable before the expiry of a fixed period.

    The depositor has to fill an application form. In case of a deposit in joint name, DBBL also takes the instructions regarding payment of money on maturity of the deposit. The banker also takes the specimen signatures of the depositors. Necessary entries are given on the FDR registerand online. An FDR is then issued to the depositor acknowledging receipt of the sum of money mentioned thereby. It also contains the rate of interest & the date on which the deposit will mature.

    Chapter 05

    5. Loan and Advances

    5.1 Introduction:

    Making advances is the primary function of a bank. A major portion of its funds is used for this purpose and this is also the major source of bank’s income.

    Loans are the right to receive payment or an obligation to make payment on demand or at some future time on account of the immediate transfer of goods (securities).

    Loans are the largest asset items, which generally account for half to almost three-quarters of the total value of all bank assets. A bank’s loan account typically is broken down into several groups of similar type loans. The Loan and Advances made by the DBBL can broadly be classified by following categories:

     

    " 143,"

    Grameenphone Limited

    ","

    Grameenphone Limited

    Company at a Glance

    Type : Limited

    Founded : 1997

    Headquarters : Celebration Point, Road # 113 A, Plot 3 & 5,

    Gulshan, Dhaka, Bangladesh

    Key people : Anders Jensen, CEO

    Industry : Telecommunication

    Products : Telephony

    Revenue : 700Million USD<href=”#_note-0″ title=””>[

    Net income : ? 6,403.8 Million Taka

    Parent : Telenor ASA

    Employees : 5052

    Slogan : We are here to help

    Website : http://www.grameenphone.com/

    About The Company

    Grameenphone (Bengali: ??????????) is a GSM-based cellular operator in Bangladesh. Grameenphone started operations on March 26, 1997. It is partly owned by Telenor (62%) and Grameen Telecom (38%).

    Grameenphone is the largest mobile phone company in Bangladesh with 16.48 million customers as of December, 2007.[5] It is also one the fastest growing cellular telephone network in Bangladesh.

    At the end of 2005, it had about 3500 base stations around the country with plans to add about 500 in the following six months. Grameenphone’s stated goal is to provide cost-effective and quality cellular services in Bangladesh.

    On the 16th of November, 2006 GP formally changed its logo to match its parent company Telenor’s logo. According to GP the new logo symbolizes trust, reliability, quality and constant progress.

    The name Grameenphone was kept as part of the new identity because the name Grameenphone carries with it all of the heritage, success and values of the companies past, added the then CEO of Grameenphone Erik Aas.

    Products Offered

    Grameenphone offers subscription in two categories, Prepaid Subscription and Postpaid Subscription.

    Prepaid subscriptions are sub-divided into three plans:

    smile (mobile to mobile connectivity within Bangladesh),

    smile PSTN (nationwide and international mobile and land line connectivity)

    djuice (a youth based mobile to mobile connectivity within Bangladesh).

    Postpaid subscription are sub-divided into two plans:

    xplore Package 1 (nationwide and international mobile and landline connectivity)

    xplore Package 2 (nationwide and international mobile and landline connectivity)

    Grameenphone also offers different value-added services including SMS, MMS, Welcome Tunes (Ringback Tones), Voice SMS, SMS Push-Pull Service, Voice Mail Service (VMS), and Fax and Data among others. Grameenphone was the first mobile operator in Bangladesh to offer EDGE services to its subscribers.

    History

    The idea of providing wider mobile phone access to rural areas was originally conceived by Iqbal Quadir, who is currently the founding director of the Program in Developmental Entrepreneurship at MIT. He was inspired by the Grameen Bank micro-credit model and envisioned a business model where a cell phone can serve as a source of income. After leaving his job as an investment banker in the United States, Quadir traveled back to Bangladesh, after meeting and successfully raising money from New York based investor and philanthropist Joshua Mailman, and worked for three years gaining support from various organizations including Nobel Peace Prize laureate Muhammad Yunus of Grameen Bank and the Norwegian telephone company, Telenor. He was finally successful in forming a consortium with Telenor and Grameen Bank to establish Grameenphone. Quadir remained a shareholder of Grameenphone until 2004.

    Grameenphone received a license for cellular phone operation in Bangladesh from the Ministry of Posts and Telecommunications on November 28, 1996. Grameenphone started operations on March 26, 1997, the Independence Day in Bangladesh.

    Grameenphone originally offered a mobile-to-mobile connectivity (widely known as GP-GP connection), which created a lot of enthusiasm among the users. It became the first operator to reach the million subscriber milestone as well as ten million subscriber milestone in Bangladesh.

    Special Event

    GP faces license cancellation threat
    BTRC accuses it of violating terms of agreement, gives 30 days to the mobile leader to defend itself. Bangladesh, Thursday, January 31, 2007

    Bangladesh Telecommunication Regulatory Commission (BTRC) yesterday sought explanation from the country’s largest telecom company Garmeenphone (GP) as to why its license should not be cancelled or suspended on charges of violating the terms of its license agreement.

    According to the telecom watchdog show cause notice, Grameenphone will have to respond within the next 30 days, otherwise BTRC might cancel or suspend the leading telecom operator’s activities.

    BTRC Chairman Maj Gen (retd) Manzurul Alam confirmed the issuance of the notice.

    Talking to The Daily Star a GP spokesperson said, “Yes, we have received the notice. We are fully cooperating with the authority in this regard. We will also response accordingly.”

    GP’s involvement in illegal VoIP (voice over internet protocol)

    The telecom watchdog issued the notice following a recent revelation by it of GP’s involvement in illegal VoIP (voice over internet protocol) operation and illegal international call termination.

    BTRC filed a case against 10 former and in service high officials of GP including two former CEOs Erik Aas and Ola Ree, accusing them of being involved in the illegal activities.

    Grameenphone, AccessTel, a local internet service provider, and Malaysia-based international call carrier DiGi Telecommunications are also accused in the case.

    BTRC filed the case with Gulshan police station on January 16.

    According to the first information report (FIR), the implicated former GP officials are ex-CEOs of the company Erik Aas and Ola Ree, former technical director Thor Randhaug, former chief technical officer Yogesh Sanjeev Malik, and former sales and marketing director Mehboob Chowdhury.

    The in service accused GP officials are Khalid Hasan, director of regulatory and corporate affairs, Md Shafiqul Islam, chief technical officer, Kafil HS Muyeed, director of new business, Md Arif Al Islam, director of finance, and Espen Wiig Warendroph, head of revenue assurance.

    The January 16 case was a follow-up of an 8-day long Rapid Action Battalion (Rab) raid, which started on December 6, 2007, on the GP head office in Gulshan of the capital. The raid recovered a large number of illegal VoIP equipment.

    During the raid Rab officials claimed that they had evidence of GP providing VoIP equipment to AccessTel to run an illegal call termination business. The law enforcers found four circuits of E1 technology that connected the GP lines with AccessTel’s.

    DiGi Telecommunications was accused as it has a bilateral deal with GP to terminate the latter’s international calls. Norway-based Telenor, the major stakeholder of Grameenphone, is also a shareholder of Digi Telecommunications.

    BTRC sources said GP terminated international calls through DiGi Tel. GP’s earnings from international calls are deposited in Webstein Bank in Singapore. But a considerable amount of the money might have been siphoned off from the bank instead of its dispatch to Bangladesh, apprehends BTRC.

    " 144,"

    GrameenPhone Oligopoly in Bangladesh

    ","

    View With Charts And Images  

    Introduction

    In terns of competitiveness, the spectrum of market
    structures reaches from pure competition, to monopolistic competition, to
    oligopoly to pure monopoly. We now direct our attention oligopoly, a market
    dominated by a few large producers of a homogeneous or differentiated product.
    Because of  their “ fewness oligopolists
    have considerable control over their price. but each must consider the possible
    reaction of rivals to its own pricing output and advertising.

    Barriers to entry such as scar econonies control of patents
    on strategic resources, or the ability to engage in retaliatory pricing
    characterize oligopolies. oligopolies may result from internal growth of firms,
    mergers, or both oligopolies are mutually interdependent in their priaing
    policies; collusion enhances oligopoly profits; and there is a temptation for
    oligopolies to cheat on a collusive agreement

    to under stand properly the oligopoly market structure, My
    report goes on Grameen phone which is very popular as oligopoly market in Bangladesh.

    To gain further insight into oligopolistic pricing and output
    behavior, we will examine three distinct pricing models.

    In the kin ked- demand theory of oligopoly, Grameenphone price is relatively
    in flexible because the firm contemplating price change that its rivals will
    follow a price cit and ignore a price increase.

    According to cartels, grameen phone limits and set a common
    price to maximize the joint profit of their members as if each were a unit of a
    single pure monopoly. According to price leadership model, GrameenPhone match
    any price change initiated by a designated firm without engaging in agreements
    and secret meetings. At last I hope that this report will be able to focus on
    the grameenphone’s marketing strategy as oligopoly market in Bangladesh.

    Background:

    The study goes on Grameen Phone as oligopoly market in Bangladesh.
    Grameen Phone was offered a celluar license in Bangladesh by the ministry of
    posts and telecommunication in November, 28, 1996. It launched its service on
    the independent day of Bangladesh
    in march, 26, 1997. After eight years of operation, Grameen phone has more than
    6 million subscribers as of March 2006.

    Grameen
    Telecom

    Grameen Telecom, which owns 38% of the shares of
    GrameenPhone, is a not-for-profit company and works in close collaboration with
    Grameen Bank. The internationally reputed bank for the poor, has the most
    extensive rural banking network and expertise in microfinance. Grameen Telecom,
    with the help of Grameen Bank, administers the Village Phone Program, through
    which GrameenPhone provides its services to the fast growing rural customers.
    Grameen Telecom trains the operators, supplies them with handsets and handles
    all service-related issues.

    Shareholders of
    GrameenPhone

    The
    shareholders of GrameenPhone contribute their unique, in-depth experience in
    both telecommunications and development. The international shareholder brings
    technological and business management expertise while the local shareholder
    provides a presence throughout Bangladesh
    and a deep understanding of its economy. Both are dedicated to Bangladesh and
    its struggle for economic progress and have a deep commitment to GrameenPhone
    and its mission to provide affordable telephony to the entire population of Bangladesh.

    Telenor
    Mobile Communications AS

    Telenor
    AS is the leading
    Telecommunications Company of Norway
    listed in the Oslo
    and NASDAQ Stock Exchanges. It owns 62% shares of GrameenPhone Ltd. Telenor has
    played a pioneering role in development of cellular communications. It has
    substantial international operations in mobile telephony, satellite operations
    and pay Television services. In addition to Norway and Bangladesh, Telenor owns
    GSM companies in Denmark, Austria, Hungary, Russia, Ukraine, Montenegro,
    Thailand and Malaysia. It has recently started a mobile phone operation in
    Pakistan.

    Telenor uses the expertise it has gained in its home and international markets
    for the development of emerging markets like Bangladesh.

    Grameen
    Telecom’s objectives are to provide easy access to GSM cellular services in
    rural Bangladesh, creating new opportunities for income generation through
    self- employment by providing villagers with access to modern information and
    communication based technologies.

    Objectives

    Broad Objective : Study
    on Grameen phone as oligopoly market in 

    Bangladesh.

    *
    Dealing with customer.

    *
    Non- Price competition.

    *
    Non profit Activities.

    *
    Their market strategy.

    Methodology

    To prepare this report on grameen phone, I have used here the
    secondary data and information from the grameen phone’s own website. I have
    also visited the corporate offices, customer care center to collect the
    necessary data, information. I focused open group discussion and observations
    from different categories of respondents. No separate sampling was done to
    under stand oligopoly market.

    Findings

    The Technology

    GrameenPhone’s Global System for Mobile or GSM
    technology is the most widely accepted digital system in the world, currently
    used by over 300 million people in 150 countries. GSM brings the most advanced
    developments in cellular technology at a reasonable cost by spurring severe
    competition among manufacturers and driving down the cost of equipment. Thus
    consumers get the best for the least.

    The Service

    GrameenPhone believes in service, a service that
    leads to good business and good development. Telephony helps people work
    together, raising their productivity. This gain in productivity is development,
    which in turn enables them to afford a telephone service, generating a good
    business. Thus development and business go together.

    The Purpose

    GrameenPhone has a dual purpose: to receive an
    economic return on its investments and to contribute to the economic
    development of Bangladesh where telecommunications can play a critical role.
    This is why GrameenPhone, in collaboration with Grameen Bank, is aiming to
    place one phone in each village to contribute significantly to the economic
    uplift of those villages.

    The Strategy

    GrameenPhone’s basic strategy is coverage
    of both urban and rural areas. In contrast to the “island” strategy followed by
    some companies, which involves connecting isolated islands of urban coverage
    through transmission links, GrameenPhone builds continuous coverage, cell after
    cell. While the intensity of coverage may vary from area to area depending on
    market conditions, the basic strategy of cell-to-cell coverage is applied
    throughout GrameenPhone’s network.

    The Village Phone

    The
    Village Phone Program has continued its rapid growth.

    VP Program began from a social commitment made by the shareholders of GrameenPhone
    that “good development is good business”. The program is implemented
    by Grameen Telecom (GTC) in cooperation with Grameen Bank, the internationally
    renowned micro- credit lending institution.

    The program facilitates women borrowers of Grameen Bank to the GSM technology
    through the village phones. They become effectively mobile public call offices.
    This not only provides rural poor with new, exciting income-generating
    opportunities, but it also helps to enhance the social status of women from
    poor rural households.

    The VP works as an owner-operated pay phone. It allows the rural poor who
    cannot afford to become a regular subscriber, to avail of the service with
    loans from Grameen Bank. The loan usually is for BDT 12,000 and pays for a
    handset, the subscription and incidental expenses. The VP operator receives
    training from GTC about mode of operation, user charges etc.

    The average revenue per user (ARPU) of VP subscribers is double that of the
    average GP business user. The revenue growth has been significant over the
    years. Beginning with BDT 0.53 million in 1997, the figure has risen to BDT
    1,114 million in 2002 and to BDT 2,070 million at the end of 2003.

    The VPs in operation now provide access to telecommunications facilities to
    more than 60 million people living in rural areas of Bangladesh.

    One of the studies was jointly conducted by Jahangirnagar University and the
    Center for Development Research at the University of Bonn in Germany. The other
    study was conducted by the Telecommunications Development Group (TDG) of Canada
    for the Canadian International Development Agency. “The Village Phone
    Program yields significant positive social and economic impacts, including
    relatively large consumer surplus and immeasurable quality of life benefits,
    The consumer surplus from a single phone call to Dhaka,
    a call that replaces the physical trip to the city, ranges from 264 percent to
    9.8 percent of the mean monthly household income. The cost of a trip to the
    city ranges from 2 to 8 times the cost of a single phone call, meaning real
    savings for poor rural people of between BDT 132 to BUT 490 (USD 2.70 to USD
    10) for individual calls,” noted the TDG multi-media case study on the
    Village Phone Program.”

    Limitation

    ·
    This
    report has to prepared within vary short time. For which much more data and
    information were not possible to collect.

    ·
    For
    want of financial assistance, I could not go physically to Grameen phone
    offices for data collection.

    ·
    Depending
    on the website information, I had not got any financial in formation and data.

    There was no other source of data and information regarding
    Grameen phone except its own website.

    Conclusion

    By bringing electronic connectivity to rural Bangladesh,
    GrameenPhone is delivering the digital revolution to the doorsteps of the poor
    and unconnected. By being able to connect to urban areas or even to foreign
    countries, a whole new world of opportunity is opening up for the villagers in
    Bangladesh. Grameen Bank borrowers who provide the services are uplifting
    themselves economically through a new means of income generation while at the
    same time providing valuable phone service to their fellow villagers. The
    telephone is a weapon against poverty.

    * Grameen phone has created the digital
    regulation in the field of telecommunication. This revolutionary success
    should  be strengthened further and
    sustainable development of people of Bangladesh In this connection. I have some
    recommendation as below:-

    * To increase network coverage upto
    interior area.

    * To bring the all people of urban and
    rural areas under Grameen phone.

    * To decrease call charges or other
    bonous of benefit in any manner may be given to the existing customers. So that
    they can more use this phone.

    * To popularize the GP to the rural
    people, advertise and publicity program
    may be initiated.

    * Rural people who use GP may be given T
    & T connection. So that they can communicate nationally and
    internationally.

    * The old users of urban areas may be
    given T & T facilities gradually to more popularize G. P.

    * To set up international network
    coverage to bring GP international boundary.

    * Lastly in the competitive market to
    retain the customer, GP has to employ efficient man power, equipment increase
    customer care center and Marketing strategy should be followed. 


    " 145,"

    GREEN HOUSE 2

    ","
    Introduction:
    The greenhouse effect is created by the ability of the atmosphere to be selective in its response to radiation .It is transparent to high energy, shortwave radiation , such as form the sun, but partially opaque to the lower energy ,long wave radiation  emanating from the earth surface .The green house effect , first discovered y Joseph Fourier in 1824 and first investigated quantitavely by Svante arrhenius in1896, is the process by which an atmosphere warms a planet .The name is form the similar effect which greenhouses utilize in order to facilitate plant growth. The term greenhouse effect refers broadly to the partial trapping by the atmosphere of radiation from the earth surface, ladling to a earth surface temperature that is larger than would be the case without the atmosphere.

    Greenhouse effect:
    The greenhouse effect is the rise in temperature that the Earth experiences because certain gases in the atmosphere (water vapor, carbon dioxide, nitrous oxide, and methane, for example) trap energy from the sun. Without these gases, heat would escape back into space and Earth’s average temperature would be about 60ºF colder. Because of how they warm our world, these gases are referred to as greenhouse gases.

    The greenhouse effect is the process in which the emission of infrared radiation by the atmosphere warms a planet’s surface.

    The greenhouse effect is important. Without the greenhouse effect, the Earth would not be warm enough for humans to live. But if the greenhouse effect becomes stronger, it could make the Earth warmer than usual. Even a little extra warming may cause problems
    for humans, plants, and animals.
    The name comes from an incorrect analogy with the warming of air inside a greenhouse compared to the air outside the greenhouse.
    The greenhouse effect was discovered by Joseph Fourier in 1824 and first investigated quantitatively by Svante Arrhenius in 1896.

    The Earth’s average surface temperature of 14 °C (57 °F) would otherwise be about -19 °C (-2.2 °F) in the absence of the greenhouse effect. Global warming, a recent warming of the Earth’s lower atmosphere, is believed to be the result of an enhanced greenhouse effect due to increased concentrations of greenhouse gases in the atmosphere.

    Objectives:

     Basic mechanism
    Solar radiation at top of atmosphere and at Earth’s surface.
    Pattern of absorption bands generated by various greenhouse gases and their impact on both solar radiation and up going thermal radiation from the Earth’s surface. Note that a greater quantity of up going radiation is absorbed, which contributes to the greenhouse effect.

    The Earth receives energy from the Sun in the form of radiation. Most of the energy is in visible wavelengths and in infrared wavelengths that are near the visible range (often called “near infrared”). The Earth reflects about 30% of the incoming solar radiation. The remaining 70% is absorbed, warming the land, atmosphere and ocean.

    For the Earth’s temperature to be in steady state so that the Earth does not rapidly heat or cool, this absorbed solar radiation must be very closely balanced by energy radiated back to space in the infrared wavelengths. Since the intensity of infrared radiation increases with increasing temperature, one can think of the Earth’s temperature as being determined by the infrared flux needed to balance the absorbed solar flux. The visible solar radiation mostly heats the surface, not the atmosphere, whereas most of the infrared radiation escaping to space is emitted from the upper atmosphere, not the surface. The infrared photons emitted by the surface are mostly absorbed in the atmosphere by greenhouse gases and clouds and do not escape directly to space.

    The reason this warms the surface is most easily understood by starting with a simplified model of a purely radioactive greenhouse effect that ignores energy transfer in the atmosphere by convection (sensible heat transport) and by the evaporation and condensation of water vapor (latent heat transport). In this purely radioactive case, one can think of the atmosphere as emitting infrared radiation both upwards and downwards. The upward infrared flux emitted by the surface must balance not only the absorbed solar flux but also this downward infrared flux emitted by the atmosphere. The surface temperature will rise until it generates thermal radiation equivalent to the sum of the incoming solar and infrared radiation.

    A more realistic picture taking into account the convective and latent heat fluxes is somewhat more complex. But the following simple model captures the essence. The starting point is to note that the opacity of the atmosphere to infrared radiation determines the height in the atmosphere from which most of the photons are emitted into space. If the atmosphere is more opaque, the typical photon escaping to space will be emitted from higher in the atmosphere, because one then has to go to higher altitudes to see out to space in the infrared. Since the emission of infrared radiation is a function of temperature, it is the temperature of the atmosphere at this emission level that is effectively determined by the requirement that the emitted flux balance the absorbed solar flux.

    But the temperature of the atmosphere generally decreases with height above the surface, at a rate of roughly 6.5 °C per kilometer on average, until one reaches the stratosphere 10-15 km above the surface. (Most infrared photons escaping to space are emitted by the troposphere, the region bounded by the surface and the stratosphere, so we can ignore the stratosphere in this simple picture.) A very simple model, but one that proves to be remarkably useful, involves the assumption that this temperature profile is simply fixed, by the non-radioactive energy fluxes. Given the temperature at the emission level of the infrared flux escaping to space, one then computes the surface temperature by increasing temperature at the rate of 6.5 °C per kilometer, the environmental lapse rate, until one reaches the surface. The more opaque the atmosphere, and the higher the emission level of the escaping infrared radiation, the warmer the surface, since one then needs to follow this lapse rate over a larger distance in the vertical. While less intuitive than the purely radioactive greenhouse effect, this less familiar radioactive-convective picture is the starting point for most discussions of the greenhouse effect in the climate modeling literature.

    The term “greenhouse effect” is a source of confusion in that actual greenhouses do not warm by this mechanism (see section Real greenhouses). Popular discussions often imply incorrectly that they do; this error is sometimes made even in materials from scientific or governmental agencies (e.g., the U.S. Environmental Protection Agency [3]).

    Greenhouse gases
    Quantum mechanics provides the basis for computing the interactions between molecules and radiation. Most of this interaction occurs when the frequency of the radiation closely matches that of the spectral lines of the molecule, determined by the quantization of the modes of vibration and rotation of the molecule. (The electronic excitations are generally not relevant for infrared radiation, as they require energy larger than that in an infrared photon.)

    The width of a spectral line is an important element in understanding its importance for the absorption of radiation. In the Earth’s atmosphere these spectral widths are primarily determined by “pressure broadening”, which is the distortion of the spectrum due to the collision with another molecule. Most of the infrared absorption in the atmosphere can be thought of as occurring while two molecules are colliding. The absorption due to a photon interacting with a lone molecule is relatively small. This three-body aspect of the problem, one photon and two molecules, makes direct quantum mechanical computation for molecules of interest more challenging. Careful laboratory spectroscopic measurements, rather than a initial quantum mechanical computations, provide the basis for most of the radiative transfer calculations used in studies of the atmosphere.

    The molecules/atoms that constitute the bulk of the atmosphere: oxygen (O2), nitrogen (N2) and argon (Ar); do not interact with infrared radiation significantly. While the oxygen and nitrogen molecules can vibrate, because of their symmetry these vibrations do not create any transient charge separation. Without such a transient dipole moment, they can neither absorb nor emit infrared radiation. In the Earth’s atmosphere, the dominant infrared absorbing gases are water vapor, carbon dioxide, and ozone (O3). The same molecules are also the dominant infrared emitting molecules. CO2 and O3 have “floppy” vibration motions whose quantum states can be excited by collisions at energies encountered in the atmosphere. For example, carbon dioxide is a linear molecule, but it has an important vibration mode in which the molecule bends with the carbon in the middle moving one way and the oxygen’s on the ends moving the other way, creating some charge separation, a dipole moment, thus carbon dioxide molecules can absorb IR radiation. Collisions will immediately transfer this energy to heating the surrounding gas. On the other hand, other CO2 molecules will be vibration ally excited by collisions. Roughly 5% of CO2 molecules are vibration ally excited at room temperature and it is this 5% that radiates. A substantial part of the greenhouse effect due to carbon dioxide exists because this vibration is easily excited by infrared radiation. CO2 has two other vibration modes. The symmetric stretch does not radiate, and the asymmetric stretch is at too high a frequency to be effectively excited by atmospheric temperature collisions, although it does contribute to absorption of IR radiation. The vibrations modes of water are at too high energies to effectively radiate, but do absorb higher frequency IR radiation. Water vapor has a bent shape. It has a permanent dipole moment (the O atom end is electron rich, and the H atoms electron poor) which means that IR light can be emitted and absorbed during rotational transitions, and these transitions can also be produced by collision energy transfer. Clouds are also very important infrared absorbers. Therefore, water has multiple effects on infrared radiation, through its vapor phase and through its condensed phases. Other absorbers of significance include methane, nitrous oxide and the chlorofluorocarbons.

    Discussion of the relative importance of different infrared absorbers is confused by the overlap between the spectral lines due to different gases, widened by pressure broadening. As a result, the absorption due to one gas cannot be thought of as independent of the presence of other gases. One convenient approach is to remove the chosen constituent, leaving all other absorbers, and the temperatures, untouched, and monitoring the infrared radiation escaping to space. The reduction in infrared absorption is then a measure of the importance of that constituent. More precisely, define the greenhouse effect (GE) to be the difference between the infrared radiation that the surface would radiate to space if there were no atmosphere and the actual infrared radiation escaping to space. Then compute the percentage reduction in GE when a constituent is removed. The table below is computed by this method, using a particular 1-dimensional model of the atmosphere. More recent 3D computations lead to similar results. Gas removed   percent reduction in GE
    H2O    36%
    CO2    9%
    O3       3%

    By this particular measure, water vapor can be thought of as providing 36% of the greenhouse effect, and carbon dioxide 9%, but the effect of removal of both of these constituents will be greater than the total that each reduces the effect, in this case more than 45%. An additional proviso is that these numbers are computed holding the cloud distribution fixed. But removing water vapor from the atmosphere while holding clouds fixed is not likely to be physically relevant. In addition, the effects of a given gas are typically nonlinear in the amount of that gas, since the absorption by the gas at one level in the atmosphere can remove photons that would otherwise interact with the gas at another altitude. The kinds of estimates presented in the table, while often encountered in the controversies surrounding global warming, must be treated with caution. Different estimates found in different sources typically result from different definitions and do not reflect uncertainties in the underlying radiative transfer.

    Positive feedback, runaway greenhouse effect and tipping point
    The Tipping point in global warming is the point at which change due to human activity brings about sufficient new processes in nature to make any human reversal of the change impossible. Some climate scientists believe this will be reached in about 2017 while others, notably James Hansen, NASA’s top climate scientist, believe it has already been reached.

    When there is a loop of effects such as the concentration of a greenhouse gas itself being a function of temperature, there is a feedback. If the effect is to act in the same direction on temperature it is a positive feedback; and if in the opposite direction it is a negative feedback. Sometimes feedback effects can be on the same cause as the forcing but it can also be via another greenhouse gas or on other effects such as change in ice cover affecting the planet’s Aledo.

    Positive feedbacks do not have to lead to a runaway effect. With radiation from the Earth increasing in proportion to the fourth power of temperature, the feedback effect has to be very strong to cause a runaway effect. An increase in temperature from greenhouse gases leading to increased water vapor which is a greenhouse gas causing further warming is a positive feedback. This cannot be a runaway effect or the runaway effect would have occurred long ago. Positive feedback effects are common and can always exist while runaway effects are much rarer and cannot be operating at all times.

    If the effects from the second iteration of the loop of effects is larger than the effects of the first iteration of the loop this will lead to a self perpetuating effect. If this occurs and the feedback only ends after producing a major temperature increase, it is called a runaway greenhouse effect. A runaway feedback could also occur in the opposite direction leading to an ice age. Runaway feedbacks are bound to stop, since infinite temperatures are not observed. They are allowed to stop due to things like a reducing supply of a greenhouse gas or a phase change of the gas or ice cover reducing towards zero or increasing toward a large size that is difficult to increase.

    According to the castrate gun hypothesis a runaway greenhouse effect could be caused by liberation of methane gas from hydrates by global warming if there are sufficient hydrates close to unstable conditions. It has been speculated that the Permian-Triassic extinction event was caused by such a runaway effect. It is also thought that large quantities of methane could be released from the Siberian tundra as it begins to thaw, methane being 21-times more potent a greenhouse gas than carbon dioxide.
    A runaway greenhouse effect involving CO2 and water vapor may have occurred on Venus due to its closer proximity to the sun. On Venus today there is little water vapor in the atmosphere. If water vapor did contribute to the warmth of Venus at one time, this water is thought to have escaped to space. Venus is sufficiently strongly heated by the Sun that water vapor can rise much higher in the atmosphere and is split into hydrogen and oxygen by ultraviolet light. The hydrogen can then escape from the atmosphere and the oxygen recombines. Carbon dioxide, the dominant greenhouse gas in the current Venusians atmosphere, likely owes its larger concentration to the weakness of carbon recycling as compared to Earth, where the carbon dioxide emitted from volcanoes is efficiently sub ducted into the Earth by plate tectonics on geologic time scales.
    Even so, the high temperatures on Venus are only partially caused by carbon dioxide; a major contributor is the thick bank of clouds containing sulphuric acid.Although these clouds give Venus a high reflectivity in the visible region, the Galileo probe showed that the clouds appear black at infrared wavelengths of 2.3 microns due to strong infrared absorption.

    Anthropogenic greenhouse effect
    CO2 production from increased industrial activity (fossil fuel burning) and other human activities such as cement production and tropical deforestation has increased the CO2 concentrations in the atmosphere. Measurements of carbon dioxide amounts from Mauna Loa observatory show that CO2 has increased from about 313 ppm (parts per million) in 1960 to about 375 ppm in 2005. The current observed amount of CO2 exceeds the geological record of CO2 maxima (~300 ppm) from ice core data.
    Because it is a greenhouse gas, elevated CO2 levels will increase global mean temperature; based on an extensive review of the scientific literature, the Intergovernmental Panel on Climate Change concludes that “most of the observed increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations
    Over the past 800,000 years,[ice core data shows unambiguously that carbon dioxide has varied from values as low as 180 parts per million (ppm) to the pre-industrial level of 270ppm.[16] Certain pale climatologists consider variations in carbon dioxide to be a fundamental factor in controlling climate variations over this time scale.

    Real greenhouses
    The term ‘greenhouse effect’ originally came from the greenhouses used for gardening, but it is a misnomer since greenhouses operate differently. A greenhouse is built of glass. It heats up mainly because the sun warms the ground inside it and this warms the air in the greenhouse. The air continues to heat because it is confined within the greenhouse, unlike the environment outside the greenhouse where warm air near the surface rises and mixes with cooler air aloft. This can be demonstrated by opening a small window near the roof of a greenhouse: the temperature will drop considerably. It has also been demonstrated experimentally (Wood, 1909): a “greenhouse” built of rock salt (which is transparent to infrared radiation) heats up just as one built of glass does. Greenhouses thus work primarily by preventing convection; the atmospheric greenhouse effect however reduces radiation loss, not convection It is quite common, however, to find sources that make the erroneous “greenhouse” analogy Although the primary mechanism for warming greenhouses is the prevention of mixing with the free atmosphere, the radiative properties of the glazing can still be important to commercial growers. With the modern development of new plastic surfaces and glazing for greenhouses, this has permitted construction of greenhouses which selectively control radiation transmittance in order to better control the growing environment.

    See an animation of how enhancing the greenhouse effect likely contributes to global warming. (Macromedia Flash Version 5 or higher plug-in required)
    Every year from 1998 through 2006 ranks among the top 25 warmest years on record for the United States, an unprecedented occurrence, according to NOAA.

    Consequence: drought and wildfire
    Warmer temperatures could also increase the probability of drought. Greater evaporation, particularly during summer and fall, could exacerbate drought conditions and increase the risk of wildfires.

    Warning signs today

    Greater evaporation as a result of global warming
    Could increase the risk of wildfires.

    The 1999-2002 national droughts was one of the three most extensive droughts in the last 40 years

    Warming may have lead to the increased drought frequency that the West has experienced over the last 30 years.

    The 2006 wild land fire season set new records in both the number of reported fires as well as acres burned. Close to 100,000 fires were reported and nearly 10 million acres burned, 125 percent above the 10-year average.

    If warming continues to exacerbate wildfire seasons, it could be costly. Fire-fighting expenditures have consistently totaled upwards of $1 billion per year.

    Consequence: more intense rainstorms
    Warmer temperatures increase the energy of the climatic system and lead to more intense rainfall at times in some areas.

    Warning signs today

    National annual precipitation has increased between 5 and 10 percent since the early 20th century, largely the result of heavy downpours in some areas.

    The IPCC reports that intense rain events have increased in frequency during the last 50 years, and human-induced global warming more likely than not contributed to the trend.

    According to NOAA statistics, the Northeast region had its wettest summer on record in 2006, exceeding the previous record by more than 1 inch.

    HEALTH EFFECTS
    More frequent and more intensive heat waves could result in more heat-related deaths. Photo: Gary Braasch, Chicago, July 1995. See the World View of Global Warming website for more Gary Braasch photos illustrating the consequences of the changing climate.

    Consequence: deadly heat waves and the spread of disease
    More frequent and more intensive heat waves could result in more heat-related deaths. These conditions could also aggravate local air quality problems, already afflicting more than 80 million Americans. Global warming is expected to increase the potential geographic range and virulence of tropical diseases as well.

    Warning signs today

    In 2003, extreme heat waves claimed an estimated 35,000 lives in Europe. In France alone, nearly 15,000 people died due to soaring temperatures, which reached as high as 104 degrees Fahrenheit and remained extreme for two weeks.

    Much of North America experienced a severe heat wave in July 2006, which contributed to the deaths of at least 225 people.

    Studies have found that a higher level of carbon dioxide spurs an increase in the growth of weeds whose pollen triggers allergies and exacerbates asthma.

    Disease-carrying mosquitoes are spreading as climate shifts allow them to survive in formerly inhospitable areas. Mosquitoes that can carry dengue fever viruses were previously limited to elevations of 3,300 feet but recently appeared at 7,200 feet in the Andes Mountains of Colombia. Malaria has been detected in new higher-elevation areas in Indonesia.

    WARMING WATER
    Consequence: more powerful and dangerous hurricanes
    Warmer water in the oceans pumps more energy into tropical storms, making them more intense and potentially more destructive.

    Warning signs today

    The number of category 4 and 5 storms has greatly increased over the past 35 years, along with ocean temperature.
    The 2005 Atlantic hurricane season was the most active Atlantic hurricane season in recorded history, with a record 27 named storms, of which 15 became hurricanes. Seven of the hurricanes strengthened into major storms, five became Category 4 hurricanes and a record four reached Category 5 strength.
    Hurricane Katrina of August 2005 was the costliest and one of the deadliest hurricanes in U.S. history.

    Consequence: melting glaciers, early ice thaw
    Rising global temperatures will speed the melting of glaciers and ice caps, and cause early ice thaw on rivers and lakes.

    Warning signs today

    At the current rate of retreat, all of the glaciers in Glacier National Park will be gone by 2070.

    After existing for many millennia, the northern section of the Larsen B ice shelf in Antarctica — a section larger than the state of Rhode Island — collapsed between January and March 2002, disintegrating at a rate that astonished scientists. Since 1995 the ice shelf’s area has shrunk by 40 percent.

    According to NASA, the polar ice cap is now melting at the alarming rate of nine percent per decade. Arctic ice thickness has decreased 40 percent since the 1960s.

    Arctic sea ice extent set an all-time record low in September 2007, with almost half a million square miles less ice than the previous record set in September 2005, according to the National Snow and Ice Data Center. Over the past 3 decades, more than a million square miles of perennial sea ice — an area the size of Norway, Denmark and Sweden combined –has disappeared.

    Multiple climate models indicate that sea ice will increasingly retreat as the earth warms. Scientists at the U.S. Center for Atmospheric Research predict that if the current rate of global warming continues, the Arctic could be ice-free in the summer by 2040.

    The satellite photo at far left shows the Larson B ice shelf on Jan. 31, 2002. Ice appears as solid white. Moving to the right, in photos taken Feb. 17 and Feb. 23, the ice begins to disintegrate. In the photos at far right, taken Mar. 5 and Mar 7, note water (blue) where solid ice had been, and that a portion of the shelf is drifting away. Photos: National Aeronautics and Space Administration

    Consequence: sea-level rise
    Current rates of sea-level rise are expected to increase as a result both of thermal expansion of the oceans and melting of most mountain glaciers and partial melting of the West Antarctic and Greenland ice caps. Consequences include loss of coastal wetlands and barrier islands, and a greater risk of flooding in coastal communities. Low-lying areas, such as the coastal region along the Gulf of Mexico and estuaries like the Chesapeake Bay, are especially vulnerable.

    Warning signs today

    Global sea level has already risen by four to eight inches in the past century, and the pace of sea level rise appears to be accelerating. The IPCC predicts that sea levels could rise 10 to 23 inches by 2100, but in recent years sea levels have been rising faster than the upper end of the range predicted by the IPCC.

    In the 1990s, the Greenland ice mass remained stable, but the ice sheet has increasingly declined in recent years. This melting currently contributes an estimated one-hundredth of an inch per year to global sea level rise.

    Greenland holds 10 percent of the total global ice mass; if it melts, sea levels could increase by up to 21 feet.ECOSYSTEM DISRUPTION
    Warmer temperatures may cause some ecosystems, including alpine meadows in the Rocky Mountains, to disappear.
    Consequence: ecosystem shifts and species die-off
    The increase in global temperatures is expected to disrupt ecosystems and result in loss of species diversity, as species that cannot adapt die off. The first comprehensive assessment of the extinction risk from global warming found that more than one million species could be committed to extinction by 2050 if global warming pollution is not curtailed. Some ecosystems, including alpine meadows in the Rocky Mountains, as well as tropical mundane and mangrove forests, are likely to disappear because new warmer local climates or coastal sea level rise will not support them.

    Warning signs today
    A recent study of nearly 2,000 species of plants and animals discovered movement toward the poles at an average rate of 3.8 miles per decade. Similarly, the study found species in alpine areas to be moving vertically at a rate of 20 feet per decade in the 2nd half of the 20th century.

    The latest IPCC report found that approximately 20 to 30 percent of plant and animal species assessed so far are likely to be at increased risk of extinction if global average temperature increases by more than 2.7 to 4.5 degrees Fahrenheit.

    Some polar bears are drowning because they have to swim longer distances to reach ice floes. The U. S. Geological Survey has predicted that two-thirds of the world’s polar bear sub-populations will be extinct by mid-century due to melting of the Arctic ice cap.

    In Washington’s Olympic Mountains, sub-alpine forest has invaded higher elevation alpine meadows. In Bermuda and other places, mangrove forests are being lost.

    In areas of California, shoreline sea life is shifting northward, probably in response to warmer ocean and air temperatures.

    Over the past 25 years, some penguin populations have shrunk by 33 percent in parts of Antarctica, due to declines in winter sea-ice habitat.

    The ocean will continue to become more acidic due to carbon dioxide emissions. Because of this acidification, species with hard calcium carbonate shells are vulnerable, as are coral reefs, which are vital to ocean ecosystems. Scientists predict that a 3.6 degree Fahrenheit increase in temperature would wipe out 97 percent of the world’s coral reefs.

    Responses:  Mitigating of global warming and adoption to global warming the threat of possible global warming has led to attempts to mitigate global warming, which covers all action aimed at reducing the negative effects or the likelihood of global warming.

    How to responses the green house effects:

    " 146,"

    Hazrat Amanat Shah Securities Ltd.-Human Resource Management Practices of Securities & Exchange Commission in Bangladesh

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    Human Resource Management Practices of Securities & Exchange Commission in Bangladesh

    1.1. Introduction:

    The capital market is the market of securities, where companies and the government can raise long-term funds. The capital market includes the stock and the bond market. The SEC is the capital market watch dog which regulates the capital market operation to ensure is protected against fraudulent activities.

    The capital market plays vital role in the industrialization of the required to create employment opportunities for the unemployed people and a strong capital base for the economic modernization to alleviate poverty.

    The growth of capital market largely depends on the policy decision of the Government. Capital market is the mechanism to mobilize excess liquidity of the market to form a strong capital base required for rapid industrialization. A vibrant capital market in one of the key players to strengthen the pace and process of industrialization in a developing country like Bangladesh.

    1.2. Objective of the study:

    · To make an overview of Dhaka Stock Exchange.

    · To make an overview of Hazrat Amanat Shah Securities Ltd.

    · To identify the various systems of human resource practices by HAS and DSE.

    · To investigate the functions, activities & developments of DSE.

    1.3. Methodology of the study:

    1. In preparing the report published materials, papers and documents of DSE are used. Also consultation in made with personnel belonging to Hazrat Amanat Shah Securities Ltd., Dhaka Stock Exchange Library. Security Exchange commission (SEC). Central Depository Bangladesh Limited. Also materials are obtained from websites

    2. Data finding, analysis and interpretation.

    1.4. Limitation of the Study:

    · It is very difficult to collect all the required information..

    · Many personnel of the DSE & Hazrat Amanat Shah Securities Ltd. Reluctant to provide useful information.

    · The employees are very much busy with their job. As a result, they provide me a little time consult with them.

    · For the reason of confidentiality, some useful information can’t be expressed in this report.

    Basic idea of capital market

    2.1. Definition of Capital Market:

    It is a Platform/Board/Forum, usually recognized by the concerned Regulatory Authority – Security Exchange Commission (SEC) in Bangladesh, Where shares or securities listed with the Stock Exchanges are traded by the general Public through Stock Brokers.

    However, where the debentures, debts, bonds, etc are traded that is usually called Bond market. Also, where the business/ventures futures are traded that is classified as Future market.

    Identically, where commodities are traded that is called commodities/commodity-wise (named) Market like the Metal market-London, Oil market-Singapore, Gold market-South Africa and Commodities market-Canada.

    Unfortunately, no such formal Market like Bond, Future and Commodities has/have yet been introduced/ established in Bangladesh.

    2.2. Structure of Capital market:

    Financial Markets can be categorized as those dealing with newly issued financial claims into Primary market and Secondary Market.

    Primary market: The first portion is primary market where securities issues for raise equity for respective company/organization.

    Secondary market : The market for exchange financial claims those previously issued in market and a secondary market is that in the secondary market the issuer of the asset does not receive funds from the buyers Rather the existing issue changes hands in the secondary market and the fund flow from the buyer of the asset to the seller.

    Third Market: It is one kind of OTC market where trading of share of listed on an exchange.

    Fourth Market: It is a financial market where trading occurs between two parties directly without help of intermediary.

    2.3. Capital market Instruments:

    1. Bond

    a. Bond by Coupon –

    I. Fixed rate bond.

    II. Floating rate bond.

    III. Zero coupon bond.

    IV. Inflation indexed bond.

    b. Bond by issuer –

    I. Corporate bond.

    II. Government bond.

    III. Municipal bond.

    IV. Sovereign bond.

    2. Equities (Stocks)

    a. Stock

    b. Share

    c. IPO

    d. Short Selling.

    3. Investment fund.

    a. Mutual Fund.

    b. Exchange traded fund (ETF).

    c. Close-end fund.

    d. Segregated fund.

    4. Derivatives

    a. Options.

    b. Warrants.

    c. Futures.

    d. Forward.

    e. Swaps.

    f. Credit derivatives.

    g. Hybrid securities.

    5. Structured finance.

    a. Securitization.

    b. Asset backed security.

    c. Collateralized debt obligation.

    d. Collateralized mortgage obligation.

    e. Credit linked note.

    f. Unsecured bond.

    g. Agency securities.

    2.4. Market participant in the stock market:

    Sl. Name of the participant Status

    01 Members (Broker/Dealer) Market intermediary

    02 Securities and Exchange Commission Regulator

    03 Clearing House Operator & Settlement

    04 Depositor & depository participant Operator

    05 Custodian Operator

    06 Sub broker Agent

    07 Credit rating agency Analyst

    08 Financial Institution Intermediary

    09 Foreign institutional investor Intermediary

    10 Issuers/Register and transfer agent Intermediary

    11 Exchange Authority Management Body

    12 Investor (Public/Institutional) Market maker.

    13 Market Analyst (fundamental/technical) Analyst.

    3.1. History of Dhaka Stock Exchange:

    The DSE was first incorporated as East Pakistan Stock Exchange Association Limited on April 28, 1954. However formal trading began in 1956 with 196 securities listed on the DSE with a total paid up capital of about Tk. 4 billion. On June 23, 1962 it was renamed as East Pakistan Stock Exchange Limited. After 1971, the trading activities of the stock Exchange remained suppressed until 1976 due to the liberation was and the economic policy pursued by the government. The trading activities resumed in 1976 with only 9 companies listed having a paid up capital of Tk. 137.52 Million on the stock exchange. In May 13, 1964 it was rename as Dacca Stock Exchange and in 1986 was renamed as Dhaka Stock Exchange Limited.

    3.2 History of Hazrat Amanat Shah Securities Ltd.:

    Hazrat Amanat Shah Securities Ltd. was started its business in capital market from October 22, 2009, its member no. in DSE is 173. Though it is newcomer in the capital business, but it is now one of the leading brokerage houses in Bangladesh. It has now 12 branches all over the country. About 250 employees are serving in the Hazrat Amanat Shah Securities ltd. The head office and branch of HAS is Moon Mansion, 12 Dilkusha, motijheel.

    3.3. Major events of DSE:

    · Incorporate as East Pakistan Stock Exchange

    · Association Ltd – 28 April 1954.

    · Starting formal Trading – 1956

    · Renamed as East Pakistan Stock Exchange Ltd – 23 June 1964

    · Renamed as Dacca Stock Exchange Ltd. – 13 May 1964

    · Trading Started in Bangladesh – 16 August 1976

    · Starting of DSE all share price index calculation – 16 October 1986

    · DSE all share price index calculation

    · Started on the basis of IFC design formula – 1 November 1993

    · Starting Automated Trading – 10 August 1998

    · Starting DSE 20 Index – 1 January 2001

    · Starting CDS – 24 January 2004

    · Starting Govt. Bond market – 1 January 2005

    · DSE all share price index reintroduced – 28 March 2005

    · Direct listing regulations 2006 introduced – 12 April 2006.

    3.4. Regulatory body & Support Organization:

    The Dhaka Stock Exchange is registered as Public Limited Company and its activities are regulated by its Articles of Association and own rules, regulations and by-laws long with the Securities and Exchange Ordinance, 1969 and Companies Act 1994.

    1. Regulating and Controlling Organization : The Regulating and Controlling Organization of the Capital market of Bangladesh are as follows –

    1. Policy making body:

    The Council is responsible for policy making only. It consists of 24 members by Article 74(1) as mentioned below.

    – 12 councilors are to be elected from members.

    – 12 selected by councilors.

    I. One Councilor to be nominated by the Ministry of Finance (Finance Division) and no below the rank and status of Joined Secretary.

    II. One Councilor to be nominated by the Bangladesh Securities & Exchange Commission from amongst its officers of or above the rank of general Manager.

    III. President of Institute of Chartered Accountants of Bangladesh, ex-officio.

    IV. President of FBCCI, ex-offico.

    V. President of Metropolitan Chamber of Commerce and Industry, ex-officio.

    VI. President of DCCI, ex-officio.

    VII. One Councilor to be nominated by the Ministry of Industry and no below the rank and status of Joined Secretary.

    VIII. One Councilor to be nominated by the Ministry of Commerce and no below the rank and status of Joined Secretary.

    IX. President of Supreme Court Bar Association, ex-officio.

    X. Head of Dept. of Finance/Economics, DU, ex-officio.

    Support organization: Securities & Exchange Commission

    About SEC:

    The Securities and Exchange Commission (SEC) was established on 8th June, 1993 under the Securities and Exchange Commission Act, 1993. The Chairman and Members of the Commission are appointed by the government and have overall responsibility to administer securities legislation. The Commission, at present has three full time members, excluding the Chairman. The Commission is a statutory body and attached to the Ministry of Finance.

    Missions of SEC:

    a) Protect the interests of securities investors.

    b) Develop and maintain fair, transparent and efficient securities markets.

    c) Ensure proper issuance of securities and compliance with securities laws.

    Functions of SEC:

    I. Regulating the business of the Stock Exchanges or any other securities market.

    II. Registering and regulating the business of stock-brokers, sub-brokers, share transfer agents, merchant Securities & Exchange Commissioners and managers of issues, trustee of trust deeds, registrar of an issue, underwriters, portfolio managers, investment advisers and other intermediaries in the securities market.

    III. Registering, monitoring and regulating of collective investment scheme including all forms of mutual funds.

    IV. Monitoring and regulating all authorized self regulatory organizations in the securities market.

    V. Prohibiting fraudulent and unfair trade practices relating to securities trading in any securities market.

    VI. Promoting investors’ education and providing training for intermediaries of the securities market.

    VII. Prohibiting insider trading in securities.

    VIII. Regulating the substantial acquisition of shares and take-over of companies.

    IX. Undertaking investigation and inspection, inquiries and audit of any issuer or dealer of securities, the Stock Exchanges and intermediaries and any self regulatory organization in the securities market

    X. Conducting research and publishing information.

    2. Support Organization : Central Depository Bangladesh Limited

    About CDBL:

    Central Depositor Bangladesh Limited (CDBL) was incorporated as a public limited company on 20th August 2000 to operate and maintain the Central Depository System (CDS) of Electronic Book Entry, recording and maintaining securities accounts and registering transfer of securities; changing the ownership without an physical movement or endorsement of certificates and execution of transfer instruments, as well as various other investor services including facilitation of the secondary market trading of Treasury Bills and Government Bonds issued by the Bangladesh Securities & Exchange Commission.

    Central Depository Bangladesh Limited (CDBL), a joint venture company setup by Securities & Exchange Commissions, stock exchange, Asian Development Securities & Exchange Commission and other institutions operates the Central Depository System (CDS) in Bangladesh.

    CDBL, by converting physical certificates into electronic form, will eliminate the risks of damaged, lost, forged and duplicate share certificates. The instantaneous delivery through electronic book entry will result in immediate transfer of ownership, which presently can take over a month. CDBL, in the long term, will also reduce the costs of the investing public.

    Participants of CDBL:

    · Stock brokers/dealers (members of the Dhaka and Chittagong Stock Exchanges);

    · Securities & Exchange Commissions.

    · Financial institutions;

    · Insurance companies;

    · A statutory organization;

    · Merchant Securities & Exchange Commissioners;

    · Asset managers;

    · Custodians; and

    · Other capital market intermediaries registered with the SEC.

    Category of CDBL Participants:

    a) Trading Participant : May only settle stock exchange trades and cannot maintain accounts on behalf of customers;

    b) Full Service Participant: This is a stock exchange member who may hold shares and operate accounts on behalf of customers.

    c) Custody Participant : May hold shares and operate accounts on behalf of customers but is not a stock exchange member;

    d) Settlement Agent Participant: May settle stock exchange trades on behalf of stock exchange members.

    Method of Operation of CDBL:

    · The investor opens an account with a participant or CDBL

    · Certificates are ‘ dematerialized’ by lodging them at the issuer.

    · The issuer updates the register and moves the holding to the depository portion of the register.

    · The investor sells on a stock exchange through a stockbroker and another investor buys.

    · The stock exchange advises CDBL to update its records.

    · CDBL debits the sellers account.

    · CDBL credits the buyers account.

    · Investors may dematerialize if they wish.

    3.5. Functions & Activities of Dhaka Stock Exchange:

    (I) Functions of Dhaka Stock Exchange :

    · Listing of Companies. (As per Listing Regulations).

    · Providing the screen based automated trading of listed Securities.

    · Settlement of trading. (As per Settlement of Transaction Regulations)

    · Gifting of share / granting approval to the transaction/transfer of share outside the trading system of the exchange (As per Listing Regulations 42)

    · Market Administration & Control.

    · Market Surveillance.

    · Publication of Monthly Review.

    · Monitoring the activities of listed companies. (As per Listing Regulations).

    · Investor’s grievance Cell (Disposal of complaint bye laws 1997).

    · Investors Protection Fund (As per investor protection fund Regulations 1999)

    · Announcement of Price sensitive or other information about listed companies through online.

    (II) Activities of Dhaka Stock Exchange.

    1. Clearing and Settlement :

    The Clearing and Settlement module provides the management of trade from the point of entry into the Settlement Pool trade database until it has been delivered and settled and removed from the Settlement Pool. It consists of three major business processes.

    Clearing: Participant trade reporting and affirmation, billing, assigning settlement instructions.

    Settlement: the process of overseeing that delivery of all instruments to the buyer and payment of all moneys to the seller has occurred before removing the trade from the settlement pool.

    Regulation 4 of the Settlement of Stock Exchange Transactions Regulation 1998 has been given effect time to time. A new directive was made by SEC dated on 18th March 2003 “Adjusted due position mechanism for settlement of scrip only as provided by regulation 4(1) of settlement of Stock Exchange Transaction Regulations, 1998 shall remain suspended from 19th March 2003 until further order”.

    As per Commission (SEC) decision, dated 5th December 2006, new netting settlement system has been implemented from 10th December 2006. Some of the listed instruments had been placed in non-netting group and others were in netting group. The “day netting” system was continuing for the netting instruments. Non- netting group, which is in compulsory spot market, the transactions are not netted. The transactions are settled by depositing all the shares sold and paying full amount for the shares purchased.

    Here is a complete picture of the settlement system for all of our 310 Instruments in Five (5) groups in the four (4) markets.

    A Group: Number of Instruments are 145 (123 + 8D + 14M), Here D for Debentures, M for Mutual funds & TB for Treasury Bonds (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility for scrip only through DSE Clearing House on T+1, T+3 basis). “A” and “DA” is marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading Software.

    This cycle is valid for A, B, G & N category instruments traded in Public, Block & Odd-lot market

    B Group: Number of Instruments are 33 (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). “B” and “DB” is marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software.

    G Group: Number of Instrument is 1 (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). “G” and “DG” is marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software.

    N Group: Number of Instrument is 4 (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). “N” and “DN” is marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software.

    Z Group: Number of Instruments are 93 (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+3, T+7 basis). “Z” and “DZ” is marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software.

    This cycle is valid only for Z group instruments traded in Public, Block & Odd-lot market.

    Instruments Of All Groups Traded in Spot Market:

    The above cycle is valid for A, B, G, N & Z category instruments traded in spot market.

    Instruments Of foreign Trades (DVP) of All Groups:

    The above cycle is valid for A, B, G, N & Z category instruments of foreign trade

    SETTLEMENT FOR DIFFERENT CATEGORIES INSTRUMENTS

    01) For A group Instruments:

    Market name Trade for Trade System Settlement & Settlement Period
    Public Trade for Trade* T+1 & T+3
    Spot Trade for Trade T+0 & T+1
    Odd + Block Trade for Trade T+1 & T+3

    02) For B group Instruments:

    Market name Trade for Trade System Settlement & Settlement Period
    Public Trade for Trade* T+1 & T+3
    Odd + Block Trade for Trade T+1 & T+3
    Spot (Before Book closer) Trade for Trade T+0 & T+1

    03) For G group Instruments:

    Market name Trade for Trade System Settlement & Settlement Period
    Public Trade for Trade* T+1 & T+3
    Odd + Block Trade for Trade T+1 & T+3
    Spot (Before Book closer) Trade for Trade T+0 & T+1

    04) For N group Instruments:

    Market name Trade for Trade System Settlement & Settlement Period
    Public Trade for Trade* T+1 & T+3
    Odd + Block Trade for Trade T+1 & T+3
    Spot (Before Book closer) Trade for Trade T+0 & T+1

    * As netting system for shares has withdrawn, for A, B, G & N group instrument, member will have to deposit the full shares at the DSE on T+1 after selling the shares, In case of purchasing such shares, the buyer will have to deposit the Balanced (Netted) money traded in Public, Block & Odd-lot market at the DSE on T+1.

    05) For Z group Instruments

    Market name Trade for Trade System Settlement & Settlement Period
    Public Trade for Trade* T+4 & T+7
    Odd + Block Trade for Trade T+4 & T+7
    Spot (Before Book closer) Trade for Trade T+1

    ** Under the Trade for trade settlement system, member will have to deposit the full money at the DSE on T+3 after purchasing the shares, In case of selling such shares, the seller will have to deposit the full shares at the DSE on T+3.

    3.6. Surveillance at DSE:

    The main objective of the Surveillance function of the Exchange is to promote market integrity in two ways—

    · By monitoring price and volume movements (volatility) as well as by detecting potential market abuses at a nascent stage, with a view to minimizing the ability of the market participants to influence the price of the scrip in the absence of any meaningful information.

    · By managing default risk by taking necessary actions timely.

    Market Abuse is a broad term which includes abnormal price/volume movement, artificial transactions, false or misleading impressions, insider trading, etc. In order to detect aberrant behavior/ movement, it is necessary to know the normal market behavior–

    The department carries out investigation, if necessary, based on the preliminary examination/analysis and suitable actions are taken against members involved based on the investigation.

    All the instruments traded in the market come under the Surveillance umbrella of DSE.

    Surveillance activities at the Exchange are divided broadly into two major segments:

    · Price Monitoring: Price monitoring is manly related to the price movement/ abnormal fluctuation in prices or volumes etc.

    · Position Monitoring: The position monitoring relates mainly to abnormal positions of members, etc. in order to manage default risk.

    Price Monitoring

    The functioning of the Price Monitoring is broadly divided into following activities–

    1. on line Surveillance:

    One of the most important tools of the Surveillance is the On-line Real Time Surveillance system with main objectives of detecting potential market abuses at a nascent stage to reduce the ability of the market participants to unduly influence the price and volumes of the scrips traded at the Exchange, improve the risk management system and strengthen the self regulatory mechanism at the Exchange. The system provides facility to access trades and orders of members.

    2. Off-Line Surveillance:

    The Off-Line Surveillance system comprises of the various reports based on different parameters and scrutiny thereof–

    · High/ Low Difference in prices

    · % change in prices over a week/ fortnight/ month

    · Top N scrips by Turnover over a week/ fortnight/ month

    · Top N scrips by Volume over a week/ fortnight/ month

    · Trading in infrequently traded scrips

    · Scrips hitting New High / Low etc.

    The Surveillance actions or investigations are initiated in the scrips identified from the above-stated reports.

    3. Investigations:

    Conducting in-depth investigations based on preliminary enquiries/analysis made into trading of the scrip. In case of irregularities observed, necessary actions are initiated or investigation case forwarded to SEC, if necessary through the CEO.

    Surveillance Actions:

    1. Warning to Members: The department may issue verbal/ written warning to member/s when market irregularities in the scrip are suspected.

    2. Imposition of penalty/ suspension: The department, through the CEO, imposes penalty or suspend the member/s who are involved in market irregularities, based on the input/ evidence available from investigation report.

    3. Rumor verification:

    · Liaising with Compliance Officers of companies to obtain comments of the company on various price sensitive corporate news items appearing in selected News Papers.

    · Comments received from the companies are disseminated to the market by way of online news bulletin.

    · Investigations based on rumor verifications are carried out, if required, to detect cases of suspected insider trading.

    Position Monitoring

    The Surveillance Department closely monitors outstanding exposure of members on a daily basis. For this purpose, it observes various off-line and on-line market monitoring reports. The reports are scrutinized to ascertain whether there is excessive purchase or sale position build up compared to the normal business of the member, whether there are concentrated purchases or sales, whether the purchases have been made by inactive or financially weak members and even the quality of scrips is considered to assess the quality of exposure.

    The following key areas are examined to assess the market risk involved –

    1. Online monitoring of Brokers Position: surveillance closely monitors broker’s gross turnover exposure for ensuring margin calls in time.

    2. B/S Statement of Trading Members: Scrutinizing the statement on daily basis. It is for keeping a watch on the exposure of the members & ascertains the quality of exposures.

    A detailed report on the net outstanding positions of top purchasers and top sellers in individual scrips, is prepared, if considered necessary.

    3. Concentrated B/S: It is considered a risky issue. In case, such a situation is noticed, fundamentals of the scrips, their daily turnover, and their nature of transactions are ascertained. Thereafter, based on the market risk perception appropriate surveillance actions are taken.

    4. B/S of scrips having thin trading: It is closely scrutinized as comparatively high market risk is involved in trading in such scrips. Details of trades in such scrips, if necessary, are called from members to assess the market risk involved & decide on the appropriate surveillance action.

    5. Verification of Institutional Trade: The institutional trades executed by the trading members are verified to ascertain the genuineness of trades.

    6. Verification of Foreign Trade: The foreign trades executed by the trading members are verified to ascertain the genuineness of trades.

    7. Verification of Cross Reporting Trade: The report crossing trades executed by the trading members are verified to ascertain the genuineness of trades.

    8. Verification of Dealers own trades: Trades executed by the trading members (Dealers) are verified to ascertain the genuineness of trades.

    9. Verification of Sponsor’s Trade: The Sponsors trades executed by the trading members are verified to ascertain the genuineness of trades.

    10 Snap Investigation: To carry out, wherever considered necessary, preliminary investigation of certain dealings to verify irregularities. Further actions, viz., referring the case for detailed investigation, referring the case to the Sec, depending on the findings of preliminary investigation.

    11. Market Intelligence: The rumors floating in the market are verified with the data available with DSE, Newspapers, Television news channels & Reuters to ascertain the national & global factors affecting the market sentiments. This enables the Exchange to avert market problems before it causes a serious damage.

    12. Review Block Trades:

    To determine —

    Whether the block was executed at a price, even if at a discount or premium which was in line with other trading of the stock.

    Whether there was any news on the company which caused the price increase or decrease subsequent to the block transaction.

    13. Review List of Settlement Failures: To identify —

    broker/s with frequent failures

    a particular stock with a pattern.

    14. Verify Company Accounts: To scrutinize company announcements, company reports, auditors qualifications & other notes of special interests in the published accounts of such company

    15. Review Media Information: To scrutinize press articles or other media on the daily basis, the news relevant to the share prices of companies.

    16. Monitoring on Newly Listed Stock: To review all activities of a newly listed stock for the first 1 / 2 weeks to identify any abnormal deal.

    17. Develop Good Liaison: To develop & maintain good liaison with staff members of SEC & listed companies & member firms as well.

    18. Develop market contacts & to pick up Intelligence.

    3.7. Trade segment of markets :

    1. Public market : For general trading of securities.

    2. Spot Market : For pre-book closer trading.

    3. Odd Lot market : Any transaction for odd lot.

    4. Block Market : Block market trannsaction involved trading of Tk. 0.5 milion or above

    3.8. Trading sessions:

    Trading at DSE is performed through a Non-stop platform in following sessions:

    Continuous Trading Hours : 10.00 an to 2.00 pm.

    Trading day : Sunday to Thursday.

    3.9. Listed companies by industry.

    Industry name No. of companies
    Securities & Exchange Commission 46
    Cement 8
    Ceramic 4
    Corporate bond 1
    Debenture 8
    Engineering 23
    Food & Allied 35
    Fuel & Power 9
    Insurance 34
    Investment 15
    IT 7
    Jute 4
    Miscellanous 13
    Paper & printing 8
    Pharmaceuticals & Chemicals 25
    Services & real Estate 5
    Tennery Industries 8
    Textile 39
    Treasuay Bond 69

    3.10. Criteria of Share category.

    “A” Category Companies: Companies which are regular in holding the Annual general meeting and have declared dividend at the rate of 10 percent or more in a calendar year.

    “B” Category Companies: Companies which are regular in holding the Annual general meeting but have failed to declare dividend at least at the rate of 10 percent in a calendar year.

    “Z” category Companies : Companies which have failed to hold the annual general meeting or failed to declare any dividend or which are not in continuously for more than six months or whose accumulated loss after adjustment of revenue reserve, if any, is negative and exceed its paid up capital.

    ”G” Category Companies: Green field Companies.

    “N” Category companies: All newly listed companies expect Greenfield companies will be placed in this category and their settlement system would be like B-category companies.

    3.11. Types of Securities listed in market:

    Types of securities Listed
    Shares 266
    Debenture 8
    Corporate Bond 1
    Mutual Fund 14
    Govt. T-bill 61

    3.12. Forms of Market Indicator of DSE: There are few indices in the DSE as follows

    Sl. Indicators Arrangement Base
    01 DSI All shares 350 (as on 01.11.1993)
    02 DGEN A, B, G & N 817.63704 (as on 24.11.2001)
    03 DS20 Top 20 share 1000 (as on 01.01.2001)
    04 Top 10 Share Top 10 share turnover
    05 Top 10 Loser Highest capital loser
    06 Top 10 Gainer Highest capital gainers

    Index calculation Algorithm (According to IOSCO Method):

    Current index: Yesterday’s Closing Index x Current M. Cap / Opening M. Cap

    Closing index: Yesterday’s Closing Index x Closing M. Cap / Opening M. Cap

    Current M. Cap = ? (LTP x Total no. of indexed shares)

    Closing M. Cap = ? (CP x Total no. of indexed shares)

    4.1. Market capitalization by year (Tk. In million):

    4.2. Sector capitalization by year (in percent):

    4.3. Market capitalization of every industry by year (in percent)

    4.4. Market turnover projection by year ((Tk. mn)

    4.5. Market Index & Indicator.

    DSE General index projection by year

    DSE 20 index projection

    DSE all index projection

    5.1. Market Capitalization to GDP.

    Market capitalization to GDP Ratio
    Financial Year 2003-04 2004-05 2005-06 2006-07 2007-08 (E)
    GDP (in percent) 6.27 5.96 6.63 6.51 6.5
    Market capitalization to GDP ratio 4.1 5.99 5.18 10.18 15.88

    5.2. Portfolio Investments vs Foreign Direct investment..

    Portfolio investment Vs. Foreign Direct Investment

    Portfolio/FDI 2003-04 2004-05 2005-06 2006-07 2007-08 (oct)
    Portfolio (US$ mn) 6 0 32 106 48
    FDI (US$ mn) 385 776 743 760 263

    5.3. Opportunity for NRB investments to DSE:

    The authority has already offered a wide range of facilities and incentives for attracting investment from both foreigners and Non resident of Bangladeshi’s.

    Opportunities for foreign investors: Bangladesh has adopted a very liberal industrial policy to attract foreign investment.

    · No limitations pertaining to equity participation. I.e. up to 100 percent foreign private investment allowed.

    · Greater facility for establishing industry in EPZ.

    · Except five reserve sectors, all in industries are open for private investment.

    Non-Resident Bangladeshi’s can enjoy the existing facilities: Non-Resident Bangladeshi’s enjoy facilities similar to foreign investors.

    · Allowed to buy newly issued shares/debentures of Bangladeshi companies.

    · 10 percent reserved quota for NRB in primary shares.

    · FC deposits in the NFCD account.

    Investment guarantee:

    · Foreign private investment (promotion & protection) act 1980 ensures legal protection to foreign investment in Bangladesh against nationalization and expropriation.

    · It also guarantees repatriation of capital and dividend and equitable treatment with local investors.

    · Adequate protection is available for intellectual property rights such as patents, designs & trademarks and copyrights.

    Other facilities and incentives:

    · Tax holiday 5-10 years depending on location of industries.

    · 15 years tax holiday for private power generation companies.

    · Facilities for repatriation of invested capital, profit & dividend.

    · Exemption of tax on interest on foreign loan.

    · Tax exemption on royalties, technical know-how & technical assistance fees.

    · Avoidance of double taxation on the basis of bilateral agreements.

    Market analysis from several aspects

    Demand and supply of securities.

    Securities Demand of the perspective of IPO
    Sl. Name of the Company G. Pub share(Tk. Core) Sub. (Tk. Core) Low <1 &High >1
    1 Khaza Mosaic Tiles and St. Indus. Ltd 1.00 0.42 0.42 times
    2 Keya Detergent Limited 3.60 7.36 2.04 “
    3 Mutual Trust Securities & Exchange Commission Limited 12.50 107.72 8.62 “
    4 Jago Corporation Limited 2.00 2.04 1.02 “
    5 Agni Systems Limited 2.00 15.15 7.58 “
    6 First Lease International Limited 2.00 54.77 27.39 “
    7 Standard Securities & Exchange Commission Limited 11.00 155.56 14.14 “
    8 Daffodils Computers Ltd. 4.50 3.12 0.69 “
    9 JMI-Bangladesh Ltd. 3.00 5.97 1.99 “
    10 Lafarz Surma Cement Ltd. 15.00 38.87 2.59 “
    11 Export-Import (EXIM) Securities & Exchange Commission Limited 40.80 501.12 12.28 “
    12 Mercantile Insurance Limited 9.00 65.61 7.29 “
    13 Pragati Life Insurance Limited 4.50 173.49 38.55 “
    14 Berger Paints Bangladesh Limited 1.16 122.79 105.94 “
    15 Progressive Life Insurance Company Limited 4.50 164.36 36.52 “
    16 Islamic Finance And Investment Limited 10.00 170.80 17.08 “
    17 Sonar Bangla Insurance Limited 9.00 36.06 4.01 “
    18 Summit Power Limited 20.00 239.04 11.95 “
    19 Asia Pacific General Insurance 10.50 13.76 1.31 “
    20 Premier Leasing International Limited 10.05 120.81 12.02 “
    21 Prime Finance & Investment 5.00 115.44 23.09 “
    22 Nitol Insurance Company Limited 9.00 24.72 2.75 “
    23 Meghna Life Insurance CompanyLimited 4.50 70.05 15.57 “
    24 Popular Life Insurance 4.50 54.59 12.13 “
    25 Fareast Islami Life Insurance 4.50 90.10 20.02 “
    26 Peoples Leasing and Financial Services Ltd. 6.36 38.26 6.02 “
    27 Global Insurance Company Limited 9.00 70.42 7.82 “
    28 Agrani Insurance Company Limited 9.00 65.27 7.25 “
    29 Prime Islami Life Insurance Ltd 4.50 141.70 31.49 “
    30 BRAC SECURITIES & EXCHANGE COMMISSION Limited 85.00 417.70 4.91 “
    31 Industrial Promotion and Development Company of Bangladesh Ltd. 13.90 226.19 16.27 “
    32 BD Industrial Finance Company Ltd.: 11.10 159.67 14.39 “
    33 Lanka Bangla Finance Limited 9.00 148.32 16.48 “
    34 Alam Cold Rolled Steels Limited 10.80 44.21 4.09 “
    35 Jamuna Securities & Exchange Commission Limited 38.61 389.65 10.09 “
    36 Continental Insurance 9.00 111.36 12.37 “
    37 Fidelity Assets & Securities Company Limited 14.06 274.29 19.50 “
    38 Mudaraba Perpetual Bond (MPB) of Islami Securities & Exchange Commission Bangladesh Limited. 150.00 324.09 2.16 “
    39 City General Insurance Company Limited 9.00 19.32 2.15 “
    40 Paramount Insurance Company Limited 9.00 29.89 3.32 “
    41 Trust Securities & Exchange Commission Limited 70.00 799.42 11.42 “
    42 Phoenix Finance & Investments Limited 12.50 277.83 22.23 “
    43 Bangladesh Finance & Invest. Co. Ltd. 7.00 217.61 31.09 “
    44 International Leasing and Financial Services Ltd. 11.25 343.23 30.51 “
    45 Union Capital Limited 7.50 298.60 39.81 “
    46 The Premier Securities & Exchange Commission Limited 84.50 537.06 6.36 “
    47 Golden Son Ltd. 6.00 63.99 10.66 “
    48 Shahjalal Islami Securities & Exchange Commission Limited 93.58 402.57 4.30 “
    49 ICB AMCL 1st NRB 10.00 94.46 9.45 “

    Interpretation: Given data table shows company offer IPO to offload shares to public and found feedback as subscription amount high 105 times and average 15 times for every security. And that implies public demanding for quality securities.

    P/E ratio by sector.

    Sector wise Price Earning Ratio (Weighted Avg.)
    Sl. Industry name 2003 2004 2005 2006 2007
    1 Securities & Exchange Commission 8.72 21.74 17.90 15.49 24.97
    2 Insurance 12.36 26.92 20.87 10.24 15.59
    3 Investment 8.84 8.27 6.55 6.13 20.29
    4 Food & Allied 10.22 10.11 9.13 18.69 23.28
    5 Pharmaceuticals & Chemicals 10.76 18.19 10.84 11.76 21.05
    6 Textile 13.65 15.30 19.15 12.01 12.14
    7 Engineering 15.22 18.62 14.14 17.34 28.57
    8 Ceramic 17.37 25.74 17.06 14.88 29.85
    9 Tannery Industries 9.47 10.51 10.28 8.00 15.38
    10 Paper & printing 9.28 1.82 4.69 6.62 6.23
    11 Jute 12.81 19.56 12.55 6.74 7.98
    12 Cement 31.54 25.23 16.13 18.53 12.61
    13 Fuel & Power 15.48 14.79 33.52 18.87 35.95
    14 Services & real Estate 34.23 9.61 8.16 12.62 8.82
    15 IT 10.71 25.11 10.46 11.12 15.25
    16 Miscellaneous 10.05 13.21 7.83 11.05 14.43

    6.1 Dividend payment performance by industry.

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    Dividend Performance (Simple Average)
    Sl. Industry name 2003 2004 2005 2006 2007
    1 Securities & Exchange Commission 3.69 18.84 34.98 35.05 25.82
    2 Insurance 18.16 13.60 19.28 18.33 15.42
    3 Investment 10.26 13.56 50.39 40.24 41.47
    4 Food & Allied 24.21 22.24 20.81 12.44 5.42
    5 Pharmaceuticals & Chemicals 18.58 21.12 22.62 25.49 30.64
    6 Textile 5.08 5.35 4.76 6.38 7.37
    7 Engineering 19.38 18.25 25.31 20.31 20.35
    8 Ceramic 7.94 8.22 8.22 8.43 8.33
    9 Tannery Industries 16.66 20.10 23.65 7.54 39.57
    10 Paper & printing 0.31 7.50 9.00 2.57
    11 Jute 2.61 2.17
    " 147,"

    History of internet

    ","

    View with charts and images

    History of internet

    General objective

    The general objective of the report is to expenses the practical experiences by working in a division and to link the theoretical knowledge with its application in real life situation. The objective of the first part of the report is to familiarize Nexdecade Technology Ltd, Bangladesh, It operational activities, the organizational structure, its services in Bangladesh, identifying marketing mix, ratio analysis of financial statement etc.

    Scope of the Study

    The time frame considered for the study is very limited. Accordingly, the information and data, assumptions, analysis of the data and projections are based upon and restricted within the limited time period. Although several investors have queued to enter the market and few have just recently have started to operate. I have only considered the service provided by the major operators of the market.

    Methodology

    Methodology that was followed to conduct the research was as follows:

    (a) Sources of data

    To complete this report data were collected from both primary and secondary sources. Working the company, discussing informally with the company personal and making observation during the period of report etc gathered the primary data. Some secondary data were collected to make the report more concrete. These data were collected from different sources; Website of Nexdecade Technology (Pvt.) Ltd., company annual report etc.

    (b) Data collection

    The data was collected information from the top to low level employees of Nexdecade Technology (Pvt.) Ltd., consumers of different corporation, officials of BTTB, and some informed professionals, such as computer experts, System admin, TS Supervisor, and university teachers through one-to-one conversational interviews. Local computer magazines and available relevant records were also reviewed.

    Limitation

    Some limitations or barriers were faced while conducting the study. A enthusiastic effort was applied to conducting the study work and to bring a reliable and fruitful result from which proper strategy can be adopted to strengthen the market condition of the Nexdecade Technology (Pvt.) Ltd. In sprit of best efforts there are limitations that acted as barriers to conducting the study. These limitations were:

    Background of ISP

    Introduction to Internet

    The Internet is correctly defined as a network of networks. Groups of networked computers, such as those at universities, large governmental agencies and various companies are all connected together. Additionally, small businesses, local non-profit organizations and plenty of individuals and families are also connected to this same inter-network structure, usually through an Internet service provider.

    History of the Internet

    The Internet began in 1969 when the US Department of Defense commissions the Advanced Research Project Agency to create ARPANET- a huge military network. They came up with a system that sent information broken down into ‘packets’ of data. This system (Transmission Control Protocol/Internet Protocol or TCP/IP) allowed data to move freely around the military network. This meant that if one of its computers became damaged, the data would be able to arrive safely by finding alternative routes. In the early 1980s the American military split away from ARPANET, leaving what became know as the Internet. Academic institutions and other government agencies, such as NSF net (National Science Foundation Network), soon joined the Internet, connecting their own computer network to the system.

    The Internet Service Provider

    Internet access comes in a variety of connection choices and account types (Type of service contracts) depending on who provide the service and what hardware and software are used. A service provider is a company that gives a person access to the Internet for a fee. There are several types of service providers who offer different types of services and benefits, at different prices.

    History of Internet in Bangladesh

    ISP Situation in Bangladesh

    Potential Clients

    Customer concentration across the country

    Figure 5.1 Customer concentrations across the country

    Most of the customers reside in Dhaka, as the country’s telecommunication system and telephone network is capital based, the pother areas of the country do not even has the necessary infrastructure to use the Internet. Beside Dhaka, there are some users in Chittagong and Sylhet and Khulna. Outside Dhaka, although some local entrepreneurs are trying to enter the new segment of business-industry, the infrastructure-backwardness and economical condition of the populace is the most critical barrier to a successful endeavor in the ISP business.

    How ISP Works:

    About Nexdecade Technology (Pvt.) Ltd.

    Nexdecade Technology (Pvt.) Ltd. is one of Bangladeshi’s leading Internet and IP communications solutions Provider

    For more than a decade, information Technology (IT) has played a key role in the domestic and international economy. It seems that IT will continue on this course for vary long time. Nexdecade Technology has Picked up on this new business trend. We understand the ever-expanding market and anticipate the imminent global surge of cybernetics.

    Nexdecade Technology (Pvt.) Ltd. can offer its clients the required level of stability, security, reliability and network coverage.

    All about the organization

    Nexdecade Technology (Pvt.) Ltd.

    44F/6, Flat-402, Tejtori Bazar Chwak

    (West Panthapath), Tejgaon,

    Dhaka-1215, Bangladesh

    Phone: +88029138417

    Fax: Ext.888

    Web: http://www.nexdecade.com

    E-mail: info@nexdecade.com.

    VISION

    To become the leading quality Internet and WAN Service Provider in the country as measured by market leadership & customer satisfaction. We will strive to be the preferred partner to our customers by providing appropriate and cost-effective communication solutions.

    MISSION

    Enriching life by enabling reliable and affordable Internet & communication anytime, anywhere. We are committed to being Bangladeshis premier business enabler by designing and managing a high performance Internet backbone.

    OBJECTIVES

    Products & Services

    Nexdecade Technology was established at the beginning of the millennium to offer the customers more productive service in the friendliest environment. Last 6 (six) years of operation company is offering Internet and wide range of data connectivity solutions which can give you the off–the-shelf instant access as well as highly customized solutions specifically designed to meet your needs. Now Nexdecade Technology (Pvt.) Ltd. is providing the following services.

    Dedicated Broadband Solution:

    Nexdecade Technology is providing high speed point to point and Point to multi point Internet connectivity through Fiber optics Network and Wireless for corporate clients with BTTB (Submarine) and VSAT.

    Figure 3.1: Nexdecade Dedicated Broadband Solution

    Corporate Dial Up:

    It is an internet service provided to corporations as well as house holds, offices etc. one has to just buy a card to go online. Installation is easy and rate is low. There are two types of dial up: Pre-paid and Post Paid.

    Pre-paid: One has to just buy a card to go online. Installation is easy and rate is low ( TK.50 per minute)

    Post-paid: This is the regular option that has been available since the beginning of internet in Bangladesh. Installation fee TK 1000.

    Unlimited: Unlimited dial up connections are available on advanced monthly payment.

    Office to Office Network Setup:

    Nexdecade Technology specializes in LAN, MAN, WAN solutions for medium to large businesses with multiple office locations in need of inter-office collaboration and efficient data sharing

    Service features:

    » Shared applications like email, calendar and task scheduling and other features to aid collaboration in the office

    » Data, video Conferencing and other inter-office communication/ collaboration facilities

    » Customized security options and access permissions to safeguard centralized data

    » Powerful high-bandwidth fibre optic network for fast and error-free data transfer in large volumes

    Corporate Office LAN Solution

    Nexdecade Technology specializes in LAN, MAN, WAN solutions for medium to large businesses with multiple office locations in need of inter-office collaboration and efficient data sharing

    Service features:

    » Customized security options and access permissions to safeguard centralized data

    » To share office activity between of department LAN has performed main task.

    VPN Solution:

    With the widespread adoption of high-speed data services, such as Fiber Optic, Radio Link, cable, DSL and satellite, distributed organizations are seeking ways to support data access at branch locations, secured by VPN technology. They are deploying Internet Protocol Virtual Private Networks (IP VPNs) to support their enterprise applications and strategic business initiatives at an unprecedented rate.

    Multinational enterprises usually have two choices for their communication needs—the creation of a private network using leased lines, or the use of the broader public Internet. The first option is highly secure but costly, while the second offers inexpensive access, but brings with it potential problems with security. IP VPNs (IP-enabled Virtual Private Networks) offer the advantages of both options—multinationals can enjoy the security of a private network using access control and encryption, while taking advantage of the economies of scale and management capabilities of large public networks. IP VPNs are run over our global IP network for fully meshed, any-to-any connectivity between multiple locations for a lower cost of ownership than a private network.

    Figure 3.2: VPN Solution

    Introduction about Linux server

    The Linux system administrator guide describes the system administration aspects of using Linux. It is intended for people who know next to nothing about system administration (as in “what is it”), but who have already mastered at least the basics of normal usage. This manual also doesn’t tell you how to install Linux; that is described in the installation and Getting Stared document. See below for more information about Linux manuals.

    System administration is all the things that one has to do to keep a computer system in a useable shape. It includes thins like backing up files (and restoring them if necessary), installing new programs, creating accounts for users (and deleting them when no longer needed), making certain that the file system is not corrupted, and so on. If a computer were, say, a house, system administration would be called maintenance, and would include cleaning, fixing broken windows, and others such things. System administration is not called maintenance, because that would be too simple.

    There is no one official Linux distribution, so different people have different setups, and many people have a setup they built up themselves. This book is not targeted at any one distribution, even though I use the Debian GNU/Linux system almost exclusively. When possible, I have tried to point out differences, and explain several alternatives.

    What is Linux?

    Linux is a free open source operating system originally developed by Linux Tornados in the early 10. It w released as open source and remains a worldwide developed operating system mainly distributed via the Internet. Linux is a popular operating system for developers, computer enthusiasts, Internet Service Providers, and corporations using it for various functions from workstations to network services. It is most popular as a server, ranging from Web servers to mail servers to FTP servers.

    Importance of Linux

    Linux is an up-and-coming competing operating system with Microsoft Windows. It is available on a wide range of platforms, but the most popular platforms are the PC. As an operating system, it still has a few3 quarks and things which are different than Windows, and for companies pursuing Linux and a replacement OS, this training can help introduce the employees and management to Linux.

    Brief History of Linux

    UNIX is one of the most popular operating systems worldwide because of its large support base and distribution. It was originally developed as a multitasking system for minicomputers and mainframes in the mid-1970s. it has since grown to become one of the widely used operating systems anywhere, despite its sometimes confusing interface and lack of central standardization.

    The real reasons for UNIX’s popularity many hackers feel that UNIX is the Right Thing—the One True Operating System. Hence, developments of Linux by an expanding group of UNIX hackers who want to get their hands dirty with their own system.

    Versions of UNIX exits for many systems, ranging form personal computers to supercomputers such as the Cray Y-MP. Most versions of UNIX for personal computers are quite expensive and cumbersome. At the time of this writing, a one-machine version of AT&T’s system V for the 36 runs at about $US1500.

    Linux is a freely distributable version of UNIX, originally developed by Linus Torvalds, who began word on Linux in 1991 as a student at the University of Helsinki in Finland. Linus now works for Transmeta Corporation, a start-up in Santa Clara, California, and continues to maintain the Linux kernel, that is, the lowest-level core component of the operating system.

    Linux released the initial version of Linux for free on the Internet, inadvertently spawning one of the largest software-development phenomena of all time. Today, Linux is authored and maintained by a group of several thousands developers loosely collaborating across the Internet. Companies have sprung up to provide Linux support, to package it into easy-to-install distributions, and to sell workstations pre-installed with the Linux software. In March 1999, the first Linux World Expo trade shows held in San Jose, California, with reportedly well over 12,000 people in attendance. Most estimates place the number of Linux users worldwide somewhere around the 10 million mark.

    Inspired by Andrew Tanenbaum’s Minix operating system, Linux began as a class project in which Linux wanted to build a simple UNIX system that could run on a 386-based PC. The first discussions about Linux were on the Usenet newsgroup comp.os.minix. These discussions were concerned mostly with the development of a small, academic Unix UNIX system for Minix users who wanted more.

    The very early development of Linux dealt mostly with the task-switching features of the 80386 protected-mode interface, all written in assemble code. Linux Writes:

    After that it was plain sailing: hairy coding still, buy I had some devices, and debugging was easier. I started using C at this stage, and it certainly speeds up developments. This is also when I start to get serious about my megalomaniac ideas to make “a better Minix than Minix.” I was bopping I’d be able to recompile gcc under Linux some day.

    Two months for basic setup, but then only slightly longer until I had a disk driver and small file system. That was about when I made 0.01 available [around late August of 1991]: it was not pretty, it had no floppy driver, and it could not do much anything. I do not think anybody ever compiled that version. But by then I was hooked, and did not want to stop until I could out Minix.

    No announcement was ever made for Linux Version 0.01. The 0.01 sources weren’t even executable: they contained only the bare rudiments of the kernel source and assumed that you had access to a Minix machine to compile and play with them.

    On October 5, 1991, Linux announced the first “official” version of Linux, version 0.02. At this point, Linux was able to run bash (the GNU Bourne Again Shell) and gcc (the GNU C compiler), but not much else was working. Again, this intended as a hacker’s systems. The primary focus was kernel development; none of the issues of user support, documentation, distribution, and so on had even been addressed. Today, the situation is quite different—the real excitement in the Linux world deals with graphical user environments, easy-to-install distribution packages, and high-level applications such as graphics utilities and productivity suites.

    Difference between Linux and other Operating systems

    It is important to understand the difference between Linux and other Operating Systems, such as Windows 95/98, Windows NT, OS/2, and other implementations of UNIX for the personal computer. First of all, it should be made clear that Linux will coexist happily with other operating systems on the same machine: that is, you can run Windows NT and OS/2 along with Linux on the same system without problems. There are even to interact between the various operating systems, as you’ll see.

    Uses of Linux

    Why use Linux instead of a commercial operating system? We could give you a thousand reasons. One of the most important, however, is that Linux is an excellent choice for personal UNIX computing. If you are a UNIX software developer, why use Windows at home? Linux will allow you to develop and test UNIX software on your PC, including database and X applications. If you are a student, chances are that your university computing system runs UNIX. With Linux, you can run your own UNIX system and tailor it to your own needs. Installing and running Linux is also an excellent way to learn UNIX if do not have access to other UNIX machines.

    But let’s not lose perspective. Linux is not just for personal UNIX users. It is robust and complete enough to handle large tasks, as well as distributed computing needs. Many businesses are moving to Linux in lieu of other Unix-based workstation environments. Linux has an excellent price-performance ratio, is one of the most stable and powerful operating system available, and because of its open source nature, is completely customizable for your needs. Universities are finding Linux to be perfect for teaching courses in operating systems design. Larger commercial software vendors are starting to realize the opportunities operating system can provide.

    Linux versus Windows 95 and 98

    It is non rare to run Linux and Windows 95/ 98 within a same system. Many Linux users rely on Windows for applications such as word processing and productivity tools. While Linux provides its own analogs for these applications and commercial software support for Linux is increasing, there are various reasons why a particular user would want to run Windows as well as Linux. If your entire dissertations are written using Microsoft Word, you may not be able to easily convert it to TeX or some other format. There are many commercial application applications for Windows that aren’t available for Linux, and there are no reasons why you can not use both.

    As your might know, Windows 95 and 98 do not fully utilize the functionality or the x86 processor. On the other hand, Linux runs completely in the processors protected mode and exploits all of the features of the machine, including multiple processors.

    We could not debate the pros and cons of windows and Linux for pages on end. However, suffice it to say that Linux and Windows are completely are completely different entities. Windows is inexpensive and has a strong foothold in the PC computing world. No other operating system for the PC has reached the level of popularity of Windows, largely because the cost of these other operating system is unapproachable for most personal computer users. Very few PC user can imagine spending a thousands dollars or more on the operating system alone. Linux, however, is free, and you finally have the chance to decide.

    We will allow you to make your own judgment of Linux and Windows based on your expectation and needs. Linux is not for everybody. But if you have always wanted to run a complete UNIX system at home, without the high cost of other UNIX implementations for the PC, Linux may be what you are looking for.

    There are tools available to allow you to interact between Linux and Windows. For example, it is easy to access Windows files from Linux. Development is proceeding on the Wine Windows emulator, which allows you to run many popular applications.

    Linux versus Windows NT

    A number of other advanced operating systems are on the rise in the PC world. Specifically, Microsoft’s Windows NT is becoming very popular for sever computing.

    Windows NT, like Linux, is a full multitasking operating system, supporting multiprocessor machines, several CPU architectures, virtual memory, networking, security, and so on. However, the real difference between Linux and Windows NT is that Linux is a version of UNIX and hence benefits from the contributions of the Unix community at large.

    There are many implementations of UNIX from many vendors. There is a large push in the UNIX community for standardization in the form of open systems, but no single corporation controls this design. Hence, any vendor may implement these standards in an implementation of UNIX.

    Windows NT, on the other hand, is proprietary system. The interface and design are controlled by a single corporation, Microsoft, and only that corporation may implement the design. In one sense, this kind of organization is beneficial: it sets a strict standard for the programming and user interface unlike that found even in the open systems community. NT is NT whenever you go.

    It seems likely that in the coming years, Linux and Windows NT will be battling it out for their share of the server computing market. Windows NT has behind it the full force of the Microsoft marketing machine, while Linux has a community of thousands of developers helping to advance the system through the open source model. So far, benchmarks of Linux versus Windows NT have demonstrated that each system has its strengths and weaknesses; however, Linux wins hand-down in a number of areas, most notably networking performance.

    Linux is also much smaller than Windows NT, has a much better price-performance ratio, and is generally seen as more stable. It might seem amazing that “Little” Linux gives Microsoft serious competition, but it’s not surprising when you realize how effective the open source development process rally is.

    Other Implementations of UNIX

    There is several other implementation of UNIX for the personal computer. The Intel x86 architecture lends itself to the UNIX design, and a number of vendors have taken advantages of this, including Sun, SCO, and BSDI.

    In terms of features, other implementations of UNIX for the PC are quite similar to Linux. You will see that almost all commercial several of UNIX supports roughly the same software, programming environment, and networking features. However, there are some major differences between Linux and commercial versions of UNIX. This stems primarily form Linux roots as a “personal” UNIX system, rather than one that’s runs only on large servers.

    First of all, Linux supports a much wider range of hardware than other UNIX implementations, simply because there is more demand under Linux to support very crazy brand of sound, graphics, network, and SCSI board. Plus, under the Open Source model, anyone with enough time and interest to write a driver for a particular board is able to do so we will cover the hardware requirements for Linux in the next section.

    The most important factor to consider for many users is price. The Linux software is free if you have access to the Internet and can download. If you don’t such packages often include bundled documentation and support. Of course, you may copy Linux from a friend who may already have the software or share the cost of purchasing it withy someone else. If you are planning to install Linux on a large number of machines, you need only purchase a single copy of the software; Linux is distributed with a “single machine” license.

    The value of commercial UNIX implementations should not be demeaned: along with the price of the software itself, you usually pay for documentation, support, and assurance of quality. These are important factors for large institutions, but personal computer users may not require these benefits. A number of companies, including Red Hat and Linux care, are now providing commercial Linux support. Caldera, another Linux distributor, Offers 24×7 supports. In any case, many businesses and Universities are finding that running Linux in a lab of inexpensive personal computers is preferable to running commercial versions of UNIX in a lab of workstations. Linux can provide the functionality of a workstation on PC hardware at fraction of the cost.

    There are other free or inexpensive implementation of UNIX for the x86. One of the most well known is FreeBSD, an implementation and port of BSD Unix for the 386. FreeBSD is comparable to Linux in many ways, but deciding which one is “better” depends on your own needs and expectations. The only strong distinction we can make is that Linux is developed openly, while FreeBSD is developed within a closed team of programmers who maintain the system. Because of this, serious pro philosophical and design differences exits between the two projects. The goals of two scratch, and the goal of FreeBSD is in part to modify the existing BSD code for use on the x86.

    NetBSD is another port of the BSD NET/2 distribution to a number of machines, including the x86. Net BSD has a slightly more open development structure and is comparable to FreeBSD in many respects. Open BSD is still another version of BSD.

    Anther project of note is the HURD, an effort by the Free Software Foundation to develop and distribution a free version of UNIX for many platforms. Contact the Free Software Foundation for more information about this project. At the time of this writing, HURD is still in early stages of development and interests in it have been mostly superseded by Linux.

    Other inexpensive versions of UNIX exist as well, such as Minis (an academic but useful UNIX clone upon which the early development of Linux was based). Some of these implementations are of mostly academic interest, while others are full-fledged systems for real productivity. But many personal UNIX users are moving to Linux.

    Configuring Sendmail

    One of the tasks in setting up DNS for your domain (my-site.com) is to use the MX record in the configuration zone file to state the hostname of the server that will handle the mail for the domain. The most popular Unix mail transport agent is sendmail, but others, such as postfix and qmail, are also gaining popularity with Linux. The steps used to convert a Linux box into a sendmail mail server will be explained here.

    How Sendmail Works

    As stated before, sendmail can handle both incoming and outgoing mail for your domain. Take a closer look.

    Incoming Mail

    Outgoing Mail

    Sendmail Macros

    When mail passes through a sendmail server the mail routing information in its header is analyzed, and sometimes modified, according to the desires of the systems administrator. Using a series of highly complicated regular expressions listed in the /etc/mail/sendmail.cf file, sendmail inspects this header and then acts accordingly.

    In recognition of the complexity of the /etc/mail/sendmail.cf file, a much simpler file named /etc/sendmail.mc was created, and it contains more understandable instructions for systems administrators to use. These are then interpreted by a number of macro routines to create the sendmail.cf file. After editing sendmail.mc, you must always run the macros and restart sendmail for the changes to take effect.

    Each sendmail.mc directive starts with a keyword, such as DOMAIN, FEATURE, or OSTYPE, followed by a subdirective and in some cases arguments. A typical example is.

    As stated before, sendmail can handle both incoming and outgoing mail for your domain. Take a closer look.

    FEATURE(`virtusertable’,`hash -o /etc/mail/virtusertable.db’)dnl

    The keywords usually define a subdirectory of /usr/share/sendmail-cf in which the macro may be found and the subdirective is usually the name of the macro file itself. So in the example, the macro name is /usr/share/sendmail-cf/feature/virtusertable.m4, and the instruction `\ hash -o /etc/mail/virtusertable.db’ is being passed to it.

    Notice that sendmail is sensitive to the quotation marks used in the m4 macro directives. They open with a grave mark and end with a single quote.

    FEATURE(`masquerade_envelope’)dnl

    Some keywords, such as define for the definition of certain sendmail variables and MASQUERADE_DOMAIN, have no corresponding directories with matching macro files. The macros in the /usr/share/sendmail-cf/m4 directory deal with these.

    Once you finish editing the sendmail.mc file, you can then execute the make command while in the /etc/mail directory to regenerate the new sendmail.cf file.

    [root@bigboy tmp]# cd /etc/mail

    [root@bigboy mail]# make

    If there have been no changes to the files in /etc/mail since the last time make was run, then you’ll get an error like this:

    Installing Sendmail

    Most RedHat and Fedora Linux software products are available in the RPM format. You will need to make sure that the sendmail, sendmail-cf, and m4 software RPMs are installed. (Chapter 6, “Installing RPM Software”, will tell you how.) When searching for the RPMs, remember that the filename usually starts with the software package name by a version number, as in sendmail-8.12.10-1.1.1.i386.rpm.

    Starting Sendmail

    You can use the chkconfig command to get sendmail configured to start at boot:

    Remember to restart the sendmail process every time you make a change to the configuration files for the changes to take effect on the running process. You can also test whether the sendmail process is running with the pgrep command:

    How to Restart Sendmail after Editing Configuration Files

    In this chapter, you’ll see that sendmail uses a variety of configuration files that require different treatments for their commands to take effect. This little script encapsulates all the required post configuration steps.

    #!/bin/bash

    cd /etc/mail

    make

    newaliases

    /etc/init.d/sendmail restart

    It first runs the make command, which creates a new sendmail.cf file from the sendmail.mc file and compiles supporting configuration files in the /etc/mail directory according to the instructions in the file /etc/mail/Makefile. It then generates new e-mail aliases with the newaliases command, (this will be covered later), and then restarts sendmail.

    Use this command to make the script executable.

    chmod 700 filename

    You’ll need to run the script each time you change any of the sendmail configuration files described in the sections to follow.

    The line in the script that restarts sendmail is only needed if you have made changes to the /etc/mail/sendmail.mc file, but I included it so that you don’t forget. This may not be a good idea in a production system.

    Note: When sendmail starts, it reads the file sendmail.cf for its configuration. sendmail.mc is a more user friendly configuration file and really is much easier to fool around with without getting burned. The sendmail.cf file is located in different directories depending on the version of RedHat you use. The /etc/sendmail.cf file is used for versions up to 7.3, and /etc/mail/sendmail.cf is used for versions 8.0 and higher and Fedora Core.

    The /etc/mail/sendmail.mc File

    You can define most of sendmail’s configuration parameters in the /etc/mail/sendmail.mc file, which is then used by the m4 macros to create the /etc/mail/sendmail.cf file. Configuration of the sendmail.mc file is much simpler than configuration of sendmail.cf, but it is still often viewed as an intimidating task with its series of structured directive statements that get the job done. Fortunately, in most cases you won’t have to edit this file very often.

    How to Put Comments in sendmal.mc

    In most Linux configuration files a # symbol is used at the beginning of a line convert it into a comment line or to deactivate any commands that may reside on that line.

    The sendmail.mc file doesn’t use this character for commenting, but instead uses the string “dnl”. Here are some valid examples of comments used with the sendmail.mc configuration file:

    These statements are disabled by dnl commenting.

    dnl DAEMON_OPTIONS(`Port=smtp,Addr=127.0.0.1, Name=MTA’)

    dnl # DAEMON_OPTIONS(`Port=smtp,Addr=127.0.0.1, Name=MTA’)

    This statement is incorrectly disabled:

    # DAEMON_OPTIONS (`Port=smtp,Addr=127.0.0.1, Name=MTA’)

    This statement is active:

    DAEMON_OPTIONS (`Port=smtp,Addr=127.0.0.1, Name=MTA’)

    Configuring DNS for sendmail

    Remember that you will never receive mail unless you have configured DNS for your domain to make your new Linux box mail server the target of the DNS domain’s MX record. See Chapter 18, “Configuring DNS”, or Chapter 19, “Dynamic DNS”, for details on how to do this.

    Configure Mail Server’s Name In DNS

    You first need to make sure that your mail server’s name resolves in DNS correctly. For example, if your mail server’s name is bigboy and it you intend for it to mostly handle mail for the domain my-site.com, then bigboy.my-site.com must correctly resolve to the IP address of one of the mail server’s interfaces. You can test this using the host command:

    [root@smallfry tmp]# host bigboy.my-site.com

    bigboy.my-site.com has address 192.168.1.100

    [root@smallfry tmp]#

    You will need to fix your DNS server’s entries if the resolution isn’t correct.

    Configure the /etc/resolv.conf File

    The sendmail program expects DNS to be configured correctly on the DNS server. The MX record for your domain must point to the IP address of the mail server.

    The program also expects the files used by the mail server’s DNS client to be configured correctly. The first one is the /etc/resolv.conf file in which there must be a domain directive that matches one of the domains the mail server is expected to handle mail for.

    Finally, sendmail expects a nameserver directive that points to the IP address of the DNS server the mail server should use to get its DNS information.

    For example, if the mail server is handling mail for my-site.com and the IP address of the DNS server is 192.168.1.100, there must be directives that look like this:

    WARNING: local host name (smallfry) is not qualified; fix $j in config file

    The /etc/hosts File

    The /etc/hosts file also is used by DNS clients and also needs to be correctly configured. Here is a brief example of the first line you should expect to see in it:

    How to Configure Linux Send mail Clients

    Converting From a Mail Client to a Mail Server

    All Linux systems have a virtual loopback interface that lives only in memory with an IP address of 127.0.0.1. As mail must be sent to a target IP address even when there is no NIC in the box, sendmail therefore uses the loopback address to send mail between users on the same Linux server. To become a mail server, and not a mail client, sendmail needs to be configured to listen for messages on NIC interfaces as well.

    1) Determine which NICs sendmail is running on. You can see the interfaces on which sendmail is listening with the netstat command. Because sendmail listens on TCP port 25, you use netstat and grep for 25 to see a default configuration listening only on IP address 127.0.0.1 (loopback):

    [root@bigboy tmp]# netstat -an | grep :25 | grep tcp

    tcp 0 0 127.0.0.1:25 0.0.0.0:* LISTEN

    [root@bigboy tmp]#

    2) Edit sendmail.mc to make sendmail listen on all interfaces. If sendmail is listening on the loopback interface only, you should comment out the daemon options line in the /etc/mail/sendmail.mc file with dnl statements. It is also good practice to take precautions against spam by not accepting mail from domains that don’t exist by commenting out the accept irresolvable domains feature too. See the fourth and next to last lines in the example.

    dnl This changes sendmail to only listen on the loopback

    dnl device 127.0.0.1 and not on any other network

    dnl devices. Comment this out if you want

    dnl to accept email over the network.

    dnl DAEMON_OPTIONS(`Port=smtp,Addr=127.0.0.1, Name=MTA’)

    dnl

    …

    …

    …

    dnl

    dnl We strongly recommend to comment this one out if you want

    dnl to protect yourself from spam. However, the laptop and

    dnl users on computers that do

    dnl not have 24×7 DNS do need this.

    dnl FEATURE(`accept_unresolvable_domains’)dnl

    dnl FEATURE(`relay_based_on_MX’)dnl

    dnl

    Note: You need to be careful with the accept_unresolvable_names feature. In the sample network, bigboy the mail server does not accept e-mail relayed from any of the other PCs on your network if they are not in DNS. Chapter 18, “Configuring DNS”, shows how to create your own internal domain just for this purpose.

    A General Guide to Use The sendmail.mc File

    The sendmail.mc file can seem jumbled. To make it less cluttered I usually create two easily identifiable sections in it with all the custom commands I’ve ever added.

    The first section is near the top where the FEATURE statements usually are, and the second section is at the very bottom.

    Sometimes sendmail will archive this file when you do a version upgrade. Having easily identifiable modifications in the file will make post upgrade reconfiguration much easier. Here is a sample:

    dnl ***** Customized section 1 start *****

    dnl

    dnl

    FEATURE(delay_checks)dnl

    FEATURE(masquerade_envelope)dnl

    FEATURE(allmasquerade)dnl

    FEATURE(masquerade_entire_domain)dnl

    dnl

    dnl

    dnl ***** Customised section 1 end *****

    The /etc/mail/relay-domains File

    The /etc/mail/relay-domains file is used to determine domains from which it will relay mail. The contents of the relay-domains file should be limited to those domains that can be trusted not to originate spam. By default, this file does not exist in a standard RedHat / Fedora install. In this case, all mail sent from my-super-duper-site.com and not destined for this mail server will be forwarded:

    My’s-super-duper-site.com

    One disadvantage of this file is that controls mail based on the source domain only, and source domains can be spoofed by spam e-mail servers. The /etc/mail/access file has more capabilities, such as restricting relaying by IP address or network range and is more commonly used. If you delete /etc/mail/relay-domains, then relay access is fully determined by the /etc/mail/access file.

    Be sure to run the restart send mail script from the beginning of the chapter for these changes to take effect.

    The /etc/mail/access File

    You can make sure that only trusted PCs on your network have the ability to relay mail via your mail server by using the /etc/mail/access file. That is to say, the mail server will relay mail only for those PCs on your network that have their e-mail clients configured to use the mail server as their outgoing SMTP mail server. (In Outlook Express, you set this using: Tools>Accounts>Properties>Servers)

    If you don’t take the precaution of using this feature, you may find your server being used to relay mail for spam e-mail sites. Configuring the /etc/mail/access file will not stop spam coming to you, only spam flowing through you.

    The /etc/mail/access file has two columns. The first lists IP addresses and domains from which the mail is coming or going. The second lists the type of action to be taken when mail from these sources or destinations is received. Keywords include RELAY, REJECT, OK (not ACCEPT), and DISCARD. There is no third column to state whether the IP address or domain is the source or destination of the mail, sendmail assumes it could be either and tries to match both. All other attempted relayed mail that doesn’t match any of the entries in the /etc/mail/access file, sendmail will reject. Despite this, my experience has been that control on a per e-mail address basis is much more intuitive via the /etc/mail/virtusertable file.

    The sample file that follows allows relaying for only the server itself (127.0.0.1, localhost), two client PCs on your home 192.168.1.X network, everyone on your 192.168.2.X network, and everyone passing e-mail through the mail server from servers belonging to my-site.com. Remember that a server will be considered a part of my-site.com only if its IP address can be found in a DNS reverse zone file:

    localhost.localdomain RELAY

    localhost RELAY

    127.0.0.1 RELAY

    192.168.1.16 RELAY

    192.168.1.17 RELAY

    192.168.2 RELAY

    my-site.com RELAY

    You’ll then have to convert this text file into a sendmail readable database file named /etc/mail/access.db. Here are the commands you need:

    [root@bigboy tmp]# cd /etc/mail

    [root@bigboy mail]# make

    The sendmail restart script we configured at the beginning of the chapter does this for you too.

    Remember that the relay security features of this file may not work if you don’t have a correctly configured /etc/hosts file.

    The /etc/mail/local-host-names File

    When sendmail receives mail, it needs a way of determining whether it is responsible for the mail it receives. It uses the /etc/mail/local-host-names file to do this. This file has a list of hostnames and domains for which sendmail accepts responsibility. For example, if this mail server was to accept mail for the domains my-site.com and another-site then the file would look like this:

    my-site.com

    another-site.com

    In this case, remember to modify the MX record of the another-site.com DNS zonefile point to my-site.com. Here is an example (Remember each “.” is important):

    ; Primary Mail Exchanger for another-site.com

    another-site.com. MX 10 mail.my-site.com.

    Which User Should Really Receive The Mail?

    After checking the contents of the virtusertable, sendmail checks the aliases files to determine the ultimate recipient of mail.

    The /etc/mail/virtusertable file

    The /etc/mail/virtusertable file contains a set of simple instructions on what to do with received mail. The first column lists the target email address and the second column lists the local user’s mail box, a remote email address, or a mailing list entry in the /etc/aliases file to which the email should be forwarded.

    If there is no match in the virtusertable file, sendmail checks for the full email address in the /etc/aliases file.

    webmaster@another-site.com webmasters

    @another-site.com marc

    sales@my-site.com sales@another-site.com

    paul@my-site.com paul

    finance@my-site.com paul

    @my-site.com error:nouser User unknown

    In this example, mail sent to:

    webmaster@another-site.com will go to local user (or mailing list) webmasters, all other mail to another-site.com will go to local user marc.

    Sales at my-site.com will go to the sales department at my-othersite.com.

    Paul and finance at my-site.com goes to local user (or mailing list) Paul

    All other users at my-site.com receive a bounce back message stating “User unknown”.

    After editing the /etc/mail/virtusertable file, you have to convert it into a sendmail-readable database file named /etc/mail/virtusertable.db with two commands:

    [root@bigboy tmp]# cd /etc/mail

    [root@bigboy mail]# make

    If these lines look like you’ve seen them before, you have: They’re in your all-purpose sendmail restart script.

    The /etc/aliases File

    You can think of the /etc/aliases file as a mailing list file. The first column has the mailing list name (sometimes called a virtual mailbox), and the second column has the members of the mailing list separated by commas.

    To start, sendmail searches the first column of the file for a match. If there is no match, then sendmail assumes the recipient is a regular user on the local server and deposits the mail in their mailbox.

    If it finds a match in the first column, sendmail notes the nickname entry in the second column. It then searches for the nickname again in the first column to see if the recipient isn’t on yet another mailing list.

    If sendmail doesn’t find a duplicate, it assumes the recipient is a regular user on the local server and deposits the mail in their mailbox.

    If the recipient is a mailing list, then sendmail goes through the process all over again to determ

    " 148,"

    HOME APPLIANCES TO THE COUNTRYSIDE

    ","

    The home appliance industry in China has mainly focused on exporting to European and America markets. It generally achieved double-digit growth in years before 2008. However, the export market is withering in recent year. The export of household appliances and electronic products last year recorded only a 3% increase and contribute to 72.5 billion U.S. dollars in 2008 (Xinhua News, 2009). For example, China’s export value of color TV sets had annually dropped by 18.4 in the first quarter of 2008, came to 1.67 billion U.S. dollars (Customs of China, 2009). Foreseeing such a declining trend, the Ministry of Finance and the Ministry of Commerce of the People’s Republic of China had introduced a pilot project for rural residents in December 2007. Such pilot project was called “home appliances to the countryside” program which is a subsidy policy on electronic home appliances for rural areas. The trail was to be held in three provinces (Shandong, Henan and Sichuan) and one city (Qingdao) by offering rural residents a 13% subsidy on consuming the selected three categories (televisions, refrigerators and mobile phones) of home appliances items.

    At present, the current level of utilization of home appliances in Chinese rural areas is only equivalent to that of the urban areas at the late 1980s (China Research and Intelligence Co., 2009). Every 100 Chinese rural households possess the number of color TVs, washing machines, cell phones and refrigerators only 2/3, 1/2, 1/2 and 1/4 respectively of the of urban households. The asymmetric information between the rural resident and the electronic home appliance industry results in adverse selection. This situation imposed the market failure as promoting electronic home appliances to rural areas. Hence, the subsidy policy of electronic home appliances for rural areas can be regarded as a policy support by the government in order to promote electronic home appliances and, thus drive a long-term structural change when encouraging manufacturers to design rural use products (Credit Suisse, 2009).

    In the third quarter of 2008, the risk of second mortgage in the United State provoked the global financial tsunami. Due to the eruption of the global financial tsunami, the global economy is in recession and the export of China suffered a great loss. Moreover, when the financial crisis has plunged the world into recession, protectionism in the globe market has been on the rise. According to a recent World Bank study, from October 2008 to February 2009, forty seven trade-restricting measures were implemented (E. Gamberoni and R. Newfarmer, 2009). While the authority had paid attention on the rising tide of trade protectionism and recession of export market, by the way of the primary success of the pilot project and the first extension of the program in the December 2008, the government announced the”home appliances to the countryside” program would be extended into a national wide scale in February 2009 (Ministry of Finance, Ministry of Commerce and Ministry of Industry and Information Technology, 2008). According to the notice, the government aims to boost domestic demand to secure economic growth, improve living standard of the country’s rural population, boost domestic consumption and stimulate the industrial production growth through the program extension. Such national wide subsidy policy covers the entire rural areas in the nation with nine categories of home electronic appliance items.

    Significances and aims of this study:

    After the extension of the “home appliances to the countryside” program in February 2009, it nationally targeted to the entire rural residents. According to the National Bureau of Statistics, the population of rural residents is 7.2 hundred million approximately, which is 55.06% of the population of China (National Bureau of Statistics, 2008). With this large numbers of target participants, how the program to promote and implement rests on the government and the electronic home appliances industries.

    The Chinese Premier, Wen Jiabao, has commented on the China’s stimulus package. According to his speech, ‘the China’s stimulus package is designed to both sustain economic growth and improve people’s livelihood’. Policies related to affecting people’s well-being are given priority to allocate public resources (Embassy of China in the US, 2009). Namely, the authority regards the subsidy policy a crucial strategy to increase domestic demand and secure the economic growth under the current economy circumstance and also a policy that also aims to improve the living standard of the rural residents. Ministry of Commerce estimates that the “home appliances to the countryside” program will boost domestic consumption and achieves RMB 150 billion in the first year and totally boost RMB 920 billion at the end of the program. However, compare with the approximate RMB 150 billion rural spending, the proportion is relatively small. During the first ten month of 2009, the national sales of the subsidy program was 2787.8 units which accounted for RMB 5.08 billion. Within this period, the sales figure record a continued dropping in August and September while the sales in August was around RMB 7.6 billion, and it was as low as RMB 6.2 billion in September. (People’s Daily, 2009). It was the first time of a continued two months sales decline from the RMB 8.8 billion sales in the July. These figures reveal that the outcome of the subsidy program is not able to meet the original approximation. This indicated the original estimation is too optimistic and overvalues the participations of rural residents.

    The subsidy policy is a comprehensive strategy involving large numbers of rural residents and large amount of money. The participants of the rural residents are the key fundamental of the subsidy policy. Rural residents will not blindly consume what the electronic home appliance industry put on the market despite there is a 13% subsidy from the government. They have their concerns and evaluations to the policy.

    This study mainly focuses on the “home appliances to the countryside” program after February 2009 and its aims to analysis the relationship among the government, the electronic home appliance industry and rural residents. For the government, the program is to boost domestic consumption in the rural area to secure economic growth. For the electronic home appliance manufacturers, they aim to gain benefits. For the rural residents, they consider to improve their living standard after purchasing the electronic home appliances through a subsided price. By studying their different purposes to participate in the program, I will try to conclude some suggestion to enhance the efficiency of the “home appliances to the countryside” program since the outcome is not satisfied with the assumed estimation.

    Literature review:

    “Home appliances to the countryside” program

    The English translation as ‘”home appliances to the countryside” program’ was officially used in the government and media in China. The program first started as a pilot project on three provinces and one city in December 2007. After holding the pilot project for one year, in December 2008, phrase one of the “home appliances to the countryside” program which extended its area to a total of 14 provinces, directly controlled municipalities and autonomous regions was started. At last, in the February 2009, the program extends to entire rural areas in the nation and to subsidize the rural residents in nine categories of electronic home appliances (color TV sets, refrigerators, mobile phones, washing machines, air conditioners, water heaters, computers, microwave ovens and electromagnetic cookers). The program will last for four years to 2012 and rural residents were entitled to a 13% subsidy on purchasing the selected electronic home appliances (limited within two units in each category). Since this subsidy program targeted the rural residents, only those with rural residency qualify for the subsidies. According to regulations of operating the “home appliances to the countryside” program, a price limit was set on each category. (For example, color TV set RMB3500, refrigerators RMB2500, mobile phone RMB1000, washing machines RMB2000, etc). The original purpose to set up such limit is to ensure items are affordable to the rural residents. However, this limit was regarded as one of the factors that hinder to achieve the approximate rural expenditure.

    The “home appliances to countryside” program has been running for more than ten months since February 2009 and different kinds of statistics were announced. According to the Ministry of Commerce, there are 17 home electronic appliances companies which has accumulated sales over 100 million and they include Haier, Gree, Midea, Skyworth, Konka, TCL, Lenovo, etc. Among these companies, Haier is the enterprise which benefits the most from subsidy program and has the highest accumulated sales figures of RMB 8.6 billion during the past 10 months. However, there are still 14 companies out of 348 which show fragmenting sales while another 17 enterprises sold less than 10 units (Minister of Commerce 2009).

    Indicators of quality of live

    As mentioned earlier in this study, the subsidy program in also a social welfare program. This policy supports the rural residents to buy electronic home appliances in order to improve their life standard. David E. Bloom, Patricia H. Craig and Pia N. Malaney in their study concluded several indicators to evaluate quality of life. They are ‘nutrition’, ‘health’, ‘education’, ‘income’, ‘gender equality’, ‘fertility’, ‘political, civil, and economic freedom’, ‘environmental quality’, ‘access to infrastructure’, and ‘access to information’.

    Televisions and mobile phone convenience their life and also provide a channel for them to gain information. Manufactures are required to add special functions which are fit to use in rural environment. The models of mobile phone which selected in the program are required to enhance the signal accessing ability where signal from network operators in rural environment are instability. In the long run, the purpose of the subsidy program is guiding the manufactures to set up production line for rural markets. As a result, when the program ends in 2012, the subsidy program is expected to motivate the production of the electronic home appliances sector, meanwhile, stimulate the industrial structure development.

    Consumption behavior in rural areas

    The “home appliances to the countryside” program is a strategy to boost domestic consumption by encouraging the rural residents to consume more. By understanding the consumption behavior of the rural residents, the government can estimate their reflection and hence the efficiency of policies can be guaranteed.

    Since there are various hierarchy of need, people would use their income to buy the basic survival resources as their priority while the development products would be subsequent and following by the leisure goods (W.H. Wong, 1999). In other words, there is a sequence of consuming. W. Guo concluded the basic sequence of expanding spending of rural residents in his study (W. Guo 1998). It is: reproduction goods, housing, and education for theyounger generation, transportation, electronic home appliances, and commodities. Under this sequence of consuming, we can predict the consumption behavior of rural households.

    Basically, personal disposable income minus personal saving is personal consumption expenditure (N. Gregory Manki, 2004). Therefore, personal disposable income becomes one of the factors that affect personal consumption expenditure. Wong in his study indicated that, the consumption power and intention to spend are different in different level of household income. Rural households of high level income prefer to consume to increase living standard. On the contrast, rural households of low income level trend to fulfill basic need because of constraining by the limed of income.

    When the rural residents can fulfill their basic need, they who are mobilized by the subsidy program are able to consume the electronic home appliances.

    Insecurity income source due to deficient in land use

    According to the World Bank, 90% of poverty is still rural excluding migrant workers from the rural population (World Bank, 2009). Although per capital net income of rural households has been being steady rising these years, the income gap between the urban and rural has also grown. According to the National Bureau of Statistic, in 2007 the per capital annual net income of urban households is around RMB 14908, meanwhile, the per capital annual net income of rural households is around RMB 4140, which is only 27.7% of the urban households (National Bureau of Statistic, 2008). Moreover, the rural households does not feel a sense of security on their income source since they only have use rights to but do not own the land themselves. In addition, the long-term investment in land is demotivated because of the insecurity of use rights (Jacoby H., Li G., Rozelle, S., 2002). Because of the consumption expenditure related to the personal income, in income of rural households are not security, they prefer to savings rather than consumption. It can be regarded one of the factors that demoviated the rural residents to participate in the “home appliance to countryside” program.

    Coverage of Social Security is low in rural areas

    According to China Social Security Annual Bulletin, in 2007, there were nearly 476 million people in China’s rural labor force. However, in that year, the numbers of workers contributed to the old age pension system was fewer than 52 million and only 11 percent of the rural labor force was covered by the scheme (Y. Yang, J.B. Williamson, C. Shen, 2009). Scholars conclude the old age pension system does not have reliable source of financing, and full of problems of funds embezzlement and is low benefits (I. Nielsen, C. Nyland, R. Smyth, M.Q. Zhang and C. J. Zhu, 2005). Since they do not and are not force to contribute to the old age pension. The rural residents rely on their savings as their risk protection. As a result, the attraction to the rural residents of the 13% subsidy from the program will decrease and the participation of the rural will be affected.

    Game Theory

    Game theory is a study of the ways in whichstrategic interactionsamongrational playersproduceoutcomeswith respect to theutilities of those players (Daniel Burgess, 2005). In other words, game theory analyses how agents (players) make decision which sufficient their own utilities instrategic situations (games). It is a mathematic theory which can be applied toin thesocial sciences research. It emphases that each player involved in game will estimate their benefits and acts in order to gain the best outcome individually. If in a situation where it is not possible to increase benefits only by the implementation of one single player, this strategy is called the Nash equilibrium. Players involved in game relation will only seek to benefit oneself, it sometimes leads to a situation of prisoner dilemma. In such situation, people do not cooperate although by so they can make both of them to be better off. ‘The efficiency of a policy depends on the coherence between the Nash equilibrium and policy maker’s ideal focal point’ (Osborne, Martin J. & Rubinstein, Ariel, 2003). Every participant involves a policy will make different choices which affect the outcome and efficiency of a policy. As a result, we can use the conclusion by analyzing game models of each participant to improve the efficiency of a policy.

    Arguments:

    The “home appliances to the countryside” program has dual functions. On one hand, it is an economic policy that emphases on maintaining economy growth by boosting domestic consumption. On the other hand, it is a social welfare policy that accents on improving the living standard of rural residents by subsidizing them to purchase electronic home appliances. The government, the electronic home appliances industry and the rural residents can choose their own strategies to participate to the “home appliances to countryside” program. This study argues the game relations among the players of the “home appliances to countryside” program will hinder the rural residents to participate to the program. As a result, the expected outcome of the subsidy program will be held back.

    Theoretical framework:

    As mentioned before, according to the game theory, the efficiency of a policy depends on the coherence between the Nash equilibrium and policy maker’s ideal focal point. The gap between the objectives and results of the policy originated from the game relations among the players. Although the government has had a good intention, the results of the program gained at present were not conforming to the original estimation. In this study, a game-theoretic model is used to study the relationships among rural residents, enterprises and governments under the policy that rural residents are encouraged to participate to the subsidy program. The government can choose to optimize the program in order to attract more rural residents to participate and consume. The rural resident can choose to or not to participate in the program by calculating their benefit and loss. As each participant seeks to satisfy its utility, this program can be analyzed as an n-person non-cooperative game. This paper tries to relocate the roles of governments, and put forward some policy suggestion on promoting the “home appliances to the countryside” program.

    Research Methodology

    In research methodology, I will use data analysis as well as document analysis methods to analyze in which areas the government should improve the “home appliances to the countryside” program. The Ministry of Commerce and the National Bureau of Statistics have been promulgating data about the subsidy program each month. Moreover, Thought these data, the game relations among the participants in the program (including the government, the industry and rural residents) can be examined. Since the subsidy program is highly concerned by the public. Scholars have been investigated and commented on the program. Their researches can contribute to relevance the game relation among the participants.

    Bibliography

     

    " 149,"

    HOME APPLIANCES TO THE COUNTRYSIDE

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    The home appliance industry in China has mainly focused on exporting to European and America markets. It generally achieved double-digit growth in years before 2008. However, the export market is withering in recent year. The export of household appliances and electronic products last year recorded only a 3% increase and contribute to 72.5 billion U.S. dollars in 2008 (Xinhua News, 2009). For example, China’s export value of color TV sets had annually dropped by 18.4 in the first quarter of 2008, came to 1.67 billion U.S. dollars (Customs of China, 2009). Foreseeing such a declining trend, the Ministry of Finance and the Ministry of Commerce of the People’s Republic of China had introduced a pilot project for rural residents in December 2007. Such pilot project was called “home appliances to the countryside” program which is a subsidy policy on electronic home appliances for rural areas. The trail was to be held in three provinces (Shandong, Henan and Sichuan) and one city (Qingdao) by offering rural residents a 13% subsidy on consuming the selected three categories (televisions, refrigerators and mobile phones) of home appliances items.

    At present, the current level of utilization of home appliances in Chinese rural areas is only equivalent to that of the urban areas at the late 1980s (China Research and Intelligence Co., 2009). Every 100 Chinese rural households possess the number of color TVs, washing machines, cell phones and refrigerators only 2/3, 1/2, 1/2 and 1/4 respectively of the of urban households. The asymmetric information between the rural resident and the electronic home appliance industry results in adverse selection. This situation imposed the market failure as promoting electronic home appliances to rural areas. Hence, the subsidy policy of electronic home appliances for rural areas can be regarded as a policy support by the government in order to promote electronic home appliances and, thus drive a long-term structural change when encouraging manufacturers to design rural use products (Credit Suisse, 2009).

    In the third quarter of 2008, the risk of second mortgage in the United State provoked the global financial tsunami. Due to the eruption of the global financial tsunami, the global economy is in recession and the export of China suffered a great loss. Moreover, when the financial crisis has plunged the world into recession, protectionism in the globe market has been on the rise. According to a recent World Bank study, from October 2008 to February 2009, forty seven trade-restricting measures were implemented (E. Gamberoni and R. Newfarmer, 2009). While the authority had paid attention on the rising tide of trade protectionism and recession of export market, by the way of the primary success of the pilot project and the first extension of the program in the December 2008, the government announced the”home appliances to the countryside” program would be extended into a national wide scale in February 2009 (Ministry of Finance, Ministry of Commerce and Ministry of Industry and Information Technology, 2008). According to the notice, the government aims to boost domestic demand to secure economic growth, improve living standard of the country’s rural population, boost domestic consumption and stimulate the industrial production growth through the program extension. Such national wide subsidy policy covers the entire rural areas in the nation with nine categories of home electronic appliance items.

    Significances and aims of this study:

    After the extension of the “home appliances to the countryside” program in February 2009, it nationally targeted to the entire rural residents. According to the National Bureau of Statistics, the population of rural residents is 7.2 hundred million approximately, which is 55.06% of the population of China (National Bureau of Statistics, 2008). With this large numbers of target participants, how the program to promote and implement rests on the government and the electronic home appliances industries.

    The Chinese Premier, Wen Jiabao, has commented on the China’s stimulus package. According to his speech, ‘the China’s stimulus package is designed to both sustain economic growth and improve people’s livelihood’. Policies related to affecting people’s well-being are given priority to allocate public resources (Embassy of China in the US, 2009). Namely, the authority regards the subsidy policy a crucial strategy to increase domestic demand and secure the economic growth under the current economy circumstance and also a policy that also aims to improve the living standard of the rural residents. Ministry of Commerce estimates that the “home appliances to the countryside” program will boost domestic consumption and achieves RMB 150 billion in the first year and totally boost RMB 920 billion at the end of the program. However, compare with the approximate RMB 150 billion rural spending, the proportion is relatively small. During the first ten month of 2009, the national sales of the subsidy program was 2787.8 units which accounted for RMB 5.08 billion. Within this period, the sales figure record a continued dropping in August and September while the sales in August was around RMB 7.6 billion, and it was as low as RMB 6.2 billion in September. (People’s Daily, 2009). It was the first time of a continued two months sales decline from the RMB 8.8 billion sales in the July. These figures reveal that the outcome of the subsidy program is not able to meet the original approximation. This indicated the original estimation is too optimistic and overvalues the participations of rural residents.

    The subsidy policy is a comprehensive strategy involving large numbers of rural residents and large amount of money. The participants of the rural residents are the key fundamental of the subsidy policy. Rural residents will not blindly consume what the electronic home appliance industry put on the market despite there is a 13% subsidy from the government. They have their concerns and evaluations to the policy.

    This study mainly focuses on the “home appliances to the countryside” program after February 2009 and its aims to analysis the relationship among the government, the electronic home appliance industry and rural residents. For the government, the program is to boost domestic consumption in the rural area to secure economic growth. For the electronic home appliance manufacturers, they aim to gain benefits. For the rural residents, they consider to improve their living standard after purchasing the electronic home appliances through a subsided price. By studying their different purposes to participate in the program, I will try to conclude some suggestion to enhance the efficiency of the “home appliances to the countryside” program since the outcome is not satisfied with the assumed estimation.

    Literature review:

    “Home appliances to the countryside” program

    The English translation as ‘”home appliances to the countryside” program’ was officially used in the government and media in China. The program first started as a pilot project on three provinces and one city in December 2007. After holding the pilot project for one year, in December 2008, phrase one of the “home appliances to the countryside” program which extended its area to a total of 14 provinces, directly controlled municipalities and autonomous regions was started. At last, in the February 2009, the program extends to entire rural areas in the nation and to subsidize the rural residents in nine categories of electronic home appliances (color TV sets, refrigerators, mobile phones, washing machines, air conditioners, water heaters, computers, microwave ovens and electromagnetic cookers). The program will last for four years to 2012 and rural residents were entitled to a 13% subsidy on purchasing the selected electronic home appliances (limited within two units in each category). Since this subsidy program targeted the rural residents, only those with rural residency qualify for the subsidies. According to regulations of operating the “home appliances to the countryside” program, a price limit was set on each category. (For example, color TV set RMB3500, refrigerators RMB2500, mobile phone RMB1000, washing machines RMB2000, etc). The original purpose to set up such limit is to ensure items are affordable to the rural residents. However, this limit was regarded as one of the factors that hinder to achieve the approximate rural expenditure.

    The “home appliances to countryside” program has been running for more than ten months since February 2009 and different kinds of statistics were announced. According to the Ministry of Commerce, there are 17 home electronic appliances companies which has accumulated sales over 100 million and they include Haier, Gree, Midea, Skyworth, Konka, TCL, Lenovo, etc. Among these companies, Haier is the enterprise which benefits the most from subsidy program and has the highest accumulated sales figures of RMB 8.6 billion during the past 10 months. However, there are still 14 companies out of 348 which show fragmenting sales while another 17 enterprises sold less than 10 units (Minister of Commerce 2009).

    Indicators of quality of live

    As mentioned earlier in this study, the subsidy program in also a social welfare program. This policy supports the rural residents to buy electronic home appliances in order to improve their life standard. David E. Bloom, Patricia H. Craig and Pia N. Malaney in their study concluded several indicators to evaluate quality of life. They are ‘nutrition’, ‘health’, ‘education’, ‘income’, ‘gender equality’, ‘fertility’, ‘political, civil, and economic freedom’, ‘environmental quality’, ‘access to infrastructure’, and ‘access to information’.

    Televisions and mobile phone convenience their life and also provide a channel for them to gain information. Manufactures are required to add special functions which are fit to use in rural environment. The models of mobile phone which selected in the program are required to enhance the signal accessing ability where signal from network operators in rural environment are instability. In the long run, the purpose of the subsidy program is guiding the manufactures to set up production line for rural markets. As a result, when the program ends in 2012, the subsidy program is expected to motivate the production of the electronic home appliances sector, meanwhile, stimulate the industrial structure development.

    Consumption behavior in rural areas

    The “home appliances to the countryside” program is a strategy to boost domestic consumption by encouraging the rural residents to consume more. By understanding the consumption behavior of the rural residents, the government can estimate their reflection and hence the efficiency of policies can be guaranteed.

    Since there are various hierarchy of need, people would use their income to buy the basic survival resources as their priority while the development products would be subsequent and following by the leisure goods (W.H. Wong, 1999). In other words, there is a sequence of consuming. W. Guo concluded the basic sequence of expanding spending of rural residents in his study (W. Guo 1998). It is: reproduction goods, housing, and education for theyounger generation, transportation, electronic home appliances, and commodities. Under this sequence of consuming, we can predict the consumption behavior of rural households.

    Basically, personal disposable income minus personal saving is personal consumption expenditure (N. Gregory Manki, 2004). Therefore, personal disposable income becomes one of the factors that affect personal consumption expenditure. Wong in his study indicated that, the consumption power and intention to spend are different in different level of household income. Rural households of high level income prefer to consume to increase living standard. On the contrast, rural households of low income level trend to fulfill basic need because of constraining by the limed of income.

    When the rural residents can fulfill their basic need, they who are mobilized by the subsidy program are able to consume the electronic home appliances.

    Insecurity income source due to deficient in land use

    According to the World Bank, 90% of poverty is still rural excluding migrant workers from the rural population (World Bank, 2009). Although per capital net income of rural households has been being steady rising these years, the income gap between the urban and rural has also grown. According to the National Bureau of Statistic, in 2007 the per capital annual net income of urban households is around RMB 14908, meanwhile, the per capital annual net income of rural households is around RMB 4140, which is only 27.7% of the urban households (National Bureau of Statistic, 2008). Moreover, the rural households does not feel a sense of security on their income source since they only have use rights to but do not own the land themselves. In addition, the long-term investment in land is demotivated because of the insecurity of use rights (Jacoby H., Li G., Rozelle, S., 2002). Because of the consumption expenditure related to the personal income, in income of rural households are not security, they prefer to savings rather than consumption. It can be regarded one of the factors that demoviated the rural residents to participate in the “home appliance to countryside” program.

    Coverage of Social Security is low in rural areas

    According to China Social Security Annual Bulletin, in 2007, there were nearly 476 million people in China’s rural labor force. However, in that year, the numbers of workers contributed to the old age pension system was fewer than 52 million and only 11 percent of the rural labor force was covered by the scheme (Y. Yang, J.B. Williamson, C. Shen, 2009). Scholars conclude the old age pension system does not have reliable source of financing, and full of problems of funds embezzlement and is low benefits (I. Nielsen, C. Nyland, R. Smyth, M.Q. Zhang and C. J. Zhu, 2005). Since they do not and are not force to contribute to the old age pension. The rural residents rely on their savings as their risk protection. As a result, the attraction to the rural residents of the 13% subsidy from the program will decrease and the participation of the rural will be affected.

    Game Theory

    Game theory is a study of the ways in whichstrategic interactionsamongrational playersproduceoutcomeswith respect to theutilities of those players (Daniel Burgess, 2005). In other words, game theory analyses how agents (players) make decision which sufficient their own utilities instrategic situations (games). It is a mathematic theory which can be applied toin thesocial sciences research. It emphases that each player involved in game will estimate their benefits and acts in order to gain the best outcome individually. If in a situation where it is not possible to increase benefits only by the implementation of one single player, this strategy is called the Nash equilibrium. Players involved in game relation will only seek to benefit oneself, it sometimes leads to a situation of prisoner dilemma. In such situation, people do not cooperate although by so they can make both of them to be better off. ‘The efficiency of a policy depends on the coherence between the Nash equilibrium and policy maker’s ideal focal point’ (Osborne, Martin J. & Rubinstein, Ariel, 2003). Every participant involves a policy will make different choices which affect the outcome and efficiency of a policy. As a result, we can use the conclusion by analyzing game models of each participant to improve the efficiency of a policy.

    Arguments:

    The “home appliances to the countryside” program has dual functions. On one hand, it is an economic policy that emphases on maintaining economy growth by boosting domestic consumption. On the other hand, it is a social welfare policy that accents on improving the living standard of rural residents by subsidizing them to purchase electronic home appliances. The government, the electronic home appliances industry and the rural residents can choose their own strategies to participate to the “home appliances to countryside” program. This study argues the game relations among the players of the “home appliances to countryside” program will hinder the rural residents to participate to the program. As a result, the expected outcome of the subsidy program will be held back.

    Theoretical framework:

    As mentioned before, according to the game theory, the efficiency of a policy depends on the coherence between the Nash equilibrium and policy maker’s ideal focal point. The gap between the objectives and results of the policy originated from the game relations among the players. Although the government has had a good intention, the results of the program gained at present were not conforming to the original estimation. In this study, a game-theoretic model is used to study the relationships among rural residents, enterprises and governments under the policy that rural residents are encouraged to participate to the subsidy program. The government can choose to optimize the program in order to attract more rural residents to participate and consume. The rural resident can choose to or not to participate in the program by calculating their benefit and loss. As each participant seeks to satisfy its utility, this program can be analyzed as an n-person non-cooperative game. This paper tries to relocate the roles of governments, and put forward some policy suggestion on promoting the “home appliances to the countryside” program.

    Research Methodology

    In research methodology, I will use data analysis as well as document analysis methods to analyze in which areas the government should improve the “home appliances to the countryside” program. The Ministry of Commerce and the National Bureau of Statistics have been promulgating data about the subsidy program each month. Moreover, Thought these data, the game relations among the participants in the program (including the government, the industry and rural residents) can be examined. Since the subsidy program is highly concerned by the public. Scholars have been investigated and commented on the program. Their researches can contribute to relevance the game relation among the participants.

    Bibliography

    " 150,"

    Hotel Radidsson Overview

    ","

    View With Charts And Images
    History of Hotel Radisson

    The history of Radisson® dates back to 1909 when the first Radisson hotel, named after famous French explorer Pierre Radisson, opened in Minneapolis, MN. In 1962 the Radisson was acquired by Curt Carlson, a Minneapolis businessman and entrepreneur. Carlson had rocketed to national prominence in the 1940s and 50s with his successful Gold Bond Stamp Company, which pioneered the concept of customer loyalty programs.

    Over the brand’s rich legacy, they’ve launched many firsts including the first American brand in the U.S.S.R, the first travel agency loyalty program, look to book®, and one of the first partnerships across the Atlantic between Radisson and Rezidor. The Radisson brand is one of the oldest upscale brands in the United States.

    Hotels That Love to Say YES!SM

    Radisson is one of the world’s leading global hotel brands. It delivers vibrant, contemporary and engaging hospitality that is characterized by its unique Yes I Can!SM service philosophy. First-class, full-service hotels with a range of World of Radisson features that have been created specifically to be empathetic to the challenges of modern travel, including its 100% Guest Satisfaction Guarantee.

    Worldwide Portfolio

    Radisson has a strong worldwide portfolio and continues to grow with a focus on adding key hotels in major cities, airport gateways, leisure destinations and other important locations. Radisson

    currently has over 430 hotels operating throughout the world with 103 contracted properties under development.

    Overview of the Radisson Water Garden Hotel Dhaka

    Sprawling over seven acres of manicured grounds and gardens with water features, the Radisson Water Garden Hotel Dhaka offers all the conveniences of a business hotel with the atmosphere and amenities of an exclusive resort. Relax in our outdoor pool, unwind in our spa or enjoy a game of golf on our adjacent course. Stay at this hotel in Dhaka, Bangladesh and experience the difference.

    Rooms

    Spacious, Stylish Dhaka Hotel Rooms

    Treat yourself to the comfortable and elegant rooms and suites at Radisson Water Garden Hotel Dhaka. All guest rooms are clean, crisp and contemporary in design with soft fabrics and splashes of color, providing a comfortable and welcoming haven to work and sleep.

    Services

    Dhaka Hotel Provides Quality Services

    After a busy day, reward yourself with a dip in our outdoor pool, brush up your tennis skills or tee off at the adjacent golf course. Enjoy a range of health treatments at our Dhaka hotel spa, or energize the body at the gymnasium.

    Groups & Meetings

    Hotel in Dhaka, Bangladesh is Ideal for Events

    Radisson Water Garden Hotel Dhaka offers a variety of banquet and meeting facilities with 30,000 square feet of flexible function space. Our eight meeting and conference rooms are ideal for different styles of events and are sure to impress your guests.

    Dining

    Radisson Hotel Dhaka Offers Feast for Senses

    Dining at Radisson Water Garden Hotel Dhaka is a feast for the senses. Our seven restaurants and bars, including the Radisson Club Lounge, serve the finest cuisine and a selection of imported premium beverages. Our hotel in Dhaka, Bangladesh also features live entertainment.

    Local Area

    Dhaka Hotel near International Airport

    The Radisson Water Garden Hotel Dhaka is located on Airport Road and adjacent to the diplomatic enclave and upcoming premium commercial hub of the city. The hotel sprawls over 7 acres of manicured gardens and is only 5km from the International Airport.

    Rooms & Amenities

    Comfortable Dhaka, Bangladesh Hotel Rooms and Suites

    The Radisson Water Garden Hotel Dhaka features 204 stylish rooms and suites with work desks, complimentary high-speed Internet, direct control air-conditioning, in-room safes, mini bars and ironing facilities. All of our comfortable Dhaka, Bangladesh hotel rooms and suites are designed to meet your needs, whether you are traveling for business or leisure.

    Our suites and hotel rooms in Dhaka feature:

    · Complimentary internet facilities

    · Tea/coffee making facilities

    · In-room safe

    · Iron/ironing board

    · Mini-bar and room service (available 24 hours)

    · Non-smoking floors and non-smoking rooms available

    · Radisson Club Floors with Club Lounge facilities

    · Remote controlled television with satellite channels

    · Self controlled air-conditioning

    · Telephone with direct international dialing

    Deluxe Rooms

    These hotel rooms in Dhaka are stylish and well appointed with a queen bed or two twin beds, a moveable work desk, armchair and wardrobe with drawers. The average size is approximately 28 square meters with double glazed windows and three point bathrooms.

    Atrium Rooms

    These guestrooms are contemporary in style and generous in size – approximately 36 square meters. Rooms have either one king bed or two double beds, a moveable work desk, armchair and wardrobe with drawers. All the rooms have double glazed windows with four point bathrooms.

    Radisson® Business Class

    Business Class by Radisson® features upgraded amenities and services specifically designed with the business traveler in mind.

    You will enjoy the following amenities while staying in Business Class:

    · Upgraded in-room amenities

    · Daily breakfast

    · 1,000 Bonus Gold Points® per night

    · Weekday newspaper delivered to your room

    · Free pressing of 2 garments

    · Daily turn down service

    Additional amenities include:

    · Access to Business Class Lounge

    · Airport transfer

    · All day refreshment in the Business Class Lounge

    · Evening canapés and drinks at the Business Class Lounge

    · Laundry and dry cleaning

    Executive Suites

    These two-room suites are located on the 7th floor of the hotel and feature a large living area with separate bedrooms. The suite includes complimentary access to the Radisson Club Lounge and features all of the complimentary amenities of the Radisson Club Rooms.

    Hotel Services

    Dhaka Hotel With Internet Access, Pool and Spa

    Ideally located and exquisitely appointed, Radisson Water Garden Hotel Dhaka boasts a comprehensive range of facilities and amenities that are sure to make your stay memorable. Guests at our hotel in Dhaka, Bangladesh can enjoy the atmosphere of an exclusive resort and the conveniences of a business hotel, including wireless Internet access in public areas, a Business Centre with boardrooms and secretarial services, the largest conference, meeting and function facilities in Dhaka and undercover and outdoor car parking facilities.

    Our Dhaka hotel amenities include:

    · 24-hour reception/concierge and room service

    · Two swimming pools and tennis court

    · ATM booth/bank and currency exchange

    · Business Centre with boardroom and secretarial services

    · Car rental and parking facilities

    · Dry cleaning and laundry facilities

    · Health Club with Spa (View the Sundaree Spa menu) and Beauty Salon

    · High-speed wired and wireless Internet access

    · Hotel installed with safety and security equipment, including fire and smoke detectors, fire sprinkler system, electronic door locks and CCTV

    · Safe deposit box at Front Desk

    Sundaree Spa

    Revitalize and rejuvenate the body, mind and soul in Dhaka’s first internationally managed spa. Enjoy a range of pampering health treatments in the Sundaree Spa, where you’ll leave feeling refreshed and rejuvenated. The holistic philosophy aims to harmonize mind and body in an environment of pure relaxation. The Spa also features a collection specially designed relaxation areas and treatment rooms where you can indulge yourself with a range of mind, body and face treatments including aromatherapy and reflexology.

    Pool Area & Health Club

    After a busy and hectic day, reward yourself with a lap in the outdoor pool, brush up your tennis skills or tee off at the adjacent golf course. For serious-minded, health conscious people, energize the body at the modern gymnasium that features state-of-the-art fitness equipment. Guests can also enjoy the jogging trail on the hotel premises that offers the opportunity to energize and unwind.

    Radisson Club Lounge

    Experience a unique “hotel within the hotel,” where we offer distinguished services and a host of amenities in an ambience of refined sophistication. The Club Lounge on Level 8 offers unparalleled premium service with an inviting and intimate atmosphere where all your needs will be taken care of by our dedicated attendants. We have designed this private lounge with only one purpose in mind — to offer you a sanctuary of peace and relaxation.

    Additional Amenities for the Radisson Club Floor:

    Groups & Meetings

    Dhaka, Bangladesh Hotel Offers Event Space near Airport

    The excellent standard of service at the Radisson Water Garden Hotel Dhaka extends to our meeting and banquet facilities. Our meeting facilities provide the perfect place for corporate and social gatherings. Whether you are planning an exquisite party, wedding or business meeting, our Dhaka hotel’s 30,000 square feet of flexible function space is sure to impress your guests. With creative catering options, comprehensive audio/visual service and an experienced meeting staff, your event is sure to be a success.

    Our Dhaka, Bangladesh hotel meeting rooms include:

    Grand Ballroom

    This is the largest ballroom in Dhaka and accommodates business groups and social gatherings of up to 1,100 guests in theatre style. The ballroom is also divisible into two rooms and offers flexibility for smaller groups and functions. The large pre-function area offers the perfect setting for pre-dinner cocktails or a reception.

    Size: 10,000 square feet

    Capacity: 1,100

    Utshab-Banquet Hall

    This is an elegant function room which accommodates business groups and social gatherings of up to 850 guests in theatre style. This banquet hall is located on the ground level with separate guest pick-up and drop-off points equipped with a modern audio visual system. The octagon-shaped pre-function area offers the perfect setting for pre-dinner cocktails or a reception.

    Approximate size: 7,500 square feet

    Mallika Meeting Room

    This meeting space is located on level 2 of the hotel and is suitable for small meetings, training sessions and banquets. Approximately 1,050 square feet in size, this meeting room can accommodate 70 guests in theatre style and 50 guests in round table setup.

    Madhabi Meeting Room

    This intimate meeting room is located on level 2 of the hotel and is suitable for small meetings, training sessions and banquets. Approximately 900 square feet in size, this meeting room can accommodate 65 guests in theatre style and 50 guests in round table setup

    Radisson Club Board Room

    The Radisson Club Board Room, located on level 8, is an exclusive meeting room that offers boardroom setup for 12 persons and private rooms for closed-door meetings. This space is approximately 320 square feet in size and is adjacent to the Radisson Club Lounge.

    Mahua Meeting Room

    The Mahua Meeting Room is located on level 2 of the hotel and is suitable for small meetings, training sessions and banquets. Approximately 840 square feet in size, this meeting room can accommodate 35 guests in theatre style and 40 guests in round table setup.

    Business Center Meeting Room

    This meeting space, at the lobby level, offers a fixed boardroom-style meeting setup and can accommodate 16 guests. This room is approximately 550 square feet in size and is situated directly opposite of the Business Centre.

    Business Center Executive Room

    This intimate meeting space at the lobby level offers a fixed boardroom-style meeting setup and can accommodate 6 guests. This space is approximately 200 square feet in size and is situated within the Business Centre.

    Dining

    On-site Dining Distinguishes Us from Other Dhaka Hotels

    Radisson Water Garden Hotel Dhaka offers a variable feast for the senses. Our Dhaka hotel features seven on-site food and beverage outlets, including the Radisson Club Lounge. Our restaurants distinguish us from other Dhaka hotels and serve the finest cuisines plus a wide selection of imported premium cigars and beverages. The bar also features live entertainment.

    Dining amenities include:

    Water Garden Brasserie

    Offering all day dining, the Water Garden Brasserie serves a hearty breakfast, quick snacks, a lavishly displayed international buffet and cook-to-order food stations for lunch and dinner. Relax and sit around the water feature room and watch the activity in the hotel’s busy lobby lounge.

    Hours: 6:30am-11pm daily

    Sublime

    A modern, yet elegant restaurant, Sublime is our hotel’s premier restaurant featuring the very best of Bangladesh produce with an emphasis on its finest – fresh, tasty, inventive and wholesome – cuisine. Sublime is the ideal choice for a superb evening out for any occasion.

    Hours: 6:30pm-11pm daily

    Spice & Rice

    For an oriental meal, try Spice & Rice, a fun restaurant featuring Asian cuisine and a taste of the Orient. Sample a range of regional influences and specialty cuisine. Spice & Rice is a contemporary restaurant within a relaxed setting – sit at our action kitchen and let the chefs entertain you for the evening with their culinary skills.

    Hours: 6:30pm-11pm daily

    Chit Chat

    Adjacent to the pool deck and the Health and Fitness Center, Chit Chat is a place to enjoy with friends. While relaxing around the hotel’s pool, enjoy a refreshing ice tea, fresh lime frappa or milkshake accompanied by light snacks such as home-baked quiche, chicken pie, salad or sandwiches and a wide selection of pastries and cakes. Guests can dine in or take away.

    Hours: 11am-9pm daily

    Blaze Entertainment Lounge & Bar

    Situated on the ground level with its own entrance, Blaze Entertainment Lounge & Bar is a swinging lounge where you can enjoy a game of billiards with friends or just enjoy the evening listening to the live entertainment and socializing in the casual atmosphere.

    Hours: Sat-Thu 6:30pm-12:30am (closed Fridays)

    The Cigar Bar

    The Cigar Bar is an intimate, private retreat to relax and unwind. Our members and hotel guests enjoy the finest refreshments and a range of the world’s premium cigars, beverages and small snacks.

    Hours: Sat-Thu 6:30pm-12:30am (closed Fridays).

    Local Attractions

    Dhaka Hotel near International Airport, Commercial Hub

    The Radisson Water Garden Hotel Dhaka is one of the newest five-star hotels in Dhaka, Bangladesh. It is adjacent to the diplomatic enclave and premium commercial hub of the city and is only 5 km from the main international airport. During your stay at our Dhaka hotel, visit local attractions, including the National Memorial, National Assembly Building (Parliament Building) and Ahsan Manzil.

    Local attractions near our hotel include:

    National Memorial

    Located approximately 35km northwest of our Dhaka hotel, this beautiful structure was designed by architect Moinul Hossain. It is the symbol of the valor and the sacrifice of those killed in the Bangladesh Liberation War of 1971, which brought the independence of Bangladesh. The monument is composed of seven isosceles, triangular, pyramid-shaped structures, with the middle one being the tallest.

    National Assembly Building (Parliament Building)

    A masterpiece designed by the world-famous American architect Louis I. Kahn, this building is considered to be one of the great monuments of modern architecture and is located approximately 11km southwest of the hotel. This distinctive architectural marvel is one of the largest legislative complexes in the world.

     

    Ahsan Manzil

    Located on the bank of the River Buriganga and approximately 30 km south of the hotel, the majestic Ahsan Manzil is the epitome of the rich cultural heritage of Bangladesh. The palace has enjoyed a varied history, starting from the Mughal period to becoming a French trading centre. The then Nawab of Dhaka bought it from the French traders in 1830, and later it was home to the Nawabs, who played a significant role in the nation’s development during their nearly 100-year regime. The palace is a piece of national heritage and is now a museum.

    About Dhaka, Bangladesh

    Dhaka, Bangladesh’s capital, is a fascinating city. It is not only a comfortable blend of the East and West but is also a mixture of the past and present. It’s a place where history and culture surround you – where you can immerse yourself in the traditional Bengladeshi culture or feel the emerging sense of modern Bangladesh. Dhaka is the commercial and administrative centre of the country and has been a flourishing commercial hub of the sub-continent for centuries.

    Upgrade to Business Class

    Let Radisson help you work and help you relax.

    Introducing Business Class, upgraded amenities and services specifically designed with the business traveler in mind.

    With Business Class, amenities include:

    And as always, with every stay at Radisson, enjoy Free High-Speed Internet and our 100% Guest Satisfaction.

    Reference

    · Mr. Md. Asaduzzaman, the Duty Manager of Radisson Water Garden Hotel Dhaka.

    " 151,"

    HRM practice in Dhaka Sheraton Hotel

    ","

    “HRM practice in Dhaka Sheraton Hotel”

    1.1 INTRODUCTION:

    Human Resource Management must be forward thinking. They must not simply react to what “management” states. Rather they are assisting management with the “people” competent of organization.

    Business is such a thing where there are very few similarities or sometimes contradictions between theories and practices and Human Resource Management is the most crucial part of a business because it is concerned with the peoples dimension of mgt where human resource deal with other resources( financial, informational, physical resources) and utilize those resources. So organizations will try to acquire, develop & stimulate to keep outstanding workers will be effective & efficient. Organizations have to survive. If HRM cannot survive, organizations can’t survive. So they need coordination. But actually human being deals with the effects of the changing world of work.

    Moreover global competition has increased the importance of organization improving the productivity of their workforce as DHAKA SHERATON HOTEL do and looking globally for the best qualified associates. This has resulted in the need for HRM specialist trained in psychology, sociology, organization and work design and law.

    DHAKA SHERATON HOTEL therefore balance two primary responsibility- that of being a strategic business partner and representative of employees. Associates of the organization can assist it in gaining and maintaining a competitive advantage. Attracting and keeping such employees require HRM to have policies and practice that such employee desire. Because professionals in the human resource area important elements in the success in any organization.

    The intention of this report is to find the Human Resource management Practice in DHAKA SHERATON HOTEL, a growing hospitality service in the hotel sector. The report will, therefore, include the Human Resource planning, organizing and development of this organization.

    1.2 OBJECTIVES

    The objective of this report is, firstly, to get a apparent view of what actually is experience in the area of Human Resource Management of DHAKA SHERATON HOTEL.

    We know that ‘Human’ is the most important input for every organization. Every organization is made up of people in their own environment. Secondly comprehensible how to acquire their services, developing their skills, motivating them to high levels of performance, and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives.

    It is imperative for us as potential business executives to gather information about the prevailing scenario of Human Resource Management that are from personnel management. In this report, we are more concerned about what is happening other than what ought to happen in the HRM of this organization.

    1.3 Scope:

    Today Human beings are not only a worker but also major and most effective resource among all. A close study of DHAKA SHERATON HOTEL finds a sustainable and proper recommendation for future course of action. The scope of this report is to have practical experience about how a research is done in the business organizations. The report has the scope to cover different aspects of Human Resource Management, which include Human Resource Planning, recruitment and selection procedures, selection devices, job analysis, job design, training and development, and salary and compensation administration and application of labor law.

    A STAY WITH SHERATON SHOULD BE AN “EXPERIENCE”

    Warm: Traveling can sometimes feel cold impersonal, but once you arrive at Sheraton that all changes. Our team members go out of their way to make you feel welcome, because we know how to listen and we care you matter.

    Comforting: When you get Sheraton you just want to relax and be yourself. As you arrive you will not only see, but also feel the comfort all around the hotel. Our team members greet you and immediately make you feel at ease.

    Connections: At Sheraton, we help guests connect to what matters most to them. We connect with you as a person, so you’ll feel welcome like you belong here. We connect you to your home base helping you stay in touch with whats important to you so you feel in control not anxious or absent. We help you feel human again.

    DHAKA SHERATON HOTEL

    2.1 The organization:

    The orgin of Sheraton date back to 1937 when the company’s founders Ernest Henderson and Robert Moore start their business which is the worlds largest chain hotel under Starwood .In 1949 Sheraton entered in international chain through purchase of two hotels in Canada and thus international path started .Presently there are more then 480 hotels in the world. in Bangladesh Dhaka Sheraton hotel is one of them. Dhaka Sheraton hotel is the first global branded hotel in Dhaka in 1966.

    2.2World Perspective:

    The orgin of the Sheraton date back to 1937 vwhen the company’s founders, Ernest Henderson and Robert moore, acquired their first hotel in Springfield, Massachusetts. Within two years, they purchased three hotels in boston and soon expanded their holding to include properties from maine to florida. In 1947 Sheraton coroporation of America is the hotel chain to be listed on the New York stock exchange. In 1958 Sheraton include “reservation”, the industry’s first automatic electronic reservation system. In 1970 it introduce a toll free 800 number for direct guest acces which is still in use today. From 1998 it is leading 89 brands.In 2006 Sheraton boasts a portfolio of hotels in countries.

    2.3 Bangladesh Perspective:

    Dhaka Sheraton Hotel started its journey in the service sector 1966.The hotel main building constructed by Pakistan Services Limited. From that time the hotel was managed by Hotel Intercontinental till 1984. Bangladesh Services Limited (BSL), a government body took over the Ownership after the independence of Bangladesh. Since 1985 Sheraton has been managing the hotel.

    Dhaka Sheraton hotel is the first global branded hotel in Dhaka.

    For many years it has been recognized as a quality venue for business and travelers as well a great meeting place for local people having a world class standard with devotion to guest satisfaction. Standing majestically in the city’s most prestigious location in the lush surrounding of primier Ramna park the Dhaka Sheraton Hotel continues to distinguish itself as the prominent place to stay in Dhaka. Modern facilities along with friendly and personalized service make Dhaka Sheraton Hotel the ultimate destination for international business and leisure travelers. It is located just 3km from the main business district and only 16KM from the international airport.

    2.3.1.Services and facility:

    Hotel function are divided as follows:

    Rooms Division

    Food and Beverage

    Sales and Marketing

    Engineering

    A&G controller

    Human Resource Department

    2.4 Sheraton at a Glance

    Sheraton is one of the largest chain hotel in the world.

    It operates more than 860 countries and expanding business every each month.

    The hotel has more than 600t employee.

    The hotel is operated by GeneralManager who is the chief executive officers.

    Room Category: including smoking and nonsmoking room

    Royal Suite – 1

    Presidential Suite – 6

    Stan suite – 5

    Executive suite – 7

    Executive clubroom – 28

    Junior suite – 15

    Premium Detune – 20

    Detune room (single)- 155

    Detune room (twin) – 35

    Total = 272

    Restaurant’s setting Arrangement:

    a. Bithika Restaurant.

    b. Vintage Restaurant.

    c. The Bar

    d. Lobby cofi

    e. Dunhill cigar lounge

    f. Italia Bank Bistro.

    In room minibar

    Cabel channel with remote control TV.

    Writing desk.

    Electronic safe.

    International direct dialing.

    24 hours room service.

    Rollaway beds.

    Meeting, convention, exhibition and conference facilities.

    Guest Service: concierge

    Business center

    24 hours front desk

    Car rental service

    Guide tour desk

    Wake up service

    Recreation: outdoor pool

    Sauna

    Jacuzzi

    Tenis and squash

    GYM

    2.5 Organ gram of Sheraton Hotel

    General Manager

    Trevor McDonalds

    Head of the Department

    Khan Sadat Anwar (HR director)

    Financial controller (A .K M. Monirul Islam)

    Mahfuzur Rahman (Dir. Of sales)

    Beren Gomes (Exe. Sous Chef)

    Ruhul Islam (Chief engineer)

    Poly Rahman (Front office manager)

    Executive Committee

    HR Division

    Dir. Of HR

    HR manager

    Training manager

    Medical consultant

    Time office

    Finance Department

    Financial Controller

    IT manager

    Purchase manager

    Chief Store Keeper

    Cost Controller

    Sales

    Sales manager

    Reservation manager

    Revenue manager

    Marketing manager

    F & B

    Dir. Of F & B

    Restaurants manager

    Production

    Engineering Department

    Deputy Chief Engineer

    Shift Engineer

    Room Division

    Front Office Manager

    Reception manager

    Exe. Housekeeper

    Laundry Manager

    Supervisior of Business Center

    Supervisor of Concierge

    Outlet Supervisors

    Associates

    Staff

    2.6 Organogram of HRD

    In the hierarchy of the Dhaka Sheraton Hotel comes first the Director of HR who control over the HR Department and the activities of the HR personnel as well as recruitment and selection activities. Then horizontally comes five post include HR Manager, training Manager, cost & benefit manager, Medical consultant and time keeping coordinator. Further more, Medical consultant control two person (1 brother and 1 sister) for immediate medical service for guest and also for associate of the Sheraton. On the other side, training coordinator is working under training manager who deal with different training program for associates and different organizational trainee. Two-time keeper working under time coordinator to check in and check out time of associates at the time of working.

    HR Practice in Dhaka Sheraton hotel

    This department, in the organization, performs a wide range of tasks, though all of the HRM practices are not in the organization. It is managed property all over the world having its head office in Boston, America, area head office in Pakistan and regional office in India. So this one department has to keep track of all the associates in all country.. This department performs the duty of recruiting, selecting, training and development, motivating, job designing, performance appraisal and rewarding and giving benefits etc. Now with veteran Ex –com, associates and staff of HR in Dhaka Sheraton Hotel going forward the standard level of contentment.

    3.1 HR Planning:

    Human resource planning is very common phenomena of any organization. Human resource planning is a process to recruitment, retrenchment, job analysis-a process of job description(duties, responsibility, accountabilities with in the job), job specification(knowledge, skill, abilities of job holders) and job evaluation(relative value and distinguish in terms of salary).it may describe the planning process for recruitment and derecruitment. Under HR planning SWOT analysis of the Dhaka Sheraton Hotel is given below.

    Strength?Experienced associates

    ?Cultured environment

    ?Highest number of room

    		 WeaknessOld building

    Lack of communication among associates
    Opportunity?Sharing vast knowledge with new chain and guest Threat?To adapt new culture.

    Difficult to hold old culture.

    Cut the job

    3.1.1. HRIS:

    Human resource information system are now more “Uses friendly” and provide quick response Dhaka Sheraton Hotel maintain HRIS that kept important information about employee and their job facility and to retrieve information when needed.

    Basically information category of Human Resource Management system followed by DSH is given below:

    Category1. Basic non confidential information: DSH keep some information that are disclose to all at the time of appointment include:

    Employee name: In case of employee name DSH used to first name at first and then the last name

    Organization name: at the time of orientation DSH provide information about their organization name.

    Work location: At the time of joining DSH provide the exact location where they set the working area for associates.

    Work phone number: in case of contact number, it available to the operator for emergency work.

    Number of associates: number of associates in the working area mentioned by the department head at the time of joining.

    Work hygiene: At the time of orientation DSH disclose how to maintain hygiene program to all.

    Category 2. General non confidential information: some information that are in the system but not to disclose. Such type of information may give below:

    Social security: DSH provide social security with the help of health insurance and ensure the safety of the work place.

    Job Security: DSH provide job security by the contractual agreement with the associates.

    Position related information: In which position they offer, they should talk friendly about the responsibility.

    Other organization related information: provide information about the competitor in all training program.

    Category3. General information with salary: salary related information kept in the HRIS and associates know their payment structure.

    Current salary: HR provides the details information about the salary when associates join the organization.

    Effective date: Date of joining is known as the effective date of working.

    Category4. Extended confidential information with salary: salary and bonus related information sometime confidential and this is on the hand of management and worker union.

    Bonus information: boinus related information kept by the HR and worker union to whom they may give bonus.

    Benefit information: different types of benefit provided to the associates but depend on the decision of HR.

    Performance evaluation information: About the performance HR personally talk to the associates but not to disclose to other.

    Projected salary increase information: Every year DSH increment the salary range that should not disclose until providing to associates

    3.1.2. Planning Process: To meet the appropriate human resource requirement planning process is very crucial for the organization. Planning process set the relationship between current and future demand for and supply of the human resource.

    Define organization mission ? Set Corporate goals & objectives ? Assess current HR Demand for associate

    ?

    Compare

    ?

    Supply for associate Demand exceed supply

    Supply

    exceeds

    Demand?

    ?Recruitment

    Derecruitment

    3.1.3. The purpose of HRP is

    1. To assess where the organization is (in which stage)

    2. Where it is going?

    3. What implications have these assessments on the supply of HR.

    The HRM planning of Dhaka Sheraton hotel is also based on these objectives. The planning process includes the following tasks.

    HR inventory DSH:

    Report showing list of name, education, training, prior employment, current position, performance rating salary, capabilities, specialized skills

    – The report determine current skill available

    – It will guide next demand

    – Help people in selecting and training promotion and transfer.

    – Provide crucial information for identifying current or future states.

    Assessing where the organization going:

    1. No and mix of human resources are to achieve the organization objective.

    2. Demand for HR will depend on demand of product and services. They are positively related.

    3. Constantly develop HR to cope with the situation.

    Implications of future demand:

    If I have year to year analysis of trend also I have performance of HRI that will provide a specialized HR.

    People are not perfectly substitute for a person.

    Estimates to be made on both qualitative and quantitative task.

    Implications of future supply:

    Factors of increasing HR:

    1. New recruitment

    2. Lateral Transfer

    3. Returning from leave

    Factors of decreasing HR:

    1. Due to retirement

    2. Dismissal

    3. Lay off (Controllable, reasonable, forecast able)

    4. Voluntary quits

    5. Prolong illness

    6. Estimated change in external supply

    Retrenchment:

    It is a strategy. In a declining situation it is better to try surviving. Ways –

    – Out placement

    – Lay off

    – Leave of absence without payment

    – Loaning

    – Work sharing

    – Reduced work hour

    – Early retirement

    DSH also give me data about the people who have been separated from hotel due to retirement, dismissal, and reduced work hour

    According to the following data we understand the condition of separation.

    Year Associate became separate
    2006 34
    2007 65
    2008 (up to sept.) 30

    3.1.4 Job Analysis

    A job analysis is a systematic exploration of the activities within a job. This analysis involves the identification and description of what is happening on the job.

    Job analysis provides information about job currently being done and the knowledge, skills and abilities that individuals need to perform the jobs.

    Job analysis method:

    Dhaka Sheraton Hotel follow same job analysis method include:

    Observation method:

    Basically Manager On duty in Dhaka Sheraton Hotel acts as job analyst and watching the activities of associate’s together information.

    Technical conference method: This method uses Supervision every each Department with extensive knowledge of the job.

    Log Book method: In this method associate record daily activity such as problems activity how is going on etc.

    Outcome of job analysis:

    Job description: A written statement of what the job holders does, how it is done and why it is done.

    Job specification identifies the knowledge, skills, education, experience, certification and abilities needed to do the job effectively Job specification should perform the job more effectively than those locking those personal characteristics.

    Job evaluation:

    Dhaka Sheraton Hotel also evaluating job in terms of skill, knowledge and abilities that are important part of cooperation, administration. Example of job description and specification in the below.

    4.1. Recruitment:

    Recruiting is the process of discovering potential candidate for actual or anticipated organizational vacancies. It is a linking activity brining together those with jobs to fill and those seeking jobs.

    4.1.1. Recruitment Goals

    1. Increase the Guest satisfaction Index level by providing world class services.

    Tending an individual who is best suited to the job requirement.

    4.1.2. Recruitment Source:

    The more application received the better recruiter’s finding an individual who is best suted to the job recruitment. Dhaka Sheraton Hotel is likely to achieve its objectives by recruiting from external and internal sources.

    Internal Source: Dhaka Sheraton Hotel used to internal source or recruiting associates from within organization.

    Reason behind internal Recruitment:

    Improving the Probability of a good selection.

    Encouraging associates who are ambitious.

    Less costly.

    Internal associates already know the organization.

    Generally for normal entry level position fulfilled by internal recruitment.

    Employee referral:

    Dhaka Sheraton Hotel also used to employee referral. It is a recommendation from a current employee regarding job applicant. Especially it is used when internal circular come and applicant apply for another department in another position.Dhaka Sheraton Hotel also used to external source especially for expert as specialist position.For hiring best competent qualified ex-com DSH are using advertisement through bd jobs. Com.

    Recruitment Hrough bd jobs. com Show in the Appendix.

    In the circular, it shoes the department who are seeking for suitable candidate through the advertisement.The advertisement Show name of the department, No. of Vacancies, Job responsibility focus the duty of an associate for the desirable position, Job specificication Education Qualification, expansions requirement etc which clarify the job information in the eyes of job candidate.

    Advertisement for Recruitment through BD Jobs.com

    Dhaka Sheraton Hotel recruits people from the external sauce through Bd jobs. com. Number of external advertisement are given below which are used last two years and his year:

    Year Advertisement (External) Position
    2008 (upto Aug) 8 GSA

    Junior waiter

    Operator

    Sales Representative

    Driver

    It

    F&B coordinator

    Laundry attended.200710GSA

    Bellman

    Security (SSO)

    Driver

    Accountant

    Souse chef

    HSKP Attended

    Night auditor

    Shift engineer

    Junior engineer200612Chef

    Asst. sales manager

    PRO

    Sales representative

    Reception manager

    GSM

    Credit manager

    Duty manager

    Driver

    IT

    Electrician

    GSA

    Reason behind external recruitment:

    Finding Specialized associate.

    Outsides know about the recruitment policy.

    Build up image.

    5.1 Selection:

    Selection activity is required a lot of careful planning and careful thought. Selection process includes some steps that also follow by Dhaka Sheraton Hotel and every steps in selection process provides decision makers with information that is very effective.

    Recruitment & Selection

    After external circular, DSH screening resume and select the associates according to the selection process. In the following I collect last 2 years and recent information about those associates who are part of DSH in deferent department.

    Year Advertisement (External) Position
    2008 28 Housekeeping attended

    Junior waiter

    GSA

    Driver

    Laundryman

    Sales representative

    Front office manager200717GSA

    Driver

    Laundryman

    Electrician

    HSKP Attended

    Hygiene manager200628Driver

    Laundryman

    Electrician

    Housekeeping attended

    Sales representative

    Engineer

    Generally for recruitment the organization follows al the possible ways of selection. The steps of the whole process are as follows:

    ? Advertisement in daily newspapers

    ? Filling-up an application form by the candidates

    ? Initial scrutiny to make a short list

    ? Written test

    ? Short list of selected candidates

    ? Comprehensive interview

    ? Final selection

    Types of Job Offering: After selecting the appropriate candidate for the Job, DSH used to offer & types of Job:

    Permanent Job.

    Contract.

    Casual.

    . Payment Range:

    Including Service Change Permanent Job = 20,000 to 50,000

    Contract = 1000 to 20,000

    Casual = Tk. 30 per hours.

    5.1.1Selection process at DSH

    Failed to meet Qualification

    Failed to complete Application

    Failed test

    Failed to impress interviewer

    Problem Encountered

    Unfit physically

    6.1 Socialization & Orientation:

    Socialization process come from employee side. In this process individual attempt to learn the value and norms of working environment.

    . When new associates are recruited, they go through a series of formal as well as informal activities for the proper orientation of the new recruits. First of all, an official orientation program is held in the HR department, where all associates participate and the new ones are given a brief introduction of the hotel function and every each department, its operation, corporate mission and other similar topics. After it, the associates organize formal cultural functions inside of the company as a part of the orientation program to introduce with current associates. After the new associates start his/her normal activities, s/he is put under a team leader or supervisor for a specific period of time. The team leader or supervisor acts as a mentor for the new associates, who clarifies the job to the new employee, gives him mental support

    Socialization Process: Socialization process followed by DSH :

    Prearrival ? Encounters ? Metamorphosis Out come

    Productivity

    Commitment

    Turnovers

    Pre-arrival: In this stage associates arrive in an organization with a set of organizational value, attitude, expectation, such as shifting duty, what the rules in working area etc.

    Encounters Stage: The companion point between organizational expectation & reality such as behavior of co.owssless. Supervision etc.

    Metamorphosis Stage: In this stage new associate work out inconsistencies during previous steps and match will the norms of the organization.

    Orientation: Orientation comes from employee side. This activity also followed by DSH. Orientation program normally associate receive before joining the working place.

    From this orientation program all associates become familiar with chief executive and executive officers and these activities.

    7.1 Training and Development:

    Training as a learning experience that permanently changes in behavior and it is focusing on individual current jobs.

    Dhaka Sheraton Hotel providing training to improve performance and ensuring best guest service. Dhaka Sheraton Hotel providing on the and off the job training.

    7.1.1 TRAINING DETAIL:

    Training provided in the following year for a number of associates

    Year Department Type Associates
    2005 Front office Off the Job training Nasrin
    2005 Front office Off the Job training Zaman
    2005 Room Reservation On the Job
    2005 Business center Off the Job Faruque Ahmed
    2005 Concierge On the Job Md. Alamgir
    2006 Room Reservation On the Job Mr. Gafur Ahmed
    2006 Credit Off the Job Amir Afzal
    2006 Engineering Off the Job Esrarul Haq
    2006 Accounts On the Job Md. Motin Rahman
    2006 Housekeeping Off the Job Shawkan
    2007 Room Reservation On the Job Tareq Abdulla
    2007 Concierge On the Job Salim Ahmed
    2007 Front office On the Job Sarmin Chowdhury
    2007 Sales Off the Job Mahfuzur Rahamn
    2008 Front office On the Job M. Jahan
    2008 Front office On the Job Mridul Mitra
    2008 Front office On the Job S. Jahangir
    2008 Business center Off the Job Md. Shofiuddin
    2008 F & B Off the Job Dipu Choudhury
    2008 F & B Off the Job Jahidul Islam

    7.1.2Training Certification: Training certification is used to focus on the performance of associates. In the Appendix the profile of training in Telephone Department is shown. In this profile, number of task is using to forecast catheter the associate receive training in the following level:

    Level 1 : Has received training

    Level 2 : Able to perform with minimal

    Level 3 : Able to perform task independent

    Level 4 : Able to train other

    The above level recommended by the head of the department.

    7.1.3 DEVELOPMENT METHOD:

    All associates, no matter at what level, can be developed. Associates development by design is more future oriented and more concentrated with education than employee job specific training. Some development method of an individual’s abilities can take place on the job. The method followed by Dhaka Sheraton Hotel is given below:

    Job rotation: Job rotation involves moving associates to various positions in the organization in an effort to expand their skills knowledge and abilities. Sometimes they promoting the associates into a new position by Vertical location and also introducing short term lateral transfer in other department.

    Assistant to position: Also sometimes Dhaka Sheraton provides opportunity to work under a seasoned and successful manager often in different department in other organization. So associates can understand a wide variety of activities and duties of next higher level.

    Committee assignment: To share in decision making, to learn by others and to investigate specific problem etc provided by Dhaka Sheraton Hotel for associates. As a result they can find out the problem, alternative solution and implementing the task.

    Lecture courses and seminars: To acquire knowledge and develop their conceptual abilities the Dhaka Sheraton Hotel arranged lecture and seminars for the associates.

    8.1 Motivation:

    Motivation is the driving force of doing the activities effectively and efficiently. Motivation can be expressed in different meaning, because it also used to describe sort of behavior. As for example one person may be highly self motivated.

    Motivation one of the main criteria for effective human resource management is motivation. For the desired result of any organization, motivating the employees is very important. So the organization also tries to motivate its employees. But the organization does not have a standard motivational process. It motivates only with the help of increment. One thing about this increment is that it has no specific period. Sometimes it is a yearly or sometimes it is quarterly and again sometimes it is semiannually, depending upon the overall performance of the workers and the hotel itself.

    The human resource officer informed me that they believe in McGregor’s “Theory Y” and emphasize the safety and love need for all employees. So besides the increment, the Dhaka Sheraton hotel sometimes tries to motivate the employees by full-filling their required needs of the employee such as promotion, transportation service, house rent allowance, bonuses But as it is a ownership based organization, management plays a big role with the administrative department in determining these motivating factors. The organization is always cautious about that all the hygiene factors are present in the environment and if the employees are not motivated, at least they are not de-motivated.

      Dhaka Sheraton hotel also use negative motivation when they watch undesirable outcome from them. Reason behind negative motivation:

    Violate the rules and regulation in duty place.

    Stolen the materials of DSH.

    To sum up we can say to work best for most people is to understand that both positive and negative motivation are useful. So to give real service, we must add something which cannot be bought or measured with money, and that is sincerity and integrity.

    8.1.1 Performance appraisals:

    Performance appraisals designed to measure reasonable performance success. Performance appraisals are integral part of most organization. The performance appraisals process can help an organization to achieve its objectives by developing productive employee.

    Performance appraisals: Performance standards depend on the evaluating an employee’s current and or future performance. The process of performance standard appraisals followed by Dhaka Sheraton Hotel:

    Performance method: Two types of method used for performance appraisals: one for new associates and other for the executive.

    Performance method for new associates: It shows in the appendix. Under this procedure, Department head clarify the information by the following way:

    Product knowledge: Product knowledge describes the idea about star wood brand, Sheraton service, deferent department of the hotels, training facility etc.

    General knowledge- External: Such type of knowledge include holiday of different market, tourism place, competition of the hotel, idea about visiting place, embassy which is very crucial for front office who actually deal with guest and guest requirement.

    Administration: Interims of administrative side, associates should capture knowledge about duty, discipline, personal hygiene mealtime that are very essential part of performance to check whether they ready for job or not.

    Technical duties: On account of maintaining PABX system, we have to league the task of each department such as the duty of PABX system include memorizing the all-important number, transfer local, ISD call, Handling wakeup call, receive information & keep up it, besides coordinating with other department.

    Second method of performance appraisals: Specially designed for executive and permanent Staff.

    a. Working with others: Working with others includes.

    Team spirit & cooperation needed to help ensure team success.

    Act with professionalism and integrity refers an associate able to leap sensitive information confidential, maintain professional appearance in accordance with dress code & grooming policy.

    Resolve customer problem focus on performance of an associate raw they identify problem, solve problem and ensure guest satisfaction.

    b. Taking responsibility: In terms of responsibility manager or reviewer rating

    E = Exceeded objectives or

    M = Met objectives or

    D = did not meet objectives.

    It include following function:

    Take ownership: it any be positive or negative outcome of work performance to check an associates blaming others to resolve problem or not.

    Learn, Develop and adapt to chance: Here manager cheak raw associate learn, are they modify behavior, shifting priorities and job requirement of them.

    Work independently: Again manager look out associates as thy work without supervision. Complete task on time, up to quality standard.

    Manage time within the requirement policy.

    Attend to detail: Manger try to ensure associates performed carefully with full attention.

    Delivering results:

    Demonstrate functional excellence: Also reviews find out an associates develop the specific technical sells for effective job performance.

    Commit to Quality: An associate’s maintain the quality with a commitment to meeting or exceeding standard.

    Follow policies, direction and procedure in a positive manner as well as understand and respect chain of command.

    Multitask: Are they able to work in mute perspective or not

    8.1.2 Performance Remark:

    Performance procedure followed by DSH is averagely satisfactory I am conducted ex-com person and HR. From their point of view performance method is granted by all at satisfactory level. Because of to ling performance associates write down their view for improvement and contact with their supervisor & manager but these is an problem- associate who are weak in education side, they don’t understand what they need. As like a blind man they sign the paper.

    8.1.3. Reward and benefit:

    People do what they do satisfy some need .They look for a payoff or reward. Reward is not only payment but also promotion desirable work assignment. Reward system in Dhaka Sheraton hotel is given below:

    Intrinsic Reward: Reward one receives from the jobs works itself. Such as Dhaka Sheraton hotel associates pride is being a part of team in Dhaka Sheraton Hotel which is one of the largest chain and five star in the world.

    Extrinsic Reward: Rewards one gets from the employer usually money, promotion. In case of extrinsic reward Dhaka Sheraton Hotel introduce star associates of the month and pay Tk.2300.Also give gift voucher if associates one better job in favor of guest, business and other staff or associates.

    Reward also given on the basis

    Associate performance such as DSH give Honesty certificate.

    Business purpose who sale product at target level So DSH give compensatory recreation service

    Guest service

    Benefit:

    Social security: Dhaka Sheraton Hotel provide retirement, disability occours at the time of working benefits through health insurance.

    Worker compensation: Dhaka Sheraton Hotel also provide worker compensation to compensate employees for death or permanent disability.

    Maternity benefit: According to the Bangladesh Labor Act, Section 45(2) no women work in any establishment during eight weeks immediately following the day of her delivery. Dhaka Sheraton hotel following this rule and provide such kind of maternity leave.

    Example of Maternity Leave:

    April to June (2008)- Sayeeqa Haq Þ GM Secretary

    October to Nov. (2007) – Sazeda Rezwan Þ Asst. Catering Sales Manager

    June to Aug(2008) – ASMA Akhter Þ Controller Secretary

    According to the Section 46 payment of maturity benefit in respect of the period of 8 weeks preceding the expected day of her delivery and 8 weeks immediately following the day of her delivery.

    9.1. Safety and health Act: Dhaka Sheraton hotel also sets standards to ensure safe and healthful working environment and provide punishment for violators.

    Job security: Dhaka Sheraton Hotel also ensures safety and health hygiene for all. One of the HR activities is job security by providing safety devices and maintaining equipment. Safety equipment is Fire signal panel, crime signal, smoke detector, sprinkler, fire protector etc.

    Health security: Health security actually related to the food hygiene and hygiene in the working place. Dhaka Sheraton Hotel maintains the food hygiene by hygiene manager who tests the food. Also in the food and beverage section people used to hair net or hat, keep nail a moderate length etc.It also Include:

    Ensure worker get enough fresh air.

    Avoiding suspect building materials and furnishing by using smoke protector carpet.

    Keeping air ducts clean and dry.

    Paying attention on equipment hygiene for every department

    Work place violence: A specific plan of action for companies to follow is difficult to detail. So Dhaka Sheraton Hotel must train their supervisor or manager personnel to identify the problem before violence. In this case worker unions are very active in Dhaka Sheraton Hotel. They don’t go for violence always tries to negotiate.

    10.1. Worker Union

    To understand the activity of worker union we have to know what union is.

    Union: A union is an organization of workers, acting collectively, seeking to protect and promote their mutual interest through collective bargaining.The reasons behind to join works Union Diverse group of associate working DSH. They may join to get :

    Higher wages & benefit.

    Greatness Job Security.

    Influence work rules.

    Being upset with management.

    DHAKA SHERATON HOTEL used to an election which is held after every 2 years.

    They have 14 bodies union formed by direct election. They spend their energy in graters interest of workers well as expand the business of this organization. This union is one of the honest, disciplined and strong principal in Bangladesh. They never involved in any clashing or break any rule. They have a good relation with the management and which is very helpful for workers to fulfill their desire. Most of employees are satisfied about their work.

    When they are listed demand and submit a copy of charting of demand. After negotiating worker union submit “memorandum of Settlement”.

    Activity of worker union:

    Providing job security for minor fault.

    Helping the associates for taking bank loan.

    Retiring associates may continue according to their performance that supported by worker union. Ex-Abdul Kader (Credit) , Mr. Mohosin (Accounts)

    Playing vital role for keeping or assigning job for dependent. Also they do if any wishes early refinement.

    Willing voting system no one create any pressure.

    They also giving medical treatment for fatal diseases that and beard by company. ex-Kamal (F&B) he may received Tk 10 lac and supported him to go India.

    We organize religion program and special food menu from union fund.

    They organize picnic, cash money reward for student who perform well.

    11.1. INDUSTRIAL RELATION:

    The provisions of the labor laws for the time being in force in Bangladesh govern all workmen categories of employees at the Dhaka Sheraton Hotel.

    The termination of service, types of gross misconduct and dismissal for gross misconducts will also be governed by the Bangladesh labor laws.

    Probation Period

    On associates employment with this Hotel associates will be on Probation for a period of six months if work is of clerical nature. For other worker such period shall be three months. However, if work involves skill and the quality of the same cannot be judged within three months then the period may be extended by an additional period of three months.

    As a permanent worker if they are employed as a probationer in a new post they may at any time, during the probationary period, be reverted to the old permanent post.

    Hours of Work and Overtime: Bangladesh labor Act, 2006 Section 120 special definition of wages

    (a) Any bonus or other additional remuneration payable under the terms and condition of employment.

    (b) Any remuneration payable in respect of overtime work holiday or leave.

    Hours of work according to the Bangladesh labor Act,2006 Section 100 working time for adults 8 hours in a day.

    According to the Section 102(1) Working hour for adults 48 hours in a week.

    According to the Section 109 working hour for women 6 am to 10 pm

    The associates have to start properly dressed at the time of the work schedule. No associate is allowed to leave his working place during working hours, unless he/she has a written authorization from his department head. The permission must be given to the Timekeeper when leaving the hotel and hand it back to the Departmental Head on return and time of absence be recorded.

    Associates will have to work overtime if needed and he will be entitled to overtime allowance as per labor laws.

    Use the door marked Entrance and Exit for Employees only when entering or leaving the building. Clock the time card every time when we enter or leave. Associates are not allowed to touch or clock another employee’s time card. Failure to clock the card on any occasion means no payment will be made. Associates must not remain in the building or return after their working hours or on their day-off.

    Salary structure:

    In case of Dhaka Sheraton Hotel: There are different salary and pay scale. Their payment structure is like this:

    Grade-1: Junior waiter, engineer helper scale of pay: tk 1500.

    Other allowances:

    House rent Conveyance Medical

    1500/- 1550/- 1850/-

    Who are working in the level-1, their basic salary is 1500 with house rent, conveyance & medical, which in equal Tk 6400.

    Grade-2: Gardener, junior laundry attended, Junior HSKP Attended

    House rent Conveyance Medical

    1750/- 1550/- 1850/-

    Who are working under grade 2, they receive tk. 1750 basic with house rent, conveyance & medical which in total 6900.

    Grade 3: Bellman, Waiter, Car painter

    Scale pay: 2000

    Other allowances:

    House rent Conveyance Medical

    2000/- 1550/- 1850/-

    Associates of grade 3 receive 2000 as their basic salary with house rent, conveyance and medical, which is in total7400.

    Grade 4: Cook 1, Electrician, Laundry attended, HKSP attended.

    Scale of pay: 2350

    Other Allowances:

    House rent Conveyance Medical

    2350/- 1550/- 1850/-

    Associates of the grade 4 toke tk 2350 as basic include house rent, conveyance & medical which is equal to the 8100.

    Grade 5: Airport representative, senior waiter, senior electrician.

    Scale of pay: 2700

    Other Allowance:

    House rent Conveyance Medical

    2700/- 1550/- 1850/-

    Associates of the grade 5 toke tk 2700 as basic include house rent, conveyance & medical which is equal to the 8800.

    Grade 6: Security officer, captain, Nurse.

    Scale of pay: 3050

    Other allowance:

    House rent Conveyance Medical

    3050/- 1550/- 1850/-

    Associates of the grade 6 toke tk 3050 as basic include house rent, conveyance & medical which is equal to the 9500.

    Grade 7: HSKP supervisor, GSA, Laundry supervisor timekeeper.

    Scale of pay: tk. 3500

    Other allowance:

    House rent Conveyance Medical

    3500/- 1550/- 1850/-

    Who are working under grade 7, they receive tk. 3500 basic with house rent, conveyance & medical which in total 10400.

    Grade 8: Senior GSA, Telephone supervisor, senior security officer, Cashier.

    Scale of pay: tk. 4100

    Other allowance:

    House rent Conveyance Medical

    4100/- 1550/- 1850/-

    Who are working under grade 8, they receive tk. 4100 basic with house rent, conveyance & medical which in total 11600.

    Grade 9: Head Waiter, HSKP supervisor & Coordinator Ship leader.

    Scale of pay: tk. 5000

    Other allowance:

    House rent Conveyance Medical

    5000/- 1550/- 1850/-

    Who are working under grade 9, they receive tk. 3500 basic with house rent, conveyance & medical which in total 13400.

    Absenteeism

    If Associates are unable to report for work any reason, notify the Human Resource Department or any department Head immediately of the reason for their absence and when they will be able to return to work.

    Habitual absence without leave or absence without leave more then 10 days constitution the offence of misconduct and is punishable to the extent of dismissal from the service under the relevant labor laws.

    Leave Intitlement

    Annual Leave with Wages

    After completion of 12 months continuous service in the Hotel associates are eligible to annual leave during subsequent period of 12 months, leave with full wages for 22 days.

    Example of Annual Leave

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    Human Resource Management, its Procedure and Practice in “CARITAS Bangladesh & Pubali Bank Limited”

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    Human Resource Management, its Procedure and Practice in “CARITAS Bangladesh & Pubali Bank Limited”

    Human Resource Management is concerned with the “people” dimension in management. Since every organization is made up of people, acquiring their services, developing their skills, motivating them to high levels of performance, and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives. This is true regardless of the type of organization-government, business, education, health recreation, or social action. Getting and keeping good people is critical to the success of every organization, whether profit or nonprofit, public or private.

    Those organizations that are able to acquire, develop, stimulate, and keep outstanding workers will be both effective and efficient. Those organizations that are ineffective or inefficient risk the hazards of stagnating or going out of business. Survival of an organization requires competent managers and workers coordinating their efforts toward an ultimate goal. While successful coordination can’t guarantee success, organizations that are unsuccessful in getting such coordination from managers and workers will ultimately fail.

    Human resource management is the set of organizational activities directed at attracting, developing and maintaining an effective workforce.

    Human resource management is a field of management involves planning, organizing, directing and controlling the functions of procuring, developing, maintaining and motivating a labor force.

    Objectives of Human Resource Management

    Objectives are benchmarks against which actions are evaluated. HRM has some specific objectives by which organizations are benefited to materialize the goals of the enterprise. The objectives are given below:

    1. To help the organization reach its goals:

    Organizations achieves their goals by the utilization of resources. Human resource utilizes all other resource without which an organization can never reach its goals. The HRM helps the organization to reach its target.

    2. To achieve effective utilization of human resources:

    Human resource are socio, psychological being. They are to be natured, motivated, inspired to contribute their best to the organization. The objective of HRM is to develop and utilize all avenues to specify the human resources. So that, there is effective utilization may be possible.

    3 Employ the skills and abilities of the workforce efficiently:

    HRM is to buildand protect the most valuable asset, people in the organization. This entails that human skills and abilities are to tracked rightly, bridge the gaps with realities and place them in the most competent jobs so that they can best use their skills and abilities.

    4. To provide the organization with well- trained and well motivated employees:

    The objective of HRM is to enhance the required skills and potential abilities through training and development. It is also intended to make the employees happy with the job. All the goals make human resource management competent to provide organization a satisfied, motivated and trained workforce that makes organization competitive in the economy.

    5. To increase the employee’s job satisfaction and self-actualization:

    The human potentials have an ability that are engaged only when they are satisfied with the jobs and feel a sense of belongingness and fulfillers with their organization. HRM is aimed at enhancing the environment of the organization in such a manner. So that the human resource is maximize their job satisfaction and actualize their self objectives and goals.

    6. To achieve quality of work life:

    The HRM is to develop and maintain a quality of work life that makes employment in the organization desirable. Quality of work life includes amicable management and supervisory style, freedom and autonomy in decision making, satisfactory psychological conditions working hours and meaningful jobs. A sound policy and program would facilitate the organization to have qualified persons and to promote motivated workforce.

    7. To communicate HRM policies to all employees:

    Communication is an effective tool to know about intensions of internal and external human bodies with which organization has got interest. The internal HR is to be communicated with policies, programs and actions which are relevant to their interest. It should be communicated in their own language; so that they can best understand and follow it accordingly.

    8. To maintain ethical policies and socially responsible behavior:

    All HRM activities must be fair, truthful and honorable. People shall not be discriminated on any account. All basic rights of people should be protected. These ethical principles and activities should apply to all activities.

    9. To manage change:

    Change is inevitable and human is the most deterrent force to bring about changes. The relationships between and among people in organization are going through rapid, turbulent and strained development. Therefore, flexible approaches must be initiated and used effectively without jeopardizing the survival of the organization. HRM is, thus targeted to cope with changes and maintain sustainable growth of the organization.

    10. To secure the integration of the people with the organization:

    HRM is intended to match people with the organization. The matching is done by talking into consideration personal jealousies, prejudices, personality, conflict, cliques, and factions, favoritism, nepotism which is deterrent to commitment and integration. This would execute the objective of HRM to secure integration of people with the organization.

    11. To manage increased urgency and faster cycle time:

    Today, firms place a growing emphasis on speed and urgency, the ability to increase customer service, the development of new product, training and education of technicians, managers and astute decision makers thought of in terms of cycle time. Therefore, HRM is distinct to prepare people meet this faster cycle time trough quick response to develop people to recruit and select most talented person for the organization.

    12. To maintain better human activities:

    HRM mainly deals with human resources achieve objectives of the organization. So it is important to maintain better human relations.

    Function of Human Resource Management

    Within each functional area of human resource management, many activities must be accomplished so that the organization’s human resources can make an optimal contribution to the organization’s success. There are four basic functions of human resource management.

    Acquisition Function

    Training & Development

    Motivation

    Maintenance

    1. Acquisition Function:

    It deals with human resource planning. It includes job analysis, recruitment, selection and socialization.

    · Human Resource Planning:

    It is the process that helps to provide adequate human resources to achieve future organizational objectives.

    · Job Analysis:

    It is the procedure by which one can determine the duties of the positions in the organization and the characteristics of the people to hire for them. It produces information for writing job description and job specification.

    Job analysis methods:

    The methods that managers can use to determine job elements and the concomitant knowledge, skills, and abilities necessary for successful performance include the following:

    OBSERVATION METHOD

    INDIVIDUAL INTERVIEW METHOD

    GROUP INTERVIEW METHOD

    STRUCTURED QUESTIONNAIRE METHOD

    TECHNICAL CONFERENCE METHOD

    DIARY METHOD

    Job analysis process:

    Ø Functional Job Analysis

    Ø Position Analysis Questionnaire

    Purpose of job analysis:

    § Job description

    § Job specification

    § Job evaluation

    Job analysis is the starting point of sound human resource management.

    · Recruitment:

    It is a process of finding and attracting qualified people for job.

    Internal recruitment channel:

    Ø Job-posting programs

    Ø Departing employees

    External recruiting channel:

    Ø Walk-ins and write-ins

    Ø Employee referrals

    Ø Advertising

    Ø Educational institutions

    Ø Professional associations

    Ø International recruiting

    Constraints and challenges of recruitment:

    § Strategic and human resource plans

    § EEO legislation and affirmative action plans

    § Environmental conditions

    § Organizational policies

    § Recruiter habits

    § Job requirements

    § Costs

    · Selection:

    Selection process is a series of specific steps used to decide which recruits should be hired. This process begins when recruits apply for employment and ends with the hiring decision. Right person for right job at the right time is the main goal of selection.

    Steps in the selection process:

    § STEP-1: PRELIMINARY RECEPTION OF APPLICATIONS

    § STEP-2: EMPOLYMENT TESTS

    § STEP-3: SELECTION INTERVIEW

    § STEP-4: REFERENCES & BACKGROUND CHECKS

    § STEP-5: MEDICAL EVALUATION

    § STEP-6: SUPERVISORY INTERVIEW

    § STEP-7: REALISTIC JOB PREVIEWS

    § STEP-8: HIRING DECISIONS

    Dependency of human resource management activities on the selection

    Inputs Human resource activity

    · Socialization:

    It is a process of getting new employees acquainted with the organization, its culture, rules and regulations, objectives and supervisors and other employees.

    Socialization process

    SOCIALIZATION PROCESS

    ORGANIZATION’S INDIVIDUAL’S

    CULTURE & VALUES PERSONALITY

    Socialization through orientation:

    Orientation covers the activities involved in introducing a new employee to the organization and to his or her work unit. It expands upon the information received during the recruitment and selection stages and helps to reduce the initial anxiety we feel when we first begin a new job. Through orientation programs, the values of organization are transmitted to newcomers.

    2. Training and Development:

    This function of human resource management includes: EMPLOYEE TRAINING, MANAGEMENT DEVELOPMENT & CAREER DEVELOPMENT.

    Training may be defined as a systematized program to suit the needs of a particular organization for developing certain attitudes, actions, skills and abilities in employees irrespective of their functional levels.

    Development helps the individual handle future responsibilities, with little concern for current job duties.

    Career development identifies paths and activities for individual employees as they develop within the organization.

    Steps of training and development:

    Training methods:

    1. ON-THE-JOB TRAINING

    Ø JOB INSTRUCTION TRAINING

    Ø VESTIBULE TRAINING

    Ø TRAINING CENTER-TRAINING

    Ø SIMULATION

    Ø APPRENTICESHIP

    1. OFF-THE-JOB TRAINING

    Ø LECTURES

    Ø THE CONFERENCE METHOD

    Ø GROUP DISCUSSION

    Ø CASE STUDY

    Ø ROLE PLAYING

    Ø PROGRAMMED INSTRUCTOR

    Ø CASE STUDY

    Ø ROLE PLAYING

    Ø E-LEARNING

    MANAGEMENT DEVELOPMENT METHOD:

    1. ON-THE-JOB DEVELOPMENT

    Ø COACHING

    Ø UNDERSTUDY ASSIGNMENT

    Ø JOB ROTATIONCOMMITTEE ASSIGNMENTS

    1. OFF-THE-JOB DEVELOPMENT

    Ø SENSITIVITY TRAINING

    Ø TRANSACTIONAL ANALYSIS

    Ø LECTURE COURSES

    Ø SIMULATION EXERCISES

    3. Motivation:

    Motivation is the process that account for an individual’s intensity, direction and persistence of effort toward attaining a goal. High performance depends on both ability and motivation.

    Motivation in human resource management includes:

    v JOB DESIGN

    v PERFORMANCE EVALUATION

    v REWARDS

    v JOB EVALUATION

    v COMPENSATION

    An employee’s job performance can be defined as being determined by the level and interaction between ability and motivation:

    JOB PERFORMANCE= ABILITY X MOTIVATION

    This equation dramatizes the importance of not only having employees with the talent to do a good job but recognizing that human resource managers must be concerned with providing the stimulus that converts employee talent into successful job performance.

    4. Maintenance:

    The objective of this function is to retain people who are performing at high levels. This requires that the organization provide safe and healthful working conditions and satisfactory labor relations. If these activities are performed effectively, we can expect to have competent employees who are committed to the organization and satisfied with their jobs.

    This function includes:

    Compensation administration

    Benefits and services

    Safety and health

    Labor relations

    Collective bargaining

    Discipline

    Human Resource Practice in Bangladesh

    Condition of HRM in Bangladesh:

    Human resource management is a strategic and coherent approach to the management of an organization’s most valued asset – the people working there who individually and collectively contribute to the achievement of its goals. HRM also can be regarded as a set of interrelated policies with an ideological and philosophical understanding. It is concerned with the employment, development, and reward of people in organization and the conduct of the relationship between management and the workforce.

    HRM maximizes output and efficiencies of employees. It ensures conductive human relations for uninterrupted production. Therefore, it deserves implementing in all organizations of all the countries in the world including Bangladesh.

    The conditions of HRM in Bangladesh are discussed below-

    Recruitment:

    Forms operating in Bangladesh use advertising and personal references to inform opening to sources. It is observed that a very few firms, specific institutions sources for supply of manpower. External employers use specific agents of agencies in Bangladesh for getting their supply of manpower.

    HR Planning:

    Government organizations, autonomous corporations and large private business or non-business organizations make short and long term HR plan but medium and small organizations; private limited companies do not have any formal HR plan. They work on immediate demands.

    Selection:

    Large number of organization follow traditional interview panel method and written employment list to choose the best candidate for the open positions. Unstructured interview is the general phenomena. A few organizations make reference check. Medical examination is done by almost all large organizations. Foundation training and orientation program are taken by a few large organizations. But it is absent in medium and small industry describing the job to potential candidates.

    Training and development:

    Government organizations have got a systematic training and development program. But selection of trainees is made at random. Therefore, it becomes ineffective. Large private organizations in-house training and very few take external training and development program. Internal training is provided by small and medium organizations but no external training. Apprenticeship is the popular internal training method. Specialized institutions and university related programs generally use external training and development mechanism.

    Wages and Salary:

    Government follows a wages and salary structure recommended by wages and salary constituted after irregular interval. Non-government organizations follow their own pay structure which is in maximum cases adjusted with government pay. Pay discrimination is high in private organizations. Workers are measurably mistreated in private organizations with barely minimum wage and discriminative pay.

    Performance appraisal:

    Most organizations maintain formal evaluation system and graphic rating scale method to appraise performance. It is annually made and done by immediate boss. It is popularly known as ACR (annual confidential report) in Bangladesh. In some organizations a board evaluation is made.

    Employee separation:

    Government organizations follow a specific limit, 57 years as retirement basis. Private organizations do not have any age limit for retirement. A systematic discharge, dismissal or termination procedure as per the law is followed by government organizations, but not by private organizations, though they are under the same law. Pension, provident fund, gratuity are the regular benefits for retiring employees in government organizations. A very few private organizations have got provident find, gratuity but none of them has any pension scheme.

    Incentives:

    Employees of government organizations get several incentives and benefits such as leave with pay, leave without pay, festival bonus, medical allowance and support etc. A very few give incentive bonus on regular basis. In some organizations health insurance, traveling allowances, medical allowance are given but majorities of the organizations do not consider leave with pay.

    Problem of HRM in Bangladesh:

    HRM maximizes output and efficiencies of employees. It ensures conductive human relations for uninterrupted production. Therefore, it deserves implementing in all organizations of all the countries in the world including Bangladesh. HRM is a critical competitive edge under the present homogeneous technological world. Therefore, a special attention and recognition to the HRM is required to win competition and to sustain in the volatile sharply competitive market economy. Nevertheless, management of the firms of Bangladesh doesn’t give much attention to this pivotal resource. Several researches have discovered numerous problems that are the different to the effective functioning of HRM in Bangladesh.

    They are discussed below:

    Lack of HRM expert:

    HRM is not recognized by many entrepreneurs as essentially distinct specialized knowledge. Moreover, institutional facilities to train and develop HRM are also very important. Therefore, shortage of specialized knowledge HRM experts and lack of recognition to HRM to contribute to the efficient supply of HRM experts is an important problem of HRM in Bangladesh.

    No separate of HR department:

    It is found that HRM is generally performed by people to designate as manager, administration. A very few organization have a separate HR department. Therefore, the function of HRM doesn’t have efficient exposure to the organizational development.

    Lack of effective HR planning:

    It is observed that a large number of firms don’t have any formal HR plan, either short term or long term. They go on whims or crisis. This severely effects the organizations in long run performance and survival.

    Lack of career development program:

    Career development program gives a promotional ladder to the incumbents, and recognition to the talented, high achievement motivated persons to stay in the organization. It is found that, a large number of private concerns don’t have any career development programs for the employees. They rather pressurize to develop themselves in their own cost. Training and development is regarded as useless venture.

    Lack of effective evaluation of training and development:

    Theorganizations that provide internal and external training and development for employees, don’t give right evaluation and reward to their achievements. Redesigning of jobs with challenging tasks, expanding authorities and/ or appropriate placement where the employees can place their newly acquired knowledge are not done. Therefore, trained and development employees lost their motivation to contribute effectively to their performance.

    Wrong placement:

    ‘Right man at the right place’ is the doctrine of organizational efficiency. But nepotism, favoritism, partisans etc. causes the problem of placing the right qualified persons to the appropriate place job. This happens both in private and public organizations in Bangladesh.

    Unhealthy trade union movement:

    Trade union is an inevitable part of the industrial democracy. It supports moves and prospers the organizational purpose and there by increases welfare of the workers. But trade union in Bangladesh is highly polarized, detracted and least committed to their purpose. Undue political interference, political association and indulge into unfair labor practice made trade union as a deterrent to the organizational prosperity and a curse of the economy.

    Unfavorable pay structure:

    Pay is the vital source of motivation to our people who are struggling for their subsystems. The general wage level of BD is not favorable to maintain minimum cost of living. Moreover, there is no protection for future uncertain. Therefore, it affects the labor productivity and labor relations.

    Lack of security:

    Security is desirable condition for getting motivation and commitment from people. Jobs of private firms are totally insecure. Financial productions are insufficient on inexistent. Future protections are not given any firm. The provisions of existing labor laws are not maintained. All these situations create an unhealthy, unfavorable and hostile environment to the work force.

    Caritas Bangladesh

    About the organization:

    Caritas is a Latin word. Literally it means “charity” or universal love. They prefer “LOVE” which includes all aspects of humanity. Caritas is Bangladeshi, local, national, non-profit, development organization, established by the Catholic Bishops’ Conference of Bangladesh, to carry out activities of integrated social welfare and development. Caritas is registered under the Societies Act XXI of 1860 No.3760-B/11 of 1972-73.

    It is also registered with the NGO Affairs Bureau., Prime Minister’s Secretariat, and The People’s Republic of Bangladesh No. 009 of 1981 under the Foreign Donation Regulation Ordinance 1978.

    Caritas was founded in 1967 as the eastern branch of Caritas Pakistan. It was re-organized and become known as Christian Organization for Relief and Rehabilitation (CORR), and took on the character of a national organization of January 13, 1971. The name Caritas was re-introduced in 1976.

    Thus, counted from its inception as Caritas Pakistan it is over 39 years old. But they prefer to take into account the period since our Liberation as a Sovereign Country and Homeland, Bangladesh. Having new directions Caritas the become a very important and active organization. In that perspective they have observed their Silver Jubilee in 1997.

    Caritas has its Head Office in Dhaka. There are seven Regional Offices in Barisal, Chittagong, Dhaka, Dinajpur, Khulna, Mymensing and Rajshahi. In all these places Caritas is operational in Integrated Development, Disaster Management and Human Resource Dvelopment, under a central management. Caritas restricts itself at present to 139 Upazilas for integrated human development work. During emergencies, such as natural disasters, Caritas is operational in any of the country.

    Vision

    In the light of the Social Teachings of the Church, Caritas Bangladesh envisions a society which embraces the values of freedom and justice, peace and forgiveness, to live as a communion and community of mutual love and respect.

    Mission

    Caritas Bangladesh tries to become a partner of people – especially the poor and marginalized, with equal respect for all – to attain integral development, to live a truly human life in dignity and to serve others responsibly.

    Priorities

    1. Human Resource Development through Education, Formation and Capacity Building

    Quality Education for children and youth, especially those in need.

    Formation and development of Youths and Adolescents.

    Capacity building and formation of staff.

    2. Establishment of Social Justice and human Rights through the Capacity Building of the

    Poor, of the Women and of the Ethnic Communities.

    Promote, uphold and advocate for Social Justice in favor of the poor and marginalized.

    Create appropriate conditions to eliminate all forms of discrimination against gender, class, religion and ethnicity.

    Self-help capacity building of the hardcore poor for their sustainable livelihood.

    Activation of self-managed sustainable People’s Organization through appropriate educational and technical support.

    Capacity building through institution development.

    3. Health and Care

    Preventive and Curative Health services including Safe Water and Sanitation

    Preventive Education on HIV/AIDS and Drug Abuse and Care for the drug addicts.

    Care for the Disabled and Elders.

    Family Life Education for promoting Responsible parenthood and Respect for Procreation.

    4. Ensure Ecological Sustainability through the Appropriate Use of Natural Resources

    And Capacity Building in Disaster Management

    Humanitarian assistance to people affected by Natural Calamities and Man-made Disasters

    Building for the capacity of the people in coping with disasters, before, during and after.

    Promote innovative steps to minimize Degradation of environment and Depletion of Natural resources to restore Ecological Balance.

    Bio-diversity Conservation and Poverty Reduction through sustainable use of natural resources as well as promotion of Indigenous Knowledge and techniques.

    Several Caritas projects at a glance:

    Co-operative & extension services and rural development:

    Ø Development Extension Education Services (DEEDS)

    Ø Integral Human Development Project (IHDP)

    Ø Improvement of Living standard of the Hardcore Poor of Sandwip (ILSHP)

    Ø Rural Infrastructure Development and Job Creation Measures (RIDJCM)

    Ø Caritas development Institute (CDI)

    Ø Prevention of Trafficking in Women and Children through Awareness Building

    Ø Training, Evaluation, resource and Counseling (TERC)

    Ø Human Rights Education programmer (HREP)

    Ø Capacity Building and Morality Project (CBMDP)

    Ø Gender Development Program (GDP)

    Ø Integrated Community Development Projects (ICDPs)

    Ø Projection and Establishing Rights on Land of Adivasi in Mynensingh (PERLAM-MJF)

    Ø Employee Creation Through Sericulture (ECTS)

    Agriculture and environment:

    Ø Social Forestry Project (SFP)

    Ø Horticulture Develop Project (HDP)

    Fisheries development:

    Ø Sustainable Aquatic Resources Management (SARM) Project

    Ø Community Based fisheries Management (CBFM) Project

    Ø Sustainable Environment Management Program (SEMP)

    Ø Management of Aquatic-ecosystem through Community Husbandry (MACH)

    Ø Patuakhali Barguna Aquaculture Extension Project (PBAEP)

    Vocational trades training and employment creation:

    Ø Technical Training Schools (regional and Mobile)

    Ø Employment Creation through Trade Training for Street Children and Youth

    Ø Mirpur Agriculture workshop and Training School (MAWRS)

    Ø Bandarban Technical Training centre (BTTC)

    Community health and family planning:

    Ø Support to Eye Hospitals of Bangladesh National Society for the Blind

    Ø Under-Fives and Maternity Clinic

    Ø Dhanjuri Leprosy Control Centre, Dinajpur

    Ø Khulna Leprosy and TB Control Project

    Ø Centre for Assistance to the Sick

    Ø Reproductive and Child Health Development Project

    Ø Safe Motherhood project

    Ø HIV/AIDS Prevention Project

    Ø Bangladesh Rehabilitation and Assistance Centre for Addicts

    Ø Programme for Rehabilitation of physically Handicaped

    Ø Work with the Disabled

    Ø Assistance to Charitable dispensaries/Clinics

    Literacy and numeracy:

    Ø Underprivileged children Preparatory Education Programme

    Ø Formation of Youth and teachers Programme

    Ø Youth Formation Activities

    Ø Education Support Programme to Children

    Ø Education Programme for Indigenous People of Chittagong Hill Tracts

    Ø Literacy and Health Care Programme for Children of Slums

    Disaster management:

    Ø Emergency disaster management Programme

    Ø Strengthening of Community Resilience to Withstand flood Project

    Ø Strengthening of Arsenic Preparedness and Mitigation Project

    Ø Shelter for the Poorest Women and Children

    Ø Sensitization, Community Mobilization and Disaster Management Programme

    Ø Disaster Prevention, Preparedness and Mitigation Programme

    Ø Humanitarian Assistance for the Fire-Affected Familis under Mohalchhari

    Ø Capacity Building in Disaster Management

    Ø Construction of River Embankment Pavement, Bhalukapara

    Handicrafts:

    Ø CORR—The Jute Workers

    Mini projects and discretionary fund grants:

    Ø Teg O Sheba Abhejan (TOSA) – Lenten Campaign

    Ø Dscretionary Fund Grants

    Ø Caritas Employees Solidity Fund.

    Human Resource practice of Caritas Bangladesh

    Caritas Bangladesh is one of the leading NGO in Bangladesh. In NGO sector, Caritas play a major role in Bangladesh. This dept. mainly focus on four functions-

    1. Acquisition Function

    2. Training and development

    3. Motivation

    4. Maintenance

    ACQUISITION FUNCTION OF CARITAS BANGLADESH

    · HUMAN RESOURCE PLANNING (HRP):

    Caritas human resource planning includes job analysis, recruitment, selection and socialization of the new employees.

    · JOB ANALYSIS:

    It is the starting point of sound human resource management.

    What should be the nature of job information for job analysis, depends upon a number of considerations. Whether the analysis is required for evaluation purposes or for other purposes as well what job level is to be analyzed what type of evaluation plan is to be used and what job knowledge is held by the analyst who is going to conduct the evaluation. Certain basic areas of information may include:

    · Fundamental purpose of the job

    · Work elements in the job. It requires study of specific tasks, areas of responsibility, and examples of work

    · Scope of the job and its impact on the operation.

    · Specific methods, equipment or techniques those are required for the job.

    The managers of human resource department can use to determine job elements and the concomitant knowledge, skills, and abilities necessary for successful performance include the following:

    1. OBSERVATION METHOD

    2. INDIVIDUAL INTERVIEW METHOD

    3. GROUP INTERVIEW METHOD

    4. STRUCTURED QUESTIONNAIRE METHOD

    · RECRUITMENT

    The recruitment committee of CB uses internal and external both types of sources of recruit for vacant post. The directors prefer SELF NOMINATION OR RECOMMENDATION channel for internal recruitment. And for external recruitment, they prefer advertising channel.

    They face some challenges like less experience applicant, reference, recommendation in case of new recruitment.

    They perform Realistic Job Preview and medical test.

    RECRUITMENT POLICY:

    · All recruitments are made against approved positions as per organ gram and provisions created by the competent authority.

    · All positions of Central and Regional Directors are elective. The Caritas General Body as per provision of Caritas Constitution makes their appointments.

    · When a vacancy occurs in a sanctioned post and recruitment is desired, it is advertised in any National/Local Daily/Weekly and/or in our own and other NGO bulletin boards.

    The advertisement should contain brief description about organization, required educational qualification, work experience, indicative salary range, and the job requirements i. e. what I expected from the suitable candidate/incumbent for the position.

    Minimum information required in the application are: brief information on the candidate’s education and experience, her/his special achievements, and preferably a note on why s/he thinks s/he is suitable for the position (only for professional positions).

    · All recruitment notices/advertisements are to be approved by the HR department/section of Caritas Central office.

    · The short listed candidates will be communicated in writing about the date, place and time of written and/ or interview. The written test/interview date will be at least after 10 days of delivery of interview card to ensure that everybody receives the card and can take minimum preparation.

    · After completing all the jobs of selection committee, the HR/Administration department will receive the joining report from the newly recruited incumbent. The new incumbent’s supervisor will verify joining report.

    · SELECTION

    The authority of CB develops a selection committee. And they follow the following steps in selection process:

    v STEP-1: PRELIMINARY RECEPTION OF APPLICATIONS

    v STEP-2: EMPOLYMENT TESTS

    v STEP-3: SELECTION INTERVIEW

    v STEP-4: REFERENCES & BACKGROUND CHECKS

    v STEP-5: MEDICAL EVALUATION

    v STEP-6: SUPERVISORY INTERVIEW

    v STEP-7: REALISTIC JOB PREVIEWS

    v STEP-8: HIRING DECISIONS

    SELECTION POLICY:

    SOME SCREENING CRITERIA MAY BE

    a. Academic achievements

    b. Relevance of experience to the position advertised

    c. Present organization and position of the applicant

    d. Potential to take additional responsibility

    e. Personal, social and cultural background

    f. Salary Expectation

    · SOCIALIZATION:

    The authority of Caritas Bangladesh arranges 21 days Development Orientation Program for the new employees.

    Every new incumbent will, during the first six months, undergo systematic induction orientation to enable her/him to adopt organization’s norms and environment. However the newly employed incumbent should be put in her/his designated job as soon as possible.

    Training and Development of Caritas Bangladesh:

    Training and development process is a complex mixture of activities intended to improve the performance of individuals and groups within an organization. It includes employee training, education and career development.

    Caritas provides employee training, education and career development activities:

    Employee training provides by Caritas:

    Caritas gives training for new employees as well as existing employees. It gives training for new and existing employees in two ways-

    1. Internal training

    2. External training

    Caritas provides internal training for new employees for development orientation (21 days) program and for existing employees gives internal training for advocacy, mediation conflict resolution and facilitation skill.

    External training available for only existing employees for community development but Caritas provides no external training for new employees.

    Caritas also provides project oriented training and evaluation services to Caritas Region and Sister Organization.

    Career development program provides by Caritas:

    Caritas provides career development program for existing employees. It provides Long-Term Mechanical Course (LTMC) of three years duration and Instructor Training Course (ITC) of one year duration for best graduates of LTMC to produce instructors for career development of existing employees. It also provides Modular training courses trades and Diploma-in Engineering courses of four years duration for career development for existing employees.

    Education program provides by Caritas:

    To build process and mechanism for addressing the issues of justice and peace and create awareness on human right at the grass root level, it introduces Human Rights Education program (HREP).

    Caritas also provides an opportunity to young poor boys and girls to ensure professional skills for life through six months vocational or trades training school, in carpentry, mechanical, electrical, plumbing work, etc. it also provides employment creation through trade training for street children and youth. A project for vocational trades, training, aimed at diversification of occupation of tribal boys and girls.

    Caritas also provides preparatory education program. This program is initiated to make aware and mobilize the community to understand the significance of education and to ensure their participation in education. More then 500 schools were established so for in Caritas working areas and among these some are nationalized and some are merged as registered schools. Still more than 300 schools are run by Caritas. The project has been creating the opportunities of quality primary education to the children of rural communities who are deprived of education for want of consciousness of parents, poverty and lack of school nearby; as well as contributing to the government’s effort of universal primary education. In the meantime, a model of child-centered interactive teaching learning is introduced to enhance the quality of education.

    Motivation functions of Caritas Bangladesh:

    To motivate the employees, Caritas provides many rewards, compensations and benefits and services. They also provide incentive to existing employees.

    Some factors that influencing the incentives policy of the Caritas. These factors are- performance, experience and specific skills on the basis of this they provide the incentive.

    Benefit and service provides by Caritas:

    Indirect financial compensation is too provided by Caritas to motivate the employee. To motivate the employees the Caritas provide promotion, yearly increment incentive to the employees. They also provide festival bonus to the employees. Caritas mainly follows individual incentive type’s structure. Caritas also provides some service to the employee. Housing facilities, pension only one direction they provide to the employees.

    Caritas also provides Employee Solidarity Fund to motivate the employees. This fund is for immediate help to the destitute helpless employees. Each staff member working under Caritas is serving the needy and poor people voluntarily by giving his/her own generous contribution in this project. It improves the livelihood condition of the employees, especially through its house repairing, income generation, marriages and other financial supports.

    MAINTENANCE OF CARITAS BANGLADESH

    GENERAL CONDUCT AND PRACTICES:

    PUNISHABLE ACTS AND OMISSION:

    TYPES OF DISCIPLINARY ACTION

    DISCIPLINARY PROCEDURES

    Before any disciplinary action is taken, the following procedures are to be followed:

    GRIEVANCE PROCEDURE

    Any employee, who has a grievance in respect any matter and wishes to seek redress thereof, must observe the following procedure:

    EMOLUMENTS AND PAY SCALES

    Every employee shall be paid emoluments in accordance with the Pay Scale and allowances approved/amended by the competent authority.

    PROVIDENT FUND

    HEALTH CARE SCHEME

    Regular employees of the organization will be entitled to the benefits of the scheme as per the rules of Caritas Health Care Scheme as approved and amended time to time.

    GRATUITY FUND

    Gratuity shall be paid at the rate of one month’s basic pay for each completed year of service, calculated on the pay drawn in the last month of the employee’s service, but not subject to any ceiling. For purpose of payment of gratuity, basic salary shall be defined as basic pay alone as per pay scale applicable without D/A or any other allowances.

    COMPENSATION SCHEME

    All Caritas employees shall be covered by the under-noted schedule of indemnities. Te principal sum will be up to a maximum limit of fifteen months’ basic salary in case of death of an employee during service life. The nominee of the employee is to notify Caritas in writing of the death within thirty days of the occurrence. In the case of an accident during service life the nominee or the staff concerned must also notify Caritas within thirty days of the occurrence in order to be entitled to the compensation related to the nature of injury to be determined by the Executive Board. The compensation will be given in the following matter:

    At or above wrist or ankle … The principal sum

    Sight in both eyes … The principal sum

    One eye and loss of one limb by

    Amputation at or above wrist or ankle … The principal sum

    Above wrist or ankle … One-half of the principal sum

    Sight in one eye …One-third of the principal sum

    Caritas Bangladesh’s practice in Bangladesh perspective

    Human resource management is a strategic and coherent approach to the management of an organization’s most valued assets- the people working there who individually and collectively contribute to the achievement of its goal. The NGO of Caritas Bangladesh also can be regarded as a set of interrelated policies with as ideological and philosophical understanding. Caritas Bangladesh’s HR department mainly concern with the employment development and reward of people in organization and the conduct of the relationship between management and workforce how to maximize output and efficiencies of employees.

    Condition of HRM in Caritas Bangladesh is discussed below:

    1. The recruitment committee of CB uses internal and external both types of sources of recruit for vacant post. The directors prefer SELF NOMINATION OR RECOMMENDATION channel for internal recruitment. And for external recruitment, they prefer advertising channel.

    They face some challenges like less experience applicant, reference, recommendation in case of new recruitment. They perform Realistic Job Preview and medical test.

    2. An interview Board or Selection Committee will be constituted by the concerned Director where one representative from Caritas General Body or Executive Board will be included for the Central Office and two representatives, one from GB or EB or PREC and another from Caritas Central office for the Regional and Project offices. At least 1/3rd of the members of the Board/Committee should be women. If it is found that any candidate is a relative of any member of the Board/Committee, such member will be replaced by someone appointed by the competent authority.

    3. A member of the Interview Board may be assigned to shortlist the candidates following the set criteria. This is essential to pinpoint responsibilities on a person, rather than on a Committee/Board. Special attention and positive attitude are to be given to the women, adivasi and disabled persons.

    4. The authority of Caritas Bangladesh arranges 21 days Development Orientation Program for the new employees. Every new incumbent will, during the first six months, undergo systematic induction orientation to enable her/him to adopt organization’s norms and environment. However the newly employed incumbent should be put in her/his designated job as soon as possible.

    5. All Caritas employees shall be covered by the under-noted schedule of indemnities. Te principal sum will be up to a maximum limit of fifteen months’ basic salary in case of death of an employee during service life. The nominee of the employee is to notify Caritas in writing of the death within thirty days of the occurrence.

    6. Caritas also provides Employee Solidarity Fund to Motivate the employees. This fund is for immediate help to the destitute helpless employees. Each staff member working under Caritas is serving the needy and poor people voluntarily by giving his/her own generous contribution in this project. It improves the livelihood condition of the employees, especially through its house repairing, income generation, marriages and other financial supports.

    CRITICAL ANALYSIS OF CARITAS BANGLADESH

    1. They generally prefer newspaper advertising for recruitment though there other channels are available.

    2. Their selection process is too lengthy.

    3. There is not enough facility for socialization for the new employees.

    There are some lacking also.

    · In this organization, the salary package is moderated; not so high, not so low.

    · Performance appraisal is not developed.

    Pubali Bank Limited

    About the company

    The Bank was initially emerged in the Banking scenario of the then East Pakistan as Eastern Mercantile Bank Limited at the initiative of some Bangalee entrepreneurs in the year 1959 under Bank Companies Act 1913. After independence of Bangladesh in 1972 this Bank was nationalized as per policy of the Government and renamed as Pubali Bank. Subsequently due to changed circumstances this Bank was denationalized in the year 1983 as

    " 153,"

    Human Resource Management of Dhaka Bank Ltd

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    “Human Resource Management of Dhaka Bank Ltd.”

    Chapter 01

    1. Introduction

    1.1 Objectives of the study:

    The objective of this study is to fulfill the requirements of project thesis:

    . Human Resource Management practices.

    . Employee Personnel practices.

    . Developing Employees practices.

    . Compensation of Employees practices.

    . Performance Appraisal of Employees practices.

    1.2 Methodology of the Report:

    Different data and information are required to meet the goal of this report. Those data and information were collected from various sources, such as primary and secondary which is showed below.

    (a) Primary Sources of Data:

    Primary data are collected from questionnaires.

    (b) Secondary Sources of Data:

    1.3 Scope of the Report:

    The scope of this report is mostly limited to Dhaka Bank Limited, as the report is based on practical observations, and also limited to the related departments of this report. There was no scope of doing outside surveys except getting some help from secondary data of other banks. The report scope was narrowed to the branch operations and practices.

    1.4 Limitations of Study:

    * Limitation of employment personal.

    * Limitation of practices in human resource management.

    * Limitation of employees’ development in this organization.

    * Limitation of benefit and compensation of employees.

    1.5 Organization Profile: Dhaka Bank Limited (DBL)

    (i) Background:

    Bangladesh economy has been experiencing a rapid growth since the ’90s. Industrial and agricultural development, international trade, inflow of expatriate Bangladeshi workers’ remittance, local and foreign investments in construction, communication, power, food processing and service enterprises ushered in an era of economic activities. Urbanization and lifestyle changes concurrent with the economic development created a demand for banking products and services to support the new initiatives as well as to channelize consumer investments in a profitable manner. A group of highly acclaimed businessmen of the country grouped together to responded to this need and established Dhaka Bank Limited in the year 1995.

    The Bank was incorporated as a public limited company under the Companies Act. 1994. The Bank started its commercial operation on July 05, 1995 with an authorized capital of Tk. 1,000 million and paid up capital of Tk. 100 million. The paid up capital of the Bank stood at Tk 1,289,501,900 as on June 30, 2006. The total equity (capital and reserves) of the Bank as on June 30, 2006 stood at Tk 2,188,529,224.

    The Bank has 40 branches across the country and a wide network of correspondents all over the world. The Bank has plans to open more branches in the current fiscal year to expand the network.

    (ii) Our Mission:

    To be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver Excellence in Banking.

    (iii) Our Vision:

    At Dhaka Bank, we draw our inspiration from the distant stars. Our team is committed to assure a standard that makes every banking transaction a pleasurable experience. Our endeavor is to offer you razor sharp sparkle through accuracy, reliability, timely delivery, cutting edge technology, and tailored solution for business needs, global reach in trade and commerce and high yield on your investments.

    (iv) Our Goal:

    Our people, products and processes are aligned to meet the demand of our discerning customers. Our goal is to achieve a distinction like the luminaries in the sky. Our prime objective is to deliver a quality that demonstrates a true reflection of our vision – Excellence in Banking.

    (v) The Value:

    (vi) Financial Highlights:

    (Figures in million Taka)

    Chapter 02

    2. The Banking Sector in Bangladesh

    2.1 The Banking sector in Bangladesh:

    The commercial banking system dominates Bangladesh’s financial sector. Bangladesh Bank is the Central Bank of Bangladesh and the chief regulatory authority in the sector. The banking system consists of four nationalized commercial Banks, around forty private commercial banks, nine foreign multinational banks and some specialized banks. The Nobel-prize winning Grameen Bank is a specialized micro-finance institution, which revolutionized the concept of micro-credit and contributed greatly towards poverty reduction and the empowerment of women in Bangladesh.

    2.2 Types of Banks:

    (i) Bangladesh Bank (Central Bank):

    Pursuant to Bangladesh Bank Order, in 1972 the Government of Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central bank of the country, and named it Bangladesh Bank with retrospective effect from 16th December, 1971.

    (ii) Nationalized Commercial Banks:

    The banking system of Bangladesh is dominated by the 4 Nationalized Commercial Banks, which together controlled more than 54% of deposits and operated 3388 branches (54% of the total) as of December 31, 2004. The nationalized commercial banks are:

    (iii) Private Commercial Banks:

    Private Banks are the highest growth sector due to the dismal performances of government banks (above). They tend to offer better services and products.

    (iv) Foreign Banks:

    (v) Specialized Banks:

    Out of the specialized banks, two (Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank) were created to meet the credit needs of the agricultural sector while the other two ( Bangladesh Shilpa Bank (BSB)& Bangladesh Shilpa Rin Sangtha (BSRS)) are for extending term loans to the industrial sector. The Specialized banks are:

    Chapter 03

    3.Profile of Southeast Bank Limited

    3.1 History of Establishment:

    Southeast Bank is one of the few banks permitted by the Bangladesh bank in the early 90s; the other banks permitted earlier were Dutch-Bangla Bank, Al-Arafah Islami Bank, Prime Bank, Dhaka Bank, Eastern Bank. These banks are known as the second generation bank and fortunate to remain immune from the bad loan culture. However, the performance of these banks is not the same, the Southeast Bank Limited remained as one of the top performers among them. Its performance also has been reflected in its good loan being the 3.5 percent as against the national average of 33 percent in the private banking sector.

    The emergence of Southeast Bank Limited at the junction of liberation of global economic activities, after the “Uruguay Round” has been an important event in the financial sector of Bangladesh. The experience of the prosperous economies of Asian countries and in particular of South Asia has been the driving force and the strategies behind operational policy option of the bank. The company’s philosophy “A Bank with vision” has been preciously the essence of the legend of bank’s success.

    3.2 Mission:

    The bank has chalked out the following corporate objectives in order to ensure smooth achievement of its goals:

    Eventually the Bank emphasizes on:

    3.3 Vision:

    The gist of our vision is “A Bank With Vision”. Southeast Bank Limited believes in togetherness with its customers, in Pits march on the road to growth and progress with services. To achieve the desired goal, there will be pursuit of excellence at all stages with a climate of continuous improvement, because in Southeast Bank Limited, we believe, the line of excellence is never ending. Bank’s strategic plans and networking will strengthen its competitive edge over others in rapidly changing competitive environments. Its personalized quality services to the customers with the trend of constant improvement will be cornerstone to achieve our operational success.

    3.4 Objectives:

    Whether in treasury, consumer or corporate banking, Southeast Bank Limited is committed to provide the best. Meeting the demand of discerning customers is not the sole objective. The Bank believes that to provide standard financial services is to deliver a quality that makes every transaction of pleasurable experience. The bank also believes that Customer is always right and in the core of everything. So providing them friendly and personalized service, tailor-made solutions for business needs, global reach in trade and commerce at the doorsteps and high yield on investments are the core objectives of the bank. But the bank also tries to do the best in conjunction with achieving the ultimate objective of a business organization- Wealth Maximization.

    3.5 No of branch:

    The Southeast Bank has 47 branches of the six divisions in the country. Forty seven branches of Southeast Bank to contribute in our economic development and they properly service the people of the country.

    3.6 Management Hierarchy of Southeast Bank Limited:

    Chairman

    ¯

    Board of Directors

    ¯

    Managing Director

    ¯

    Additional Managing Director

    ¯

    Deputy Managing Director

    ¯

    Executive Vice Presidents

    ¯

    Senior Vice Presidents

    ¯

    Vice Presidents

    ¯

    Senior Assistance Vice

    ¯

    Assistance Vice Presidents

    ¯

    Senior Principal Officers

    ¯

    Principal Officers

    ¯

    Executive Officers

    ¯

    Management Trainee Officer

    ¯

    Junior Officers

    ¯

    Assistant Officer

    ¯

    Trainee Officers

    3.7 Total No of Employees:

    At present Southeast Bank Limited have 1786 over employee and employer surrounding several branches of Bangladesh. All are maintain a significant co-operative relationship between themselves to accommodate better service to the people & society of Bangladesh.

    3.8 Human resource practices in Dhaka Bank Limited:

    Employee’s are the core resources of any organization, without them, one can not run their organization, and human resources is conducted with the growth of development of people toward higher level of competency, creativity and fulfillment. It keep employee’s become better more responsible person and then it tries to create a climate in which they contribute to the limits of their improved abilities. It assumes that expanded capabilities and opportunities for people with lead directly to improvements in operating effectiveness. Essentially, the human resource approach means that people better result. Dhaka Bank Limited always determine what jobs need to be done, and how many and types of workers will be required. So, establishing the structure of the bank assists in determining the skills, knowledge and abilities of jobholders. To ensure appropriate personnel are available to meet the requirements set during the strategic planning process, human resource managers engage in HRP. This effort is to determine what HRM requirements exists for current and future supplies and demands for workers. Because this bank believes that the quality work comes from quality workers who are well motivated and ready to take challenge to provide better service.

    3.9 Strategies of Dhaka Bank Limited:

    DBL believes in the practice of Market- Oriented Strategic Planning, developing and maintaining a viable fit between the organization’s objectives, skills and resources. The aim of such approach is to shape and reshape the bank’s businesses and services so that they yield target profits and growth. The strategic planning of DBL involves repeated cycles of corporate and business planning as well as divisional and products or marketing planning. Since the growth and profits of banking business largely depend upon the locations of branches where larger concentration of other businesses and industries are involved DBL primarily focused on location-based strategy. Every year an overall profit target as well as individual targets for each line of business (export, import, loans & advances etc) is set for each branch location by the corporate bodies in collaboration with the regional heads and branch managers.

    3.10 Corporate Government:

    Like all the other local banks, DBL has a conventional structure. A corporate body conducts a meeting on a weekly basis; the committee is called the Executive Committee. The committee includes Chairman, Vice Chairman, and the group of Directors, Managing Director (MD), Deputy Managing Director (DMD), and Company Secretary. This executive committee approves the various proposals brought by the management prior to implementation. All the proposals are placed to the committee through the managing Director of the Bank.

    3.11 Board of Directors:

    Name Designation
    Mr. Alamgir Kabir (FCA) Chairman
    Mr. Ragib Ali Vice Chairman
    Mr. M. A. Kashem Director
    Mr. Azim Uddin Ahmed Director
    Mrs. Jusna Ara Kashem Director
    Mrs. Duluma Ahmed Director
    Bangla Capital Limited, Represented by Mr. Tahnoun A. Harun Director
    Mrs. Rehana Rahman Director
    Mr. Syed Shahid Ali Director
    Mr. Mostori Miah Director
    Mrs. Sirat Monira Director
    Karnafuli Tea Co. Ltd, represented by Mr. Abdul Hye Director
    Dr. Zaidi Sattar Independent Director

     

    Name Designation
    Mr. Neaz Ahmed Managing Director.
    Mr. M. A. Muhith Deputy Managing Director – I.
    Syed Imtiaz Hasib Deputy Managing Director – II.
    Mr. Muhammad Shahjahan Senior Executive Vice President & Company Secretary.

     

    3.12 Management Committee:


    (i) Managing Director:

    Neaz Ahmed

    (ii) Deputy Managing Director:

    1. M. A. Muhith
    2. Syed Imtiaz Hasib

    (iii) Senior Executive Vice Presidents:

    1. Saleh Uddin Ahmed
    2. Mohammed Gofran

    (iv) Executive Vice Presidents:

    1. Muhammad Shahjahan
    2. Giash Uddin Ahmed
    3. Shahabuddin Md. Jafar
    4. Shahid Hossain
    5. A.F.M. Shariful Islam
    6. Lutfur Kabir
    7. A.K.M. Nurul Alam
    8. Senior Vice Presidents
    9. Md. Altafur Rahman
    10. Md. Anwar Hossain
    11. Haradhan Banik
    12. Md. Abdul Wali
    13. M. Kamal Hossain
    14. Abdul Hamid Mia
    15. S.M. Intekhab Alam
    16. Md. Sawkat Hossain
    17. Mustafizur Rahman
    18. Pritish Kumar Sarker
    19. Shahid Atiqul Islam

    (v) Vice Presidents:

    1. Mohammad Mahmud Hasan
    2. Mozammel Hossain Chowdhury
    3. Md. Shamsul Huda
    4. Anowar Uddin
    5. Mahfuzur Rahman Khan
    6. Mirza Akhteruzzan Begg
    7. Kamal Uddin

    (vi) First Vice Presidents:

    1. Mahbubur Rahman Shabbir
    2. Abu Syed Md. Mohiuddin
    3. Golam Akbar Chowdhury
    4. Syed Nurul Bashar
    5. Md. Abdul Naim
    6. Mohammad Hafizur Rahman
    7. Nur Hossain Hafizur Rahman
    8. Nur Hossain Chowdhury
    9. Fazle Kader Ahmed
    10. Md. Shahjahan Sarker
    11. Shafiur Rahman
    12. Md. Zakir Hossain
    13. Abdul Batin Chowdhury
    14. 14. Nuruddin Md. Sadeque Hussain

    Chapter 04

    4.HRM- An Overview

    4.1 Meaning of HRM:

    Human resource management (HRM) is the strategic and coherent approach to the management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms “human resource management” and “human resources” (HR) have largely replaced the term “personnel management” as a description of the processes involved in managing people in organizations. In simple sense, Human Resource Management (HRM) means employing people, developing their resources, utilizing maintaining and compensating their services in tune with the job and organizational requirement.

    4.2 Academic theory:

    The goal of human resource management is to help an organization to meet strategic goals by attracting, and maintaining employees and also to manage them effectively. The key word here perhaps is “fit”, HRM approach seeks to ensure a fit between the management of an organization’s employees, and the overall strategic direction of the company (Miller, 1989).

    The basic premise of the academic theory of HRM is that humans are not machines; therefore we need to have an interdisciplinary examination of people in the workplace. Fields such as psychology, industrial engineering, industrial, Legal/Paralegal Studies and organizational psychology, industrial relations, sociology and critical theories: postmodernism, post-structuralism play a major role. Many colleges and universities offer bachelor and master degrees in Human Resource Management.

    One widely used scheme to describe the role of HRM, developed by Dave Ulrich, defines 4 fields for the HRM function:

    1. Strategic business partner
    2. Change management
    3. Employee champion
    4. Administration

    However, many HR functions these days struggle to get beyond the roles of administration and employee satisfaction, and are seen rather as reactive as strategically proactive partners for the top management. In addition, HR organizations also have the difficulty in proving how their activities and processes add value to the company. Only in the recent years HR scholars and HR professionals are focusing to develop models that can measure if HR adds value.

    4.3 Critical Theory:

    Postmodernism plays an important part in Academic Theory and particularly in Critical Theory. Indeed Karen Legge in ‘Human Resource Management: Rhetorics and Realities’ poses the debate on whether HRM is a modernist project or a postmodern discourse (Legge 2004). In many ways, critically or not, many writers contend that HRM itself is an attempt to move away from the modernist traditions of personnel (man as machine) towards a postmodernist view of HRM (man as individuals). Critiques include the notion that because ‘Human’ is the subject we should recognize that people are complex and it is only through various discourses that we understand the world. Man is not Machine, no matter what attempts are made to change it Fordism / Taylorism, McDonaldisation (Modernism).

    Critical Theory, in particular postmodernism (poststructuralist) recognizes that the subject people in the workplace is a complex one, and therefore simplistic notions of ‘the best way’ or a unitary perspective on the subject are too simplistic. It also considers the complex subject of power, power games and office politics. Power in the workplace is a vast and complex subject that cannot be easily defined. This leaves many critics to suggest that management ‘Gurus’, consultants and HR models are often overly simplistic, but in order to sell an idea, they are simplified, and often lead Management as a whole to fall into the trap of oversimplifying the relationship.

    4.4 History of HRM:

    (a) Introduction:

    This assignment traces the history of Human Resource Management from the Industrial Revolution in the 18th century to present times. The assignment discusses key periods and movements in this field and expands on their contribution to modern Human Resource Management. In discussing the history of Human Resources Management it is important to offer a definition of the subject. Human Resource. Management can be described as “The comprehensive set of managerial activities and tasks concerned with developing and maintaining a qualified workforce in ways that contribute to human resources.

    (b) A Historical Review:

    (i) The Industrial Revolution:

    The momentum for the industrial revolution grew through the 17th century. Agricultural methods were continually improving, creating surpluses that were used for trade. In addition, technical advances were also occurring, for example the Spinning Jenny and the Steam Engine. These advances created a need for improved work methods, productivity and quality that led to the beginning of the Industrial Revolution.

    (ii) Adam Smith:

    In 1776, Adam Smith wrote about the economic advantages of the division of labor in his work “The Wealth of Nations”. Smith (1776) proposed that work could be made more efficient through specialization and he suggested that work should be broken down into simple tasks. From this division he saw three advantages.

    In modern business the Human Resource Management function is complex and such has resulted in the formation of Human Resource departments/divisions in companies to handle this function. The Human Resource function has become a wholly integrated part of the total corporate strategy. The function is diverse and covers many facts including manpower planning, recruitment and selection, employee motivation, performance monitoring and appraisal, industrial relations, provision management of employee benefits and employee education training & development.

    4.5 Functions of Human Resource Management:

    4.5.1 The Management of Workplace:

    HR Management needs to change from an ethnocentric view (“our way is the best way”) to a culturally relative perspective (“let’s take the best of a variety of ways”). This shift in philosophy has to be ingrained in the managerial framework of the HR Management in planning, organizing, leading and controlling of organizational resources.

    4.5.2 Planning a Mentoring Program:

    One of the best ways to handle workplace diversity issues is through initiating a Diversity Mentoring Program. This could entail involving different departmental managers in a mentoring program to coach and provide feedback to employees who are different from them. In order for the program to run successfully, it is wise to provide practical training for these managers or seek help from consultants and experts in this field.

    4.5.3 Organizing Talents Strategically:

    Many companies are now realizing the advantages of a diverse workplace. As more and more companies are going global in their market expansions either physically or virtually (for example, E-commerce related companies), there is a necessity to employ diverse talents to understand the various niches of the market. With this trend in place, a HR Manager must be able to organize the pool of diverse talents strategically for the organization. Management must consider how a diverse workforce can enable the company to attain new markets and other organizational goals in order to harness the full potential of workplace diversity.

    4.5.4 Control and Measure Results:

     A HR Manager must conduct regular organizational assessments on issues like pay, benefits, work environment, management and promotional opportunities to assess the progress over the long term. There is also a need to develop appropriate measuring tools to measure the impact of diversity initiatives at the organization through organization-wide feedback surveys and other methods. Without proper control and evaluation, some of these diversity initiatives may just fizzle out, without resolving any real problems that may surface due to workplace diversity.

    4.6 Challenges of Human Resource Management:

    The role of the Human Resource Manager is evolving with the changing of competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources.With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organization. In order to succeed, HR must be a business driven function with a thorough understanding of the organization’s big picture and be able to influence key decisions and policies. In general, the focus of today’s HR Manager is on strategic personnel retention and talents development. HR professionals will be coaches, counselors, mentors, and succession planners to help motivate organization’s members and their loyalty. The HR manager will also promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the management of workplace diversity.

    Chapter 05

    5. Employment of Personnel

    5.1 Meaning of Human Resource Planning:

    An organization would not build a new plant, conducting the ribbon-cutting ceremony, and then begin to worry about how to staff the facility. A firm cannot hire several hun­dred engineers and get them on board overnight, nor can it develop management tal­ent in just a few weeks. Foresight is necessary to ensure that appropriately qualified staff will be available to implement an organization’s future plans. The tighter the labor market, the more forward planning is required to avoid future problems due to understaffing. On the other hand, planning ahead in a declining economy is also crit­ical in minimizing expensive overstaffing and possible layoffs. Human resource planning is concerned with the flow of people into, through, and out of an organization. HR planning involves anticipating the need for labor and the supply of labor and then planning the programs necessary to ensure that the organization will have the right mix of employees and skills when and where they are needed. The forecasting methods described below provide key input for these processes.

    Human resource experts can also take on a strategic role in collaboration with the top management team to plan a strategy for the firm that capitalizes on or builds the organization’s unique human resource competencies. For instance, Marriott Corporation’s goal of being the provider of choice for food and lodging services was supplemented by the goal of becoming the “employer of choice” as well. Executives decided that unless Marriott was a very’ attractive employer, it would not be able to obtain the number and quality of people it needed, for a growth and high-quality service strategy. The company adopted initiatives to broaden its recruiting base, but ‘it also worked hard at retaining and motivating current employees, To that end, changes were made in career paths, job responsibilities, work teams, and reward systems.

    At Colgate-Palmolive, a global HR team was formed to help the organization meet its goal of “becoming the best truly global consumer products company.” Top HR managers and key senior line managers worked together on the team to translate business plans into human resource plans that would support organiza­tional excellence. As a result, strategic initiatives were adopted in recruitment, selection, development, individual performance management, team performance management, career planning, diversity, employee attitude surveys, and employee communication.

    5.2 Objectives of Human Resource Planning:

    Managers and HR departments achieve their purpose by meeting objectives. Objectives are benchmarks against which actions are evaluated. Sometimes they are carefully thought out and expressed in writing. More often objectives are not formally stated. Either way, they guide the HR function in practice. Con­sidering the objectives of Hewlett-Packard’s founders: Human resource objectives not only need to reflect the intention of senior management, they also must balance challenges from the organization, the HR function, society, and the people who are affected. Failure to do so can harm the firm’s performance, profits, and even survival. These challenges spotlight four objectives that are common to HR management and form a framework around which this book is written.

    (i) Organizational objective: 

    To recognize that HR management exists to contribute to organizational effectiveness. Even when a formal HR department is created to help managers, the managers remain responsible for employee performance. The HR department exists to help managers achieve the objectives of the organization. HR management is not an end in itself; it is only a means of assisting managers with their human resource issues

    (ii) Functional objective: 

    To maintain the department’s contribution at a level appropriate to the organization’s needs. Resources are wasted when HR man­agement is more or less sophisticated than the organization demands.

    (iii) Societal objective: 

    To be ethically and socially responsive to the needs and challenges of society while minimizing the negative impact of such demands on the organization. The failure of organizations to use their resources for soci­ety’s benefit in ethical ways may result in restrictions.

    (iv) Personal objective: 

    To assist employees in achieving their personal goals, at least insofar as those goals enhance the individual’s contribution to the orga­nization. The personal objectives of employees must be met if workers are to be maintained, retained, and motivated. Otherwise, employee performance and satisfaction may decline and employees may leave the organization.

    Not every HR decision can meet these organizational, functional, societal, and personal objectives every time. Trade-offs does occur. But these objectives serve as a check on decisions. The more these objectives are met by the depart­ment’s actions, the larger its contribution will be to the organization’s bottom line and the employees’ needs. Moreover, by keeping these objectives in mind, HR specialists can see the reasons behind many of the department’s activities.

    5.3 Model for Human Resource Planning:

     The first step in HR planning is to collect information. A forecast or plan cannot be any better than the data on which it is based. HR planning requires two types of information data from the external environment and data from inside the organiza­tion:

    Figure: Human Resource Planning Model

    . Current condition and prediction changes in the general economy.

    . Economy of the specific industry, relevant technology and competitor firms.

    Any of these may affect the organization’s business direction and volume and thus the need for human resources.

    Human resource planners must also be aware of labor-market conditions such as unemployment rates, skill availabilities, and the age distribution of the labor force. Finally, planners need to be aware of federal and state regulations, those that directly affect staffing practices, such as affirmative action or retirement-age legislation, and to get rid of those that indirectly affect demand for services or ability to pay staff.

    External benchmarking data also can be useful in Human Resource Planning. One might, for instance, discovers that other companies are doing the same work with fewer people, which could lead to a consideration of more efficient ways to work. Benchmarking efforts by Duke Power Company’s consulting firm showed them new ways to organize. Historically, they had staffed projects exclusively with highly experienced (and expensive) professionals. Benchmarking showed them that other successful consulting firms used a small number of top-class experts working with a large support staff of less skilled and experienced people, and they were able to replicate this approach successfully.

    The second major type of information comes from inside the organization. In­ternal information includes short-term and long-term organizational plans and strate­gies. Obviously, plans to build, close, or automate facilities will have HR implica­tions, as well as  plans to modify the organization’s structure, buy or sell businesses, and enter or withdraw from markets. A decision to compete en the basis of low cost rather than personalized service also will have staffing implications. Finally, information is needed on the current state of human resources in the organization, such as how many individuals are employed in each job and location, their skill levels, and how many are expected to change positions or depart the organization during the forecast period.

    Once planners have the external and internal information they need, they can forecast the future demand for employees. At a minimum, this forecast includes estimating the number of employees who will be needed in the coming year. Longer-term demand forecasts also may be made. Next, planners forecast the sup­ply of labor, the internal supply of employees and their skills and promo ability, as well as the probable availability of potential new employees, with requisite skills in the external labor market.

    The final step in HR planning is to plan specific programs to ensure that supply will match demand in the future. These programs often include recruiting plans and also may include training and development activities, incentives or disincen­tives to early retirement, Modifications of career paths in the organization or a va­riety of other HR management programs. Note that the feedback loop shown in Figure 3.1 allows for learning from past planning efforts. If demand or supply fore­casts have not been as accurate as desired, forecasting processes can be improved in subsequent years.

    5.4 Organizational practices:

    Practices in the Southeast Bank Limited:

    The bank follows most of the steps of integrate HR planning  with corporate planning, assessment of internal HR capabilities and so on.The bank has an integrated HR planning. Their manpower ratio is satisfactory for smooth and quality services to the potential customers.

    Dhaka Bank Limited is forecasting future manpower requirements. This is done either in terms of mathematical projections or in terms of judgmental estimates. Mathematical projections are done extrapolating factors like, economic, environment, development trends in the bank. Judgmental estimates are done depending on the specific future plans of the bank by managerial discretion which is based on past experience.

    Dhaka Bank Limited is preparing an inventory of present manpower. Such inventory contains data about each employee’s skills, abilities, work preferences and other items of information.

    Dhaka Bank all times prepares anticipating problems of manpower. This is can be done by projecting present resources into the future and comparing the same with the forecast of manpower requirements. This helps in determining the quantitative and qualitative adequacy of manpower.

    5.5 Concepts of Recruitment:

     Recruitment is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applications from which new employees are selected. In large organizations specialists in the recruiting process, called recruiters, are often used to find and attract capable applicants. The HR plan can be especially helpful because it shows the recruiter both present openings and those expected in the future. Figure presents an overview of the recruitment process from the perspectives of the organization and the candidate. This flow chart displays the process as it un­folds over time. When a vacancy occurs and the recruiter receives authorization to fill it, the next step is a careful examination of the job and an enumeration of the skills, abilities, and experience needed to perform the job successfully. Existing job analysis documents can be very helpful in this regard. In addition, the recruit­ment planner must consider other aspects of the job environment, for example, the supervisor’s management style, the opportunities for advancement, pay, and  geographic location in deciding what type of candidate to search for and what search methods to use.

    In the recruitment and selection process, the organization’s and individual’s objectives may conflict. The organization is trying to evaluate the candidate’s strengths and weaknesses, but the candidate is trying to present only strengths. Conversely, although the candidate is trying to ferret out both the good and the bad aspects of the prospective job and employer, the organization may prefer to re­veal only positive aspects. In addition, each party’s own objectives may conflict The organization wants to treat the candidate well to increase the probability of job-offer acceptance, yet the need to evaluate the candidate may dictate the use of methods that may alienate the prospect, such as background investigations or stress interviews. Analogously, the applicant wants to appear polite and enthusias­tic about the organization to improve the probability of receiving an offer, but he or she may also want to ask penetrating questions about compensation, advance­ment, and the company’s financial health and future.

    5.6 Strategic Issues in Recruiting:

    The nature of a firm’s recruiting activities should be matched to its strategy and values as well as to other important features such as the state of the external labor market and the firm’s ability to pay.

    5.7 Selection:

    Selection is the process by which managers and others use specific instruments to choose from a pool of applicants.

    Personnel selection is a process of measurement, decision making, and evalua­tion. The goal of a personnel selection system is to bring into an organization individuals who will perform well on the job. A good selection sys­tem also should be fair to minorities and other protected groups.

    5.8 Internal Recruitment Process:

    Current employees are a major source of recruits for all but entry-level positions. Whether for promotions or for “lateral” job transfers, internal candidates already know the informal organization and have detailed information about formal policies and procedures. Promotions and transfers are typically proceeded by operating managers with little involvement by the HR department.

     (i) Job-Posting Programs:

    HR departments become involved when internal job opening are publicized through job-posting programs, which inform employees at openings with required qualifications and invite qualified employees to apply.

    Self-nominations may even apply to management trainees. Many organiza­tions hire recent college graduates for management training programs, and this may be little more than an extended job rotation through several departments. After this rotation is completed, some companies allow trainees to nominate themselves to fill posted job openings.

    (ii) Departing Employees:

    An often overlooked source of recruits consists of departing employees. Many employees leave because they can no longer work the traditional forty-hour workweek. School, child-care needs, and other commitments are the common reasons. Some might gladly stay if they could rearrange their hours of work or their responsibilities. Instead, they quit when a transfer to a part-time job may retain their valuable skills and training.

    (iii) External Recruitment Process:

    When job openings cannot be filled internally, the HR department must look outside the organization for applicants. The remainder of the chapter discusses the external recruitment channels most commonly used by employers and ap­plicants.

    (iv) Walk-ins and Write-ins:

    Walk-ins are job seekers who arrive at the HR department in search of a job; write-ins are those who send a written inquiry. Both groups normally are asked to complete an application blank to determine their interests and abilities. Us­able applications are kept in an active file until a suitable opening occurs or until an application is too old to be considered valid, usually six months.

    (v) Employee Referrals:

    Employees may refer job seekers to the HR department. Employee referrals have several advantages.

    First, employees with hard-to-find job skills may know others who do the same work. For example, a shortage of workers on the Alaskan pipeline was partially solved by having workers ask their friends in the “lower forty-eight states” to apply for the many unfilled openings. TRW and McDonald’s pay employees a referral bonus when qualified candidates arc recommended at some locations.

    Second, new recruits already know some­thing about the organization from the employees who referred them. Thus, re­ferred applicants may be more strongly attracted to the organization than the referrals who casually walk-ins.

    Third, employees tend to refer their friends, who are likely to have similar work habits and attitudes.

    (vi) Advertising:

    Ads describe the job and the benefits, identify the employer, and tell those who are interested how to apply. They are the most familiar form of employ­ment advertising. For highly specialized recruits, ads may be placed in profes­sional journals or out-of-town newspapers in areas with high concentrations of the desired skills. For example, recruiters in the aerospace industry often ad­vertise in Los Angeles, St. Louis, Dallas-Fort Worth, and Seattle newspapers because those cities are major aerospace centers.

    But ads have severe limitations. They may attract thousands of job seekers for one partcular job opening or few may apply for less attractive jobs. For ex­ample, few people apply for door-to-door sales jobs if they know the product is vacuum cleaners or encyclopedias. Likewise, the ideal recruits are probably al­ready employed and not reading these ads. Finally, secret advertising for a re­cruit to replace an incumbent cannot be done with traditional ads. These limitations are avoided through the use of blind ads. A blind ad is an ad that does not identify the employer. Interested applicants are told to send their re­sumes to a mailbox number at the post office or to the newspaper. A resume, which is a brief summary of an applicant’s background, is then forwarded to the employer. These ads allow the opening to remain confidential, prevent countless telephone inquiries and avoid the public relations problem of disap­pointed recruits.

    (vii) State Employment Security Agencies:

    Every state government has a state employment security agency. Often called the unemployment office or the employment service, this agency matches job seek­ers with job openings.

    (viii) Private Placement Agencies:

    Private placement agencies, which exist in every major metropolitan area, arose to help employers find capable applicants. They take an employer’s re­quest for recruits and then solicit job seekers, usually through advertising or among walk-ins. Candidates are prescreened, matched with employer re­quests, and then told to report to the employer’s HR department for an inter­view. The matching process conducted by private agencies varies widely. Some placement services carefully prescreen applicants; others simply provide a stream of applicants and let the HR department do most of the screening.

    (ix) Professional Search Firms:

    Professional search firms are much more specialized than placement agencies. Search firms usually recruit only specific types of human resources for a fee paid by the employer. For example, some search firms specialize in executive talent, while others find technical and scientific personnel. Perhaps the most signifi­cant difference between search firms and placement agencies is the approach taken. Placement agencies hope to attract applicants through advertising, but search firms actively seek out recruits among the employees of other compa­nies. Although they may advertise, search firms use the telephone as their pri­mary tool to locate and attract prospective recruits.

    " 154,"

    HUMAN STOMACH (part 1)

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    In the introduction portion of our series on the digestive system called “Overview of the Digestive System,” we overviewed the process whereby food enters the mouth and passes through the GI tract and on out through the anus. We also focused on the process of actually getting food into the stomach through the mouth and esophagus. And finally, we discussed how enzymatic digestion begins in the mouth, but for most people, because of diet and eating habits, never actually amounts to much.

    We now pick up the process as the bolus of food arrives in the cardia of the stomach — which brings us to our first key point of the day that although the stomach has no actual physical separations, it does not function as an undifferentiated sac.

    The divisions of the stomach

    Anatomically, the stomach is not so much a separate organ as it is an enlargement (like the esophagus) of the intestinal tract that sits just below the diaphragm. In fact, the only thing that separates it from the rest of the GI tract are areas at its top and bottom that use muscles to constrict and close it off from the esophagus and the duodenum on either end respectively. Its functions are very simple: to grind, mix, digest, and parcel out its contents to the intestinal tract in a slow, controlled manner.

    Although it is a single cavity (again, just part of the GI tract), it has four main “functional” divisions. Physiologically speaking, they are:

    The chyme moves through these divisions sequentially, rather than just dumping into one great cavity. This distinction is crucial to understanding the digestive process. Unfortunately, although medical doctors understand the sequential nature of digestion in the stomach, they do not fully understand what it means. And once again, that’s because they base their assumptions on observation; and when it comes to observation, 99.9% of the people they see eat the typical highly processed, cooked food “modern” diet — not the more natural diet our bodies were designed to handle. In other words, doctors’ assumptions about digestion are based on observing people who eat badly, consume food totally devoid of live enzymes, and gulp their food down so quickly it barely has any time to mix with salivary enzymes. This gives a very distorted view of how the digestive process “should” work. And it has profound implications for our understanding of the digestive process and the things that can go wrong with it — all of which, we will talk more about later.

    For now, just understand that food moves through the divisions of the stomach sequentially. Among other things, this allows us to consume more than the intestines are ready for at one time. The divisions allow us to process the food slowly and prepare it for entry into the intestines in a controlled and measured manner.

    The layers of the stomach

    The outer covering of the stomach is called the serosa. Its primary purpose is to carry blood vessels and to protect the stomach. The stomach is supplied by an extremely rich supply of blood vessels. Just under the serosa are the layers of muscle — longitudinal, circular, and oblique.

    As you can see from the illustration to the right, these muscles allow the stomach to bend, twist, and fold in almost any direction.  Combine all of that motion with the folds (rugae) in the interior of the stomach (as shown in our previous illustration of the stomach’s divisions) and it’s easy to see how the stomach can easily “grind” food down and totally mix it up with any digestive enzymes and juices that are present.

    One final layer that we need to talk about is the thick, plush layer of mucosa cells that line the stomach cavity. It has deep clefts that increase the stomach’s surface area considerably. There are four different types of mucosa cells.

    Digestion

    There are two main kinds of digestion processes in the stomach:

    Mechanical digestion is defined by the stomach’s mixing of the chyme, whereas chemical digestion is defined by the action of various acids, hormones, and enzymes on the chyme.

    Mechanical digestion

    After the bolus drops into the cardia, it is pushed up into the fundus, where it is held for upwards of 40-60 minutes with minimal stomach acid being produced — about 30% of full levels and not enough to render digestive enzymes inactive. It is while in the fundus that enzymatic digestion (from live enzymes present in the food, salivary enzymes introduced while chewing, or supplemental digestive enzymes taken with your meal) takes place. Up to 75% of digestion can take place during this phase — or none at all if there are no enzymes present. Since any sustained heat of approximately 118-129 degrees F destroys virtually all enzymes, it’s easy to see why the modern diet is pretty much devoid of live enzymes. Add to this the fact that the vast majority of people don’t really chew their food but, rather, gulp it down — thus missing out on salivary enzymes as well — and you have the very real potential for zero enzymatic digestion taking place in the fundus.

    Once again, enzymatic digestion is almost never accounted for in medical texts because doctors rarely see it. Again, ninety-nine percent of their patients eat cooked/processed food that is devoid of digestive enzymes and chew their food minimally so there is very little salivary action on the food. In any case, when doctors look at the cardia and fundus, they primarily see holding areas where virtually no enzymatic digestion takes place.

    One nod the medical texts do give to the fundus is that it’s where ghrelin is manufactured. Ghrelin is a hormone produced mainly by the P/D1 cells lining the fundus. The key role ghrelin plays is that it stimulates hunger. It is considered the counterpart of the hormone leptin, produced by fatty tissue, which induces satiation when present at higher levels.

    In any case, at the end of “fundal” cycle, whether any enzymatic digestion has taken place or not, the chyme is moved down into the body of the stomach, where stomach acid is introduced at full levels, thus neutralizing all enzyme activity.  Very little mixing takes place in the cardia or the fundus (again, these areas are reserved primarily for enzymatic digestion) but commences full force once the chyme is in the body of the stomach. In fact, waves of peristalsis (muscle contractions) grind and mix the food once in the body. This action is aided by the rugae, or folds, in the interior of the stomach, which force the chyme to roll over and churn as the muscular contractions squeeze the chyme over the folds.

    After a period of intense mixing and digestion, the chyme moves from the body of the stomach into the antrum, where it is held up. The body knows that the duodenum is very small. Therefore, only a small amount of chyme is allowed into the duodenum at any given time; the rest remains in the antrum for additional mixing and grinding and additional chemical digestion. In fact, the major chemical processes take place, not in the body of the stomach, but in the antrum while chyme is waiting its turn to pass through the pyloric valve.

    And with that stated, now let us take a closer look at these chemical processes.

    Chemical digestion

    When we refer to chemical digestion, we’re talking about the action of hydrochloric acid and pepsin (or parietal cells and chief cells) on the chyme. At its most basic level, chemical digestion is about taking big molecules and breaking them down into smaller molecules. Note: enteroendocrine cells are also active in the stomach, but (as we will discuss later) they play a regulatory role, rather than a digestive role. Let us now look at the different cells in the stomach that play the major roles in chemical digestion.

    Parietal cells

    There are some parietal cells in the fundus, but most are in the body of the stomach and the antrum. The parietal cells are extremely important as they secrete hydrochloric acid (HCL) in very high concentrations.

    HCL performs the following functions.

    Chief cells

    Pepsinogen is secreted by the chief cells. By itself, pepsinogen is inactive and will digest nothing until it is converted into pepsin when it comes in contact with the hydrochloric acid in the stomach. Pepsin is an extremely powerful protein digestive enzyme that thrives in a high acid environment.  Pepsinogen converts to active pepsin only at low (high acid) pH. This is actually a remarkably elegant maneuver by your digestive system. Since pepsin literally digests protein, you don’t want pepsin active in the mucosal/chief cells or it would digest them. Thus the mucosal cells release pepsinogen, pepsin’s precursor — which is converted into pepsin only after the pepsinogen has made its way out of the chief cells and into the stomach itself, where it is converted in the presence of stomach acid. Since the wall of the stomach is coated with a glycoprotein mucous, the pepsin can only digest your meal and not your stomach.

    As we discussed already, stomach acid doesn’t actually digest protein; it merely unfolds the proteins. That’s where pepsin comes in. Pepsin is what actually breaks bonds between amino acids that make up proteins; thus, it is the pepsin that literally digests proteins. (Actually, it breaks them into “peptides,” which are smaller chains of amino acids.) And once again, if your body is getting the benefit of full enzymatic digestion in the cardia and fundus, it will digest up to 75% of the proteins in your meal before HCL and pepsin ever come into play. This means that in proper digestion, HCL and pepsin should only be required to do clean up duty. But without enzymatic digestion, your body is required to increase HCL and pepsinogen production by some 400% to make up the difference. Once again, this is a major body stressor with profound long term consequences.

    Pepsinogen serves one other key function in the stomach: it plays a significant role in moving chyme through the digestive tract. Or in “medicalese,” it increases gastric motility. It accomplishes this in two ways. First, it is the arrival of pepsinogen that plays a key role in telling the esophageal sphincter to close down so that food and stomach acid can’t back up into the esophagus. Pepsinogen then works at the other end of the stomach by telling the pyloric sphincter to open, thus allowing food to exit the stomach and make its way into the duodenum.

    The chief cells also secrete gastric lipase, which breaks triglycerides into fatty acids and monoglycerides. Unlike triglycerides, fatty acids and monoglycerides are usable by your body and do not promote heart disease. It should also be noted that because gastric lipase is active at a pH of 3-6, its role is somewhat limited until it enters the duodenum, where stomach acid is neutralized and pH is raised. Another note is that although salivary lipase and gastric lipase are overshadowed by the later action of pancreatic lipase in the intestinal tract, if allowed to do their job, the action of salivary and gastric lipase can significantly reduce the burden of pancreatic lipase in the intestinal tract. Once again, we pay a price for our modern diets — unless we supplement with digestive enzymes.

    Enteroendocrine cells

    Enteroendocrine cells, which are also known as G-cells, are located primarily in the antrum and release gastrin which stimulates the production of both HCL and pepsinogen in the antrum and higher up in the body of the stomach. It is able to signal higher up in the stomach because the gastrin is released into the bloodstream and circulates around until it can enter the blood vessels that feed the stomach all the way from the esophageal sphincter to the pyloric valve. In addition to promoting digestive juices, gastrin causes the lower esophageal sphincter to relax; thus, high levels of gastrin are thought to play a role in the development of acid reflux disease since they cause the valve to relax too much and at inappropriate times. This will become significant when we talk about using antacids and proton pump inhibitors since by dramatically lowering HCL levels during digestion they cause a concomitant jump in gastrin levels in an attempt to ramp HCL levels back up. The net effect is a much “looser” esophageal valve thus allowing chyme to back up into the esophagus more easily. Taking this into consideration, high levels of gastrin may play a significant role in the development of acid reflux disease.

    It probably should be mentioned that G-cells produce these higher levels of gastrin in response to antacids and proton inhibitors by proliferating wildly so that there are more of them to produce gastrin.  So once again, artificially forcing symptoms back in line with pharmaceutical drugs has consequences. Although, to be fair, there is no evidence yet that this proliferation of cells leads to a malignant transformation in patients using the drugs. Then again, is that a risk you want to take?

    Conclusion

    In our discussion of the stomach so far, we have learned exactly how the lack of enzymes in our food affects digestion and why supplementation with a good digestive enzyme formula makes sense. We have also picked up strong indications as to why antacids and proton pump inhibitor drugs may not be the best long term solutions to acid reflux. In fact, you may never look at your stomach in the same way again.

    In our next issue, we will conclude our discussion of the anatomy and physiology of the stomach, as we:

    And finally, we’ll finish with the big payoff on our discussion of the stomach with an examination of the things that can go wrong and how to prevent and even cure them, such as:

    Continue reading Jon’s series about digestive health:

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